ITO, New Delhi V. M/s. Caraf Builders & Construction Pvt. Ltd., New Delhi

ITA 1212/DEL/2013

• Counselvise Citation: 121220114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHA KUMARI
• Assessee Lawyers: SATYAJEET GOYAL CAS
• Keywords: Earning of tax free income
• 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 B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .1212/DEL/2013 1212/DEL/2013 1212/DEL/2013 1212/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -3(2), 3(2), 3(2), 3(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S C M/S C M/S C M/S CARAF BUILDERS & CONSTRUCTIONS ARAF BUILDERS & CONSTRUCTIONS ARAF BUILDERS & CONSTRUCTIONS ARAF BUILDERS & CONSTRUCTIONS PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., 1 11 1- -- -E, NAAZ CINEMA COMPLEX, E, NAAZ CINEMA COMPLEX, E, NAAZ CINEMA COMPLEX, E, NAAZ CINEMA COMPLEX, JHANDEWALAN EXTENSION, JHANDEWALAN EXTENSION, JHANDEWALAN EXTENSION, JHANDEWALAN EXTENSION, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. PAN : AACCC8696F. PAN : AACCC8696F. PAN : AACCC8696F. PAN : AACCC8696F. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SUDHA KUMARI, CIT-DR. RESPONDENT BY : SHRI R.S. SINGHVI AND SHRI SATYAJEET GOYAL, CAS. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XIII, NEW DELHI DATED 14 TH DECEMBER, 2012 FOR THE AY 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 01. WHETHER THE LD.CIT(A) HAS ERRED ON FACTS AND I N LAW IN DELETING THE ADDITION OF RS.1,44,52,68,698/- MADE U /S 14A IGNORING THE FACT THAT THE METHOD OF DISALLOWANCE A DAPTED BY THE ASSESSEE IS FOUND TO BE FACTUALLY INCORRECT AS AR WAS UNABLE TO JUSTIFY ITS COMPUTATION OF EXPENSES, ATTRIBUTABLE TO EARNING OF DIVIDEND INCOME. 02. WHETHER THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.8,55,97,765/- MADE ON A CCOUNT OF EXPENDITURE U/S 57(3). 03. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F ITA-1212/DEL/2013 2 APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. HOWEVER, WE FIND THAT BOTH THE ABOVE GROUNDS ARE MISCONCEIVED WHICH WOULD BE EVIDENT FROM THE FOLLOWING COMPUTATI ON MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER:- WITH THESE REMARKS, INCOME OF THE ASSESSEE IS COMP UTED AS UNDER: INCOME FROM SHORT TERM CAPITAL GAINS 6,30,945 ADD : DISALLOWANCE OF LOSS U/S 94(7) 55,157 6, 86,102 INCOME FROM OTHER SOURCES INTEREST INCOME 41,81,11,353 LESS : INTEREST PAID AS PER SEC. 57(III) 8,55,97 ,765 33,25,13,588 EXEMPT INCOME DIVIDEND 19,25,655 LESS : EXPENSES U/S 14A 144,52,68,698 NIL TOTAL TAXABLE INCOME 33,31,99,690 4. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION OF ` 144,52,68,698/- UNDER SECTION 14A. IN FACT, HE WORKED OUT THE ABOVE AMOUNT AS EXPENSES UNDER SECTI ON 14A, REDUCED THE SAME FROM DIVIDEND INCOME AND ACCORDINGLY, THE DIVIDEND INCOME WAS TREATED AT NIL. THUS, IN SUBSTANCE, NO ADDITIO N OF ` 144,52,68,698/- WAS MADE. SO, THE QUESTION OF DELETION OF THE ABOV E ADDITION BY THE CIT(A) CANNOT ARISE. SIMILARLY, WE FIND THAT THE A SSESSING OFFICER ALLOWED THE DEDUCTION OF INTEREST AMOUNTING TO ` 8,55,97,765/- WHILE COMPUTING THE INTEREST INCOME UNDER THE HEAD INCOM E FROM OTHER SOURCES. THERE WAS NO ADDITION OF ` 8,55,97,765/- BY THE ASSESSING OFFICER. SO, THE QUESTION OF DELETING THE SAME DOE S NOT ARISE. THE APPEAL WAS FILED ON 4 TH MARCH, 2013. HOWEVER, THE GROUNDS OF APPEAL HAVE NOT BEEN MODIFIED. IN OUR OPINION, BOTH THE G ROUNDS OF APPEAL ARE MISCONCEIVED AND THEREFORE, LIABLE TO BE REJECTED B EING MISCONCEIVED. ITA-1212/DEL/2013 3 WE, THEREFORE, DISMISS THE REVENUES APPEAL AT THE THRESHOLD. HOWEVER, WE MAY ADD THAT THE REVENUE IS AT LIBERTY TO FILE THE APPEAL AFRESH, IF SO ADVISED, RAISING THE CORRECT GROUNDS OF APPEAL ARISING FROM THE ORDER OF LEARNED CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED IN LIMINE . DECISION PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 14.08.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -3(2), NEW DELHI. 3(2), NEW DELHI. 3(2), NEW DELHI. 3(2), NEW DELHI. 2. RESPONDENT : M MM M/S CARAF BUILDERS & CONSTRUCTIONS PVT.LTD., /S CARAF BUILDERS & CONSTRUCTIONS PVT.LTD., /S CARAF BUILDERS & CONSTRUCTIONS PVT.LTD., /S CARAF BUILDERS & CONSTRUCTIONS PVT.LTD., 1 1 1 1- -- -E, NAAZ CINEMA COMPLEX, JHANDEWALAN EXTENSION, E, NAAZ CINEMA COMPLEX, JHANDEWALAN EXTENSION, E, NAAZ CINEMA COMPLEX, JHANDEWALAN EXTENSION, E, NAAZ CINEMA COMPLEX, JHANDEWALAN EXTENSION, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR