M/s. AES (India) Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 106/DEL/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8525 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 13-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: S K AGGARWAL
• Keywords: Depreciation; Earning of tax free income; Question of law
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.592/DEL/201 592/DEL/201 592/DEL/201 592/DEL/2012 22 2 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), 1(1), 1(1), 1(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. V VV VS. S.S. S. M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., A AA A- -- -138, FIRST FLOOR, 138, FIRST FLOOR, 138, FIRST FLOOR, 138, FIRST FLOOR, DAYANAND COLONY, DAYANAND COLONY, DAYANAND COLONY, DAYANAND COLONY, LAJPAT NAGAR LAJPAT NAGAR LAJPAT NAGAR LAJPAT NAGAR- -- -IV, IV,IV, IV, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : PAN : PAN : PAN : AACCA3059J. AACCA3059J. AACCA3059J. AACCA3059J. (APPELLANT) (RESPONDENT) CROSS CROSS CROSS CROSS- -- -OBJECTION NO.106/DEL/2012 OBJECTION NO.106/DEL/2012 OBJECTION NO.106/DEL/2012 OBJECTION NO.106/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004- -- -05 0505 05 M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., 2/11B, BASEME 2/11B, BASEME 2/11B, BASEME 2/11B, BASEMENT NTNT NT- -- -JANGPURA A, JANGPURA A, JANGPURA A, JANGPURA A, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 014. 110 014. 110 014. 110 014. PAN : AACCA3059J. PAN : AACCA3059J. PAN : AACCA3059J. PAN : AACCA3059J. VS. VS. VS. VS. M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., A AA A- -- -138, FIRST FLOOR, 138, FIRST FLOOR, 138, FIRST FLOOR, 138, FIRST FLOOR, DAYANAND COLONY, DAYANAND COLONY, DAYANAND COLONY, DAYANAND COLONY, LAJPAT NAGAR LAJPAT NAGAR LAJPAT NAGAR LAJPAT NAGAR- -- -IV, IV,IV, IV, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AACCA3059J. PAN : AACCA3059J. PAN : AACCA3059J. PAN : AACCA3059J. (APPELLANT) (RESPONDENT) REVENUE BY : MS.Y.KAKKAR, SR.DR. ASSESSEE BY : SHRI S.K. AGGARWAL, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-IV, NEW DELHI DATED 18 TH NOVEMBER, 2011 FOR THE AY 2004-05. THE ASSESSEE HAS ALSO FILED CROSS-OBJECTI ON. 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS APP EAL READS AS UNDER:- ITA-592/DEL/2012 & CO-106/DEL/2012 2 THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIR ECTING THE AO TO TREAT 50% OF THE EXPENSES TO BE ATTRIBUTED TO BUSINESS AND 50% TO EARNING OF EXEMPT INCOME. 3. THE GROUNDS RAISED IN THE CROSS-OBJECTION BY THE ASSESSEE READ AS UNDER:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT GIVING FULL BENEFIT OF EXPENDITURE AS CLAIMED BY TH E ASSESSEE AND HAS FURTHER ERRED IN DIRECTING TO LD.A O TO ALLOW THE EXPENDITURE ONLY TO THE EXTENT @ 50% ALON G WITH 50% DEPRECIATION INSTEAD OF 100% FOR THE PURPOSE OF BUSINESS ON THE BASIS OF SURMISES AND CONJECTURES. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD.AO IN HOLDING THAT THE APPELLANT IS COVERED BY THE PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT, 1961. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER DISALLOWED A SUM OF ` 1,33,90,150/- HOLDING THE SAME TO HAVE BEEN INCURRE D FOR EARNING OF EXEMPT INCOME. ON APPEAL, LEARNED CIT(A ) HELD THAT 50% OF THE EXPENSES INCURRED BY THE ASSESSEE ARE TO BE ATT RIBUTED TOWARDS EARNING OF EXEMPT INCOME. AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), BOTH THE PARTIES ARE IN APPEAL/CROSS-OBJECTION. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED CO UNSEL FOR THE ASSESSEE POINTED OUT THAT IN ASSESSEES OWN CASE FO R AY 2005-06, HON'BLE JURISDICTIONAL HIGH COURT, VIDE ORDER DATED 10 TH APRIL, 2013 IN ITA NO.449/2012, HELD AS UNDER:- SUBSEQUENT TO THE PASSING OF THE IMPUGNED ORDER DA TED 01.08.2011, THIS COURT HAS ALSO DECIDED THE ISSUE O F SECTION 14A AS ALSO THE OTHER RELATED ISSUES INCLUDING THE APPLICABILITY OF RULE 8D OF THE INCOME TAX RULES, 1 962 IN THE CASE OF MAXOPP INVESTMENT LIMITED V. CIT : 347 ITR 272. WE ALSO NOTE THAT THE TRIBUNAL HAS ALSO FOLLO WED ITS OWN ORDER IN THE ASSESSEES OWN CASE FOR THE ASSESS MENT ITA-592/DEL/2012 & CO-106/DEL/2012 3 YEAR 2003-04. AS SUCH, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. HOWEVER, WE MUST ADD THAT THE ASSESSING OFFICER, WHEN HE CONSIDERS THE MATTER AFRESH IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNA L, WOULD ALSO CONSIDER THE DECISION OF THIS COURT IN MAXOPP INVESTMENT LIMITED (SUPRA) AND WOULD DECIDE IN ACCORDANCE WITH THE SAID DECISION. 6. THE LEARNED COUNSEL, THEREFORE, SUBMITTED THAT T HE ORDER OF THE ASSESSING OFFICER ON THIS POINT SHOULD BE SET ASIDE AND HE SHOULD BE DIRECTED TO READJUDICATE THE SAME AS PER THE ABOVE DIRECTION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE. 7. LEARNED DR FAIRLY AGREED WITH THE ABOVE SUBMISSI ON OF THE LEARNED COUNSEL. 8. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE ASSESSING OFFICER ON THIS POINT AND RESTORE THE MATTER TO HIS FILE WITH THE DIRECTION THAT HE WILL READJUDICATE THE ISSUE IN ACCORDANCE W ITH THE DIRECTION OF HON'BLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FOR AY 2005-06 WHICH HAS BEEN EXTRACTED ABOVE. NEEDLESS TO MENTIO N THAT THE ASSESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE WHILE READJUDICATING THE ISSUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS- OBJECTION OF THE ASSESSEE BOTH ARE DEEMED TO BE ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 24 TH MAY, 2013. SD/- SD/- ( (( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 24.05.2013 VK. ITA-592/DEL/2012 & CO-106/DEL/2012 4 COPY FORWARDED TO: - 1. REVENUE : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1(1), NEW DELHI. 1(1), NEW DELHI. 1(1), NEW DELHI. 1(1), NEW DELHI. 2. ASSESSEE : M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., M/S AES (INDIA) PVT.LTD., 2/11B, BAS 2/11B, BAS 2/11B, BAS 2/11B, BASEMENT EMENT EMENT EMENT- -- -JANGPURA A, JANGPURA A, JANGPURA A, JANGPURA A, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 014. 110 014. 110 014. 110 014. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR