DCIT, New Delhi V. M/s Encorp E Service Ltd., New Delhi

ITA 2355/DEL/2011

• Counselvise Citation: 235520114 RSA 2011
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-08-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHA KUMARI
• Assessee Lawyers: MANU K GIRI
• Keywords: Depreciation
• Section: 143(3); 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO. .. .2355/DEL/2011 2355/DEL/2011 2355/DEL/2011 2355/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), 11(1), 11(1), 11(1), N NN NEW DELHI. EW DELHI. EW DELHI. EW DELHI. VS. VS. VS. VS. M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M MM M- -- -4, SURYA MANSION, 4, SURYA MANSION, 4, SURYA MANSION, 4, SURYA MANSION, KAUSALYA PARK, KAUSALYA PARK, KAUSALYA PARK, KAUSALYA PARK, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 016. 110 016. 110 016. 110 016. PAN : AABCE3129L. PAN : AABCE3129L. PAN : AABCE3129L. PAN : AABCE3129L. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. SUDHA KUMARI, CIT-DR. RESPONDENT BY : SHRI MANU K. GIRI, ADVOCATE. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-V, NEW DELHI DATED 15 TH FEBRUARY, 2011 FOR THE AY 2004- 05. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.8,40,051/- ON ACCOUNT OF DIFFERENCE OF INTEREST IN COME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.11,91,43,370/- ON ACCOUNT OF DEPRECIATION ON COMP UTER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.26,68,85,829/- ON ACCOUNT OF UNSECURED LOAN. ITA-2355/DEL/2011 2 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.77,74,920/- ON ACCOUNT OF COMMISSION PAID. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.1,16,95,952/- ON ACCOUNT OF TERMINAL INSTALLATION EXPENSES. 3. THE FACTS OF THE CASE ARE THAT THE PRESENT APPEAL HAS ORIGINATED FROM THE ASSESSMENT ORDER DATED 23 RD DECEMBER, 2009 WHICH WAS PASSED UNDER SECTION 263 AND 148 READ WITH SECTION 14 3(3) OF THE INCOME-TAX ACT, 1961. IN THIS CASE, ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 29.11.2006. THE CASE WAS SET ASIDE UNDER SECTION 263 BY THE CIT VIDE ORDER DATED 13.03.2009. IN PURSUANCE THERETO, THE ASSESSMENT PROCEEDINGS WERE TAKEN UP AND T HE RESULTANT ASSESSMENT ORDER WAS PASSED ON 23.12.2009. THE ASSESSEE HAD FILED THE APPEAL AGAINST THE ORDER UNDER SECTION 263. THE CIT HAS HELD THE ASSESSMENT TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF THE REVENUE ON SEVERAL GROUNDS. HOWEVER, AFTER EXAMINATI ON, THE ITAT MODIFIED THE ORDER OF THE LEARNED CIT(A) AND HELD T HAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IN RESPECT OF NON-EXAMINATION OF UNSECURED LOAN. THE RE VENUE FILED THE APPEAL TO HON'BLE JURISDICTIONAL HIGH COURT AGAINST T HE ORDER OF ITAT WHICH WAS DISMISSED IN ITA NO.287/2011 VIDE ORDER DATED 14.09.2011. AGAINST THE ASSESSMENT ORDER DATED 23.12.2009 WHICH WA S PASSED IN PURSUANCE TO THE ORDER UNDER SECTION 263, THE ASSESSEE H AD FILED THE APPEAL BEFORE THE CIT(A) WHO DECIDED GROUND NOS.5 TO 9 OF THE APPEALS BEFORE HIM WITH THE FOLLOWING FINDING:- 5. GROUND OF APPEAL NOS.5 TO 9. THE ASSESSEE COMPANY HAD MOVED AN APPEAL BEFORE HONBLE ITAT, DELHI BENCH AGAINST THE ORDER U/S 263 O F THE ACT PASSED BY THE CIT, DELHI-V, NEW DELHI. THE ORDE R HAS ITA-2355/DEL/2011 3 BEEN PRONOUNCED ON 19.2.2010 AND COPY OF THE ORDER OF THE HONBLE ITAT IS PLACED ON RECORD. 