DCIT, New Delhi V. M/s. Sindhu Trade Links Ltd., New Delhi

ITA 1452/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3913 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISHA KUMARI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 69C; 50C; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. AMIT SHUKLA , JM ITA NO. 1452/DEL/2014 : ASSTT. YEAR : 2007 - 08 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIR CLE - 21 , NEW DELHI - 110055 VS M/S SINDHU TRADE LINKS LTD., 129, TRANSPORT CENTRE, ROHTAK ROAD, PUNJABI BAGH, NEW DELHI - 110035 (APPELLANT) (RESPONDENT) PAN NO. A A ACS0447A ASSESSEE BY : SH. SANAT KAPOOR, ADV. REVENUE BY : SMT. MANISHA KUMARI , SR. DR DATE OF HEARING : 15 .01 .201 8 DATE OF PRONOUNCE MENT : 17 .01 .201 8 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 22.01 . 2014 OF LD. CIT(A) - X I , NEW DELHI 2 . FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALLOWANCE U/S 14A OF THE I.T. ACT TO 10% OF RS.1,97,231/ - MADE BY THE AO. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.43,70,000/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69C OF THE I.T. ACT, 1961. 3. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. ITA NO . 1452 /DE L/201 4 SINDHU TRADE LINKS LTD. 2 (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3 . AS REGARDS TO THE ISSUE AGITATED BY THE DEPARTMENT IN GROUND NO. 1, THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE IS COVERED BY THE ORDER DATED 26.10.2010 OF THIS BENCH OF THE TRIBUNAL IN ASSESSEE S OWN CASE IN ITA NO. 1747/DEL/2009 FOR THE ASSESSMENT YEAR 2006 - 07 (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACE D ON RECORD). 4 . IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5 . AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS WAS A SUBJECT MATTER OF THE ASSESSEE S APPEAL IN THE PRECEDING ASSESSMENT YEAR 2006 - 07 IN ITA NO. 1747/DEL/2009 , ORDER DATED 26.10.2010 WHEREIN THE RELEVANT FINDINGS ARE GIVEN IN PARA 5 AS UNDER: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ONLY GRIEVANCE OF THE ASSESSEE IS REGARDING DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS. 2,50,538/ - U/S 14A. THIS DISALLOWANCE HAS B EEN CONFIRMED BY THE LD CIT(A) ON THE BASIS OF PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT,1961 AND RULE 8D OF THE IT RULES, 1962, SINCE THE ITA NO . 1452 /DE L/201 4 SINDHU TRADE LINKS LTD. 3 ASSESSEE HAD DIVIDEND INCOME ALSO AND THEREFORE, IT WAS HELD THAT THE PROVISIONS OF SECTION 14A ARE APPLICABLE BUT AS PER THE RECENT JUDGMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF GODREJ & BOYCE MFG. PVT. LTD. AS REPORTED IN 43 DTR 177 (BOM.), RULE 8D IS NOT RETROSPECTIVE AND HENCE IT CANNOT BE MADE APPLICABLE IN THE ASSESSMENT YEAR 2006 - 07 AS IN THE PRESENT CASE BUT STILL DISALLOWANCE HAS TO BE MADE BY THE ASSESSING OFFICER ON REASONABLE BASIS. WE FEEL THAT CONSIDERING THE SMALLNESS OF AMOUNT OF DIVIDEND INCOME AND SMALLNESS OF THE AMOUNT OF DISALLOWANCE MADE BY THE ASSESSING OFFICER, IT WILL MEET TH E ENDS OF JUSTICE IF THE DISALLOWANCE IS MADE TO THE EXTENT OF 10% OF DIVIDEND INCOME BECAUSE CONSIDERING THE SMALLNESS OF AMOUNT IN DISPUTE, WE DO NOT FEEL IT FRUITFUL TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION AS WE ARE DOING IN OTHER CASES WHERE THE STAKES ARE HIGH. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 10% OF DIVIDEND INCOME. 6 . IN THE PRESENT CASE ALSO, THE LD. CIT(A) RESTRICTED THE DISALLOWANCE U/S 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) TO THE EXTENT OF 10% OF THE INCOME WHILE THE AO MADE THE DISALLOWANCE BY INVOKING THE PROVISIONS OF RULE 8D OF THE INCOME TAX RULES, 1962, WHICH IS APPLICABLE FOR THE ASSESSMENT YEAR 2008 - 09 AND NOT FOR THE YE AR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2007 - 08. WE, THEREFORE, DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENTAL APPEAL. 7 . AS REGARDS TO THE SECOND ISSUE RELATING TO THE DELETION OF ADDITION MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 69C ITA NO . 1452 /DE L/201 4 SINDHU TRADE LINKS LTD. 4 OF THE ACT, T HE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE WAS AGITATED BY THE DEPARTMENT FOR THE ASSESSMENT YEAR 2004 - 05 IN ITA NO. 1268/DEL/2014 WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTM ENT VIDE ORDER DATED 24.10.2017 (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). 8 . IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE. 9 . AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS BEEN ADJUDICATED BY THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 24.10.2017 IN ITA NO. 12 68/DEL/2014 FOR THE ASSESSMENT YEAR 2004 - 05 WHEREIN THE RELEVANT FINDINGS ARE GIVEN IN PARA 3 OF THE SAID ORDER WHICH READ AS UNDER: 3. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE RELEVANT ORDERS OF THE LOWER AUTHORITIES AS WEL L AS THE DIRECTION GIVEN BY THE COORDINATE BENCH. THE LD CIT(A) HAS DELETED THE ABOVE ADDITION VIDE PARA NO. 11.4 TO 11.6 OF THE ORDER. ACCORDING TO HIM NOTHING ADVERSE WAS NOTICED FROM THE REPLY OF THE PARTIES FROM WHOM THE ENQUIRIES WERE CONDUCTED BY THE AO AND IN FACT THEY CONFIRMED THAT THE TRANSACTION OF THE SALE OF THE PROPERTIES IS AT THE PURCHASE PRICE SHOWN BY THE APPELLANT. HE FURTHER HELD THAT THE PROVISION OF SECTION 50C FOR THAT RELEVANT YEAR APPLIED IN ITA NO . 1452 /DE L/201 4 SINDHU TRADE LINKS LTD. 5 THE HANDS OF THE SELLER AND NOT THE BUYER . IN THE PRESENT CASE THE ASSESSEE IS A BUYER. HENCE, HE STATED THAT INCOME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE BY INVOKING PROVISION OF SECTION 50C OF THE ACT. HE FURTHER EXAMINED THAT PROVISION OF SECTION 56(1)(VII)(B) OF THE ACT IS NOT APPLICAB LE AS IT APPLIES W.E.F. 01.04.2014. THE LD DR ALSO COULD NOT POINT OUT ANY INFIRMITY IN THE ORDER OF THE LD CIT(A). WE ARE ALSO OF THE CONSIDERED VIEW THAT THERE IS NO PROVISION OF DIFFERENCE BETWEEN STAMP DUTY VALUE AS WELL AS THE TRANSACTED VALUE CAN BE ADDED IN THE HANDS OF THE BUYER. IN THE RESULT WE CONFIRM THE FINDING OF THE LD CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 1 0 . SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 11 . IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER P RONOUNCED IN THE COURT ON 17 /01/2018 ) SD/ - SD/ - ( AMIT SHUKLA ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 /01/2018 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR