M/S KANDOI POWDERS MFG. CO. PVT. LTD.,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR

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%.

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.

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.

authorities below.

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.

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