6. GROUND OF APPEAL NOS.5, 6, 8 AND 9 WERE ALLOWED B Y THE HONBLE ITAT IN THE ORDER REFERRED TO ABOVE AND GROUND NO.7 RELATING TO EXAMINATION OF UNSECURED LOANS WAS P UT FOR RE EXAMINATION BY THE AO IN THE FOLLOWING WORDS : THUS ON AN ANALYSIS OF THE REPLY OF THE ASSESSEE VIS. A VI S. THE REASONS ASSIGNED IN THE SHOW CAUSE NOTICE EXTRACTED SUPRA WE ARE OF THE OPINION THAT THE ONLY ISSUE FOR WH ICH NO PROPER INQUIRY WAS CONDUCTED BY THE AO IS NON EXAMINATION OF UNSECURED LOANS. AS FAR AS OTHER REASO NS TAKEN UP BY THE LD.COMMISSIONER FOR CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ARE NOT SUSTAINABLE. THE ASSESSEE HAS DEMONSTRATED THAT ALL THESE ISSUES HAVE BEEN GONE THROUGH BY THE AO AND HE HAS ACCEPTED THE ENTRIES AS W ELL AS CONTENTIONS OF THE ASSESSEE ON THESE ISSUES AFTER DUE VERIFICATION. THEREFORE WE ALLOW THE APPEAL OF THE ASSESSEE PARTY. WE MODIFY THE ORDER OF THE LD.COMMISSIONER TO THE EXTENT THAT ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE IN RESPECT OF NON EXAMINAT ION OF UNSECURED LOANS. THE AO SHALL CONSIDER AND READJUDICAT E THIS ISSUE AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN VIEW OF THE ORDER OF THE HONBLE ITAT IN RESPECT OF GROUNDS OF APPEAL NOS.5, 6, 7, 8 AND 9 THE AO IS DIREC TED TO GIVE EFFECT TO THE ORDER OF HONBLE ITAT. 4. GROUND NOS.5 TO 9 ARE FIVE GROUNDS WHICH ARE RAISE D IN THE APPEAL BY THE REVENUE. GROUND NO.1 IN THE REVENUE S APPEAL WAS GROUND NO.5 BEFORE THE CIT(A), GROUND NO.2 WAS GROUN D NO.6, GROUND NO.3 WAS GROUND NO.7, GROUND NO.4 WAS GROUND NO.8 AND GROUND NO.5 WAS GROUND NO.9. THUS, WE FIND THAT THE CIT(A) HAS NO T DELETED THE ADDITION AND ONLY DIRECTED THE ASSESSING OFFICER TO GIV E EFFECT TO THE ORDER OF THE ITAT. THEREFORE, THE REVENUE IS WRONG IN MENTIONING IN THE GROUNDS OF APPEAL THAT THE CIT(A) DELETED THOSE ADDITIONS. THE ORDER OF THE ITAT HAS BEEN UPHELD BY THE HON'BLE JUR ISDICTIONAL HIGH COURT AND, THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF ITA-2355/DEL/2011 4 LEARNED CIT(A) TO GIVE EFFECT TO THE ORDER OF ITAT, WHICH IS UPHELD BY THE HONBLE HIGH COURT. IN VIEW OF THE ABOVE, WE D O NOT FIND ANY MERIT IN THE REVENUES APPEAL. THE SAME IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 22.08.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TAX , DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -11(1), NEW DELHI. 11(1), NEW DELHI. 11(1), NEW DELHI. 11(1), NEW DELHI. 2. RESPONDENT : M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M/S ENCORP E SERVICE LTD., M M M M- -- -4, SURYA MANSION, KAUSALYA PARK, 4, SURYA MANSION, KAUSALYA PARK, 4, SURYA MANSION, KAUSALYA PARK, 4, SURYA MANSION, KAUSALYA PARK, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 016. 110 016. 110 016. 110 016. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR