TaxTMI 
TaxTMI 
2014 (12) TMI 98
X X X X Extracts X X X X
X X X X Extracts X X X X
....632/- confirmed by the CIT(A) be deleted. 2. The Ld.Commissioner of Income tax (Appeals) XVI, Ahmedabad has erred in confirming the disallowance of Rs. 32,31,486/- out of interest payment made by the appellant (para 4.4 page 18 of Assessment order). In view of the facts and circumstances of the case, the disallowance of Rs. 32,31,486/- confirmed by the CIT(A) be deleted. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 22/12/2011, thereby the Assessing Officer (AO in short) made disallowance by invoking the provisions of section 14A of the Act read with Rule-8D of the IT Rules, 1962 amounting to Rs. 5,14,632/-, disallowance of interest claimed u/s.36(1)(iii) of the Act amounting to Rs. 3,15,09,824/- and the other disallowances in respect of vehicle expenses of Rs. 33,152/- & telephone expenses of Rs. 37,588/-. Apart from the said disallowances, the AO also made disallowance in respect of the rate difference amounting to Rs. 34,78,373/-. Aggrieved by the assessment order, the assessee carried the matter befor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No.2325/Ahd/2012 for AY 2008-09 vide order dated 31/10/2014 has decided this issue in favour of assessee. He submitted that this issue in earlier year also travelled upto the Hon'ble Jurisdictional High Court, wherein the Hon'ble High Court has, in assessee's own case - in Tax Appeal Nos.851 to 856 of 2014 vide order dated 01/09/2014, decided the issue in favour of assessee. 6. On the contrary, ld.Sr.DR supported the order of the ld.CIT(A). 7. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. In the instant case, we find that the ld.CIT(A) has decided this issue, by following the earlier decision pertaining to AYs 2007-08 & 2008-09, by observing as under:- "4.3 It has been noted that there is no material change in the facts of the case of the present appeal as compared to appellants case for AY 2007-08 & 2008- 09. The finding given in above orders are reasonable enough and given after considering the legitimate need of the borrowed funds and utilization thereof. It is pertinent to be noted here that the Assessing Officer had not properly examined the case. He has disallowed the interest expen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ional interest of Rs. 20,77,358/- has been found to be bereft of any merit. Accordingly, the addition made by the ld AO is confirmed to the extent of Rs. 32,31,486/- only and the balance is deleted. The second ground of appeal raised is therefore partly allowed." 7.1. The Coordinate Bench of this Tribunal (ITAT Bench "B" Ahmedabad) in ITA No.2325/Ahd/2012 for AY 2008-09 in assessee's own case vide order dated 31/10/2014 has decided this issue in paras-17 and 18 by observing as under:- "17. Further, in respect of the retention of disallowance of interest of Rs. 10,71,797/-, we find that the CIT(A) upheld the disallowance on his findings that borrowed funds were not required for immediate business needs. In our considered view, the need of business is to be judged from the point of view of businessmen. The assessee is having business turnover of over 211 crores during the year under consideration. The amount which the assessee may need for his business may not be available always to the assessee. Therefore, the assessee has to avail the loan amount when it is available by keeping in view the future needs which may arise in the course of business. Therefore, merely as because th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er year. Therefore, the rate of interest paid by the assessee is quite reasonable. Considering the facts of the case in their totality, it is apparent that the assessee has borrowed funds and used the same for its business purposes. Both, the Commissioner (Appeals) as well as the Tribunal have concurrently found that the borrowed funds have been used for business purposes and have held that interest on such borrowed funds is an allowable expenditure. The only difference in opinion is to the extent of interest allowable on such borrowed funds. The Commissioner (Appeals) has restricted such allowance to the interest paid to transporters and towards 'goods deposits' whereas the Tribunal has held the interest paid at the rate of 18% to be reasonable. Having regard to the findings recorded by the Tribunal for holding the rate of interest at 18% to be reasonable, it is not possible to state that there is any legal infirmity in the conclusion arrived at by the Tribunal so as to give rise to a question of law, much less, a substantial question of law, warranting interference." 7.3. The Revenue has not placed any contrary material on record suggesting that the facts and circumstances in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....per 1000 to dealers and further commission of Rs. 0.19 to Rs. 0.59 is claimed to have been made to the dealers for making payment by them to the peta-dealers. He submitted that before AO the assessee failed to furnish the evidences in respect of its claim. 11.1. On the contrary, the ld.counsel for the assessee submitted that all details were furnished by the assessee. He submitted that the ld.CIT(A) has thoroughly examined the issue and has rightly came to the conclusion in favour of the assessee. He further submitted that the payments have been made through banking channels and all applicable tax deductions of the provisions have been complied with and wherever assessee was required to deduct the tax he deducted the tax and the evidence of deduction of tax and the payments made through banking channels were produced and the ld.CIT(A) has examined and rightly came to the conclusion in favour of the assessee. 12. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given a finding on fact at para-6.2 of his order, which is reproduced hereinbelow:- "6.2 I have carefu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appeal is rejected. 13. Ground Nos.3 & 4 are general in nature require no independent adjudication. 14. In the combined result, the appeal of the Assessee is allowed for statistical purposes, whereas the appeal of the Revenue is dismissed. Order pronounced in the Court on Friday, the 28th day of November, 2014 at Ahmedabad. ============= Document 1 Name of Depositor Name of Date of Amount Interest 14% interest Bank Deposit Days up to Amt. up to 3/31/2009 3/31/2009 Shree Arbuda Transport UBI 12.04.2008 7500000 353 1015479 Company Shree Jaylaxmi Transport UBI 12.04.2008 2500000 353 338493 Company Parbhudas Kishordas HUF UBI 18.04.2008 325000 347 43256 Jaswantlal Parbhudas UBI 18.04.2008 650000 347 86512 HUF 10975000 Parbhudas Kishordas HUF UBI 28.05.2008 1300000 307 153079 1300000 Parbhudas Kishordas HUF UBI 14.06.2008 1300000 290 144603 1300000 Shree Arbuda Transport UBI 08.08.2008 3000000 235 270411 Company Parbhudas Kishordas HUF UBI 19.08.2008 200000 224 17184 Jaswantlal Parbhudas ....