M/s. Blackwood Developers P. Ltd., Lucknow V. ACIT, New Delhi

ITA 2720/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6570 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Opportunity of being heard; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. BHAVNESH SAINI, ACCOUNTANT MEMBER AND SH. R. K. PANDA, JUDICIAL MEMBER ITA NO.2720/DEL/2017 ASSESSMENT YEAR: 2013-14 BLACKWOOD DEVELOPERS P. LTD. MAHMOODABAD ESTATE BUILDING, 15, HAZRATGANJ, LUCKNOW -226001 PAN NO. AADCB2661A VS. ACIT CIRCLE 5 (1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. PRATAP GUPTA, CA RESPONDENT BY SH. S. L. ANURAGI, SR. DR DATE OF HEARING: 05/02/2020 DATE OF PRONOUNCEMENT: 10/02/2020 ORDER PER R.K PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 17.02.2017 OF THE CIT(A)-35, NEW DELHI RELATING TO A.Y.2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- PAGE | 2 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WHICH IS ILLEGAL, IMPROPER AND AGAINST THE PRINCIPLES OF NATURAL 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE ORDER WITHOUT GIVING AD EQUATE OPPORTUNITY OF BEING HEARD. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF INTE REST OF 33,75,088/- (5F 24,98,828.53 + 8,76,259/-) MADE BY THE LD. ASSESSING OFFICER. 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN NOT GRANTING RELIEF SOUGHT BY THE A PPELLANT IN APPEAL. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUND OF APPEAL OR RAISE ANY NEW GROUND OF APPEAL DURING THE PENDENCY OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF ARE THAT THE ASSESSE E IS A COMPANY ENGAGED IN MALL AND MULTIPLEX BUSINESS. IT FILED ITS RETURN OF INCOME ON 28.09.2013 DECLARING TOTAL LOSS OF RS.14,17,20,823/-. THE AO COMPLETED THE ASSESSMENT U/S. 143(3) ON 04.02.2016 DETERMINING THE TOTAL LOSS AT RS.12,84,32,1260/-WHEREIN HE DISALLOWED INCOME FROM HOUSE PROPERTY AT RS.1,18,34,435/- AND BUSINESS LOSS OF R S.14,54,331/- . WHILE DOING SO HE DID NOT CONSIDER THE REVISED CO MPUTATION OF INCOME ON THE GROUND THAT THE SAME WAS NOT FILED TH ROUGH A REVISED RETURN WHERE THE TIME FOR FILING A REVISED RETURN HAS EXPIRED. 4. IN APPEAL THE LD. CIT(A) DISMISSED THE APPEAL FI LED BY THE ASSESSEE BY OBSERVING AS UNDER :- PAGE | 3 '4.4.1. I HAVE CAREFULLY PERUSED THE ASSESSMENT ORD ER AS WELL AS THE ASSESSMENT ORDER AND THE VERIFICATION REPORT DA TED 30.01.2017. 4.4.2. THE FIRST ISSUE THAT REQUIRES ADJUDICATION I S WHETHER AN APPELLANT IS COMPETENT TO REVISE COMPUTATION OF INC OME AFTER EXPIRY OF THE DATE OF REVISING RETURN OF INCOME AND SHOULD THE AO ACCEPT SUCH A REVISED COMPUTATION FILED AFTER INITI ATION OF ASSESSMENT PROCEEDINGS. 4.4.3. IN THE PRESENT CASE THE AO ACCEPTED THE RENTAL REC EIPT OF RS. 1,69,06,336.00/- SHOWN FROM 01.04.2012 TO 30.06.201 2 VIDE REVISED COMPUTATION OF INCOME, DURING ASSESSMENT PROCEEDING S. HOWEVER HE FAILED TO ALLOW DEDUCTION ON ACCOUNT OF INTEREST ON BORROWED CAPITAL OF RS. 24,98,828/- 81 RS.876259/- AS THE CO MPUTATION WAS REVISED DURING ASSESSMENT PROCEEDINGS AND NOT B Y WAY OF A REVISED RETURN. 4.4.4. TO THIS EXTENT I FIND THE ACTION OF THE AO N OT LEGALLY TENABLE AS ONCE A REVISED RENTAL RECEIPT IS ACCEPTED DESPIT E THE FACT THAT TIME FOR REVISING RETURN HAD EXPIRED THEN THE AO CA NNOT HAVE A DIFFERENT APPROACH FOR ALLOWING DEDUCTION ON ACCOUN T OF INTEREST ON BORROWED CAPITAL. HE IS LEGALLY BOUND TO ACCEPT THE LATTER ALSO, ALTHOUGH HE HAS AUTHORITY TO VERIFY THE SAME. 4.4.5. IT IS ALSO OBSERVED THAT BEFORE ME DURING AP PELLATE PROCEEDINGS THE AR HAS FAILED TO PRODUCE ANY DOCUME NTS/RELEVANT PAPER AS CONCRETE EVIDENCE TO SUBSTANTIATE THE CLAI M OF INTEREST ON BORROWED CAPITAL. OPPORTUNITY WAS AFFORDED DURING A PPELLATE PROCEEDINGS BY WAY OF NOTICES AND HEARINGS BUT THE AR FAILED TO SUBMIT RELEVANT EVIDENCE/INTEREST DOCUMENTS/BANK PA PERS ETC. 4.4.6. THUS I OBSERVE THAT THE REVISED COMPUTATION OF INCOME CAN BE ACCEPTED BY THE AO. HOWEVER THE SAID REVISED AND SUBSEQUENT CLAIMS IN THE REVISED COMPUTATION HAVE TO BE SUITAB LY SUBSTANTIATED WITH DOCUMENTARY EVIDENCE. THE AR/APP ELLANT HAS PAGE | 4 FAILED TO DO THE SAME. HENCE CLAIM OF DEDUCTION ON ACCOUNT OF INTEREST ON BORROWED FUNDS IS REJECTED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE RECORD. WE FIND DESPITE OPPOR TUNITIES GRANTED BY THE CIT(A) THE ASSESSEE FAILED TO PRODUC E THE RELEVANT MATERIAL FOR CLAIMING INTEREST ON BORROWED CAPITAL. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY HE IS IN A POSITION TO SUBSTANTIATE THE CLAIM WITH EVIDENCE TO THE SATISFACTION OF THE CIT(A). IT IS HIS SUBMISSION THAT THE ASSESSEE IS CONTEMPLATING TO GO FOR THE RE CENTLY ANNOUNCED TAX SETTLEMENT SCHEME. CONSIDERING THE T OTALITY OF THE FACTS OF THE CASE WE DEEM IT PROPER TO RESTORE THE MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO GRANT ONE FINAL O PPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM AND DECIDE THE I SSUE AS PER FACT AND LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROU NDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICA L PURPOSE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10.02.2020. SD/- SD/- (BHAVNESH SAINI) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:-10.02.2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) PAGE | 5 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 05.02.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 05.02.2020 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS 10.02.2020 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 10.02.2020 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 10.02.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 10.02.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 10.0 2.2020 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER