Surya Processed Food Pvt. Ltd., Noida vs Assessee

Surya Processed Food Vs. Income Tax Officer, Pvt. Ltd., D-1, Sector-2, Ward-9(4), Noida New Delhi (PAN:AAKCS7174G) (Appellant) (Respondent)

Appellant by : Sh. K.P. Garg, CA Respondent by: Sh. Vikram Sahay, Sr. DR

Date of hearing: 07.04.2015 Date of pronouncement: 17.04.2015

ORDER

PER INTURI RAMA RAO, AM :

This is an appeal filed by the appellant against the order dated 30.01.2013

passed by learned CIT(A) for the assessment year 2009-10 raising the following

grounds of appeal:

i. That on the facts and in the circumstance of the case the learned Commissioner of Income Tax Apeals-12, New Delhi has erred in confirming the order passed by Assessing Officer, Ward 9(4), New Delhi for making the fake addition of Rs. 302197/- on account of interest income earned by the appellant company on Fixed Deposit made for issue the several letter of credits/bank guaranty.

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ii. That on the facts and in the circumstances of the case the learned Commissioner of Income Tax Appeals-12, New Delhi and learned Assessing Officer, Ward 9(4), New Delhi has never asked for the details of fixed deposit made and the purpose of the same. However, all the necessary details have already been filed.

iii. That on facts and in the circumstance of the case the learned Commissioner of Income Tax Appeals-12, New Delhi and learned Assessing Officer, Ward 9(4), New Delhi has passed this order in hurry and without giving reasonable opportunity to the appellant. And not considered the justification given by the appellant. iv. That the order of the learned Commissioner of Income Tax Appeals-12, New Delhi and Assessing Officer, Ward 9(4), New Delhi, being not sustainable the appeal be allowed.

v. That the appellant reserves the right to add, delete or modify any ground of appeal.

2. The factual matrix of the case leading to the present appeal is as under:

2.1 The appellant is a company incorporated under the provisions of

Companies Act, 1956. It is engaged in the manufacturing and selling of

chocolates and wafers etc. For the assessment year 2009-10, the appellant

company filed return of income on 24th September, 2009 offering nil income

after claiming deduction under the provisions of Section 80IC of the Income-tax

Act, 1956 (for short "the Act"). The Assessing Officer disallowed the claim of

the appellant by holding that the appellant company had not filed any evidence

in support of the contention that the fixed deposits were made only to procure

letters of credit for business purposes. Aggrieved, an appeal was filed by the

appellant before the learned CIT(A), who vide order dated 30.01.2013 dismissed

the same. Hence, the present appeal.

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4. It was argued before us that when the fixed deposits were made for the

purpose of procuring letters of credit the interest income earned on such deposit

is nothing but business income and therefore eligible for deduction under

Section 80IC of the Act. In support of this proposition, reliance was placed on

the decision of Hon'ble Supreme Court in the cases of Liberty India Vs. CIT

(SC)-02/09/2009, and CIT vs. Karnal Co-operative Sugar Mills Ltd. (2000) 243

ITR 2 (SC). Reliance was also placed on the decision of Hon'ble Delhi High

Court in the case of CIT- Delhi (IV) vs. Jaypee DSC Ventures Ltd.

5. On the other hand, the leaned Departmental Representative vehemently

argued that there was no evidence on record to show that the fixed deposits on

which interest was earned were made only for the purpose of procuring letters of

credit for business purpose and therefore, claim cannot be allowed.

6. We have heard the rival submissions of the parties and perused the

material on record as well as the paper book. We find from the paper book that

only an application to the banker for opening of letter of credit was filed. Copies

of balance-sheet, Profit and Loss account and the ledger extract of interest

account were filed. According to us, these materials do not prove conclusively

that the fixed deposits on which interest income earned were made only for the

purpose of opening of letters of credit. The appellant has chosen not to file any

conclusive evidence even before us. Mere reliance on legal proposition without

proving the facts conclusively does not help the case of the appellant. It's 4

nothing but bald claim which cannot be allowed. We, therefore, dismiss the

appeal filed by the appellant.

7. In the result, the appeal of the appellant is dismissed.

The decision is pronounced in the open court on 17th April, 2015.

Sd/- Sd/- (G.C. GUPTA) (INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 17th April, 2015. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi