O/TAXAP/775/2017 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 775 of 2017 WITH TAX APPEAL NO. 776 of 2017 PRINCIAPL COMMISSIONER OF INCOME TAX-5 Appellant(s) Versus SJ AND SP FAMILY TRUST Opponent(s) Appearance: MRS MAUNA M BHATT, ADVOCATE for Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE BIREN VAISHNAV Date : 03/10/2017 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Both appeals arise out of common judgement of Tribunal. Revenue is in appeal against judgement of Income Tax Appellate Tribunal dated 22.11.2016 raising following questions for our consideration: (A) Whether Appellate Tribunal is correct in holding that assessment u/s. 143(3) r.w.s. 254 should be completed within 9 months from end of financial year of Tribunal's Remand Order i.e. upto 31/12/2010 disregarding specific provision u/s. 153(3) of Act? Page 1 of 3 HC-NIC Page 1 of 3 Created On Wed Oct 11 10:18:38 IST 2017 O/TAXAP/775/2017 ORDER (B) Whether Appellate Tribunal has erred in not giving preponderance of vital facts that even bank interest is 14% whereas assessee claimed interest @22%, therefore, order of Appellate Tribunal is perverse? 2. We may notice facts from Tax Appeal No. 775 of 2017. first question relates to period of limitation available with Assessing Officer for completing assessment in terms of order passed by Tribunal. Tribunal in first round of litigation had directed as under: ....in absence of material as discussed above', in our considered opinion it shall be in interest of justice to restore issue back to file of AO for adjudication afresh. AO shall verify all relevant materials in light of discussions made hereinabove and thereafter shall pass speaking order in accordance with law.... And direct AO to reframe assessment.... 3. Assessing Officer passed fresh order on 23.12.2011 which according to assessee was required to be passed before 31.03.2011 in terms of period of limitation prescribed under Section 153 of Act. This contention was accepted by Commissioner as well as Tribunal. In judgement which is impugned in present tax appeal, case of revenue, however, is that Assessing Officer was merely carrying out directions issued by Tribunal and therefore had at his command full period of 12 months for passing order. 4. quoted portion of Tribunal's earlier order would make it clear that Assessing Officer was required to pass Page 2 of 3 HC-NIC Page 2 of 3 Created On Wed Oct 11 10:18:38 IST 2017 O/TAXAP/775/2017 ORDER fresh order of assessment. Such assessment of course had to be done bearing in mind observations made by Tribunal. Nevertheless, it was order of assessment which would be passed afresh. Commissioner and Tribunal, therefore, committed no error. In somewhat similar situation, this Court in case of Instruments And Control Co. vs. Chief Commissioner of Income-Tax and Others reported in [2012] 349 ITR 571 (Guj) expressed same opinion. 5. In view of this conclusion, it is not necessary to go into second question presented by Revenue which touches merits of additions made by Assessing Officer. In any case, issue is predominantly factual in nature. assessee had borrowed funds from its sister concerns and paid interest at rate of 22% which was found to be excessive as compared to prevailing bank rates. Commissioner as well as Tribunal on analysis of facts on record come to conclusion that disallowance of interest expenditure was not justified. 6. In result, tax appeals are dismissed. (AKIL KURESHI, J.) (BIREN VAISHNAV, J.) divya Page 3 of 3 HC-NIC Page 3 of 3 Created On Wed Oct 11 10:18:38 IST 2017 Principal Commissioner of Income-tax-5 v. SJ and SP Family Trust