Addl. CIT, Range-4, New Delhi V. Housing & Urban Development Corporation Ltd, New Delhi

ITA 2004/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8040 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHARWAN KUMAR GAUTAM
• Keywords: Depreciation; Question of law
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NOS. 2004 & 2000 /DEL/2018 (ASSESSMENT YEARS : 2009-10 & 2005-06) ACIT RANGE 4, NEW DELHI 110002 PAN NO. AAACH 0632 A VS. HOUSING & URBAN DEVELOPMENT CORPORATION LTD., HUDCO BHAWAN, LODHI ROAD, NEW DELHI-110003 (APPELLANT) (RESPONDENT) A SSESSEE BY SHRI GAGAN KUMAR, ADV. RE VENUE BY SHRI SHARWAN KUMAR GAUTAM, CIT(DR) DATE OF HEARING: 17.08.2021 DATE OF PRONOUNCEMENT: 25 . 0 8 . 202 1 ORDER PER ANIL CHATURVEDI, AM : BOTH THE PRESENT APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (A)-35, NEW DELHI DATED 15.12.2017 RELATING TO ASSESSMENT YEARS 2009-10 & 2005-06. 2. BEFORE US, AT THE OUTSET, LEARNED DR AND LEARNED AR SUBMITTED THAT THE ISSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT FOR THE YEAR AND AMOUNTS INVOLVED AND THEREFORE THEY HAVE COMMON SUBMISSIONS TO MAKE FOR BOTH THE YEARS. IN VIEW OF THE AFORESAID SUBMISSIONS OF THE COUNSEL, WE FOR THE SAKE 2 OF CONVENIENCE PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER BUT FOR THE SAKE OF REFERENCE REFER TO THE FACTS FOR A.Y. 2005-06. 3. THE RELEVANT FACTS AS CULLED FROM THE MATERIAL ON RECORDS ARE AS UNDER : 4. ASSESSEE IS A COMPANY WHO FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 28.10.2005 DECLARING INCOME OF RS.496,24,42,636/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 28.12.2007 AND THE TOTAL INCOME WAS DETERMINED AT RS.552,11,06,710/-. AGGRIEVED BY THE ASSESSMENT ORDER PASSED BY AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE. THEREAFTER, THE MATTER WAS CARRIED BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 09.02.2016 DECIDED THE THREE ISSUES AS UNDER: I. TRIBUNAL UPHELD THE DISALLOWANCE OF RS.30,20,512/- ON ACCOUNT OF DEPRECIATION ON ESTIMATED INCREASE IN COST OF PROPERTIES. II. TRIBUNAL UPHELD THE ADDITION OF RS.1,25,00,000/- ON ACCOUNT OF CHANGE IN THE METHOD OF ACCOUNTING OF BOOKING OF EXPENDITURE ON THE DATE OF MATURITY OVER THE FORWARD CONTRACT. III. ITAT UPHELD THE FINDINGS THAT THE ASSESSEE SHOULD BE DE- RECOGNISE INTEREST INCOME ON NPAS IN ACCORDANCE TO RULE 6ED OF INCOME TAX RULES AND NOT ON THE BASIS OF NATIONAL HOUSING BOARD GUIDELINES. 3 5. ON THE AFORESAID THREE ISSUES, AO VIDE PENALTY ORDER PASSED U/S 271(1)(C) OF THE ACT DATED 29.06.2016 LEVIED PENALTY OF RS.10,46,75,729/- U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO VIDE ORDER DATED 15.12.2017 IN APPEAL NO. 270/16-17 DELETE THE PENALTY AND THEREBY ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN LAW IN DELETING THE PENALTY OF RS.10,46,75,729/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT, 1961. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL. 6. BEFORE US, LEARNED DR TOOK US TO THE PENALTY ORDER AND SUPPORTED THE ORDER OF AO. LEARNED AR ON THE OTHER HAND SUPPORTED THE ORDER OF CIT(A) AND FURTHER SUBMITTED THAT AS FAR AS THE DISALLOWANCE OF RS.30,20,512/- ON ACCOUNT OF DEPRECIATION IS CONCERNED, AGAINST THE ORDER OF THE TRIBUNAL, ASSESSEE HAD CARRIED THE MATTER BEFORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT OBSERVED THAT THE OPINION OF THE ITAT DOES NOT CORRECTLY REFLECT THE POSITION BUT HOWEVER, REMITTED THE MATTER FOR VERIFICATION TO AO. HE POINTED TO THE COPY OF THE RELEVANT ORDER PLACED IN THE PAPER BOOK. WITH RESPECT TO THE ADDITION OF RS.1,25,00,000/-, HE SUBMITTED THAT AGAINST THE ORDER OF THE TRIBUNAL, ASSESSEE HAD CARRIED THE MATTER BEFORE THE HONBLE HIGH COURT AND THE HONBLE HIGH COURT DECIDED THE ISSUE IN ASSESSEES 4 FAVOUR. HE POINTED TO THE RELEVANT ORDER PLACED IN THE PAPER BOOK. AS FAR AS THE ISSUE REGARDING DE-RECOGNITION OF INTEREST ACCRUING UPON NPAS IN ACCORDANCE WITH RULE 6EB OF THE INCOME TAX RULES, 1962 IS CONCERNED, HE SUBMITTED THAT ASSESSEE FILED SPECIAL LEAVE PETITION (SLP) BEFORE THE HONBLE SUPREME COURT AND HONBLE SUPREME COURT IN SLP (CIVIL) DIARY NO(S). 24914/2018 DATED 06.08.2018 HAS STAYED THE OPERATION OF THE ORDER PASSED BY THE HONBLE HIGH COURT. HE THEREFORE, SUBMITTED THAT ON THE THREE AFORESAID ISSUES ON WHICH THE AO HAD LEVIED PENALTY, THE HONBLE HIGH COURT HAD FRAMED QUESTION OF LAW THEN THE ISSUE IS TO BE CONSIDERED AS DEBATABLE AND THEREFORE NOT LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. IN SUPPORT OF HIS AFORESAID CONTENTION, HE RELIED ON THE DECISION OF HONBLE HIGH COURT IN THE CASE OF PCIT VS. HARSH INTERNATIONAL PVT. LTD. (2021) 431 ITR 118 (DELHI)(HC). HE THEREFORE RELYING ON THE AFORESAID DECISION OF HONBLE DELHI HIGH COURT SUBMITTED THAT NO INTERFERENCE TO THE ORDER OF CIT(A) IS CALLED FOR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT APPEAL IS WITH RESPECT TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IT IS AN UNDISPUTED FACT THAT AO HAS LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THREE ISSUES STATED IN PARA 4 (I), II) & (III) HEREINABOVE. ON ALL THE AFORESAID THREE ISSUES ON WHICH AO HAD LEVIED PENALTY U/S 271(1)(C) OF THE ACT, WE FIND THAT THE ISSUES WERE CARRIED BY THE ASSESSEE BEFORE THE HONBLE HIGH COURT & THE HONBLE HIGH COURT HAD ADMITTED THE APPEAL OF ASSESSEE HOLDING IT TO BE SUBSTANTIAL 5 QUESTION OF LAW. WE FIND THE HONBLE HIGH COURT IN THE CASE OF PCIT VS. HARSH INTERNATIONAL (SUPRA) HAS HELD THAT IF THE QUANTUM ORDER ITSELF HAS BEEN CHALLENGED AND THE COURT HAS FRAMED SUBSTANTIAL QUESTIONS OF LAW IN THE APPEAL PREFERRED BY THE ASSESSEE, IT SHOWS THAT THE ALLEGED CONCEALMENT IS NOT FINAL AND THE ISSUE IS DISPUTABLE AND IN SUCH CASES, THE PENALTY LEVIED BY THE ASSESSING OFFICER CANNOT SURVIVE. APART FROM THE AFORESAID, WE ARE ALSO FIND THAT CIT(A) WHILE DELETING THE PENALTY HAS OBSERVED THAT THERE WAS NO CONCEALMENT OF THE PARTICULARS OF INCOME NOR ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREFORE THE PENALTY WAS NOT LEVIABLE. BEFORE US, NO FALLACY IN THE FINDINGS OF CIT(A) HAS BEEN POINTED OUT BY THE REVENUE NOR HAS REVENUE PLACED ON RECORD ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE TO THE ORDER OF CIT(A) AND THUS THE APPEAL OF THE REVENUE IS DISMISSED. 8. AS FAR AS ITA NO.2004/DEL/2018 FOR A.Y. 2009-10 IS CONCERNED, BEFORE US, BOTH THE PARTIES HAVE SUBMITTED THAT THE ISSUE IS IDENTICAL TO THAT OF A.Y. 2005-06. WE HAVE HEREINABOVE WHILE DECIDING THE APPEAL FOR A.Y. 2005-06 FOR THE REASONS STATED THEREIN HAVE DISMISSED THE GROUNDS OF REVENUE. WE FOR SIMILAR REASONS, HOLD THAT NO INTERFERENCE TO THE ORDER OF CIT(A) IS CALLED FOR IN THE YEAR UNDER CONSIDERATION AND THUS THE APPEAL OF REVENUE IS DISMISSED. 6 9. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.08.2021. SD/- SD/- D (KULDIP SINGH) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:- 25.08.2021 PY* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI