IFCI INFRASTRUCTURE DEVELOPMENT LTD.,DELHI V. ACIT, SPL.RANGE 4, DELHI

ITA 3655/DEL/2023

AI Insights

The case involves IFCI Infrastructure Development Ltd., a company engaged in property development, which filed appeals against the orders of the CIT(A)/NFAC, Delhi, for the assessment years 2012-13, 2013-14, 2014-15, and 2016-17. The primary contention in these appeals was the addition of certain pre-operative and preliminary expenses to the assessee's income, which were disallowed by the Assessing Officer (AO) under section 35D of the Income Tax Act. The CIT(A) upheld these additions, leading to the current appeals. The Tribunal noted that the assessee, being a Public Sector Undertaking, faced genuine issues due to changes in the Finance Department, which affected their representation before the CIT(A). Consequently, the Tribunal decided to remit the matter back to the CIT(A) for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38686 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: SANJAY AGRAWAL
• Keywords: Opportunity of being heard; TDS; Earning of tax free income
• Section: 147; 148; 143(3); 14A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’’ : NEW DELHI) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA Nos. 3653, 3654, 3655 & 3656/Del/2023 Asstt. Years : 2012-13, 2013-14, 2014-15 & 2016-17 IFCI INFRASTRU CTURE VS. ADDL/JT. CIT RANGE-4, DEVELOPMENT LTD., NEW DELHI IFCI TOWER, 61, NEHRU PLACE, C.R. BLGD., I.P. ESTATE, NEW DELHI – 19 NEW DELHI – 2 (PAN: AABC17713C) (Appellant) (Respondent) Appellant by :Sh. Sanjay Agrawal, CA Respondent by :Sh. Om Parkash, Sr. DR. Date of Hearing 24.02.2025 Date of Pronouncement 12.03.2025 ORDER PER SHAMIM YAHYA, AM : These four appeals have been filed by the Assessee against the separate orders, all dated 31.10.2023 passed by the Ld. CIT(A)/NFAC, Delhi. Since the appeals are interconnected, hence, same are being disposed of by this common order, by dealing with the facts of assessment year 2012-13, being a lead case. 2. The grounds raised in assessment year 2012-13 read as under:- i) That the order of the Ld. CIT(A), NFAC, Delhi is bad in law and wrong on facts. ii) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the assessment under section 147 where the notice was issued after more than 4 years from end of the assessment year and where the 2 | P a g e assessment had already been made under section 143(3) of the Act. iii) That on the facts and in the circumstances of the case, the Ld. CIT(A), has erred in upholding the decision of the AO in respect of addition of Rs. 90,73,672/- on account of pre- operative expenses. iv) That the appellant craves leave to reserve t itself the right to add, alter, amend or vary and ground(s) at or before the time of hearing. 3. The grounds raised in assessment year 2013-14 read as under:- i) That the order of the Ld. CIT(A), NFAC, Delhi is bad in law and wrong on facts. ii) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 90,73,672/- on account of preoperative expenses. iii) That on the facts and in the circumstances of the case, the Ld. CIT(A), has erred in upholding the decision of the AO in respect of addition of Rs. 44,99,601/- on account of preliminary expenses. iv) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 41,05,729/- on account of provision of expenses. v) That the appellant craves leave to reserve t itself the right to add, alter, amend or vary and ground(s) at or before the time of hearing. 3 | P a g e 4. The grounds raised in assessment year 2014-15 read as under: i) That the order of the Ld. CIT(A), NFAC, Delhi is bad in law and wrong on facts. ii) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 90,73,672/- on account of preoperative expenses. iii) That on the facts and in the circumstances of the case, the Ld. CIT(A), has erred in upholding the decision of the AO in respect of addition of Rs. 44,99,601/- on account of preliminary expenses. iv) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 1,23,04,860/- on account of provision of expenses. v) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not directing the AO to examine and allow the credit for TDS of Rs. 3,75,000/-. vi) That the appellant craves leave to reserve t itself the right to add, alter, amend or vary and ground(s) at or before the time of hearing. 