M/s. Dalmia Finance Ltd., New Delhi V. DCIT, New Delhi

ITA 271/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5195 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Business expenditure; Opportunity of being heard; Earning of tax free income; Revenue expenditure
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 271/DEL/2017 ASSESSMENT YEAR: 2012-13 M/S DALMIA FINANCE LTD. VS. DCIT, CIRCLE-7(1), 2 ND FLOOR, INDRAPRAKASH, NEW DELHI 21, BARAKHAMBA ROAD, NEW DELHI 110 001 (PAN: AABCD5533H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VINOD KUMAR BINDAL, C A REVENUE BY : SH. T. VASANTHAN, SR. DR ORDER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER DATED 28.5.2016 OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS)- 12, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THE APPEAL READ AS UNDER:- 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN PASSING AN ORDER IN SUMMARY MANNER WITHOUT ADJUDICATING EACH AND EVERY GROUND FOR WHICH DETAILED ORAL AND WRITTEN SUBMISSIONS WERE MADE WITH EVIDENCE BUT THOSE HAVE BEEN IGNORED IN TOTALITY. THE IMPUGNED PERVERSE APPELLATE ORDER MUST BE REVERSED. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE RS. 1,35,835/- TOWARDS 2 'LOSS FROM AGRICULTURAL OPERATION' AS EXEMPT LOSS, WHILE IGNORING THE EXPLANATION AN SUPPORTING DOCUMENTS THAT IT WAS A GENUINE BUSINESS EXPENDITURE WRONGLY DECLARED UNDER THAT HEAD. THUS, THE DISALLOWANCE SO MADE MUST BE REVERSED. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 2,28,111/- TOWARDS 'RENT, RATE & TAXES' AS NON-REVENUE EXPENDITURE, WHILE IGNORING THAT THE APPELLANT COMPANY WAS CONDUCTING ITS LAND DEVELOPMENT BUSINESS ACTIVITIES FROM THE SAID PREMISES. THUS, THE DISALLOWANCE SO MADE MUST BE REVERSED. 4. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 1,58,529 ULS 14A R.W.R. 8D(2)(III) TOWARDS EXPENDITURE INCURRED FOR EARNING OF EXEMPT INCOME, WHEREAS NO SUCH SUM WAS FACTUALLY INCURRED BY THE APPELLANT NOR ANY SUCH NEXUS BETWEEN THE EXPENDITURE CLAIMED AND DIVIDEND EARNED HAS BEEN ESTABLISHED BY THE CIT(A). THUS, THE DISALLOWANCE SO MADE MUST BE DELETED. 5. WITHOUT PREJUDICE TO GROUND NO.3 TAKEN ABOVE, TH E LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 1,58,529/- ULS 3 14A RESULTING INTO THE TOTAL DISALLOWANCE OF RS. 5,22,475/- MADE UNDER THE IMPUGNED PROCEEDINGS, WHICH, BEING MORE THAN THE TOTAL EXPENDITURE OF RS. 4,57,600/- DEBITED TO THE PROFIT & LOSS ACCOUNT, CANNOT BE PERMITTED. THUS, THE DISALLOWANCE ULS 14A, IF HELD AS VALIDLY MADE, SHOULD BE REDUCED BY THE SAID EXCESS SUM ACCORDINGLY. 6. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 4. DURING THE HEARING, LD. A.R. OF THE ASSESSEE, HA S STATED THAT ASSESSEE HAS FILED ALL THE NECESSARY DOCUMENTARY E VIDENCES BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A) WHICH HAS N OT BEEN CONSIDERED BY BOTH THE AUTHORITIES. HE REQUESTED T HAT THE ISSUE IN DISPUTE MAY BE SET ASIDE TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE SAME AS PER LAW, AFTER GIVING ADEQUATE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. HE ALSO UNDERTAKES TH AT IF THE MATTER IS SET ASIDE TO THE AO, THE ASSESSEE WILL APPEAR BEFO RE THE AO AND FULLY COOPERATE WITH THE AO AND WILL NOT TAKE ANY UNNECES SARY ADJOURNMENT. LD. COUNSEL OF THE ASSESSEE ALSO FILED A PAPER BOOK CONTAINING PAGES NO. 1 TO 49 HAVING THE COPY OF DET AILS OF EXPENSES BOOKED AS LOSS ON AGRICULTURAL OPERATIONS (A) A PHO TOCOPY OF THE STATEMENT OF ACCOUNT FROM AGRICULTURE OPERATION FOR THE YEAR ENDED 31.3.2012 IN THE BOOKS OF THE ASSESSEE; (B) A PHOTO COPY OF THE DEBIT 4 NOTE DATED 31.3.2012 RAISED BY M/S ILAC INVESTMENT LIMITED; (C) A LIST SHOWING NATURE OF AGRICULTURE INCOME AND EXPEN SES; (2) A PHOTOCOPY OF THE MEMORANDUM OF ASSOCIATION DATED 1 3.8.2010 AMONGST THE CO-OWNERS FOR DEVELOPMENT OF PROPERTY; (3) A PHOTOCOPY OF DEVELOPMENT AGREEMENT DATED 13.8.2010 BETWEEN THE CO-OWNERS AND THE DEVELOPER; 4(A) A PHOTOCOPY OF TH E LEDGER ACCOUNT OF RENT, RATES AND TAXES AS ON 31.3.2012 IN THE BOO KS OF THE ASSESSEE; (B) A PHOTOCOPY OF THE PROPERTY TAX INVOI CE NO. WGF/03/2011-12 DATED 29.6.2011 ISSUED BY THE OTHER CO-OWNER; (C) A PHOTOCOPY OF THE PROPERTY TAX RECEIPT FOR THE F Y 2011-12 FROM MUNICIPAL CORPORATION OF DELHI; (5) A PHOTOCOPY OF THE COMPUTATION OF ASSESSABLE INCOME, BALANCE SHEET AND PROFIT AND LOS S ACCOUNT FOR THE AY 2012-13 OF THE ASSESSEE; (6) A PHOTOCOPY OF THE DETAILS OF NON- CURRENT INVESTMENTS FOR THE YEAR ENDED 31.3.2012 OF THE ASSESSEE; (7) A PHOTOCOPY OF THE EVIDENCE FOR PROSE OF GHCL SHARES FROM OF M/S KK SECURITIES LTD. DURING THE YEAR; (8) A PHOTO COPY OF THE CIRCULAR NO. SO 1949(E)[F.NO. 370142/7/2016-TPL) DA TED 2.6.2016 OF THE CBDT REGARDING DISALLOWANCE U/S. 14A OF THE ACT; (9) A CHART SHOWING DETAILS OF PROFIT / LOSS FOR 10 YEARS; (10) DEFINITION OF STRATEGIC INVESTMENT DOWNLOADED FROM ECONOMYWATCH.C OM; (11) PHOTOCOPIES OF THE FOLLOWING WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS DATED 22. 7.2016, 14.8.2016, 22.8.2016 AND 30.8.2016. LD. COUNSEL OF THE ASSESSEE ALSO CERTIFIED THAT THE ABOVE DOCUMENTS WERE PLACED ON RECORD OF AUTHORITIES BELOW. HE FURTHER STATED THAT THESE DOC UMENTS WERE NOT APPROPRIATELY CONSIDERED BY THE AUTHORITIES BELOW. 5. ON THE CONTRARY, LD. DR OPPOSED THE REQUEST OF T HE LD. COUNSEL OF THE ASSESSEE. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW. I F IND THAT LD. COUNSEL OF THE ASSESSEE FILED A PAPER BOOK CONTAINING PAGE S NO. 1 TO 49 HAVING THE COPY OF (A) A PHOTOCOPY OF THE STATEMENT OF ACCOUNT FROM 5 AGRICULTURE OPERATION FOR THE YEAR ENDED 31.3.2012 IN THE BOOKS OF THE ASSESSEE; (B) A PHOTOCOPY OF THE DEBIT NOTE DAT ED 31.3.2012 RAISED BY M/S ILAC INVESTMENT LIMITED; (C) A LIST SHOWING NATURE OF AGRICULTURE INCOME AND EXPENSES; (2) A PHOTOCOPY OF THE MEMORANDUM OF ASSOCIATION DATED 13.8.2010 AMONGST THE CO- OWNERS FOR DEVELOPMENT OF PROPERTY; (3) A PHOTOCOPY OF DEVELOPMENT AGREEMENT DATED 13.8.2010 BETWEEN THE C O-OWNERS AND THE DEVELOPER; 4(A) A PHOTOCOPY OF THE LEDGER A CCOUNT OF RENT, RATES AND TAXES AS ON 31.3.2012 IN THE BOOKS OF TH E ASSESSEE; (B) A PHOTOCOPY OF THE PROPERTY TAX INVOICE NO. WGF/03/20 11-12 DATED 29.6.2011 ISSUED BY THE OTHER CO-OWNER; (C) A PHOTO COPY OF THE PROPERTY TAX RECEIPT FOR THE FY 2011-12 FROM MUNICI PAL CORPORATION OF DELHI; (5) A PHOTOCOPY OF THE COMPUTATION OF ASSESS ABLE INCOME, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE A Y 2012-13 OF THE ASSESSEE; (6) A PHOTOCOPY OF THE DETAILS OF NON-CU RRENT INVESTMENTS FOR THE YEAR ENDED 31.3.2012 OF THE ASSESSEE; (7) A PHOTOCOPY OF THE EVIDENCE FOR PROSE OF GHCL SHARES FROM OF M/S KK SECURITIES LTD. DURING THE YEAR; (8) A PHOTOCOPY OF THE CIRCULAR NO . SO 1949(E)[F.NO. 370142/7/2016-TPL) DATED 2.6.2016 OF THE CBDT REGARDING DISALLOWANCE U/S. 14A OF THE ACT; (9) A C HART SHOWING DETAILS OF PROFIT / LOSS FOR 10 YEARS; (10) DEFINIT ION OF STRATEGIC INVESTMENT DOWNLOADED FROM ECONOMYWATCH.COM; (11) P HOTOCOPIES OF THE FOLLOWING WRITTEN SUBMISSIONS FILED BY THE A SSESSEE DURING THE APPELLATE PROCEEDINGS DATED 22.7.2016, 14.8.2016, 2 2.8.2016 AND 30.8.2016, WHICH HAS NOT BEEN CONSIDERED BY THE AO. IN THE INTEREST OF JUSTICE, I AM OF THE VIEW THAT ISSUE IN DISPUTE DESERVE TO BE SET ASIDE TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE SAME AS PER LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AFTER APPRECIATING THE DOCUMENTARY EVIDE NCE FILED IN THE SHAPE OF PAPER BOOK, AS MENTIONED ABOVE. THE ASSESS EE IS ALSO DIRECTED TO FULLY COOPERATE WITH THE AO AND DID NOT SEEK ANY 6 UNNECESSARY ADJOURNMENT AND PRODUCE ALL THE DOCUMEN TARY EVIDENCES BEFORE HIM. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 02-08-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED : 02-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.