Case Law Details
DCIT Vs Gayatri Construction (ITAT Ahmedabad)
Ld. counsel has submitted that advances were given to Ramjibhai and Company for business purpose and petrol and diesel was also purchased from them. The ld. Counsel has also contended that assessee was having interest free fund of Rs. 64,75,145/-. The ld. counsel has also placed reliance on the judicial pronouncement of the Hon’ble Bombay High Court in the case of Reliance Utilities 313 ITR 340 (Bom).
The assessee has not brought any material on record to substantiate that aforesaid huge amount of advance was extended to Ramji bhai and Company exclusively for the purpose of petrol and diesel. The ld. Departmental Representative has pointed out that loan amount was very old which was given in the earlier years and there was no sufficient interest free fund available with the assessee. During the course of course of appellate proceedings before us, the ld. counsel has stated that opening debit balance was Rs. 61,14,336/- and closing debit balance was Rs. 59,31,445/- and the interest free fund available with the assessee was Rs. 64,75,145/-. However, to controvert the submission of the ld. Departmental Representative the ld. counsel has not furnished any information and material to disprove the claim of the Ld. Departmental Representative that the loan amount was pertained to earlier years when the assessee was not having sufficient interest free fund. The cases relied upon by the assessee are distinguishable on facts. We do not find any merit in the ground of appeal of revenue after considering that the ld. CIT(A) has judiciously restricted the disallowance to the extent of Rs. 3,98,436/- on pro-rata basis as elaborated in his finding supra in this order after following the decision of Sanghiv Swiss Refills Pvt. Ltd. 85 (ITD) 59. In the light of the above facts and findings, both the appeals of the Revenue and assessee on this issue are dismissed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These two appeals filed by Revenue and assessee for A.Y. 2009-10, arise from order of the CIT(A), Gandhinagar, Ahmedabad dated 03-102012, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. Since similar issues involved in these ground of appeal directed against the order of ld. CIT(A) therefore for the sake of convenience both these appeals are adjudicated together as under.
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