5. The grounds raised in assessment year 2016-17 read as under:- i) That the order of the Ld. CIT(A), NFAC, Delhi is bad in law and wrong on facts. ii) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 90,73,672/- under normal computation as well as under section 115JB. 4 | P a g e iii) That on the facts and in the circumstances of the case, the Ld. CIT(A), has erred in upholding the decision of the AO in respect of addition of Rs. 44,99,601/- on account of preliminary expenses. iv) That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the decision of the AO in respect of addition of Rs. 1,28,33,703/- under section 14A in respect of exempt income of Rs. 1,25,85,000/- under normal computation as well as under section 115JB. v) That the appellant craves leave to reserve t itself the right to add, alter, amend or vary and ground(s) at or before the time of hearing. 6. Briefly, stated facts of the case are that the assessee ‘IFCI Infrastructure development Limited’ is a company engaged in the business of property development and was running service apartments under the name and style of “Frazer Suites” at New Delhi. The assessee filed its return of income on 29.09.2012 declaring income at Rs. 9,46,04,630/- for AY 2012-13. During the course of scrutiny assessment of AY 2016-17, it was noticed that the assessee could not substantiate the claim of Rs. 90,73,672/- as pre-operative expenses u/s 35D of the Act and therefore, the case of the assessee company was reopened u/s 147 of the Act and accordingly notice u/s 148 of the Act was issued on 29.03.2019. In response to the said notice, the assessee submitted to treat the original return filed as the return filed. Subsequently, various statutory notices were issued requesting the appellant to submit the details of Pre-operative expenses claimed of Rs. 90,73,672/- however, the reply of the appellant was not found tenable by the AO. During the assessment proceedings, it was observed by AO that the assessee had claimed Rs. 90,73,672/- (1/5th of Rs. 4,53,68,362/-) on account of preoperative expenses in P&L account u/s 35D of the Act for the year under consideration. 5 | P a g e However, the AO held that the preoperative expenses which are since in the nature of expenditure specified u/s 35D(2) are only eligible u/s 35D. Further, the assessee did not file the details of expenditure for which deduction u/s 35D of the Act had been claimed. It is also observed by the AO that the similar disallowance was made for AY 2016-17 as the appellant failed to establish the nature of the expenses. Since, the appellant again could not produce the details of expenditure for which the deduction claimed u/s 35D of the Act for the year under consideration, the AO disallowed the entire deduction claimed of Rs. 90,73,672/- and added to the total income. Aggrieved by the order of the AO, the assessee preferred the present appeal. Upon assessee’s appeal, Ld. CIT(A) noted that assessee was not interested in prosecuting the appeal, hence, he dismissed the appeal of the assessee, by confirming the addition in dispute. 7. Against the aforesaid order, assessee is in appeal before us. 8. We have heard both the parties and perused the records. Ld. Counsel for the assessee prayed that assessee is a Public Sector Undertaking and there was some genuine reasons for non-prosecution on the part of the assessee. He submitted that due to change in the Finance Department, proper representation could not be done before the Ld. CIT(A). Hence, he prayed that an opportunity may be granted to the assessee before the ld. CIT(A) to canvass the appeal properly. Ld. DR did not have any objection to this proposition. Accordingly, in the interest of justice, we remit back the issues in dispute to the file of the Ld. CIT(A). Ld. CIT(A) shall decide the issues, afresh, in accordance with law, after giving adequate opportunity of being heard to the assessee. As a result, the appeal filed by the assessee for the assessment year 2012-13 stands allowed for statistical purposes. 9. As regards assessment years 2013-14, 2014-15 & 2016-17 are concerned. Since the facts of the cases are similar and identical to assessment 6 | P a g e year 2012-13 as aforesaid, hence, our aforesaid decision given for the assessment year 2012-13 shall apply mutatis mutandis to the assessment years 2013-14, 2014-15 and 2016-17 as well. We hold and direct accordingly on the same directions, as aforesaid. As a result, the Assessee’s appeals for AYs 2013- 14, 2014-15 & 2016-17 also stand allowed for statistical purposes. 10. In the result, all the 04 appeals filed by the assessee are allowed for statistical purposes. Order pronounced 12.03.2025. Sd/- Sd/- (SUDHIR KUMAR) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench "