Itxa/650/2008 Of The Commissioner Of Income-Tax,14,,Mum v. M/S Gini Silk Mills

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.650 OF 2008 The Commissioner of Income Tax-14V/s.M/s.Gini Silk Mills ..... Appellant.....Respondent Mr.P.K.Kamwal, A.G.P., for the appellant. CORAM : SHRI P.B.MAJMUDAR & SHRI J.P.DEVADHAR, JJ. DATED : 17[th] NOVEMBER, 2008. P.C. 1.Heard the learned A.G.P. for the appellant.2.This appeal is directed against the order of the Income TaxAppellate Tribunal in ITA No.2624/M/04, which is in connection with theAssessment Year 1999-2000. Considering the question of assessment,the finding of fact recorded by CIT(A) has been approved by the IncomeTax Appellate Tribunal. The Tribunal while examining the issue has foundthat the books of accounts of the assessee were audited under Section44AB and that CIT(A) has rightly found that no mistake was pointed out bythe Assessing Officer, nor the books of accounts were rejected. TheAssessing Officer has also not made any comparative study between thebusiness of the assessee and other assessees of similar business. Onexamining the issue, the Tribunal has held in Para No.4, 5 & 6 as under : “4.Having heard both the parties and having considered their rival contentions, we find that the books of account of the assessee were audited u/s.44AB and as rightly pointed by the CIT(A), the Assesing Officer has neither pointed out any mistake therein, nor rejected those books of account. The Assessing Officer has also not made comparative study between the business of the assessee and other assessees of similarand has adopted the G.P. Of the earlier years. Heverify if the contention of the assessee that it haddamaged and outdated cloth which has resulted inwas correct or not ? In view of the same, we doreason to interfere with the order of the CIT(A)of appeal of the Revenue is therefore, business did not even only sold the the gross loss not see any and this ground rejected. 5.As regards Ground No.2, the brief facts are that theAssessing Officer noticed that the assessee has secured andunsecured loans of Rs.5.3 crores and 4.12 crores respectively andhas also received loans of more than 10 crores from M/s.Blow PlastIndustries Ltd. and M/s.V.I.P. Industries Ltd. He further observedthat the assessee has also given an advances of more than 4.5crores to the partners and their relatives. Thus, he held that theseheavy loan transactions are not justified and are disproportionateto the activity of the assessee and disallowed the interestpaid by the assessee of Rs.22,53,072 on the loans borrowedfrom outsiders. Aggrieved by the same, the assessee filed anappeal before the CIT(A), who deleted the disallowance holdingthat the assessee has not given any interest free loans oradvances to the partners or to any other parties and theinterest paid was on borrowed loans, which were however,for business purpose of the assessee firm. Aggrieved the Revenuein appeal before us. partners whether the for thereon 6.Having gone through the material on records, we find that the CIT(A) has perused the account copies of M/s.Blow Plat Industries Ltd. and M/s.V.I.P. Industries Ltd., and also the copies of partners account before coming to the conclusion that the assessee has not advanced any interest free loans to theor other parties. It is not for the Assessing Officer to saythe borrowing of funds was justified or is disproportionate toactivity of the assessee. As long as the funds have been usedthe business purposes of the assessee, the interest paidcannot be disallowed. In view of the same, we do not see any ground reason to interfere with the order of the CIT(A) and thisof appeal of the revenue is rejected. partners whether the for thereon 6.Having gone through the material on records, we find that the CIT(A) has perused the account copies of M/s.Blow Plat Industries Ltd. and M/s.V.I.P. Industries Ltd., and also the copies of partners account before coming to the conclusion that the assessee has not advanced any interest free loans to theor other parties. It is not for the Assessing Officer to saythe borrowing of funds was justified or is disproportionate toactivity of the assessee. As long as the funds have been usedthe business purposes of the assessee, the interest paidcannot be disallowed. In view of the same, we do not see any ground reason to interfere with the order of the CIT(A) and thisof appeal of the revenue is rejected. 3.In our view, the finding of fact recorded by CIT(A) and which isconfirmed in appeal by the Tribunal cannot be re-appreciated by this Court,as this appeal is maintainable only on substantial question of law. In ourview, it cannot be said that the Tribunal has committed any error of lawmuch less any substantial question of law, which requires interference bythis Court in this appeal. We accordingly do not find any substance in theappeal. The appeal is therefore, dismissed. ( J.P.DEVADHAR, J. ) ( P.B.MAJMUDAR, J. )