LEMON PARK HOTEL & SPA, HALDWANI V. ITO, WARD- 1(2), HALDWANI

ITA 2336/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4082 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Notional interest
• Section: 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2336/DEL/2018 ASSESSMENT YEAR: 2014-15 LEMON PARK HOTEL & SPA, TEHRI PULIA, NAINITAL ROAD, HALDWANI, UTTARAKHAND. PAN: ABHFS5408G VS. ITO, WARD-1(2), HALDWANI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAHUL KHARE, CA REVENUE BY : SHRI AMIT JAIN, SR.DR DATE OF HEARING : 11.03.2019 DATE OF PRONOUNCEMENT : 11.03.2019 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28 TH NOVEMBER, 2017 OF THE CIT(A), HALDWANI, RELATING TO ASSESSMEN T YEAR 2014-15. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN NOT ALLOWING THE DEDUCTION U/S 80IC WHICH IS NOT ONLY BAD IN LAW BUT ALSO AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ADDITION OF RS.74,900 ON ACCOUNT OF INTEREST WHICH IS NOT ONLY BAD IN LAW BUT ALSO AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2336/DEL/2018 2 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF RUNNING A HOTEL UNDER THE NAME A ND STYLE OF M/S LEMON PARK HOTEL & SPA, TEHRI PULIA, NAINITAL ROAD, HALDWANI. IT FI LED ITS RETURN OF INCOME ON 02.11.2015 DECLARING NIL INCOME. THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE H AS DISCLOSED TOTAL RECEIPTS FROM HOTEL BUSINESS AT RS.99,56,054/- AND DECLARED NET P ROFIT AT RS.22,68,266/- ON WHICH DEDUCTION U/S 80IC OR 80IE OF THE IT ACT, 1961 HAS BEEN CLAIMED. THE ASSESSING OFFICER CONFRONTED THE ASSESSEE REGARDING SUCH CLAI M U/S 80IC. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON V ARIOUS DECISIONS, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S 80IC OF RS.22,68,266/-. THE ASSESSING OFFICER SIMILARLY NOTED THAT THE ASSESSEE HAS GIVEN A LOAN OF RS.5,35,000/- TO SHRI MUDIT BANSAL FOR NON-BUSINESS PURPOSE AND NO INTERE ST HAS BEEN CHARGED ON SUCH LOAN. REJECTING VARIOUS EXPLANATIONS GIVEN BY THE ASSESSE E AND RELYING ON VARIOUS DECISIONS, THE ASSESSING OFFICER MADE AN ADDITION OF RS.74,900 /- TO THE TOTAL INCOME OF THE ASSESSEE BEING NOTIONAL INTEREST @ 14% BEING THE IN TEREST ON SUCH INTEREST FREE ADVANCES. 4. IN APPEAL, THE LD.CIT(A), FOLLOWING HIS ORDER FO R ASSESSMENT YEAR 2013-14, UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFIC ER. SO FAR AS THE ADDITION ON ACCOUNT OF NOTIONAL INTEREST OF RS.74,900/- IS CONC ERNED, HE ALSO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. ITA NO.2336/DEL/2018 3 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL, AT THE OUTSET, SUBMITTED THAT T HE ISSUE RELATING TO DEDUCTION U/S 80IC HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER BY THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2012-13 AND 2013-14 IN ITA NO.3 112/DEL/2017 & 3113/DEL/2017, ORDER DATED 15 TH DECEMBER, 2017. THEREFORE, HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER IN THE LIGHT OF THE DIRECTION OF THE TRIBUNAL FOR THE PRECEDING TWO ASSESSMENT YEARS . SO FAR AS THE DISALLOWANCE OF INTEREST IS CONCERNED, NO ARGUMENT WAS ADVANCED BEF ORE THE TRIBUNAL BY THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE TRIBUNAL IN THE PRECEDING TWO ASSESSMENT YEARS HAS RESTORED THE ISSUE OF DEDUCTION U/S 80IC TO THE FIL E OF THE ASSESSING OFFICER AND SINCE THE LD. CIT(A) WHILE REJECTING THE CLAIM OF DEDUCTI ON U/S 80IC HAS FOLLOWED HIS ORDER FOR THE PRECEDING ASSESSMENT YEAR, THEREFORE, CONSI DERING THE TOTALITY OF THE FACTS AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTOR E THE ISSUE OF DEDUCTION U/S 80IC BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING T HE ISSUE AFRESH IN THE LIGHT OF THE DIRECTIONS OF THE TRIBUNAL FOR THE PRECEDING TWO AS SESSMENT YEARS. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER FAC T AND LAW, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2336/DEL/2018 4 7. SO FAR AS THE SECOND GROUND IS CONCERNED, AS MEN TIONED EARLIER, THE LD. COUNSEL FOR THE ASSESSEE DID NOT MAKE ANY SUBMISSION CONSID ERING THE SMALLNESS OF THE AMOUNT. I, THEREFORE, DISMISS THE SECOND GROUND AS NOT PRES SED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT AT T HE TIME OF HEARING ITSELF ON 11.03.2019. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 11 TH MARCH, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI