DCIT, New Delhi V. M/s. Housing and Urban Development Corporation Ltd., New Delhi

ITA 3693/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6953 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 14-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2013
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Assessee Lawyers: SSH GAGAN KUMAR
• Keywords: Opportunity of being heard
• Section: 37; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO S . 3692 & 3693 /DEL/ 2013 ASSESSMENT YEAR S : 2009 - 10 & 2008 - 09 DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE - 12(1), NEW DELHI VS. HOUSING AND URBAN DEVELOPMENT CORPORATION LTD., HUDCO BHAWAN, LODHI ROAD, NEW DELHI. PAN: AAACH0632A (APPELLANT) (RESPONDENT) APPELLANT BY SH. A.K. SAROHA, CIT (DR) RESPONDENT BY S/SH. GAGAN KUMAR, ADV. & AMIT KAUSHIK, CA DATE OF HEARING 17.12.2015 DATE OF PRONOUNCEMENT 12.02.2016 ORDER PER O.P. KANT , A. M. : THE PRESENT APPEALS BY THE REVENUE ARE DIRECTED AGAINST SEPARATE ORDER S DATED 21.03.2013 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XV, NEW DELHI , PASSED FOR THE ASSESSMENT YEARS 2009 - 10 AND 2008 - 09. THE SOLE GROUND OF APPEAL RAISED, BEING IDENTICAL IN BOTH THE APPEALS EXCEPT THE AMOUNT , IS AS UNDER: 1. WHETHER LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS CORRECT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION OF RS. 1,94,26,084/ - MADE BY THE ASSESSING OFFICER ON WRITING OFF OF FINANCIAL CHARGES? 2 ITA NOS. 3692 & 3693/DEL/2013 AY: 2009 - 10 & 2008 - 09 2. T HE SOLE ISSUE IN QUESTION HA S ALREADY BEEN DECIDED BY THIS B ENCH VIDE ORDER DATED 09.02.2016 IN ITA NOS. 4303/DEL/2009 ; 1166 TO 1168/D EL/2012; 3365 & 3366/DEL/2013 FOR ASSESSMENT YEAR S 2004 - 05 TO 2009 - 10 IN PARA NO S. 8 TO 8.2, WHICH IS REPRODUCED AS UNDER: 8. IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF FINANCIAL CHARGES WRITTEN OFF OF RS. 3,07,77,527/ - , CLAIMED IN THE COMPUTATION OF INCOME. ACCORDING TO LD. ASSESSING OFFICER THE EXPENSES WERE TOWARDS ISSUE OF BONDS, DEBENTURES , TERM LOANS ETC., AND THEREFORE HE HELD THE EXPENSES AS CAPITAL IN NATURE BEING FOR THE PURPOSE OF EXTENSION OF BUSINESS OF THE ASSESSEE, IN VIEW OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF BROOKE BOND INDIA VS. COMMISSIONER OF INCOME TAX, (1997) 225 ITR 798, AND THEREFORE NOT ALLOWABLE. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE CLAIMED THAT IT WAS A NON - BANKING FINANCIAL INSTITUTION ENGAGED IN PROVIDING LONG TERM FINANCES FOR HOUSING PROJECTS AND URBAN DEVELOPM ENT AND FOR THIS PURPOSE, THE ASSESSEE RAISED FUNDS BY WAY OF ISSUE OF BONDS, DEBENTURE, DEPOSITS, LOANS IN ADVANCE FROM VARIOUS SOURCES AND AGENCIES. HOWEVER, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ASSESSMENT YEAR 2004 - 05 SUSTAINED DISALLOWANCE OF RS. 3,07,77,527/ - AS UNDER: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT AND THE CASE LAW CITED. THE ITAT FOR THE A/Y 1996 - 97, SET ASIDE THE ISSUE TO THE FILE OF AO WITH A DIRECTION TO EXAMINE WHETHER ASSESSEE S CASE IS COVERED BY THE PROVISION OF SECTION 35D OR NOT. IF THE CASE IS NOT COVERED BY SECTION 35D OF THE ACT, THE CLAIM CAN BE EXAMINED UNDER SECTION 37 OF THE ACT. THE AO WILL EXAMINE THE CASE AFRESH AND DECIDE THE ISSUE AS PER LAW AFTER AFFORDING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. REFER PAGE NO.9 OF ITAT ORDER DATED 31.08.2007. HOWEVER, FOR ASSESSMENT YEAR 2004 - 05 THE CIT, APPEAL - XII, IN APPEAL NO. 71/07 - 08 DATED 15.07.2009 H AS HELD WHILE MAKING THE SAID DISALLOWANCE ASSESSING OFFICER HAS OBSERVED THAT FUNDS RAISED BY THE ASSESSEE ARE OF FIXED TENURE AND THEREFORE THE ASSESSEE AMORTIZED THE EXPENDITURE FOR RAISING THE FUNDS OVER THE TENURE OF THE FUNDS RAISED BY IT ON PRO - RA TA BASIS IN ITS BOOKS OF ACCOUNTS. THE ASSESSEE RECEIVED BENEFIT ON THE EXPENDITURE INCURRED BY IT OVER THE TENURE OF LOANS/BONDS AND THEREFORE THE EXPENDITURE ALSO SHOULD BE SPREAD OVER THE TENURE OF 3 ITA NOS. 3692 & 3693/DEL/2013 AY: 2009 - 10 & 2008 - 09 LOANS/BONDS. HE THEN PROCEEDED TO MAKE THE SAID DISALLO WANCE OBSERVING THAT: THE CLAIM OF FINANCE CHARGES MADE BY THE ASSESSEE AMOUNTING TO RS. 20,25,06,417/ - IS HEREBY DISALLOWED. HOWEVER, THE AMORTIZED PART OF THESE EXPENSES, WHICH WAS CLAIMED BY THE ASSESSEE ITSELF IN ITS BOOKS OF ACCOUNTS AMOUNTING TO RS. 15,67,86,815/ - IS ALLOWED TO THE ASSESSEE. THE EXCESS DEDUCTION CLAIMED BY THE ASSESSEE AMOUNTING TO RS. 4,57,19,602/ - IS HEREBY DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. IN VIEW OF THE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 2004 - 05 AND FINDIN GS OF THE ASSESSING OFFICER, I SUSTAIN THE DISALLOWANCE OF RS. 3,07,77,527/ - . APPEAL ON THIS GROUND IS DISMISSED. 8.1 THE LD. AR SUBMITTED THAT THE ISSUE IN DISPUTE WAS RESTORED BACK TO THE LD ASSESSING OFFICER BY THE TRIBUNAL FOR ASSESSMENT YEARS 2002 - 03 AND 2003 - 04. THE LEARNED CIT(DR), ON THE OTHER HAND, RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 8.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSISTENT WITH THE VIEW TAKEN IN PARAGRAPH 16 THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2002 - 03 IN ITA NO. 686/DEL/2006 AND PARAGRAPH 10 OF THE ORDER FOR ASSESSMENT YEAR 2003 - 04 IN ITA NO. 687/DEL/2006 IN THE ASSESSEE S OWN CASE, WE RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCO RDANCE WITH LAW. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 3. IN VIEW OF ABOVE FINDINGS, WE ARE OF THE OPINION THAT THE ISSUE IN QUESTION NEED TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW, AND THUS FOLLOWING OUR OWN FINDINGS IN THE AFORESAID APPEALS, WE DECIDE THE GROUND OF THE APPEAL OF THE REVENUE ACCORDINGLY AND RESTORE THE MATTER TO THE ASSESSING OFFICER WITH THE DIRECTION GIVEN IN PARA 8.2 OF THE ORDER OF THE TRIBUNAL IN ITA NOS. 4303/DEL/2009 ; 1166 TO 1168/DEL/2012; 3365 & 3366/DEL/2013 FOR ASSESSMENT YEAR S 2004 - 05 TO 2009 - 10. 4 ITA NOS. 3692 & 3693/DEL/2013 AY: 2009 - 10 & 2008 - 09 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES . THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY , 2016 . S D / - S D / - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 2 T H FEBRUARY , 2016 . RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI