DCIT RG 8(2), MUMBAI V. HOTEL CORPORATION OF INDIA, MUMBAI

ITA 2723/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8466 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 08-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Wholly owned subsidiary; Assessment record
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI I.P.BANSAL,JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 2723/MUM/2011(A.Y. 2006-07) THE DY.CIT, CIR. 8(2), ROOM NO.216-A, AAYKAR BHAVAN, MK ROAD, MUMBAI - 20. (APPELLANT) VS. M/S. HOTEL CORPORATION OF INDIA LTD., TRANSPORT ANNEXE BLDG., 1 ST FLOOR, AIR INDIA COMPLEX, OLD AIR PORT, SANTACRUZ (EAST), MUMBAI - 400 029. PAN:AAACH 2768R (RESPONDENT) APPELLANT BY : SHRI RAKESH RANJAN RESPONDENT BY : NONE DATE OF HEARING : 08/11/2012 DATE OF PRONOUNCEMENT : 08 /11/2012 ORDER PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DI RECTED AGAINST THE ORDER DATED 03/12/2010 PASSED BY LD. CIT(A)-17, MUMB AI FOR THE ASSESSMENT YEAR 2006-07. THE GROUND OF APPEAL RAISED BY THE REVENUE READS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW L OSS OF RS.1,35,37,727/- AS CLAIMED BY THE ASSESSEE, WITHOUT APPRECIATING THE F ACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSE ES CLAIM OF SUBMISSION OF INFORMATION FOR LOSS CLAIMED VIDE LETTER DATED 21/0 8/2008, IS NOT CORRECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE DISALLOWANCE OF LOSS CLAI MED IN THE RETURN FILED ALONG WITH AUDITED STATEMENT OF ACCOUNTS AND AUDIT REPORT IS NOT WARRANTED, WITHOUT APPRECIATING THE FACTS OF THE CASE. ITA NO. 2723/MUM/2011(A.Y. 2006-07) 2 2. THIS APPEAL WAS LISTED FOR HEARING ON 8/11/20 12, WHEN NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING LD. D.R, EX-PARTE QUA THE ASSESSEE. 3. ASSESSEE, IN THE PRESENT CASE IS A PUBLIC SECTOR UNDERTAKING AND IS 100% SUBSIDIARY OF AIR INDIA LTD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LUXURY HOTELS AT DELHI AND SRINAGAR AND HAS ALSO FL IGHT KITCHENS AT MUMBAI AND DELHI. THE RETURN OF INCOME WAS FILED AT NIL C LAIMING A LOSS OF RS. 1,35,37,727/- TO BE CARRIED FORWARD. THE AO ISSUED CERTAIN NOTICES AND HE HAS ALSO RECORDED IN THE ASSESSMENT ORDER THAT IN RESPO NSE TO THOSE NOTICES THE ASSESSEE HAS FILED PART DETAILS. ON ACCOUNT OF NO N-SUBMISSION OF BALANCE DETAILS THE AO DENIED THE BENEFIT TO THE ASSESSEE F OR CARRY FORWARD LOSS OF RS.1,35,37,727/-. THE ACTION OF THE AO WAS AGITATE D IN AN APPEAL BEFORE LD. CIT(A). IT WAS SUBMITTED THAT THE ASSESSEE HAD ATT ENDED ALL THE NOTICES ISSUED BY AO AND DATE WISE DETAILS WAS GIVEN IN STATEMENT OF FACTS, WHICH IS REPRODUCED BELOW: S.NO. DATE PERSONS ATTENDING TO DCIT DETAILS. 1. 05.06.2008 MRS. G.PRADHAN FROM HCI(APPELLANT) WITH SHRI R.J. SHUKLA, CA OF D.J.SHUKLA & CO. CHARTERED ACCOUNTANTS ATTENDED. THE DCIT AFTER PERUSING THE RETURN OF INCOME, AUDITED ACCOUNTS ETC. INFORMED THAT A QUESTIONNAIRE SEEKING INFORMATION WILL BE ISSUED AND APPELLANT SHOULD FILED DETAILS ACCORDINGLY AND HE INFORMED THAT THEREAFTER, THE HEARING WILL BE FIXED ON SOME OTHER DATE. 2. RECEIVED NOTICE U/S. 142(1) OF I.T. ACT, 1961 DA TED 08.08.2008 RECEIVED FROM DCIT, RANGE 8(2), REQUIRING SUBMISSION OF DETAILS ON 22.0 8.2008. 