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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed these appeals against the orders of Commissioner of Income Tax (Appeals)-1, Coimbatore in & 213/2016-17 dated 22.01.2018 for assessment years 2013-14 & 2014- 15, respectively.
:-2-: & 1163/Chny/2018
M/s. Rajasayee Fine Linen Pvt. Ltd, the assessee, is engaged in the business of textiles, handlooms & power looms. While making the assessments for assessment years 2013-14 & 2014-15, the Assessing Officer, inter alia, disallowed the interest advanced out of its interest bearing loans to M/s. Coimbatore Popular Spinning Mills Ltd. Aggrieved, the assessee filed appeals before the Ld. CIT(A). The Ld. CIT(A) allowed the appeals.
Aggrieved against those orders of the Ld. CIT(A), the Revenue filed these appeals. The Ld. DR inviting out attention to the order of this tribunal decision in the assessee’s own case for assessment year 2012-13 in dated 15.02.2018 submitted that the issue involved in these appeals were subject matter there ad it was remitted back to the AO for a fresh examination. Further, he invited out attention to the assessment order and submitted that the company had stopped its operation in October, 2012. Though, the Ld. CIT(A) dismissed the assessee’s appeal for assessment year 2012-13, in spite of the same facts and circumstances, he allowed the appeals for assessment years 2013-14 & 2014-15. The Ld. DR also pleaded that since the assessee is not engaged in the business from assessment year 2013-14 onwards, the Ld. CIT(A) erred in his decision and hence the orders of the Ld. CIT(A) may be set aside and the issues be remitted
:-3-: & 1163/Chny/2018 back to the AO as decided in the assessee’s own case for assessment year 2012-13. None was present for assessee.
We heard the Ld. DR and gone through the relevant material.
We find merit in the submission of the Ld. DR, supra. The relevant portion of the order of this tribunal’s decision in supra, is extracted as under:
“5. We heard the rival submissions and gone through relevant material. From the agreement copies, it is seen M/s. Coimbatore popular Spinning Mills Limited (The Mills') is represented by its MD, Shri G. Venkataramachandran and the assessee company M/s. Rajasaayee Fine Linen Pvt. Ltd ('The Job Party') is represented by its Director Smt. Lakshmi Ramachandran, W/o. Sri G. Venkataramachandran. From the other materials in the paper book, it is seen that Shri G. Venkataramachandran is holding 20.01% shares in the assessee company and 11.35% shares in M/s. Coimbatore popular Spinning Mills Limited. Smt. Lakshmi Ramachandran is holding 20.01% shares and M/s. Rajasayee Fine Linen Pvt. Ltd is holding 6.16% sharesin M/s. Coimbatore popular Spinning Mills Limited, respectively . It appears other family members also hold substantial interest. It is also seen from the P& L account of the assessee company that its revenue from the operations fell from Rs. 25,51,83,661/- from the earlier year to Rs 4,89,59,447/- in the current year and its finance cost rose from Rs. 43,11,280/- in the earlier to Rs 2,84,13,585/- in the current year. It is also seen from the P& L account of the M/s. Coimbatore popular Spinning Mills Limited that its revenue from the operations fell from Rs. 66,248,485/- from the earlier year to Rs 67,88,983/- in the current year and its finance cost fell from Rs.1,1,54,791/- in the earlier to Rs 22,31,046/-in the current year. Although, there is no agreement for payment of any advance as held by the CIT (A), from the orders of the lower authorities, it appears that the relevant facts and circumstances required for deciding the commercial expediency or otherwise , diversion of interest bearing funds or otherwise have not been properly examined. ---------------------------------------------------------------------- ------------------------------------------------------------------
:-4-: & 1163/Chny/2018 In the facts and circumstances, we deem it fit to remit these issues back to the AO for a fresh examination. The assessee shall place all the materials in its support before the AO and comply to the AO’s requirements as per law. The A O is free to conduct appropriate enquiry as deemed fit, but he shall furnish adequate opportunity to the assessee on the material etc to be used against it and decide the matter in accordance with law .
In the result, the assessee’s appeal is treated as allowed for statistical purposes.”
On the facts and circumstances, supra, and in accordance with the above decision, we set aside the orders of the Ld. CIT(A) and remit these issues back to the AO for a fresh examination on the lines in which this tribunal has decided the assessee’s case for assessment year 2012-13, supra. The Revenue’s appeals are treated as allowed for statistical purposes.
In the result, the Revenue’s appeals are treated as allowed as statistical purposes.
Order pronounced on Tuesday, the 20th day of November, 2018 at Chennai.