Parveen Kumar Goel, Ludhiana v. ITO, Ludhiana

ITA 828/CHANDI/2015 | 2012-2013
Pronouncement Date: 05-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 82821514 RSA 2015
Assessee PAN AAUPG5325J
Bench Chandigarh
Appeal Number ITA 828/CHANDI/2015
Duration Of Justice 10 month(s) 25 day(s)
Appellant Parveen Kumar Goel, Ludhiana
Respondent ITO, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 05-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 05-10-2016
Assessment Year 2012-2013
Appeal Filed On 10-11-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER ITA NO. 828/CHD/2015 ASSESSMENT YEAR: 2012-13 SHRI PARVEEN KUMAR GOEL VS THE ITO SHOP NO. 29 WARD V(3) TARUNDEEP MARKET KHANNA. LUDHIANA. PAN: AAUPG5325J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VARDHMAN JAIN RESPONDENT BY : SHRI MANJIT SINGH DR DATE OF HEARING : 03.10.2016 DATE OF PRONOUNCEMENT : 05.10.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 LUDHIANA DATED 01.09.2015 FOR ASSESSMENT YEAR 2012-13. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. EARLIER THIS APPEAL WAS DISMISSED FOR DEFAULT HOWE VER BY ALLOWING MISCELLANEOUS APPLICATION OF THE ASSESS EE THE APPEAL OF THE ASSESSEE WAS RESTORED FOR HEARING ON MERITS. 2 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 4 OF THE APPEAL. SAME IS DISMISSED AS WITHDRAWN. 4. ON THE REMAINING GROUND NOS. 1 TO 3 THE ASSESSE E CHALLENGED THE DISALLOWANCE OF RS. 2 29 930/- UNDER SECTION 36(1)(III) OF THE INCOME TAX ACT. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER NOTED THAT ASSESSEE HAS MADE INTEREST FREE ADVANCES AS PER CHART IN EARLIER YEARS TO THE FOLLO WING PARTIES I.E. SHRI NITIN SINGLA RS. 8 00 000/- M/S RAJNISH GOEL & SONS (HUF) RS. 7 30 000/- AND SHRI NARINDER BANSAL RS. 2 50 000/- TOTALING TO RS. 17 80 000/-. THE ASSESSEE SUBMITTED THAT THESE INTEREST FREE ADVANCE S WERE MADE IN EARLIER YEARS AND NO ADVANCES HAVE BEE N MADE IN ASSESSMENT YEAR UNDER APPEAL. THE CAPITAL OF THE ASSESSEE PROPRIETOR ARE AS UNDER : I) PROPRIETORS CAPITAL RS. 42 86 253/- II) UNSECURED LOANS RS. 1 81 82 921/- 6. THE ASSESSING OFFICER HOWEVER DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND FOLLOWING THE DECISI ON OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES 286 ITR 1 DISALLOWED THE INTERE ST OF RS. 2 29 930/- UNDER SECTION 36(1)(III) OF THE ACT. THE ASSESSEE PLEADED BEFORE LD. CIT(APPEALS) THAT ADVAN CE WAS OF RS. 19 80 000/- IN PRECEDING MANY ASSESSMENT 3 YEARS AND IN THE CASE OF SHRI RAJNISH GOEL THE AMO UNT HAS REDUCED BY TAKING BACK RS. 2 LACS ON DIFFERENT DATES. THE LD. CIT(APPEALS) HOWEVER CONFIRMED THE ADDITI ON AND DISMISSED APPEAL OF THE ASSESSEE. 7. AFTER CONSIDERING RIVAL SUBMISSIONS I AM OF THE VIEW ADDITION IS WHOLLY UNJUSTIFIED. THE CONTENTIONS RA ISED BEFORE THE AUTHORITIES BELOW HAVE NOT BEEN DISPUTED BY THE AUTHORITIES BELOW. THE ASSESSEE HAS FILED COPI ES OF THE ACCOUNTS OF ALL THE THREE PARTIES TO WHOM INTER EST FREE ADVANCES HAVE BEEN GIVEN IN EARLIER YEARS COP IES OF WHICH ARE FILED AT PAGE 9 TO 21 OF THE PAPER BOOK. IN THE CASE OF SHRI NITIN SINGLA ADVANCE OF INTEREST FREE WAS GIVEN IN JUNE 2010 IN A SUM OF RS. 8 LACS THEREFOR E IT WAS OPENING BALANCE IN ASSESSMENT YEAR UNDER APPEAL . IN THE CASE OF M/S RAJNISH GOEL & SONS (HUF) THE INTEREST FREE ADVANCE WAS GIVEN FROM NOVEMBER 2007 TO MARCH 2011 IN A SUM OF RS. 9 30 000/- AND IN NOVEMB ER AND DECEMBER 2011 RS. 1 LAC EACH HAVE BEEN RECEIV ED BACK BY THE ASSESSEE THEREFORE OPENING BALANCE REMAINED IN ASSESSMENT YEAR UNDER APPEAL IN A SUM O F RS. 7 30 000/-. IN THE CASE OF SHRI NARINDER BANSA L THE ADVANCE WAS GIVEN IN AUGUST 2006 IN A SUM OF RS. 2 50 000/- WHICH REMAINED OPENING BALANCE IN SUBSEQUENT ASSESSMENT YEARS AND EVEN IN ASSESSMENT YEAR UNDER APPEAL IT WAS OPENING BALANCE. ACCORDI NG TO THE ASSESSEE NO DISALLOWANCE OUT OF INTEREST HAVE BEEN MADE IN EARLIER YEARS. THE INTEREST FREE BORROWING S ARE 4 MORE THAN THE INTEREST FREE ADVANCES. EVEN THE ASSESSEE'S CAPITAL ON ACCOUNT OF PROPRIETOR IS ALSO MORE THAN THE INTEREST FREE ADVANCES GIVEN ABOVE. HON'B LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KAPSON ASSOCIATES 381 ITR 204 HELD THAT WHEN ASSESSEE WAS HAVING SUFFICIENT INTEREST FREE ADVANCES TO COVER I NTEREST FREE ADVANCES NO DISALLOWANCE SHOULD BE MADE UNDER SECTION 36(1)(III) OF THE ACT. SIMILAR VIEW IS TAKEN BY HON'BLE SUPREME COURT IN THE CASE OF HERO CYCLES PV T. LTD. 379 ITR 347 IN WHICH THE DECISION IN THE CASE OF ABHISHEK INDUSTRIES LTD. (SUPRA) HAVE BEEN OVER-RUL ED. 8. CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTAN CES I AM OF THE VIEW THAT ADDITION IS WHOLLY UNJUSTIFIE D. I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE TH E ADDITION OF RS. 2 29 930/-. GROUND NOS. 1 TO 3 OF APPEAL OF THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 5 TH OCTOBER 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT DR ASSISTANT REGISTRAR ITAT/CHD