TMI Blog2009 (5) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... 59,637/- have been arrived at by ignoring the relevant materials and/or by taking into consideration irrelevant and/or extraneous materials and/or are otherwise arbitrary, unreasonable and perverse ? The facts of the case briefly are as follows ;- During the relevant previous year for the assessment year 1994-95 the appellant had borrowed funds on which it had paid interest. The deduction for such interest was allowed by the Assessing Officer (hereinafter referred to as AO) in the assessment made under Section 143(3) of the Income Tax Act, 1961 (the Act). Thereafter the Commissioner initiated proceedings under Section 263 of the Act on the ground that the AO had not investigated whether borrowed funds were given by way of interest free loans to the subsidiaries of the appellant. The initiation of the proceedings under Section 263 of the Act were challenged by the appellant by way of writ proceedings before this Hon ble Court in which it was not successful. Thereafter by an order dated March 16, 1999 the Commissioner set aside the assessment made by the AO with a direction to frame it afresh. Agaisnt the said order of the Commissioner the petitioner had taken an appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts relating to the amounts outstanding against the said concerns are summarised in annexure A which were duly submitted before the assessing authorities and the Tribunal supported by necessary evidence but the same were not at all considered by the Tribunal. The various facts as mentioned in Annexure B hereto as would appear from the Miscellaneous Application filed before the Tribunal, were urged before it and the various documents filed in the paper book were relied upon in support thereof at the time of the hearing. The Tribunal, however, failed to consider and/or deal with any of such facts and/or evidence and contentions of the Appellant. The facts stated in the said Miscellaneous Application were not controverted either by the department or the Tribunal which rejected the said Miscellaneous Application only on the ground that it would amount to a review of its order. The various facts and documents in support thereof and contentions raised which the Tribunal failed to consider and deal with are summarized herein below :- a) No part of the borrowed funds was utilized for any such interest free advances to the subsidiaries and others. b) The amounts were adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper book). On the basis of such requisition the appellants duly by its letter dated October 20,1993 furnished the full particulars in respect of the loans and advances. The appellant also by a letter dated February 21, 1994 (150 of paper book) gave full details relating to the advance made by it to its three subsidiaries. The further documents which are annexed to the paper book, have also been placed before us by Mr. Bajoria. He pointed out that in the order of assessment (page 169 of paper book) the order of amalgamation was discussed by the assessing officer and it was recorded that income was being computed on the basis of details and documents and explanation submitted by the appellant. In the said order of assessment no disallowance was made on any interest borrowed funds with reference to the said outstanding against the said various concerns. The following facts were placed before us by Mr. Bajoria;- In the previous year relevant to the assessment year 1992-93, an advance of ₹ 37.56 crores was made by the appellant to its subsidiary Poly Investments Co. Ltd. In the course of the assessment proceedings the appellant duly pointed out that such advance was made fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income tax return and in the computation of total income filed for the said assessment year 1994-95 the profits derived from sale of the said shares were duly disclosed. (Pages 138/140 of PB). The bill for sale of the said shares at page 123 of PB. The sale of the said shares was also reflected in the Balance Sheet of the appellant (Pages 124 to 125 of PB.) In the assessment for the assessment year 1994- 95 the transaction of sale of the said shares has been duly accepted by the AO. It would be seen that the amount advanced to Gupta Syal Limited during the year was only ₹ 15,000/- and the rest was the opening balance. The amount advanced to Kishan Chand spinning Mills Limited during the year was about ₹ 85,981/- on the various days and the rest ₹ 25.62 lakhs was the opening balance of the earlier years. From the accounts of Kedarnath Kishan Chand Finance Investments Limited it would be seen that no advance was made during the year and the entire amount related to the earlier year s balance. In the case of Poly Investments Limited it would be seen that the total advance to the said subsidiary during the year was reduced. The opening balance of the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Spinning Mills Ltd. the increase was of ₹ 85,981/- only and in the case of Kidernath Kishan Chand there was no increase. Mr. Bajoria pointed out further that Miscellaneous Application was also filed before the Tribunal but the Tribunal did not advert to any of the argument and the document placed before us and did not deal with the submissions made by the assessee. In these circumstances he submitted that the Tribunal has erred in passing that order. In these circumstances, he submitted that the matter should be remanded back and to be decided by the Tribunal afresh. Learned Counsel appearing on behalf of the department also submitted that the matter may be remanded back before the Tribunal so that the Tribunal can hear out the matter afresh after considering all the materials which have been placed in this paper book and in particular with regard to the points on questions of law which have been raised before us. Accordingly, we set aside the order of the Tribunal and direct that the matter should be heard out by the Tribunal on the above those two points afresh. For the reasons stated hereinabove the appeal is disposed of. All parties concerned are to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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