P.) Ltd v. Commissioner Of Income Tax"2016 (381) Itr 107

ITA No. 214 of 2019}1] IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH ITA No. 214 of 2019.Date of decision: 15.1.2020 The Pr. Commissioner of Income Tax (Central), Ludhiana.. Appellant Vv M/s Genex Industries Ltd. .. Respondent CORAM:HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEBEESH JHINGHON'BLE MR. JUSTICE AVNEBEESH JHING Present:Mr. Rajesh Katoch, Senior Standing Counsel andMs. Pridhi Jaswinder Sandhu, Junior Standing Counselfor the appellant.Ms. Pridhi Jaswinder Sandhu, Junior Standing Counselfor the appellant. AVNEESH JHINGAN, J. This order shall dispose of ITA Nos. 214, 208 and 217 of 2019,as Similar questions are raised. The revenue has filed the appeals under Section 260A of theIncome Tax Act, 1961 (for short, ‘the Act’). For the sake of convenience,facts from ITA No. 214 of 2019 have been taken. Following substantialquestions of law have been claimed; “(1) Whether in the facts and circumstances of the case, theorder of Hon'ble ITAT is perverse as it has ignored the lackof business purpose and commercial expediency of thetransaction and decided the issue only on account ofavailability of interest free funds with the assesseeCOMpany|order of Hon'ble ITAT is perverse as it has ignored the lackof business purpose and commercial expediency of thetransaction and decided the issue only on account ofavailability of interest free funds with the assesseeCOMpany| (141) Whether in the facts and circumstances of the case and in ITA No. 214 of 2019A law, the Hon'ble ITAT has erred in confirming the decisionof the CIT (A) without examining that the transaction waswithout any business consideration or commercialexpediency and therefore, the interest claimed on borrowedfunds was not allowable u/s 36(1)(ii1) of the Income TaxAct, 1961. (111) Whether the impugned order dated 31.10.2018 passed byITAT is sustainable in the eyes of law or maintainable inthe facts and circumstances of the case.” The facts in brief are that the assessment year involved is 2012-13. The Assessing Officer during assessment proceedings noticed the factthat the assessee had given interest free advances to its group concerns butwas Claiming interest expenses on borrowed capital. The assessment orderdated 31.3.2016 was passed under Section 153A of the Act, disallowinginterest claimed under Section 36(1)(i11) of the Act. The Commissioner ofIncome Tax (Appeal) (hereinafter referred to as ' the Appellate Authority’)partly allowed the appeal vide order dated 22.2.2018, considering the factthat there were sufficient interest free funds available with the assesseefrom which interest free loan and advances were made. It was held that thefinding recorded on transfer of interest bearing funds to the group concernscannot be sustained. Addition made by disallowing the interest claimedunder Section 36(1)(ii1) of the Act was set aside. The revenue filed anappeal before the Tribunal. The appeal was dismissed on 31.10.2018. TheTribunal upheld the finding of the Appellate Authority that there weresufficient interest free funds for advancing loan to the group concerns.Reliance was placed upon a decision of this Court inBright Enterprises ITA No. 214 of 2019}3] (P.) Ltd. v. Commissioner of Income Tax"2016 (381) ITR 107. ITA No. 214 of 2019}3] (P.) Ltd. v. Commissioner of Income Tax"2016 (381) ITR 107. Learned counsel for the revenue is not in a position to disputethat the matter with regard to disallowance of deduction under Section36(1)(ii1) of the Act is covered in favour of the assessee by the decision ofthis Court in|Bright Enterprises (P.) Ltd.6Scase (supra)and of theSupreme Court inS.A. Builders Ltd. v. Commissioner of Income Tax(Appeals) and another"2007 (15) SCC 147,However, it is argued that theTribunal has not decided the issue of commercial expediency tor makingadvances to the group concerns of the assessee. There is no dispute raisedthat advances made to the group concerns were of the assessee. Moreover,the said issue was never pressed before the Tribunal as is evident from theorder. Nothing has been produced to show that the issue was raised andpressed at the time of arguing the appeal. For the reasons mentioned above, no interference is called forin the order of the Tribunal. The appeals are dismissed, (AVNEESH JHINGAN) (AJAY TEWARIT)JUDGE JUDGE JUDGE JUDGE 15.11.2028? Whether speaking/reasoned:Yes/NoWhether reportable:Yes/No