M/s. REL Infra-facilities Limited, Noida V. DCIT, New Delhi

ITA 2978/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2824 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATIQ AHMED SENIOR
• Assessee Lawyers: RONAK DOSHI CAS
• Keywords: Principle of natural justice
• Section: 143(3)

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 F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, G.D. AGRAWAL, PRESIDENT PRESIDENT PRESIDENT PRESIDENT AND AND AND AND SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA ITAITA ITA NO NONO NO . .. . 2978/DEL/2014 2978/DEL/2014 2978/DEL/2014 2978/DEL/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009 - -- - 10 1010 10 M/S REL INFRA M/S REL INFRA M/S REL INFRA M/S REL INFRA - -- - FACILITIES FACILITIES FACILITIES FACILITIES LIMITED, LIMITED, LIMITED, LIMITED, (FORMERLY KNOWN AS RELIGA (FORMERLY KNOWN AS RELIGA (FORMERLY KNOWN AS RELIGA (FORMERLY KNOWN AS RELIGARE RE RE RE REALTY LIMITED), REALTY LIMITED), REALTY LIMITED), REALTY LIMITED), 7 77 7 TH THTH TH FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER- -- -A, A,A, A, PLOT A PLOT A PLOT A PLOT A- -- -3, 4, 5, 3, 4, 5, 3, 4, 5, 3, 4, 5, SECTOR SECTOR SECTOR SECTOR- -- -125, 125, 125, 125, NOIDA NOIDA NOIDA NOIDA 201 301. 201 301. 201 301. 201 301. PAN : AADCR5579B. PAN : AADCR5579B. PAN : AADCR5579B. PAN : AADCR5579B. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -15(1), 15(1), 15(1), 15(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANKIT AGRAWAL AND SHRI RONAK DOSHI, CAS. RESPONDENT BY : SHRI ATIQ AHMED, SENIOR DR. DATE OF HEARING : 20.12.2017 20.12.2017 20.12.2017 20.12.2017 DATE OF PRONOUNCEMENT : 21.12.2017 21.12.2017 21.12.2017 21.12.2017 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PER G.D. AGRAWAL, PRESIDENT PRESIDENT PRESIDENT PRESIDENT : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2009-10 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVIII, NEW DELHI DATED 3 RD MARCH, 2014. 2. GROUND NO.1 OF THE ASSESSEES APPEAL, WHICH READ S AS UNDER, WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)-XVIII , NEW DELHI (THE CIT(A)) ERRED IN NOT HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-15(1), NEW DELHI (THE AO') U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) IS IN VIOLA TION OF THE PRINCIPLES OF NATURAL JUSTICE. ITA NO.2978/DEL/2014 2 3. ACCORDINGLY, THE SAME IS REJECTED AS NOT PRESSED . 4. GROUND NO.2 READS AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF TH E AO OF DISALLOWING INTEREST EXPENSES AMOUNTING TO RS.1,28,61,855/- PAID ON BORROWED FUNDS ON THE ALLE GED GROUND THAT THE SAID BORROWED FUNDS WAS NOT UTILIZE D FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. 2. THE APPELLANT PRAYS THAT THE AFORESAID DISALLOWA NCE OF RS.1,28,61,855/- BE DELETED. 5. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT THE ASSESSING OFFICER DISALLOWED INTER EST PAID BY THE ASSESSEE ON THE GROUND THAT THE BORROWED MONEY HAS BEEN UTILIZED FOR GIVING ADVANCES TO THE SISTER CONCERN. HE HAS STAT ED THAT IN THE BALANCE SHEET UNDER THE HEAD CURRENT ASSETS, THERE IS LOAN AND ADVANCES TO THE TUNE OF `66.83 CRORES, THE BREAKUP OF WHICH IS GIVEN IN SCHEDULE-G WHICH IS AT PAGE 9 OF THE PAPER BOOK. F ROM THE ABOVE SCHEDULE, HE POINTED OUT THAT THERE IS NO LOAN AND ADVANCES BUT IT IS MAINLY SECURITY DEPOSIT AND ADVANCE PAYMENT OF TAXE S AND OTHER EXPENSES. HE SUBMITTED THAT THE ASSESSEE IS IN THE BUSINESS OF SUBLEASING OF REAL ESTATE I.E., OFFICE PREMISES. T HAT THE ABOVE ADVANCES WERE GIVEN AS SECURITY DEPOSIT FOR TAKING PREMISES ON HIRE. THEREFORE, ALL THE ADVANCES ARE FOR THE PURPOSE OF BUSINESS. HE ALSO STATED THAT THE ADVANCES ARE NOT GIVEN TO SISTER CO NCERN AS STATED BY THE ASSESSING OFFICER AND THE ASSESSEE HAD FURNISHE D THE COPY OF LEASE AGREEMENT WITH THE LANDLORD, FROM WHICH, IT IS EVID ENT THAT THE ADVANCES WERE AS PER LEASE AGREEMENT AND WERE NOT G IVEN TO SISTER CONCERN. 6. LEARNED SENIOR DR, ON THE OTHER HAND, STATED THA T THESE FACTS NEED VERIFICATION AT THE END OF THE ASSESSING OFFIC ER. ITA NO.2978/DEL/2014 3 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED THE MATERIAL PLACED BEFORE US. FROM A PERUSAL OF SCHED ULE-G OF THE BALANCE SHEET, IT IS EVIDENT THAT THE MAJOR PORTION OF LOAN AND ADVANCES IS IN FACT SECURITY DEPOSITS AND SOME LOAN AND ADVA NCES ARE PREPAYMENT OF TAXES AND OTHER EXPENSES. HOWEVER, W HETHER SECURITY DEPOSIT IS FOR HIRING OF THE PREMISES OR NOT NEEDS VERIFICATION. IF THE SECURITY DEPOSIT IS MADE FOR TAKING ANY PREMISES ON HIRE WHICH IS BEING SUBLEASED BY THE ASSESSEE, THEN SUCH DEPOSIT WOULD BE FOR THE PURPOSE OF BUSINESS. WITH THIS OBSERVATION, WE DEEM IT PRO PER TO SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO BE R EADJUDICATED IN THE LIGHT OF OUR OBSERVATION ABOVE. NEEDLESS TO MENTIO N THAT THE ASSESSING OFFICER WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 21.12.2017 . SD/- SD/- (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER PRESIDENT PRESIDENT PRESIDENT PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S REL INFRA M/S REL INFRA M/S REL INFRA M/S REL INFRA- -- -FACILITIES LIMITED, FACILITIES LIMITED, FACILITIES LIMITED, FACILITIES LIMITED, (FORMERLY KNOWN AS RELIGARE REALTY LIMITED), (FORMERLY KNOWN AS RELIGARE REALTY LIMITED), (FORMERLY KNOWN AS RELIGARE REALTY LIMITED), (FORMERLY KNOWN AS RELIGARE REALTY LIMITED), 7 77 7 TH THTH TH FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER FLOOR, TOWER- -- -A, PLOT A A, PLOT A A, PLOT A A, PLOT A- -- -3, 4, 5, 3, 4, 5, 3, 4, 5, 3, 4, 5, SECTOR SECTOR SECTOR SECTOR- -- -125, NOIDA 125, NOIDA 125, NOIDA 125, NOIDA 201 301. 201 301. 201 301. 201 301. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -15(1), NEW DELHI. 15(1), NEW DELHI. 15(1), NEW DELHI. 15(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR