9911796707
TMI Blog2009 (10) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... crores made by the Assessing Officer in the A.Y. 1996-97 on the ground that assessee has advanced interest bearing funds to sister concerns. Facts of the case are that during the course of assessment proceedings, for the Assessment year 1996-97 & 1997-98 Assessing Officer found that the assessee has advanced ₹ 102.5 crores to sister concerns free of interest. It is noted by him that these sister concerns are subsidiaries of the assessee company and transactions had taken place with them during the financial years 1995-1996. The assessee had taken loan from the financial institutions and advances were given to the sister concerns as under: a. Paid for acquisition of international business |(export business) on going concern basis wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as commercial property. The company to whom such amount was advanced spent major portion of amount advanced for acquisition of assets almost entire portion of which was enjoyed by the company for it business purposes including housing offices/staff, car parking training centers etc. without any cost/ 40.00 e. Amount advanced to a Research Foundation having object to carry out research related to collection of blood, blood transfusion and other related areas. UAs the company was in the business of manufacture of blood collection bags as for development of new products. 2.50 Total Rs.102.50 Cr. 3. It was explained to the Assessing Officer that advances were given for business purposes and assessee is benefited by way of acquisition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the learned AR for the assessee raised preliminary issue that Revenue effect in this case is nil as assessed income and returned income, both are loss and therefore following the decision of Hon'ble Delhi High Court in CIT Vs. Manglam Ricinus Limited (2008) 174 Taxman 186 Delhi appeal is not maintainable. In the alternative, Learned A.R. submitted that issue is covered by the decisions of this Tribunal in the case of ITO Vs. Yashvant S. Tejani ITA 268/A/05 for the assessment year 2001-02 pronounced on 04-09-2009, wherein it is held that if assessee has discharged the primary onus by showing that it has sufficient interest free capital, then it is for the revenue to show that in spite of assessee having interest free capital the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lved is to be seen. This precisely what the Tribunal has done. We do not find any error in the view taken by the Tribunal." This judgment was followed by ITAT, Ahmedabad Bench in DCIT Vs. Sanbhav Media Limited ITA No. 2733/A/2006, assessment year 2003-04 pronounced on 24-04-2009, wherein, it is held that if returned income and assessed income both are negative, then appeal filed by the department in limine is not maintainable. Respectfully following these decisions, we hold that appeal filed by the Revenue in both the years is not maintainable. 8. Notwithstanding, at the instance of the department that the issue is of legal nature should be considered on merit also, we find that the facts of the case are similar to the facts in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008) 298 ITR 298 (SC). Therefore, the decision of Hon'ble Punjab and Haryana High Court in Abhishek industries (supra) is no longer a good law. 10. For the sake of convenience, we reproduce para 13 to 16 from our decision in Yashwant S. Tejani's case as under: "13. He also relied on the following judgments. I. Shree Digvijay Cement Co. Ltd V/s CIT 138 ITR 45 (Guj) II. CIT V/s Gopikrishna Muralidhar, 47 ITR 469 (AP), III. CIT V/s Hotel Savera 239 JTR 795 (Mad) IV. GNFC V/s CIT 73 TTJ 787 (Ahd), V. Sháhibaug Enterprises v/s CIT 49 TTJ 554 (Ahd) and VI. Torrent Financiers V/s CII 73 TTJ 624 (Ahd) VII. CIT V/s Alok Paper Industries 138 JTR 729 VIII. R. V. Joshi V/s CIT- 251 ITR 332 'M.P.) 14. We have he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tejani & Mahesh S. Tejani were old balances and no disallowance in the past has been made. Secondly, Shri. Manish Tejani is an employee and interest free advances are given to him for commercial expediency. Thirdly, loan taken from bank are apparently used for purchasing plant and machinery as explained by Ld. A.R. Notwithstanding assessee has interest free funds and Assessing Officer is expected to show that explanation furnished by the assessee that it is only out of interest free funds from which interest free advances are given is not correct by pointing out that when money was given to the friendly persons, the assessee had built up cash balances by borrowing interest bearing loans from the Bank or from other persons and had he not bo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