3. 05.09.2008 MRS. G.PRADHAN FROM HCI(APPELLANT) WITH MRS. M.J.MEHTA, CA OF D.J.SHUKLA & CO. CHARTERED ACCOUNTANTS ATTENDED. SUBMITTED LETTER NO. HO:ACCTS/ITDJ/758 DATED AUGUST 21, 2008 TOGETHER WITH THE INFORMATION REQUIRED TO BE SUBMITTED BY DCIT. DISCUSSED THE CASE WITH DCIT. 14.10.2008 MRS. G.PRADHAN, HCI WITH SHRI R.J.SHUKLA, CA OF D.J.SHUKLA & CO. CHATERED ACCOUNTANTS ATTENDED. WAITED TO MEET THE DCIT FOR MORE THAN ONE HOUR DISCUSSED WITH DCIT AND REQUESTED TO PLEASE CALL D.J. SHUKLA & CO. IF ANY FURTHER DETAILS / DOCUMENTS ARE REQUIRED. ITA NO. 2723/MUM/2011(A.Y. 2006-07) 3 WHEN THEY WERE ABOUT TO LEAVE, KEEPING A NOTE FOR DCIT AT ABOUT 3.20 PM, THE DCIT CAME TO HIS ROOM. 4. 02.01.2009 NOTHING WAS HEARD FROM DCIT TILL RECEIPT OF ORDER U /S. 14393) DATED 31.12.2008. 4. ON THIS SUBMISSION OF THE ASSESSEE LD. CIT(A) HA S RECORDED A FINDING THAT ASSESSEE HAD REPLIED THE QUESTIONNAIRE ISSUED BY THE AO AND NO FURTHER SPECIFIC INFORMATION WAS CALLED FOR, THEREFORE, DIS ALLOWANCE OF LOSS CLAIMED IN THE RETURN FILED ALONGWITH AUDITED STATEMENT OF AC COUNTS AND AUDIT REPORT WAS NOT WARRANTED. HE, THEREFORE, DIRECTED THE AO TO A LLOW THE LOSS AS CLAIMED BY THE ASSESSEE. IT IS AGAINST THIS FINDING OF THE LD . CIT(A), THE DEPARTMENT HAS FILED THE AFOREMENTIONED APPEAL. 5. IT WAS SUBMITTED BY LD. DR THAT ASSESSMENT RECOR DS HAS BEEN CALLED FOR AND THE SAME IS AVAILABLE WITH HIM. THE ASSESSMENT RECORD WAS PERUSED BY THE BENCH AND IT WAS FOUND THAT ASSESSEE HAD FILED ALL EVIDENCES EXCEPT DETAILS REGARDING TDS WHICH HAS NOT BEEN MADE THE BASIS BY THE AO TO REJECT THE CLAIM OF LOSS. HOWEVER, ASSESSEE HAS SUBMITTED THE DETAI LS BY WAY OF VOLUMINOUS PAPER BOOK WITH THE LETTER REPLYING TO ALL QUESTION NAIRES ISSUED BY THE AO. HOWEVER, LD. D.R RELIED UPON THE ASSESSMENT ORDER A ND PLEADED THAT AO WAS RIGHT IN MAKING THE DISALLOWANCE OF LOSS. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. DR AND CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS ORDER PASSED BY LD. CIT(A). WE HAVE ALSO PERUSED THE ASSESSMENT RECORD WHICH WAS P RODUCED BY LD. DR AND WE FIND THAT ASSESSEE HAS FILED ALL REQUIRED DETAIL S FROM WHERE THE CLAIM MADE BY THE ASSESSEE IN THE P&L ACCOUNT COULD BE VERIFIE D. NO SPECIFIC QUESTION WAS PUT BY THE AO AND IT HAS ALSO NOT BEEN SPECIFIED TH AT WHAT IS THE BASIS OF DISALLOWING THE LOSS. THE ASSESSEE HAS ALSO FIELD AUDITED ACCOUNTS AND IT IS A PUBLIC SECTOR UNDERTAKING. KEEPING IN VIEW ALL THE SE FACTS IN MIND, WE SEE NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) VIDE W HICH IT HAS BEEN HELD THAT ITA NO. 2723/MUM/2011(A.Y. 2006-07) 4 DISALLOWANCE OF LOSS BY THE AO WAS NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE DECLINE TO INTERFERE IN SUCH FINDING RECORDED BY LD. CIT(A) AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 8 TH DAY OF NOV. 2012 SD/- SD/- (RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 8 TH NOV. 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.R H BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.