Disallowance of interest of CC account, for capital advances for purchase of assets

Last updated: 07 August 2021

Court :
INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH

Brief :
This is an appeal by the assessee against the order dt. 01/06/2019 of the Ld. CIT(A)-3, Ludhiana.

Citation :
ITA NO. 1158/Chd/2019

IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH
(VIRTUAL COURT)

BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM

ITA NO. 1158/Chd/2019

Assessment Year : 2012-13

Monte Carlo Fashions Ltd.
106, G.T. Road, Sherpur, Ludhiana, Punjab

PAN NO: AAFCM7888Q

Appellant

The ACIT
C-7, Ludhiana, Punjab

Respondent

Assessee by : Shri Navdeep Sharma, Advocate

Revenue by : Shri Ashok Khanna, Addl. CIT

Date of Hearing : 26/07/2021

Date of Pronouncement : 26/07/2021

Order

1. This is an appeal by the assessee against the order dt. 01/06/2019 of the
Ld. CIT(A)-3, Ludhiana.

2. Facts of the case in brief are that this case was earlier decided by the ITAT‘B’ Bench, Chandigarh vide order dt. 12/10/2017 in ITA No. 1341/Chd/2016 and the issue under consideration was set aside to the file of the A.O. to be decided after verification from the record as to whether the assessee was having surplus funds and whether any borrowed funds have been utilized more than available own funds and that if sufficient funds were available no disallowance was called for under section 36(1)(iii) of the Income Tax Act, 1961 (for short the ‘Act’).
However, the A.O. again made the disallowance of Rs. 16,79,012/-.

3.The Ld. Counsel for the assessee furnished a chart to substantiate that the assessee was having surplus funds therefore the disallowance made by the A.O. and sustained by the Ld. CIT(A) was not called for. The said chart furnished by the Ld. Counsel for the assessee.

4. In his rival submissions the Ld. Sr. DR strongly supported the orders of the authorities below and further submitted that the disallowance sustained by the Ld. CIT(A) was justified.

5. In the result, appeal of the assessee is allowed for statistical purposes.