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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 417/JP/2018
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh Hkkxpan] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 417/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2014-15 cuke M/s Kandoi Powders Mfg. Co. D.C.I.T., Vs. Pvt. Ltd., Central Circle-3, F-381-382, Road No. 9F, VKI Jaipur. Area, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCK 0316 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar (Adv) jktLo dh vksj ls@ Revenue by : Smt. Seema Meena (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 04/06/2018 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 08/06/2018 vkns'k@ ORDER
PER: BHAGCHAND, A.M. The appeal filed by the assessee emanates from the order of the ld. CIT(A)-IV, Jaipur dated 01/03/2018 for the A.Y. 2014-15. The only issue involved in the appeal is against sustaining the addition of Rs. 15,96,592/- made on account of restricting the rate of interest to 13.5% whereas the assessee has paid interest @ 18%.
The assessee company is engaged in the business of manufacturing and trading of metal powders and copper wire roads. Return of income
ITA 417/JP/2018_ 2 M/s Kandoi Powders Mfg. Co. P. Ltd. Vs DCIT
was filed on 5/11/2014 declaring NIL income. The assessment was
finalized U/s 143(3) of the Income Tax Act, 1961 (in short the Act) at NIL
income on 20/12/2016. The Assessing Officer found that the assessee has
paid interest @ 18% to the persons as specified in Section 40A(2)(b) of
the Act.
While pleading on behalf of the assessee, the ld AR has submitted
that during the year, the assessee has paid interest of Rs. 63,86,369/- @
18% to the persons covered U/s 40A(2)(b) of the Act. the Assessing
Officer restricted the payment @ 13.5% per annum by holding that the
payment of interest is unreasonable, abnormal and excessive. The
Assessing Officer also observed that average rate of payment of interest to
other persons who are not related to the assessee comes to 13.5% and he
held that the disallowance to this interest paid was not for legitimate need
of the business of the assessee. The ld AR has submitted that the
comparison of payment of interest between bank, others and to relatives is
unreasonable without considering the quantum of loans taken and the
period for which such loans have been taken. Further the ld AR submitted
that this addition has been made without considering the past history of
the assessee wherein similar interest was paid at the rate of same rate of
interest to these persons in the past years and no disallowance was made.
He also emphasized that the assessee of earlier years was made U/s
ITA 417/JP/2018_ 3 M/s Kandoi Powders Mfg. Co. P. Ltd. Vs DCIT
143(3) of the Act. Ld. AR vehemently submitted that rule of consistency
should have been followed and no addition or disallowance should have
been made.
On the other hand, the ld DR has relied on the orders of the
authorities below.
We have heard the rival contentions of both the parties and perused
the material available on the record. We find that the assessment for the
A.Y. 2011-12 to 2013-14 was made under scrutiny assessment U/s 143(3)
of the Act. The assessee has made payment of interest in those years to
these persons also @ 18%. There is no new facts or circumstances have
been brought on record to justify the disallowances. The rule of
consistency is a settled proposition of law and wherever there is same set
of facts and circumstances exist then the settled portion should not be
disturbed. The Hon'ble Supreme Court in the case of Durga Prasad More
Vs CIT 82 ITR 540 (SC) held that the decision reached in one year would
be a cogent factor in the determination of a similar point in the following
year. The Hon’ble Kerala High Court in the case of CIT Vs. Krishan Varier
308 ITR 823 (Ker) has also held that a finding in a subsequent year
ignoring without material the conclusion arrived at earlier would be vitiated
in law. Similarly the Hon’ble Rajasthan High Court in the case of Sardar
ITA 417/JP/2018_ 4 M/s Kandoi Powders Mfg. Co. P. Ltd. Vs DCIT
Kehar Singh Vs CIT 195 ITR 769 (Raj) has also viewed that where no fresh
facts were available before the authority giving the later decision, the
authority was not entitled to unsettle the earlier finding. The Hon’ble
Rajasthan High Court in the case of CIT Vs Kusum Bader 185 ITR 70 (Raj)
has also held that where the authority giving the earlier decision had taken
into consideration all the facts, the later authority was not entitled to
unsettle the earlier finding. In this case, the nature of business of the
assessee remained the same, the nature of books of account remains the
same, the payment of interest also remains the same and in such a
situation, there was no justification for disallowance part of interest
treating the same as excess and unreasonable. After considering the
above facts and circumstances, we direct the Assessing Officer to allow
whole of interest paid.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 08/06/2018.
Sd/- Sd/- ¼fot; iky jko½ ¼Hkkxpan½ (VIJAY PAL RAO) (BHAGCHAND) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 08th June, 2018
*Ranjan
ITA 417/JP/2018_ 5 M/s Kandoi Powders Mfg. Co. P. Ltd. Vs DCIT आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- M/s Kandoi Powders Mfg. Co. Pvt. Ltd., 1. Jaipur. izR;FkhZ@ The Respondent- The D.C.I.T., Central Circle-3, Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 417/JP/2018) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत