M/S VSN INTERNATIONAL, Indore v. THE ACIT 4(1), Indore

ITA 899/IND/2016 | 2012-2013
Pronouncement Date: 28-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 89922714 RSA 2016
Assessee PAN AAJFV2824J
Bench Indore
Appeal Number ITA 899/IND/2016
Duration Of Justice 1 month(s) 29 day(s)
Appellant M/S VSN INTERNATIONAL, Indore
Respondent THE ACIT 4(1), Indore
Appeal Type Income Tax Appeal
Pronouncement Date 28-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 28-10-2016
Assessment Year 2012-2013
Appeal Filed On 30-08-2016
Judgment Text
M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE .. ..!' #$ # !% BEFORE SHRI D.T. GARASIA JUDICIAL MEMBER AND SHRI O.P. MEENA ACCOUNTANT MEMBER I.T.A. NO. 899/IND/2016 ASSESSMENT YEAR: 2012-13 M/S VSN INTERNATIONAL INDORE PAN AAJFV 2824J :: APPELLANT VS ACIT 4(1) INDORE :: RESPONDENT ASSESSEE BY SHRI C.P. RAWKA REVENUE BY SHRI R.P. MOURYA ! ' #$ DATE OF HEARING 7.10.2016 %&'( #$ DATE OF PRONOUNCEMENT 7.10.2016 * O R D E R PER SHRI D.T. GARASIA JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 30.6.2016 OF THE LEARNED CIT(A)-II INDORE. M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 2 2. THE ONLY GROUND IN THIS APPEAL IS DISALLOWANCE OF INTEREST. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE FILED THE RETURN OF INCOME ON 2.8.2013. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON PERUSAL OF PROFIT AND LOS S ACCOUNT THE ASSESSEE HAS CLAIMED RS.898603/- ON ACCOUNT OF INTEREST EXPENSES FOR THE LOAN EXPECT BANK AND FURN ISHED A LIST OF PERSONS FROM WHOM LOAN WAS TAKEN. IT COMES TO RS.50 84 640/-. THE ASSESSEE HAS GIVEN LOAN AND ADVANCE OF RS.42 15 413/- TO VARIOUS ENTITIES INCLUDING SIST ER CONCERN WITHOUT INTEREST AND SHOWED THE INTEREST REC EIVED OF RS.2 50 000/- ONLY THEREFORE THE ASSESSING OFF ICER WAS OF THE VIEW THAT THE ASSESSEE HAS GIVEN THE ADVANCE TO HIS FAMILY MEMBERS WHICH READS AS UNDER :- SL.NO. NAME AMOUNT PURPOSE RATE OF INTEREST 1 VERSHA BIDASARIA 165000 ADVANCE NIL 2 BIDASARIA MILL PVT. LTD. 279274 ADVANCE NIL 3 BIDASARIA EXPORT P.LTD. 290364 ADVANCE NIL M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 3 4 SMT. ANJU BIDASARIA 13866 ADVANCE NIL TOTAL 748504 THEREFORE THE ASSESSING OFFICER HAS DISALLOWED THE I NTEREST. THE MATTER WAS CARRIED IN APPEAL AND THE LEARNED CIT(A) HAS CONFIRMED THE SAME. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE COURSE OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT THE ASSESSEE HAS GIVEN LOAN TO VARSHA BIDASARIA AGAINST THE SERVICES PROVIDED FOR ACCOUNTING OF THE FIRM. SHE IS QUALIFIED UPTO CA FINAL GROUP-I THEREFORE THIS ADVANCE WAS GIVEN TO HIM FOR HER SERVICES. WE ARE OF THE VIEW THAT VARSHA BIDASARIA IS C LOSE RELATIVE OF THE ASSESSEE. SIMILARLY FOR THE ADVANCE T O MANJU BIDASARIA THE ASSESSEE DID NOT GIVE ANY EXPLANATION WHILE THIS ADVANCE WAS GIVEN TO HER FAMILY MEMBERS. WE FIND T HAT IN CASE OF BOTH THESE ADVANCES THE ASSESSEE COULD NOT PROVE ANY JUSTIFICATION FOR ADVANCING THE SAME. THE M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 4 ASSESSEE HAS GIVEN INTEREST BEARING FUNDS FOR RUNNING THE BUSINESS WHICH COMES TO RS.50 84 640/- AND THE ASSESS EE HAS GIVEN INTEREST FREE ADVANCE TO THESE PERSONS WHICH IS NOT AS PER THE LAW. THEREFORE WE DISALLOW THE SAME. 4. IN RESPECT OF BIDASARIA MILLS AND BIDASARIA EXPORT PVT. LTD. THE ASSESSEE HAS GIVEN THIS ADVANCE TO SICK COMPANY AND PRINCIPAL RECOVERY IS DOUBTFUL THEREFORE THE INTEREST IS NOT CHARGED. THEREFORE WE ARE OF THE VIE W THAT THE REVENUE IS NOT JUSTIFIED IN DISALLOWING THE CLAIM . THEREFORE WE ALLOW THE CLAIM. SIMILARLY IN RESPECT O F ADVANCE TO BIDASARIA EXPORT THIS FIRM IS CLOSED AND THE ASSESSEE IS UNABLE TO RECOVER THE PRINCIPAL AMOUNT THEREFORE NO INTEREST HAS BEEN CHARGED THEREFORE T HE REVENUE IS NOT JUSTIFIED IN DISALLOWING THE CLAIM. WE THEREFORE ALLOW THE SAME. 5. WE FURTHER FIND THAT THE ASSESSEE HAS LENT THE AMOUNT OF RS.21 00 000/- TO JAIDEEP ISPAT & ALLOYS PVT . M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 5 LTD. AND CHARGED INTEREST @ 12% ONLY. THE ASSESSEE HAS TAKEN LOAN @ 15.6% BUT IT HAS CHARTED INTEREST @ 12%. SIMILARLY THE ASSESSEE FIRM LENT RS.11 96 484/- TO G AMUT ELECTRONICS PVT. LTD. ON VARIOUS DATES AND CHARGED INTE REST @ 12%. THEREFORE IN THE INTEREST OF JUSTICE AND FAIR PLAY WE DIRECT THE A.O. TO ALLOW THE CLAIM OF INTEREST @ 13.5 % IN BOTH THESE CASES. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 7 TH OCTOBER 2016. SD/- SD/-8 ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 28 OCTOBER 2016. DN/ M/S V.S.N. INTERNATIONAL ITA NO. 899/IND/2016 6