TaxTMI 
TaxTMI 
2021 (1) TMI 906
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....f Rs. 25,00,000/- made on account of interest received on margin money at lower rate than it had to pay the borrowers. 2. At the outset, it is noted that this is the second round of appellate proceedings where the matter was set-aside to the file of the AO with certain specific directions. During the set-aside proceedings, relevant facts and findings of the AO as contained in order passed u/s 143(3) r/w 254 read as under: "While completing assessment u/s 143(3) on 31-01-2001 an addition of Rs. 4,24,27,000/- was made to the income of the assessee on account of cash premium received which was found out of the books of accounts maintained by the assessee. This issue was disputed by the assessee at various levels of appeals and finally the ITAT, Jaipur has restored the issue to the assessing officer. The ITATs observation is as under:- "41. We have heard the rival contentions of both the parties and perused the material available on the record. For AY 1996- 97, similar issue has been dealt by the coordinate Bench in ITA 382 & 420/JP/2011 dated 19.08.2016 wherein it was held as under: "We have heard the rival contentions of both the parties and perused the ....
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....f the bench in respect of whether CESTAT Order has been pronounced or not since the date of passing of order by the co-ordinate bench in August -2016. Onces the CESTAT Order is pronounced, the nature of implication as well as the implication as well as the year involved would be clear and the Revenue as well as the assessee would be in a better position to put forward their respective contentions. Hence the finding and directions contained in Co-ordinate Bench decision for AY 1996-97 shall apply mutatis muntadis to the impugned assessment year as. well. Hence ground No. 7 of assessee is allowed for statistical purposes." As per the above mention/directions, the period involved is to be ascertained from the order of CESTAT. 2. That the assessee had field appeal before Customs, Excise & Services Tax Appellate Tribunal (CESTAT) against the order dated 19.02.2009 of Commissioner of Central Excise (Adjudication) Delhi. The CESTAT heard the appeal and passed the order on dated 17.02.2017. (A copy of the Order is enclosed herewith for your ready reference and record) The assessee then filed appeal in hon'ble Superme Court against the order of CESTAT . The Ho....
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....sympathetically but not found tenable because during the course of set-aside assessment proceedings, the assessee has submitted the CESTAT, Principal Bench, New Delhi's said order dated 17-02-2017 passed in. Excise Appeal Number 1605 of 2009. The CESTATs order has decided the issue regarding quantification of differential duty on extra amount collected in cash from buyers and the outcome is against the contentions of the assessee. The conclusive para of the CESTATs order number 51801/2017 dated 17-02-2017 arising out of CCE(Adj.), New Delhi's original order number CCE/ADJ/PKJ/01/2009 date 19/02/2009 is reproduced below - "7. On careful consideration of the facts of the case and the adjudication in terms of direction issued by the Tribunal , we find no infirmity in the said findings of the Original Authority. The differential duty has been calculated based on weighted average and it is pertinent to note that the Original Authority has complied with the directions of the Tribunal and the submission made by the appellants that the present impugned order is beyond the scope of denovo direction by the Tribunal is not factually correct. No other issue was pressed during ....
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....-99. 4. That the matter travelled to Hon'ble ITAT, Jaipur Bench. Hon'ble ITAT vide order dated: 17/11/2016 has restored the matter to the file of the A.0 with the following direction:- "41. We have heard the rival contentions of both the parties and perused the material available on the record. For AY 1996-97, similar issue has been dealt by the coordinate Bench in lTA 382 & 420/JP/2011 dated 19.08.2016 wherein it was held as under: "We have heard the rival contentions of both the parties and perused the material available on the record. The Id. AR has confirmed that the matter before CESTAT is still pending for adjudication and he has given an assurance that as soon as the order is pronounced by CESTAT and a copy is made available to the assessee, the assessee shall forthwith share a copy of the CESTAT order with the AO without any undue delay. In light of that, we confirm the order of the Id. CIT (A) and set-aside the matter to the file of the AO to decide the same afresh as per law after taking into consideration the decision of CESTAT. Further we do not see any infirmity in the order of the Id. CIT (A) to allow the claim of the assessee toward....
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....bsp; Appellant Versus CCE, New Delhi Respondent Appearance Shri A.K. Prasad, Advocate- for the appellant Shri G.R. Singh, Authorized Representative (DR) for the Respondent. CORAM: Hon'ble Shri S.K. Mohanty, Member (Judicial) Hon'ble Shri B. Ravichandran, Member (Technical) Final Order No. 51801/2017 Dated 17/02/2017 Per. B. Ravichandran:- The appeal is against order dated 19/02/2009 of Commissioner of Central Excise (Adjudication), Delhi. The said order was passed in line with the direction of the Tribunal vide final order No. 195/2002-A dated 24/05/2002. The brief facts of the case are that the appellants are engaged in the ma....
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.... Central Excise, Range-1, Alwar (Rajasthan) That in the assessment order passed in consequent to the set aside proceedings the A.O has again added the amount of Rs. 4,24,27,000/- giving following reasons; In assessee own case in A.Y 1996-97 differential duty of Rs. 1,45,61,753/- raised by the commissioner of Central Excise on 08.12.1998 stands upheld by the CESTAT, New Delhi and on the basis of above information addition was made in A.Y 1996-97. Therefore it appears that this type of practice of receiving on money has been in general and it is held that same type of practice of receiving unaccounted cash over and above the invoice price is existing in the year under consideration. It is also noted that Ld. CIT (A) Alwar vide his order no. 201/2000-01 dated 30.09.2014 confirmed the addition. Since this amount of differential duty formed basis of addition of Rs. 4,24,27000/- in the assessee's income-tax assessment completed on 31-01-2001, the same consequently stands upheld. Hence addition of Rs. 4,24,27,000/- is made to the income of the assessee." 6.4 I have considered the above mentioned facts of the case. Hon'ble ITAT Jaipur ....
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....ny material or evidence and only on presumptions, conjectures and surmises has made the additions. The Revenue has failed to controvert the said findings of the ld CIT(A) before us. We therefore affirm the findings of the ld CIT(A) wherein he has rightly deleted the addition of Rs. 4,27,27,000/- and the ground of appeal so taken is hereby dismissed. 5. Now, coming to the second ground of appeal relating to disallowance out of interest income of Rs. 25 lacs, we find that this issue was again set-aside to the file of the AO in the first round with certain specific directions and the relevant facts and findings of the AO in the set-aside proceedings are as under: "While completing assessment u/s 143(3) on 31-01-2001 an addition of Rs. 25,00,000/- was made to the income of the assessee on account of Interest of margin money. This issue was disputed by the assessee at various levels of appeals and finally the ITAT, Jaipur has restored the issue to the assessing officer. The ITAT's observation is as under:- We have heard the rival contentions of both the parties and perused the material available on the record. It is submitted by the Ld AR that the interest paid ....
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....harged lower rate of interest or gave interest free loans. Assessee has charged interest as margin money at rate of 9.30% whereas he pay interest on term loan, FDR, Banks from 14.36% to 21.62%. This practice is apply to reduce his profit. It is also mentioned here that order of Hon'ble ITAT in ITA No. 387/JP/1 dated 19-08-2016 pertain to A.Y 1996-97 has been challenged by the department in Hon'ble Rajasthan High Court and now the matter is pending to file SLP. Loan raised at high rates of interest and advanced them on a lower rate was to support, the sister concerns and other group companies satisfied the test of commercial expediency because in the guise of such support the assessee company had minimized its profit. It need not to support its sister concerns or other groups companies at the cost of its loss. It should charge at least interest at the rate which it had to pay to the borrowers. Moreover, if the assessee company had sufficient funds as share capital, then where was the need to borrow funds on such high rate of interest? From this it is clear that the assessee company, in this way, used the funds for its own purposes and reduced the profit in the name of suppor....