Sanjeev Laroia, New Delhi V. DCIT, Circle-27(1), New Delhi

ITA 1973/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6201 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 21-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MANINDER KAUR
• Assessee Lawyers: RAJEV MAGO
• Keywords: Set aside; Liquidation
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BEN CH, NEW DELHI (THROUGH VIDEO CONFERENCING] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL M EMBER ITA NO. 1973/DEL/2018 [A.Y 2014-15] SHRI SANJEEV LAROIA VS. THE DY.C.I.T 504, SAVITRI CINEMA COMPLEX CIRCLE -27(1) GREATER KAILASH - II NEW DELHI NEW DELHI PAN: AABPL 3428 Q [APPELLANT] [RESPONDENT] DATE OF HEARING : 09.09.2021 DATE OF PRONOUNCEMENT : 09.09.2021 ASSESSEE BY : SHRI RAJEV MAGO, CA REVENUE BY : DR. MANINDER KAUR, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 9, NEW DELHI DATED 22.12.2017 PERTAINING TO ASSESSMENT YEAR 2014-15. 2 2. THE GRIEVANCES OF THE ASSESSEE READ AS UNDER : 1. THAT THE LD. CIT(A)-9, NEW DELHI AND THE L D. ASSESSING OFFICER, CIRCLE 27(1), NEW DELHI HAVE WRONGLY INTER PRETED THE PROVISIONS OF SECTION 57{III) OF THE ACT THUS MAKIN G THE ORDER PASSED BAD IN LAW. 2. THE LD. CIT(A), NEW DELHI AND THE LD. ASSESSING OFFICER HAVE ERRED IN FACT AND LAW IN UPHOLDING THE DISALLO WANCE OF INTEREST OF RS. 5,65,706.00 CLAIMED U/S 57(III) WHICH ACT OF THE CIT(A) AND THE A.O. IS CONTRARY TO THE FACTS OF THE CASE AND A GAINST PROVISIONS OF LAW. 3. THE LD. CIT(A) AND THE A.O. FAILED TO APPRECIATE THE NATURE OF INTEREST PAYMENT MADE OF RS. 5,65,706.00 AS ALSO THE CONSEQUENT RECEIPT OF INTEREST OF RS. 4,35,992.00 W HILE UPHOLDING THE DISALLOWANCE, WHICH ACT OF THE LD. CIT(A) AND T HE A.O. IS WRONG BOTH ON FACTS AND IN LAW. 4. THE LD. CIT(A) HAS ERRONEOUSLY OBSERVED THAT THE ASSESSEE HAD NOT OBJECTED TO THE INTEREST INCOME OF RS. 4,1 7,084.00 BEING ASSESSED U/S 56 OF THE ACT WHICH FINDING OF CIT(A)- 9 IS AGAINST THE FACTS OF THE CASE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS EARNED INTEREST INCOME OF RS. 4,35,992 /- FROM ERA 3 LANDMARK INDIA LTD. THE ASSESSING OFFICER FOUND TH AT THE ASSESSEE HAS SET OFF THE SAME WITH INTEREST EXPENSE OF RS. 5,65, 706/-. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. THE ASSESSEE REPLI ED AS UNDER; YOUR HONOUR'S ATTENTION IS INVITED TO CLAUSE A.2.( A) OF THE BUYERS AGREEMENT ENTERED INTO BY THE ASSESSEE WITH. ERA IN N MARKS (INDIA) LTD. DATED 2307.2008. THE CLAUSE REFERS TO THE DISCOUNTE D CASH DOWN PLAN FOR THE PURCHASE OF THE PROPERTY WHEREBY HE WAS GIV EN A SPECIAL DISCOUNT OF RS. 12,36,243/-. FURTHER, ON THE ASSESSEE PREFERRING TO ADOPT THE DISCOUNTED CASH DOWN PLAN AS PER PARA A.2.(C) THE ASSESSEE WAS ENTITLED TO A MONTHLY GUARANTEE ASSURED INCOME WHIC H WOULD FURTHER REDUCED HIS COST OF INVESTMENT. FOR EARNING THIS IN COME AND ALSO AVAILING THE DISCOUNT THE ASSESSEE, AS AGAINST LIQUIDATION A LL HIS INVESTMENT PREFERRED TO GO FOR A TOP UP HIS HOME LOAN TO TAKE ADVANTAGE OF THE AVAILABLE DISCOUNT OF RS. 12,36,243/- AND ALSO EARN ED INCOME THEREON IT CAN THUS BE STATED THAT THE INTEREST BEEN PAID T O IKE BANK IS FOR THE PURPOSE OF AVAILING THE DISCOUNTED SCHEME AND EARNING INTEREST WHICH HAS BEEN DECLARED IN THE RETURN. IF THE ASSESSEE HA D ADOPTED THIS FINANCIAL PATTERN HE WOULD HAVE LOSE THE OPPORTUNIT Y TO AVAIL THE DISCOUNT, EARNED INTEREST WITHOUT IMPACTING HIS OTH ER REVENUE EARNING ASSETS. THERE IS THUS A DIRECT NEXUS BETWEEN THE INCOME EARNED FROM ERA LANDMARK (INDIA) LTD. (NOW KNOWN HAS PRASANDI INFOT ECH PARK PVT. LTD. 4 4. ASSESSEES REPLY WAS DULY CONSIDER BY THE ASSESS ING OFFICER BUT THE ASSESSING OFFICER WAS NOT CONVINCED AS HE WAS O F THE OPINION THAT INTEREST PAYMENT WAS IN THE NATURE OF CAPITAL EXPEN DITURE AND ACCORDINGLY, DISALLOWED THE SAME AND MADE ADDITION OF RS. 5,65,706/-. 5. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 6934/DEL/2017 FOR A.Y 2012-13 AND POINTED OUT THAT THE TRIBUNAL, AFTER CONSIDERING THE FACTS HAD SET ASIDE THE DISPU TE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH. 7. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESS EE THAT PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL, THE ASSESSING OFFIC ER FRAMED ASSESSMENT ORDER AND HAS ACCEPTED THE CONTENTION OF THE ASSESS EE AND ALLOWED THE INTEREST EXPENDITURE TO BE SET OFF AGAINST THE INTE REST INCOME. 8. THE LD. DR FAIR CONCEDED TO THIS ACCEPTANCE BY T HE ASSESSING OFFICER. 5 9. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW AND THE ORDER OF THE TRIBUNAL REFERRED TO BY THE LD . COUNSEL FOR THE ASSESSEE. WE FIND FORCE IN THE CONTENTION OF THE L D. COUNSEL FOR THE ASSESSEE. IN A.Y 2012-13, ON A SIMILAR QUARREL, TH E TRIBUNAL SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AND WE FIND THAT THE ASSESSING OFFICER, VIDE ASSESS MENT ORDER DATED NIL, FRAMED U/S 254 OF THE ACT GIVING EFFECT TO THE DIRECTIONS OF THE TRIBUNAL HAS ACCEPTED THE CONTENTION OF THE ASSESSE E AND ALLOWED SET OFF OF EXPENDITURE AGAINST THE INTEREST EARNED. CO NSIDERING THE FACTS IN TOTALITY, WE DIRECT THE ASSESSING OFFICER TO DEL ETE THE IMPUGNED ADDITION. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 2061/DEL/2018 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09.09. 2021 IN THE PRESENCE OF BOTH THE RIVAL REPRESENTATIVES. SD/- SD/- [ SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 TH SEPTEMBER, 2021 VL/ 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. SR. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER