TMI Blog2006 (1) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was diversion of fund. The assessee claimed that it had free reserves to the tune of Rs. 1,58,23,406. The assessee also provided statement of funds that were generated over the years which showed funds that were received back from companies to which it had advanced earlier and the extent of surplus funds still available for advance to the sister concern. For the assessment year 1993-94 the amount that were generated was to the tune of Rs. 22.22 lakhs and the surplus funds are Rs. 13.22 lakhs. In another statement also the same figures are shown. This statement shows that the assessee's own funds was more than what it had advanced to the sister concern. Therefore, the question of assessee utilising the borrowed funds for advancing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirming the disallowance of Rs. 4,20,000 being interest at the rate of 15 percent per annum on the amounts given to PMP Steel Rolling Mills (Mds.) Ltd. and PMP Steels Ltd. Here also the assessee's contention was that these amounts were given for the purchase of shares from out of own funds generated during that assessment year from the income earned and by way of depreciation availed during that period. While hearing the case the assessee has also filed paperbook along with the 10th, 11th, 12th, 13th, 14th and 15th Annual Reports of the assessee-company to show cash reserves. However, the assessee could not establish that these documents were already available before the revenue authorities for the purpose of deciding the issue. It is a se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of orders. However, orders were not passed till Shri A. Kalyanasundharam was transferred and relinquished his office as Sr. Vice President, Chennai Benches, Chennai. He appears to have sent proposed orders subsequently to the learned Judicial Member for his signatures, who did not agree and has passed dissenting orders. Shri A. Kalyanasundharam is not available for stating the point or points of difference and accordingly learned Vice President, Chennai Zone has sent these files to me. In terms of section 255(4), I frame the points of difference in the five appeals as below and appoint the Zonal Vice President as Third Member, for dealing with cases in accordance with law: 1. I.T-A.Nos. 955 and 1851/Mds./1995 Asstt. Years: 1994-95 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asstt. Commissioner of Income-tax. "Whether, on facts and in the circumstances of the case, order of C.I.T. under section 263 is required to be set aside, as held by learned Sr. Vice-President or upheld as held by the learned Judicial Member?" The above points of differences in 5 cases are referred to the Hon'ble Vice-President, Chennai as a Third Member, for separate decision in each case, for disposal in accordance with law. THIRD MEMBER ORDER Per M.K. Chaturvedi, Vice-President. - These appeals came before me as a Third Member to express my opinion on the following question: "Whether, on the facts and in the circumstances of the case, the order of the Sr. Vice-President is to be upheld or that of the Judicial Member, in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns to purchase shares. Such advance was made out of the free reserves. It was submitted free reserves to the tune of Rs. 1,58,23,406 were available with the assessee. 5. The learned counsel for the assessee invited my attention on the provision of section 139(9) of the Income-tax Act, 1961. It was stated that the assessee did furnish Trading and Profit Loss Account for all the years and Balance-Sheet. No defect memo under section 139(9) was issued. This proves beyond the shadow of doubt that the assessee discharged its onus in respect of the availability of funds. It was further submitted that the powers of the Tribunal in the matter of setting aside an assessment are large and wide, but these cannot be exercised to allow the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the ld. Judicial Member. It was submitted that the assessee failed to adduce evidence before the revenue authorities in regard to its claim. As it was not clear that whether advance was made out of the borrowed funds or out of own funds, the ld. Judicial Member rightly restored the matter to the file of the Assessing Officer for fresh adjudication. 9. Having heard rival submissions and after perusing the details available on record, I find that the ld. Judicial Member restored the matter to the file of the Assessing Officer as because in his opinion assessee failed to discharge the burden as to the fact that no borrowed funds were diverted to the sister concerns free of interest. It is the burden of the assessee to prove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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