M/s. Kshipra Gears,, Indore v. The Addl. CIT, Indore

ITA 467/IND/2009 | 2001-2002
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 46722714 RSA 2009
Assessee PAN AABFK2098K
Bench Indore
Appeal Number ITA 467/IND/2009
Duration Of Justice 7 month(s) 30 day(s)
Appellant M/s. Kshipra Gears,, Indore
Respondent The Addl. CIT, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 31-05-2010
Assessment Year 2001-2002
Appeal Filed On 01-10-2009
Judgment Text
PAGE 1 OF 3 -. I.T.A.NO. 467/IND/2009 KSHIPRA GEARS INDORE. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AABFK2098K I.T.A.NO. 467/IND/2009 A.Y. : 2001-02 M/S.KSHIPRA GEARS ACIT 3/1 RACE COURSE ROAD VS CIRCLE 5 INDORE. INDORE APPELLANT RESPONDENT APPELLANT BY : SHRI P.D.NAGAR C. A. RESPONDENT BY : SMT. APARNA KARAN SR. DR DATE OF HEARING : 31.05.2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-II INDORE DATED 22.06.2009 FOR THE ASSESS MENT YEAR 2001-02. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL THE ISSUE INVOLVED IS REGARDING NET TING OF INTEREST WHILE COMPUTING DEDUCTION U/S 80HHC. THE LEARNED CO UNSEL SUBMITTED THAT THE ASSESSEE HAD PURCHASED FDRS OUT OF BORROWE D FOUNDS AND SUCH FDRS WERE PROVIDED AS MARGIN MONEY FOR THE ASSESSEE S EXPORT BUSINESS. PAGE 2 OF 3 -. I.T.A.NO. 467/IND/2009 KSHIPRA GEARS INDORE. HENCE ONLY NET INTEREST INCOME SHOULD HAVE BEEN EX CLUDED. IN THIS REGARD HE REFERRED TO THE COPY OF CASH CREDIT ACCO UNT WITH THE BANK CONTAINING THE DETAILS OF FDRS PURCHASED DURING THE YEAR AND THE CORRESPONDING DEBIT/CREDIT BALANCE ON THAT DATE. ON A QUERY FROM THE BENCH THE LEARNED COUNSEL SUBMITTED THAT THE LD. C IT(A) DID NOT ACCEPT THIS PLEA OF THE ASSESSEE FOR THE REASON THAT THE L D. CIT(A) FOLLOWED THE CERTAIN DECISIONS OF THE INDORE BENCH OF THE TRIBUN AL WHEREIN FDRS WERE EITHER PURCHASED OUT OF SURPLUS FUNDS OR THERE WAS NO NEXUS OF SUCH FDRS WITH THE EXPORT BUSINESS OF THE ASSESSEE. HENCE SU CH DECISIONS WERE NOT RELEVANT HERE IN THE FACTS OF THE CASE. ON PERUSAL OF THE BANK STATEMENT WE FIND THAT IN SOME OF THE CASES THE FDRS HAVE BE EN PURCHASED OUT OF BORROWED FUNDS AND IN SOME CASES THERE IS A CREDIT BALANCE IN THE CASH CREDIT ACCOUNT ON THE DATE OF PURCHASE OF FDRS. HEN CE IN OUR OPINION THE ISSUE SHOULD GO BACK TO THE FILE OF THE AO TO A NALYZE THE CASH CREDIT ACCOUNT AND TO DO THE NETTING OF INTEREST INCOME IN CASE OF FDRS PURCHASED OUT OF BORROWED FUNDS I.E. ON THE DATE OF PURCHASE OF SUCH FDRS THEREIN BEING A DEBIT BALANCE IN THE CASH CRED IT ACCOUNT ON CLOSING BASIS AND INTEREST PAID ON THE AMOUNT OF SUCH FDRS ONLY BE SET OFF AGAINST THE INTEREST EARNED ON SUCH FDRS. IT IS NEEDLESS TO MENTION THAT THE AO SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. PAGE 3 OF 3 -. I.T.A.NO. 467/IND/2009 KSHIPRA GEARS INDORE. 4. THUS THIS APPEAL OF THE ASSESSEE STANDS ALLOWED FO R STATISTICAL PURPOSES IN TERMS INDICATED ABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST MAY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST MAY 2010. CPU* 315