TaxTMI 
TaxTMI 
2014 (1) TMI 932
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome of Rs.30,01,909/- after processing the return u/s 143(1), notice was issued u/s 143(2) and the assessment was completed u/s 143(3) on 23rd November,2011 assessing the total income at Rs.43,70,100/- inter alia making an addition on account of disallowance u/s 36(1)(iii) as well as addition on account of disallowance u/s 14A. Aggrieved the assessee carried the matter in appeal. 3. The First Appellate Authority enhanced the disallowance u/s 36(1)(iii) by Rs.1,55,976/-, while upholding the disallowance made by the Assessing Officer. On the disallowance made u/s 14A, the Ld.Commissioner of Income Tax (Appeals) granted part relief to the assessee. Further aggrieved the assessee is in appeal before us on the following effective grounds. "2. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Schedule 1.9 at page 15, Schedule 1.3 at page 12 and Schedule 1.5 at page 14 of the paper book to demonstrate his claim that the factual findings recorded by the Ld.Assessing Officer as well as the Ld.Commissioner of Income Tax (Appeals) were wrong. 4.1. He took this Bench to the submissions before the Ld.Commissioner of Income Tax (Appeals) and pointed out that it was brought to his notice that the advances in question to companies under the same management, were running accounts and the maximum balance during the year was only Rs.6,57,225/-. He also submitted that the assessee has not taken any unsecured loan or secured loan during the year ended 31st March, 2009 and that no interest free loan was given during the year. He pointed out t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come Tax (Appeals) and submitted that the assessee has admitted that it has advanced interest free loans to sister concerns and that these were not given based on commercial expediency. She relied on the case laws referred to by the Ld.A.O. in his order to the proposition that the disallowance can be made. She further relied in the following case laws for the proposition that res judicata does not apply to income tax proceedings. 67 ITR 106 (S.C.) M.M. Ipoh & Others vs CIT, Madras She further relied on the judgement of the Hon'ble Punjab & Haryana High Court in the case of Abhishek Industries, 286 ITR p.1. 6. Joining the issue Mr.Ranjan Chopra, the Ld.Counsel for the assessee submitted that the judgement of P&H High Court in the case of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fficer recorded that these are interest free loans. In fact he also recorded that an amount of Rs.50,70,856/- was an interest free advance, when the fact was that it is an investment in M/s Puriflair P.ltd. At page 3 of the assessee's paper book, it is stated that these amounts were advanced to sister concerns for supply of material. The claim of the assessee is that this is a running account maintained with the sister concerns, with whom the assessee has regular business transactions. Thus the Assessing Officer was wrong on facts, when he records that the amount of Rs.50,70,856/- is interest free advance and that the assessee has also given interest free loans to companies under the same management. The CIT(A) is also wrong in his observat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....umstances of the case the ITAT is right in law in holding that since no additions have been made in earlier years, the opening debit balance cannot be considered during the current year and that the enquiry has to be limited to the increase in the current year only? Held : "We are in agreement with the view expressed by the Appellate Tribunal. The status of the amount outstanding from Nalanda on the first day of the accounting year is the amount that stood outstanding on the last day of the previous accounting year, and, therefore, its nature and status cannot be different on the first day of the current accounting year from its nature and status as on the 1st day of the previous accounting year. Regarding the past years, the assessee's cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ridev Enterprises (1991) 192 ITR 167 has held that a departure from a finding in respect of deductions permitted during the past years would result in a contradictory finding. 5. We are also of the view that it would not be equitable to permit the Revenue to take a different stand in respect of expenses which were the subject matter of previous year's assessments. In our opinion, consistency and definiteness of approach by the Revenue is necessary in the matter of recognizing the nature of an account maintained by the assessee so that the basis of a concluded assessment is not ignored without actually reopening the assessment." The Hon'ble Court followed the propositions laid down by in the case of Sri Devi Enterprises (supra). In the ca....