M/s Embassy Inn Private Limited , Bangalore V. The Assistant Commissioner of Income Tax Circle-2(1)(2), Bangalore

ITA 2781/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8216 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 04-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRIM. RAJASEKHAR
• Keywords: Revised return; Rule 8D
• Section: 143(3); 142(1); 14A; 250; 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO. 2781 /BANG/2018 (ASSESSMENT YEAR: 201 5 - 16 ) M/S. EMBASSY INN PVT. LTD., 1 ST FLOOR, EMBASSY POINT, 150, INFANTRY ROAD, BANGALORE - 560 001 .APPELLANT. VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2), BANGALORE. ..RESPONDENT. ITA. NO. 2825 /BANG/2018 (ASSESSMENT YEAR: 201 5 - 16 ) (BY REVENUE) ASSESSEE BY: NONE. REVENUE BY: SHRI M. RAJASEKHAR, ADDL. CIT. DATE OF HEARING : 15.07 .2019 DATE OF PRONOUNCEMENT : 17 .07 .2019 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE SE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 4 , BANGALORE PASSED U/S 1 4 3 (3) AND U/S 250 OF THE INCOME TAX ACT, 1961. 2 ITA NOS.2781 & 2825/BANG/2018 2. WE SHALL TAKE UP THE APPEAL OF ASSESSEE IN ITA NO.2781/BANG/2018. AT THE TIME OF HEARING, IT WAS BROUGHT TO THE KNOWLEDGE OF THE BENCH THAT THERE IS A SHORT PAYMENT OF APPEAL FEES OF RS.9,500. IN THIS REGARD, A DEFECT MEMO ALONG WITH THE NOTICE HAS B EEN ISSUED TO THE ASSESSEE. A COPY OF DEFECT MEMO IS AS UNDER : 3 ITA NOS.2781 & 2825/BANG/2018 FURTHER T HE CASE WAS POSTED ON 4.2.2019, ON THE SAID DATE, THE LD. AR OF THE ASSESSEE SOUGHT ADJOURNMENT AND THE CASE WAS POSTED ON 7.5.2019. ON THE SAID DATE OF HEARING, ON THE REQUES T OF LD. AR VIDE LETTER DT.6.5.2019 THE CASE WAS ADJOURNED TO 5.9.2019. SUBSEQUENTLY, FOR THE SPEEDY DISPOSAL OF APPEAL, THE CASE WAS POSTED PREPONED TO 5.7.2019 AND NOTICE WAS ISSUED ON 14.6.2019 BY RPAD AND ACKNOWLEDGEMENT OF RPAD IS PLACED ON RECORD THAT THE NOTICE HAS BEEN RECEIVED ON 2 4 .6.2019 . B U T AN ADJOURNMENT LETTER DT.13.7.2019 WAS SENT BY POST TO THE ASST.REGISTRAR, BANGALORE AND WAS RECEIVED BY THE OFFICE ON 15.7.2019 AT 2.15 P.M (LETTER PLACED ON RECORD) . NONE APPEARED AT THE TIME OF HEARING , FROM THE FILE REC ORD IT WAS FOUND THAT THE ASSESSEE HAS NOT RECTIFIED THE DEFECT OF SHORT PAYMENT OF APPEAL FEES OF RS.9,500 AND BALANCE PAYMENT IS OUTSTANDING PAYABLE . WE 4 ITA NOS.2781 & 2825/BANG/2018 CONSIDERING THE ACTION OF THE ASSESSEE IN NOT RECTIFYING THE DEFECT AND NON - COMPLIANCE OF THE DIRECTIONS OF THE ITAT, REGISTRY, DISMISS THE APPEAL OF ASSESSEE . 3. THE REVENUE HAS FILED AN APPEAL IN ITA NO.2825/BANG/2018. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 4. THE BRIEF FACT OF THE CASE AR E THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND FILED THE RETURN OF INCOME FOR THE ASST. YEAR 2015 - 16 ON 30.09.2015 DECLARING TOTAL INCOME OF RS.93,29,441 AND SUBSEQUENTLY FILED REVISED RETURN OF INCOME ON 27.9.2015 WITH NIL INCOME. T HE CASE WAS SELECTED FOR SCRUTINY AND NOTICES WERE ISSUED UNDER SECTION 143(2) & 142(1) OF THE ACT. THE ASSESSING OFFICER ON PERUSAL OF THE FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE'S BUSINESS LOSS CANNOT BE ALLOWED BECAUSE THE ASSESSEE WAS ENGAGED I N INVESTMENT ACTIVITY OF OBTAINING FUNDS AND ADVANCING THE FUNDS TO ITS GROUP AND SISTER CONCERNS. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, IS OF THE OPINION THAT THE BUSINESS OF THE ASSESSEE COMPANY IS NOT SETUP AND CON SIDERING THE MATCHING CONCEPT OF ACCOUNTING HAS DISALLOWED BUSINESS LOSS OF RS.37,32,655 AND MADE DISALLOWANCE UNDER SECTION 14A R.W. RULE 8D OF RS. 54,43, 142 AND ASSESSED THE TOTAL INCOME OF RS.36,42,970 AND PASSED ORDER 5 ITA NOS.2781 & 2825/BANG/2018 UNDER SECTION 143(3) OF THE ACT DT. 27.12.2017. AGGRIEVED BY THE ORDER OF ASSESSMENT, THE ASSESSEE FILED APPEAL WITH THE CIT (APPEALS). THE CIT (APPEALS) CONSIDERING THE EXPLANATIONS AND SUBMISSIONS AT PARA 7 OF THE ORDER AND ASSESSING OFFICERS OBSERVATIONS IN RESPECT OF DISALLOWANCE OF D EDUCTIONS CLAIMED UNDER SECTION 57 OF THE ACT , CIT (APPEALS) HAS GRANTED PARTIAL RELIEF BY RESTRICTING THE DISALLOWANCE UNDER SECTION 57(III) OF THE ACT TO RS.24,65,753 WHICH READ IN PARA 7.2 OF THE ORDER AS UNDER : 6 ITA NOS.2781 & 2825/BANG/2018 AGGRIEVED BY THE CIT (APPEALS) ORDER, THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE CIT (APPEALS) HAS ERRED IN GRANTING THE RELIEF IN RESTRICTING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 57 OF THE ACT AGAINST THE ORIGINAL DISALLOWANCE OF THE ASSESSING OFFICER AND PRAYED FOR ALLOWING THE REVENUES APPEAL. NONE APPEARED ON BEHALF OF THE ASSESSEE. 6. WE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS EMPHASIZING T HAT THE CIT (APPEALS) HAS ERRED IN RESTRICTING THE DEDUCTION TO RS.24,65,753 WHERE AS THE ASSESSING OFFICER HAS MADE DISALLOWANCE IN THE ASSESSMENT ORDER OF RS.95,73,377 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF ASSESSING OFFICER, WE FIND THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE OBSERVATIONS OF THE CIT (APPEALS) WITH NEW EVIDENCE OR COGENT MATERIAL EXCEPT RELYING ON THE ORDER OF THE ASSESSING OFFICER. WE FIND THAT THE CIT (APPEALS) HAS CONSIDERED THE F ACT S AND TAKEN A REASONABLE VIEW WHICH WE ARE NOT INCLINED TO INTERFERE AND UPHOLD THE SAME AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 7 ITA NOS.2781 & 2825/BANG/2018 7. IN THE RESULT, APPEAL S OF THE ASSESSEE A ND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 T H JULY, 2019. S D / - S D / - (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 7 .07. 2019. *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE