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Income Tax Appellate Tribunal, “A”
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
Per S.S.Godara, JM:
This assessee’s appeal for Assessment Year 2015-16 is directed against the Commissioner of Income Tax(Appeals), Pune- 3’s order dated 15.01.2019 passed in case no.PN/CIT (A)- 3/cir.3,Pn/347/2017-18, in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short “the Act”].
Heard both the parties. Case file perused.
The assessee’s first and foremost substantive ground challenges correctness of both the lower authorities action disallowing / adding suppressed sales of Rs.216125/- in the course of assessment as upheld in the CIT(A)’s order. A perusal of the A.Y. 2015-16 Manish M. Sabade (A)
Assessing Officer’s detailed discussion in para 4 page 2 of his assessment order dated 22.12.2017 indicates that he had duly put the assessee on notice on 18.12.2017 for filing the necessary re- conciliation which was never done till the last date. The very factual position continued in the CIT(A)’s order as well. Faced with this situation, we find no merit in the assessee’s instant former substantive grievance. Rejected accordingly.
Next comes section 36(1)(iii) interest disallowance of Rs.17574922/- made in both the lower authorities after holding the assessee to have diverted his interest bearing funds for non-business purposes. There is hardly any dispute between the parties that the assessee’s capital account in the relevant previous year was admittedly in negative figures indicating utilisation of interest bearing funds only.
Learned counsel reiterated the assessee’s stand adopted throughout that his diversion of interest bearing funds was for business purposes involving commercial expediency. He also quotes hon’ble apex court’s landmark decision in S A Builders 288 ITR 1 (SC) that such a diversion of interest bearing funds involving commercial expediency indeed deserves business deduction under the provisions of the Act. All these arguments fail to evoke our concurrence as it has come on record from a perusal of assessment A.Y. 2015-16 Manish M. Sabade (A) discussion in para 5.2 page 4 that the assessee had not been able to prove the foregoing commercial expediency regarding diversion of interest bearing funds amounting to Rs.26,41,80,892/- involving ten related parties. We thus conclude that both the learned lower authorities have rightly disallowed the impugned interest amounting to Rs.175,74,922/- in these peculiar facts and circumstances. The same stands upheld.
No other ground or argument has been pressed before us.
This assessee’s appeal is dismissed.