DCIT, Circle- 20(1), New Delhi V. Provestment Secruties Pvt. Ltd., New Delhi

ITA 198/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8097 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 08-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Keywords: Unexplained cash credit; Earning of tax free income; Rule 8D
• Section: 14A; 250; 68

Judgement Text

ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 198/DEL/2018 ( ASSESSMENT YEAR: 2014-15) DCIT, CIRCLE 20(1), NEW DELHI. VS. M/S PROVESTMENT SECURITIES PVT. LTD., 305, RATTAN JYOTI BUILDING, 18, RAJENDRA PLACE, NEW DELHI-110008. APPELLANT RESPONDENT PAN NO: AAACP1326P ITA NO:- 293/DEL/2018 ( ASSESSMENT YEAR: 2014-15) M/S PROVESTMENT SECURITIES PVT. LTD. VS. DCIT, CIRCLE 20(1), NEW DELHI. APPELLANT RESPONDENT PAN NO: AAACP8116H REVENUE BY : SHRI JAGDISH SINGH, SR. DR ASSESSEE BY : SHRI RAHUL CHAURASIA, CA PER ANADEE NATH MISSHRA, AM (A) THESE TWO CROSS APPEALS BY REVENUE AND ASSESSEE ARE FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-25, DELHI, [LD. CIT(A), FOR SHORT], ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 2 OF 6 DATED 13.10.2017 FOR ASSESSMENT YEAR 2014-15. GROUNDS TAKEN IN BOTH THESE APPEALS OF REVENUE AND ASSESSEE ARE AS UNDER: ITA NO.- 198/DEL/2018 1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 1,44,98,543/- OUT OF TOTAL DISALLOWANCE OF RS. 1,48,63,485/-. AS THE FINANCIAL COST OF RS. 1,48,63,485/- MADE BY THE AO U/S 36(L)(III) OF THE I.T. ACT, ON ACCOUNT OF INTEREST EXPENSES NOT RELATABLE TO BUSINESS ACTIVITY CONDUCTED BY THE ASSESSEE COMPANY. 2. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN DELETING THE DISALLOWANCE OF RS. 24,17,577/- OUT OF TOTAL DISALLOWANCE OF RS. 29,34,163/- MADE BY THE AO U/S 14A R.W.R. 8D OF THE I.T. ACT. 3. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 45,00,000/- AND RS. 50,00,000/- U/S 68 OF THE IT ACT, IN RESPECT OF LOANS RECEIVED FROM M/S RKG FINVEST LTD. AND M/S S.P. SAI IT PVT. LTD. 4.THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUND(S) OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUND(S) OF APPEAL. ITA NO.- 293/DEL/2018 1. THAT THE ORDER DATED 13-10-2017PASSED U/S 250 OF THE INCOME-TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 25, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO PARTLY UPHOLD THE ACTION OF THE LEARNED DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -20(1), NEW DELHI BY SUSTAINING THE ADDITION OF RS. 3,64,942/- MADE BY THE ASSESSING OFFICER BY RESORT TO THE PROVISIONS OF S. 36(1 )(III) OF THE INCOME-TAX ACT, 1961 ON ACCOUNT INTEREST PAID ON THE LOANS RECEIVED FROM SHAREHOLDERS. 2. THAT THE ORDER DATED 13-10-2017 PASSED U/S 250 OF THE INCOME-TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 25, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO PARTLY UPHOLD THE ACTION OF THE LEARNED DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -20(1), NEW DELHI IN SUSTAINING THE ADDITION OF RS. 5,16,586/-MADE BY THE LD. ASSESSING OFFICER TOWARDS EXPENSES INCURRED FOR EARNING EXEMPT INCOME BY RESORTING TO THE PROVISIONS OF SECTION 14A OF THE INCOME-TAX ACT, 1961 READ TOGETHER WITH RULE 8D OF THE INCOME TAX RULES, 1962. 3. THAT THE ORDER DATED 13-10-2017 PASSED U/S 250 OF THE INCOME-TAX ACT, ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 3 OF 6 1961 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) 25, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO PARTLY UPHOLD THE ACTION OF THE LEARNED DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -20(1), NEW DELHI IN SUSTAINING THE ADDITION OF RS. 3,27,00,000/-BY THE LD. ASSESSING OFFICER BY RESORTING TO THE PROVISIONS BY RESORTING TO THE PROVISIONS OF S. 68 OF THE ACT TOWARDS ALLEGEDLY UNEXPLAINED CASH CREDITS IN RESPECT OF THE FOLLOWING NINE PARTIES : (B) AT THE TIME OF HEARING, AT THE OUTSET, THE LD. AUTHORIZED REPRESENTATIVE (LD. AR, FOR SHORT) FOR THE ASSESSEE INFORMED US THAT THE ASSESSEE HAS OPTED FOR VIVAD SE VISHWAS SCHEME, 2020 (VSVS, FOR SHORT) FOR THE SETTLEMENT OF SUBJECT MATTER OF THE DISPUTES IN THESE APPEALS. HE ALSO DREW OUR ATTENTION TO LETTER DATED 19.04.2021 SENT FROM ASSESSEES SIDE; AND COPY OF FORM-3 (ISSUED BY DESIGNATED AUTHORITY) ENCLOSED THERETO. AT THE TIME OF HEARING BEFORE US, THE LD. AR FOR ASSESSEE SUBMITTED BEFORE US THAT BOTH THESE APPEALS MAY BE DISMISSED ON ACCOUNT OF THE AFORESAID VSVS. THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE [LD. SR. DR, FOR SHORT] DID NOT EXPRESS ANY OBJECTION TO THIS; AND AGREED WITH THE SUBMISSIONS MADE BY LD. AR FOR THE ASSESSEE. WE HAVE PERUSED FORM-3 DATED 16.04.2021 ISSUED BY LD. PCIT-7, DELHI; THE DESIGNATED AUTHORITY UNDER VSVS. AFTER DUE CONSIDERATION, AND IN VIEW OF THE FOREGOING; WE TREAT BOTH THESE APPEALS AS WITHDRAWN ON S. NO. NAME AMOUNT 1 ATROCIOUS SOLF SOLUTIONS PVT LTD 60,00,000 2 CHAHAT RAM 25,00,000 3 CHIRAG MARKETING 1,40,00,000 4 HARI TRADERS 12,00,000 5 INTELLECT PERSONAL SELECTION NETWORK PVT LTD 60,00,000 6 N K YARNS 10,00,000 7 SUNIL GUPTA 5,00,000 8 SUPERTAX 10,00,000 9 VITRAG CHEMICALS AND PLASTICS 5,00,000 TOTAL 3,27,00,000 ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 4 OF 6 ACCOUNT OF THE AFORESAID VSVS. ACCORDINGLY, BOTH THESE APPEALS ARE DISMISSED BEING TREATED AS WITHDRAWN. (B.1) BEFORE WE PART, WE HEREBY CLARIFY, BY WAY OF ABUNDANT CAUTION, THAT IF FOR SOME REASON IT IS FOUND BY EITHER REVENUE OR THE ASSESSEE, THAT THE DISPUTES UNDER THESE APPEALS BEFORE US ARE NOT FULLY SETTLED UNDER THE AFORESAID VSVS, THEN REVENUE AND / OR ASSESSEE, AS THE CASE MAY BE, WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THESE APPEALS, IN ACCORDANCE WITH LAW. (B.2) WITH THESE DIRECTIONS, THE AFORESAID APPEALS OF REVENUE AND ASSESSEE ARE DISMISSED, BEING TREATED AS WITHDRAWN. (C) FOR STATISTICAL PURPOSES, THESE APPEALS ARE DISMISSED. THIS ORDER WAS ALREADY PRONOUNCED ON 01 ST SEPTEMBER, 2021 IN OPEN COURT, IN THE PRESENCE OF REPRESENTATIVES OF BOTH SIDES; AFTER CONCLUSION OF THE HEARING. NOW THIS WRITTEN ORDER IS SIGNED TODAY ON 02/09/2021. SD/- SD/- (SUCHITRA KAMBLE) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 02/09/2021 (POOJA) ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 5 OF 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.-198/DEL/2018 AND 293/DEL/2018 M/S PROVESTMENT SECURITIES PVT. LTD. PAGE 6 OF 6 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