M/S. SAMBHAV MEDIA LTD.,AHMEDABAD vs. THE DY.CIT, CIRCLE-8, AHMEDABAD

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ITA 36/AHD/2015Status: DisposedITAT Ahmedabad22 March 2019AY 2011-123 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the matter back to the AO to re-examine the assessee's claim regarding the disallowance of interest after considering the balance sheet and other documentary evidence.

What were the facts?

The assessee claimed interest expenses, a portion of which was disallowed by the Assessing Officer (AO) and confirmed by the CIT(A). The assessee argued that it had sufficient funds, including interest-free funds, to cover the advances made.

What were the issues?

Whether the disallowance of interest expenses was justified when the assessee claimed to have sufficient interest-free funds for the advances made.

Which sections of the Income-tax Act were involved?

Section 36(1)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI PRAMOD KUMAR, HON’BLE & SHRI MAHAVIR PRASAD

For Appellant: DR यथ क ओर से /

आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ ‘C’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, HON’BLE VICE PRESIDENT & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 36/Ahd/2015 (�नधा�रण वष� / Assessment Year: 2011-12) M/s Sambhaav Media Ltd. DCIT बनाम/ Sambhaav House, Circle-8 Vs. Opp. Judges Bungalows, Ahmedabad- 380015 Premchand Nagar Road, Vastrapur, Ahmedabad- 380015 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAB CP1 464 F .. (अपीलाथ� /Appellant) (��यथ� / Respondent) अपीलाथ� ओर से /Appellant by : Ankit Talsania, AR O. P. Sharma, CIT DR ��यथ� क� ओर से / Respondent by : सुनवाई क� तार�ख / Date of 03/01/2019 Hearing घोषणा क� तार�ख /Date of 22 /03/2019 Pronouncement आदेश/O R D E R PER MAHAVIR PRASAD - JM: This appeal has been preferred by the assessee against the order of Ld. CIT(A) Appeal No. CIT(A)-XIV/DCIT/Cir.-8/527/2013-14 dated 28.10.2014 arising from out of assessment order dated 12.03.2014.

2.

In this case Ground No. 1, 2 and 4 are not pressed. Now, remaining effective ground is to be adjudicated is that CIT(A) has error in law on facts of the case in confirming the disallowance of interest of Rs. 8,40,000/- u/s. 36(1)(iii) of the Act out of total disallowance of interest of Rs. 23,64,468/- made by Ld. AO.

ITA No.36/Ahd/2015 [M/s Sambhaav Media Ltd. vs. DCIT] A.Y. 2011-12 - 2 -

3.

Thereafter assessee preferred first statutory appeal before the Ld. CIT(A) who confirmed the action of the Ld. AO.

4.

We have gone through the relevant record and impugned order Ld. AR stated that in cash flow statement as given balance sheet on Page No. 41 which demonstrate that during the year under consideration appellant had cash operating profit of Rs. 11,02,98,462/, out of which total loan and advances of Rs. 87,61,428/- has been made. It is further pointed out that out of total loan and advances of Rs. 87,61,428/- includes advances of Rs. 70,00,000/- same is part of balance sheet of Page No. 28 and further submitted that share capital reserve and surplus as on 31.03.2001 stood at 45,88,83,505/- at its disposal. And Ld. AR further submitted that appellant has sufficient fund as well as interest free funds at its disposal to make impugned advances, question of disallowance of interest u/s 36(1)(iii) of the Act does not arise.

5.

In view of the above contention of the Ld. AR we set aside this matter back to the file of the Ld. AO who will examine the claim of the assessee after going through the balance sheet and other documentary evidences in respect of its contention and thereafter decide the matter as per provisions of the law.

6.

In the result, appeal is allowed for statistical purposes in the terms as stated above.

This Order pronounced in Open Court on 22/03/2019

Sd/- Sd/- (PRAMOD KUMAR) (MAHAVIR PRASAD) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad: Dated 22/03/2019 True Copy TANMAY आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue

ITA No.36/Ahd/2015 [M/s Sambhaav Media Ltd. vs. DCIT] A.Y. 2011-12 - 3 - 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।

1.Date of dictation on 14.03.2019 2.Date on which the typed draft is placed before the Dictating Member 18.03.2019 3.Date on which the approved draft comes to the Sr.P.S./P.S. 22.03.2019 4.Date on which the fair order is placed before the Dictating Member for pronouncement 22.03.2019 5.Date on which the fair order comes back to the Sr.P.S./P.S 22.03.2019 6.Date on which the file goes to the Bench Clerk 22.03.2019 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Despatch of the Order………

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