M/s Interglobe Technologies Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 306/DEL/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8340 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 28-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 27-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: TAPAS RAM MISRA
• Keywords: Depreciation

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 C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI B.R.JAIN, ACCOUNTANT MEMBER B.R.JAIN, ACCOUNTANT MEMBER B.R.JAIN, ACCOUNTANT MEMBER B.R.JAIN, ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.3401/DEL/2012 3401/DEL/2012 3401/DEL/2012 3401/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007- -- -08 0808 08 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), 11(1), 11(1), 11(1), NE NENE NEW DELHI. W DELHI. W DELHI. W DELHI. VS. VS. VS. VS. M/S INTERGLOBE TECHNOLOGIES M/S INTERGLOBE TECHNOLOGIES M/S INTERGLOBE TECHNOLOGIES M/S INTERGLOBE TECHNOLOGIES PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, THAPAR HOUSE, THAPAR HOUSE, THAPAR HOUSE, 124, JANPATH, 124, JANPATH, 124, JANPATH, 124, JANPATH, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACI5079A. PAN : AAACI5079A. PAN : AAACI5079A. PAN : AAACI5079A. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION N N N NO OO O. .. .306/DEL/2012 306/DEL/2012 306/DEL/2012 306/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007- -- -08 0808 08 M/S INTERGLOBE M/S INTERGLOBE M/S INTERGLOBE M/S INTERGLOBE TECHNOLOGIES TECHNOLOGIES TECHNOLOGIES TECHNOLOGIES PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, THAPAR HOUSE, THAPAR HOUSE, THAPAR HOUSE, 124, JANPATH, 124, JANPATH, 124, JANPATH, 124, JANPATH, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACI5079A. PAN : AAACI5079A. PAN : AAACI5079A. PAN : AAACI5079A. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), 11(1), 11(1), 11(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SATPAL SINGH, DR. ASSESSEE BY : SHRI TAPAS RAM MISRA, ADVOCATE. ORDER ORDER ORDER ORDER PER B.R.JAIN, AM PER B.R.JAIN, AM PER B.R.JAIN, AM PER B.R.JAIN, AM : : : : THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION B Y THE ASSESSEE ARISE FROM THE ORDER DATED 10 TH APRIL, 2012 OF LEARNED CIT(A)- XV, NEW DELHI BY RAISING THE FOLLOWING GROUND:- ITA-3401/D/2012 & CO-306/D/2012 2 GROUND RAISED BY THE REVENUE :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9, 52,840/- MADE ON ACCOUNT OF SUB-LETTING INCOME. GROUND RAISED BY THE ASSESSEE :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN NOT DIRECTING THAT EVEN IF THE HIRE CHARGES OF FURNITURE WAS TO BE ASSESSED AS INCOME FROM OTHER SOURCES, DEPRECIATION RELATING THERETO OUG HT TO BE ALLOWED. 2. BRIEF FACTS ARE THAT THE ASSESSING OFFICER FOUND THAT AN AMOUNT OF ` 86,86,440/- WAS ASSESSEES INCOME FROM SUB-LETTING/HIRE CH ARGES AND UNRELATED TO THE NORMAL EXPORT BUSINESS OF THE ASSESSEE, P ROFITS OF WHICH WERE EXEMPT UNDER SECTION 10A OF THE INCOME-T AX ACT, 1961. THE ASSESSEE HIMSELF HAD TREATED AN AMOUNT OF ` 78,33,600/- AS SUB- LETTING INCOME. THE ASSESSING AUTHORITY, THEREFORE, EX CLUDED THE BALANCE AMOUNT OF THE INCOME OF ` 9,52,840/- FROM THE ASSESSEES PROFITS OF BUSINESS EXEMPT UNDER SECTION 10A OF THE AC T. THE LEARNED CIT(A), HOWEVER, ENTERTAINED THE VIEW THAT THE DEDU CTION OF DEPRECIATION OF ` 14,07,228/- IN RESPECT OF FIXTURES AND FITTINGS FOR WH ICH HIRE CHARGES OF ` 9,52,840/- HAVE BEEN RECEIVED IS CLEARLY ADMISSIBLE AS DEDUCTION UNDER SECTION 57(II) OF THE ACT. CONSEQUE NTLY, HE FOUND NO JUSTIFICATION IN REDUCING THE QUALIFYING PROFITS BY A N AMOUNT OF ` 9,52,840/-. ITA-3401/D/2012 & CO-306/D/2012 3 3. HEARD PARTIES WITH REFERENCE TO THE MATERIAL ON R ECORD. ADMITTEDLY, THE SUB-LETTING/HIRE CHARGES ARE ASSESSABLE A S ASSESSEES INCOME FROM OTHER SOURCES. THE AMOUNT OF SUCH INCOME, THEREFORE, IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT AS BUSINESS PROFITS. MERELY BECAUSE THE ASSESSEE HAD CLAIMED DEPRECI ATION, THE AMOUNT CAN BE ALLOWED AS DEDUCTION UNDER SECTION 57( II) OF THE ACT CANNOT BE A REASON ALONE TO DELETE THE ADDITION WHEN THE INCOME FROM SUB-LETTING/HIRE CHARGES WAS TO BE ASSESSED UNDER A SPECIF IED HEAD OF INCOME I.E. INCOME FROM OTHER SOURCES. THE LEARNED C IT(A) IN THIS CASE DID NOT VERIFY AS TO WHETHER THE AMOUNT OF DEPRECIAT ION OF ` 14,07,228/- STATED TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 57 (II) OF THE ACT HAS FACTUALLY BEEN CLAIMED AS DEDUCTION BY THE ASSESSEE AND ALLOWABLE DEDUCTION, OR, OTHERWISE, IS A MATTER THAT NEEDED ENQ UIRY INTO THE FACTS. WE, THEREFORE, SET ASIDE HIS DECISION AND REMIT THE ISSUE OF CLAIM OF DEPRECIATION BY THE ASSESSEE BACK TO THE ASSESSING OFFIC ER FOR EMBARKING ENQUIRY INTO THE FACTS AND TAKE A DECISION AFRESH IN ACCORDANCE WITH LAW HAVING REGARD TO THE AFORESAID O BSERVATIONS. NEEDLESS TO SAY THAT EFFECTIVE OPPORTUNITY OF BEING HE ARD SHALL BE ALLOWED TO THE ASSESSEE. 4. IN THE RESULT, THE REVENUES APPEAL STANDS ALLOWED W HEREAS ASSESSEES CROSS-OBJECTION STANDS ALLOWED FOR STATISTICAL PUR POSES ONLY. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (B.R.JAIN (B.R.JAIN (B.R.JAIN (B.R.JAIN) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED : 28.03.2013 VK. ITA-3401/D/2012 & CO-306/D/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- -- -11(1), NEW DELHI. 11(1), NEW DELHI. 11(1), NEW DELHI. 11(1), NEW DELHI. 2. ASSESSEE : M/S INTERGLOBE TECHNOLOGIES PVT.LTD., M/S INTERGLOBE TECHNOLOGIES PVT.LTD., M/S INTERGLOBE TECHNOLOGIES PVT.LTD., M/S INTERGLOBE TECHNOLOGIES PVT.LTD., GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, 124, JANPATH, NEW DELHI. THAPAR HOUSE, 124, JANPATH, NEW DELHI. THAPAR HOUSE, 124, JANPATH, NEW DELHI. THAPAR HOUSE, 124, JANPATH, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR