M/s. Bharti Hexacom Ltd., New Delhi V. DCIT, New Delhi

ITA 1623/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6808 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-07-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: GAU RAV WADHWA
• Keywords: Depreciation
• Section: 115JB; 201(1); 147

Judgement Text

1 ITA NOS. 1623 & 1624/DEL/ 2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-1623/D EL/2013 (A.Y 2004-05) & I.T.A .NO.-1624/D EL/2013 (A.Y 2005-06) BHARTI HEXACOM LTD. BHARTI CRESCENT 1, NELSON MANDELA ROAD, VASANT KUNJ, PHASE-II NEW DELHI AAACH1766P (APPELLANT) VS DCIT CIRCLE-2(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. ANIL BHALLA, CA & GAURAV WADHWA, CA. RESPONDENT BY SH. S. K. JAIN, DR ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 26/12/2012 PASSED BY CIT (A)-V, NEW DELHI FOR A.YS. 2004- 05 AND 2005-06. 2. THE ASSESSEE WAS CARRYING OUT THE BUSINESS OF CE LLULAR PHONE AND LAND LINE SERVICE AND ITS ASSOCIATED VALUE ADDE D SERVICE FOR THE DATE OF HEARING 18.07.2016 DATE OF PRONOUNCEMENT 26.07.2016 2 ITA NOS. 1623 & 1624/DEL/ 2013 RELEVANT ASSESSMENT YEARS 2004-05 AND 2005-06. ORIG INAL ASSESSMENT FOR A.Y. 2004-05 WAS COMPLETED ON 27/12/ 2006 AT NIL INCOME AFTER SETTING OFF OF BROUGHT FORWARD LOSSES AND UNOBSERVED DEPRECIATION OF RS. 48,38,52,447/- UNDER NORMAL PRO VISIONS OF THE INCOME-TAX ACT AND AT RS.38,05,69,000/- IN TERM OF SECTION 115JB OF THE INCOME-TAX ACT. PROCEEDINGS U/S 147 INITIAT ED AFTER RECORDING REASONS THERETO. THE A.O. COMPLETED THE ASSESSMENT ON 9/11/2011 AT AN INCOME OF RS.9,24,50,000/- AFTER MAKING DISAL LOWANCE U/S 40 (A) (IA) OF THE ACT AMOUNTING TO RS.9,24,50,000/-. THE A.O DISALLOWED SIMILAR EXPENSES TO THE EXTENT OF RS.67, 9500/- FOR FREE AIRTIME TO DISTRIBUTORS U/S 40(A)(IA) & RS. 82,02,0 00/- FOR ROAMING CHARGES U/S 40(A) (IA). FOR THE A.Y. 2005-06 ASSESS MENT WAS COMPLETED ON 31/12/2007 AT NIL INCOME AFTER APPROVI NG THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT AMOUNTING TO RS.14 ,34,76,918/- AND AT RS.48,71,81,220/- IN TERMS OF SECTION 115JB OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT AT AN IN COME OF RS.14,34,76,918/- AFTER MAKING DISALLOWANCE UNDER S ECTION 40(A)(IA) AMOUNTING TO RS. 1,49,97,000/-. 3. BEING AGGRIEVED WITH THE SAID ACTIONS OF THE ASS ESSING OFFICER, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) FOR BO TH THE ASSESSMENT YEARS. THE CIT (A) DISMISSED THE APPEALS OF THE AS SESSEE. THEREFORE, THE ASSESSEE FILED PRESENT APPEALS. 4. THE LD. AR SUBMITTED THAT AS RELATES TO ORDER PA SSED U/S 201 (1) OF THE ACT, THE ITAT JAIPUR BENCH [ITA NO. 251/ JP 2013 (A.Y 2004-05) & ITA NO. 252/JP/2013 (A. Y 2005-06)] DECI DED THE ISSUE 3 ITA NOS. 1623 & 1624/DEL/ 2013 IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMENT YEARS I.E. 2004-05 & 2005-06. THE DEPARTMENT HAS NOT FILED ANY APPEALS AGAINST THE SAID ORDER BEFORE THE HONBLE HIGH COURT. THUS, TH E ITAT ORDER SETTING ASIDE THE ORDER U/S 201(1) OF THE ACT ATTAI NS FINALITY. IT IS SUBMITTED BY THE LD. AR THAT RELATED TO ORDER U/S 2 01(1) OF THE ACT HAS BEEN SET ASIDE. THUS THE ISSUE OF TDS DOES NOT SURVIVE AND HENCE APPLICABILITY OF SECTION 40(A) (IA) OF THE AC T DOES NOT SUSTAIN. THE LD. AR FURTHER SUBMITTED THAT PROCEEDINGS UNDER SECTION 147 OF THE ACT WAS BEYOND LIMITATION & HENCE THE ASSESSMEN T ORDERS ITSELF ARE NOT SUSTAINABLE UNDER LAW AS TIME BARRED. 5. THE LD. DR COULD NOT SUBMIT ANY ARGUMENT CONTRAR Y TO THESE FACTS AND THE LEGAL POSITION. 6. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH TH E ORDER PASSED BY THE ITAT JAIPUR BENCH. ONCE THE ORDER U/S 201(1) OF THE ACT IS SET ASIDE THEN THE ISSUE RELATED TO SECTION 40(A) (IA) OF THE ACT DOES NOT SUSTAIN. THUS THE DISALLOWANCE UNDER SECTI ON 40(A)(IA) OF THE ACT IN RESPECT OF FREE AIRTIME TO DISTRIBUTORS AND ROAMING CHARGES BY THE ASSESSING OFFICER DOES NOT SUSTAIN IN LIGHT OF THE ORDER PASSED BY THE ITAT, JAIPUR BENCH IN ASSESSEE S OWN CASE. 7. IN RESULT, BOTH THE APPEALS ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT 26 TH OF JULY 2016. SD/- SD/- (R.S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER 4 ITA NOS. 1623 & 1624/DEL/ 2013 DATED: 26/07/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 18.07.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 18.07.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 2 6 .07.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 6 .07.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 5 ITA NOS. 1623 & 1624/DEL/ 2013