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TMI Blog2009 (11) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... ant had made interest-free advances to sister concern M/s. Kesho Ram Industries. 1.2 That the impugned order was erroneous inasmuch as the ld. CIT(A) did not apply his mind to the vital aspects of the case not placed or argued before/addressed by the Hon'ble ITAT in the appellate order for assessment year 2001-02, ignoring the case law cited before him without distinguishing the same and in merely mechanically following the order of his predecessor. 1.3 That the ld. CIT(A) in all fairness should have given his reasoning and finding on the various points and issues raised before him and showing how the case law cited before him was not applicable. 2. That on the facts and in the circumstances of the case, the ld. CIT(A) has erred in law in arbitrarily sustaining disallowance of Rs. 30,35,472 at the rate of 15 per cent of polishing charges paid to petty artisans/labour. 4. First, we shall deal with the grounds of appeal taken by the assessee. In the first ground of appeal, the issue involved is regarding the disallowance of interest paid to the bank. Briefly stated, the facts relating to the issue involved in gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf is not for the purpose of the business. An assessee with liquidity cannot claim that it can give interest-free advances and then borrow funds from the bank on interest for business purposes. Such borrowing will not be for business purposes but for supplementing the cash diverted by the assessee without any benefit to it. Thereafter, the Assessing Officer observed that it cannot be held that the money borrowed by the assessee and later on advanced by its sister concern and others free of interest was not utilized for the purposes of its own business and the assessee has not derived any benefit of the same. Further, in assessment years 2000-01 and 2002-03, such disallowances on this account were made and were also upheld by the CIT(A), New Delhi. Thereafter, the Assessing Officer worked out the disallowance at Rs. 2,69,637 as per the statement enclosed by the assessee which was supported by the bank certificate and accordingly made an addition of Rs. 2,69,637. 5. On appeal, the ld. CIT(A), while passing a detailed order, dismissed the appeal of the assessee by making following relevant observations :- "3.5 .....I have also gone through the findings of the Assessing Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to follow the order (supra) of the co-ordinate Bench of ITAT deciding the issue against the issue and confirming the disallowance made/upheld by tax authorities below. 6.2 In a recent decision, Hon'ble jurisdictional High Court of Delhi in the case of DLF Universal Ltd. v. CIT [2008] 306 ITR 2711, held that : "It is now well-settled that when one Bench of the Tribunal takes a view, then another Bench of the Tribunal cannot pass a contrary order but must, if it disagrees with that view, have the conflict resolved by referring the matter to a larger Bench. This is not only a matter of judicial propriety but also of judicial discipline." As both the members constituting this Bench do not have a view different on the issue required to be resolved in the year under consideration, which has already been decided by a co-ordinate Bench in the case of this very assessee, the question of not following the view taken in the case (supra) does not arise in view of the ratio of the decision (supra) of the Hon'ble jurisdictional High Court of Delhi. Hence, respectfully following the decision (supra) of the co-ordinate Bench in the case of this very assessee for assessment year 2001-02, the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer noticed that the assessee has claimed Rs. 3,02,74,918 towards polishing charges paid to various parties under the head 'job work expenses'. The Assessing Officer asked the assessee to give details of above persons/parties with addresses and confirmations thereof and also to produce them before him. In its reply, the assessee submitted that the polishing workers are petty artisans moving from place to place and have mostly no permanent residential addresses. Such workers who number about 300 or so work in sub-groups with one of them being head of his sub-group with whom the assessee deals. The assessee has no interaction with individual artisan who change places and residences frequently and mostly live in jhuggies and slum areas. Addresses of some polishers have already been given. They have also started making efforts to collect the particulars of the addresses of these artisans. There has been a lot of scarcity of polishing artisans on account of competition with the resultant increase in their wages and the reasonableness of the rates can be verified from other relevant manufactures in the line. It was also submitted that confirmations of the polishers who are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, in the case of another manufacturer S.S. Utensils, namely, Shri Manish Bansal, Prop. M/s. Sunder Steels, the same CIT(A) also reduced the disallowance to 15 per cent and against those orders also the appeals are pending. On considering the submissions, the ld. CIT(A) restricted the disallowance to 15 per cent of the claim of the expenses of Rs. 2,02,36,484 which came to Rs. 30,35,472 by following those orders and allowed a relief of Rs. 70,82,770. 9. We have given our careful thought to the rival submissions of both the parties, perused the material available on record and gone through the orders of tax authorities below. In the instant case, the assessee has claimed to have paid polishing charges of Rs. 3,02,74,918 to about 300 workers. Onus is on the assessee to prove (i) that these workers have actually carried out the polishing work for the assessee for which polishing charges were paid by the assessee (ii) identity of these workers (iii) their confirmations having received the payments (iv) documentary evidence in support of the payments - like bills and vouchers issued by the polishers, the quantity manufactured and polishing charges paid thereon, quantitative de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther assessee named Shri Manish Bansal, decided by the Tribunal on 24-8-2007 in ITA No. 795/Delhi/2006 and ITA No. 590/Delhi/06, assessment year 2002-03, wherein according to AR, similar disallowance made by the Assessing Officer deleted by the CIT(A) was upheld by the Tribunal. This case (supra) relied upon by the AR cannot be taken as precedence for deciding the issue under consideration before us as it is clearly distinguishable on facts because in that case (supra) before the Tribunal, the assessee during the course of assessment proceedings furnished the details of polishing expenses along with bills and vouchers issued by the polishers; furnished complete quantitative details of monthwise quantity manufactured beside other evidences whereas in the case under consideration before us, no such evidence was filed by the assessee before the Assessing Officer. Hence, because of these distinguishing features, we are unable to follow this order (supra) of the Tribunal for deciding the issue under consideration before us. 9.6 At a very late stage, the assessee during the course of the hearing, has filed the comparative chart of polishing charges paid from assessment years 1999-2000 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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