DCIT, New Delhi V. M/s Kumara Kruppa frontier Hotels (P) Ltd., New Delhi

ITA 1658/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3643 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 30-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R S SIDDHVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.-1658/DEL/2016 ( ASSESSMENT YEAR: 2012-13) DCIT CIRCLE 14(2) NEW DELHI VS KUMARA KRUPPA FRONTIER HOTELS (P) LTD. ROOM NO. 510, 5 TH FLOOR, SCOPE COMPLEX, CORE 8, LODHI ROAD, NEW DELHI. AABCK9184K ASSESSEE BY SH. R.S. SIDDHVI, CA REVENUE BY SH. AMIT JAIN, SR. DR ORDER PER SHRI K.N. CHARY, J.M. AGGRIEVED BY THE ORDER DATED 15/01/2016 IN APPEAL NO. DEL/CIT (A)-5/0355/2014-15 RELEVANT TO THE ASSESSME NT YEAR 2012-13 PASSED BY THE LD. COMMISSIONER OF INCOME TA X (APPEALS)- 5, DELHI (HEREINAFTER FOR SHORT REFERRED TO AS THE LD. CIT(A)). REVENUE FILED THIS APPEAL ON THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LD.CIT (APPEALS) IS ERRONEOU S AND CONTRARY TO FACTS AND LAW. 2. THAT WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 1 ,74,16,125/- MADE DATE OF HEARING 15.11.2017 DATE OF PRONOUNCEMENT 16.11.2017 2 ITA NO. 1658/DEL/2016 BY THE AO ON ACCOUNT OF UNDISCLOSED LEASE RENT BEIN G THE DIFFERENCE BETWEEN THE FULL LEASE RENT AS PER TDS CERTIFICATE ISSUED BY THE DEDUCTOR AND AS DECLARED BY THE ASSESSEE IN THE P&L ACCOUNT. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR FOREGO ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF H EARING. 2. RELEVANT FACTS ARE THAT THE ASSESSEE COMPANY M/S KUMARKRUPPA FRONTIER HOTELS (P) LTD. (KFH) CAME INT O EXISTENCE ON 23.08.2001 IN PURSUANCE TO THE GOVERNMENT DECISI ON FOR DISINVESTMENT OF ITDC HOTELS, AND HOTEL ASHOK, BANG ALORE WAS ACCORDINGLY DEMERGED INTO A SEPARATE ENTITY M/S KUM ARKRUPPA FRONTIER HOTELS (P) LTD. THE GOVERNMENT OF INDIA D ECIDED TO HAND OVER HOTEL ASHOK, BANGALORE AND AIRPORT RESTAURANT, BANGALORE TO M/S BHARAT HOTELS LTD. (BHL). ACCORDINGLY, M/S KFH AND M/S BHL ENTERED INTO AN AGREEMENT ON 29.11.2001 FOR REN T. THE ASSESSEE COMPANY IS RECEIVING LEASE PAYMENTS FROM B HARAT HOTELS LTD. FOR HOTEL ASHOK, BANGALORE AND AIRPORT RESTAUR ANT AT BANGALORE. FOR THE AY 2012-13 ASSESSEE FILED RETUR N OF INCOME ON 19.09.2012 DECLARING A TOTAL INCOME OF RS. 8,83,97, 719/- AND DURING SCRUTINY AO FOUND THAT THE TDS CERTIFICATES ISSUED BY BHL SHOWS THE INCOME OF THE ASSESSEE AS RS. 7,33,39,190 /-, WHEREAS THE ASSESSEE DECLARED THE ONLY INCOME OF RS. 5,59,2 3,065/-, AS SUCH, THE DIFFERENCE AMOUNT OF RS. 1,74,16,125/- WA S TO BE ADDED 3 ITA NO. 1658/DEL/2016 ON ACCRUAL BASIS. ASSESSEE CHALLENGED THE SAID ADD ITION OF RS.1,74,16,125/- AND THE LD. CIT (A) BY WAY OF IMPU GNED ORDER ACCEPTED THE CONTENTION OF THE ASSESSEE THAT IF THE SET OFF ON ACCOUNT OF DISCOUNTING FACTOR OF 12% AS CLAIMED BY THE ASSESSEE, THERE WOULD BE NO LOSS TO THE REVENUE NOR TO THE AS SESSEE. HE ALSO REFERRED TO THE ORDERS OF HIS PREDECESSORS FOR THE AY 2004-05, 2008-09, 2009-10 AND 2011-12 AND GRANTED RELIEF TO THE ASSESSEE. HENCE, THE REVENUE IS BEFORE US IN THIS APPEAL. 3. AT THE OUTSET, IT IS SUBMITTED BY THE LD. AR THA T IN RESPECT OF ASSESSMENT YEARS 2004-05, 2007-08, 2008-09 AND 2009 -10 THE MATTER WENT UP TO THE LEVEL OF THE TRIBUNAL AND A C OORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 850/DEL/2011 AND BATCH OF CASES FOUND IT APPROPRIATE TO RESTORE THIS ISSUE TO THE F ILE OF THE AO FOR FRESH CONSIDERATION, IN THE LIGHT OF THE LEASE AGRE EMENT, CONFIRMATION OF ACCOUNTS FROM BHL AND RECONCILIATIO N STATEMENT. IT IS FURTHER SUBMITTED BY THE LD. AR THAT FOR THE AY 2014-15 AO ACCEPTED THE CONTENTIONS OF THE ASSESSEE IN THE ASS ESSMENT ORDER. THESE FACTS ARE NOT CONTROVERTED BY THE LD. DR. 4 ITA NO. 1658/DEL/2016 3. HAVING CONSIDERED THE CONTENTIONS AND ALSO THE O RDER OF A COORDINATE BENCH OF THIS TRIBUNAL PASSED ON 09.02.2 015 IN ITA NO. 850/DEL/2011 AND BATCH OF MATTERS, WE ARE OF THE CO NSIDERED OPINION THAT FOR THIS ASSESSMENT YEAR ALSO THE ISSU E REQUIRES RECONSIDERATION BY THE AO IN THE LIGHT OF THE DOCUM ENTS LIKE LEASE AGREEMENT, CONFIRMATION OF ACCOUNTS FROM THE BHL AN D THE RECONCILIATION STATEMENTS ETC. TO BE FURNISHED BY T HE ASSESSEE. WE, THEREFORE, SET ASIDE THE MATTER TO THE FILE OF AO FOR RECONSIDERATION IN THE LIGHT OF THE ORDERS OF THE C OORDINATE BENCH IN ITA NO. 850/DEL/2011 AND BATCH OF MATTERS IN ASS ESSEES OWN CASE, AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE T O PRODUCE THE RELEVANT DOCUMENTS. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARY) PRESIDENT JUDICIAL ME MBER DATED: 16.11.2017 *KAVITA ARORA 5 ITA NO. 1658/DEL/2016 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI