Sh. Rajesh Chanana, New Delhi V. ITO, New Delhi

ITA 3757/DEL/2013

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2003 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 234B; 13

Judgement Text

1 ITA NO. 3757/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 3757/DEL/20 13 (A.Y 2009-10) (THROUGH VIDEO CON FERENCING) RAJESH CHANANA 26, OKHLA INDUSTRIAL ESTATE NEW DELHI AADPC9637Q (APPELLANT) VS ITO WARD-22(4) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 28/03/2013 PASSED BY CIT(A)-XXIII, NEW DELHI FOR ASSESSMENT YE AR 2009-10. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING THE PART DISALLOWANCE OF DEDUCTION OF IN TEREST PAID AND CLAIMED UNDER SECTION 24(B) OF THE ACT, AMOUNTI NG TO RS. 28, 16, 512/-, AS AGAINST THE TOTAL DEDUCTION CLAIM ED BY THE APPELLANT AMOUNTING TO RS. 57, 18, 810/-. APPELLANT BY SH. SHAILESH GUPTA, ADV RESPONDENT BY SH. SUSHMA SINGH, CIT(DR) DATE OF HEARING 7.12.2020 DATE OF PRONOUNCEMENT 07.12.2020 2 ITA NO. 3757/DEL/2013 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING THE BASIC FAC T THAT DURING THE YEAR LOAN AMOUNTING TO RS. 4, 00, 00, 00 0/- WAS RAISED BY THE APPELLANT FROM M/S PNB HOUSING FINANC E LTD., AND INTEREST PAID BY APPELLANT ON THE SAID LOAN AMO UNTED TO RS. 57, 18, 810/-, WHICH WAS WHOLLY ALLOWABLE AS DE DUCTION UNDER SECTION 24 (B) OF THE I.T. ACT 2.1 THAT THE IN DOING SO, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IGNORED THE BASIC FACT THAT TH E INTEREST PAID AMOUNTING TO RS. 28, 16, 512/- PERTAINED TO LO AN AMOUNTS OF RS. 1, 50, 00, 000/- AND RS. 47, 00, 000 /- OUT OF TOTAL LOAN OF RS. 4, 00, 00, 000/-, TAKEN DURING TH E YEAR AND WAS UTILIZED IN MAKING PAYMENTS TO LESSEES M/S EURO MOTORS LTD. AND M/S DAIKIN AIR CONDITIONING INDIA PVT. LTD ., UNDER TERMINATION OF LEASE AGREEMENTS, ON ACCOUNT OF RENO VATION AND RECONSTRUCTION EXPENSES INCURRED BY THEM ON THE PRO PERTY LET OUT AND AS SUCH, WAS AN ALLOWABLE EXPENDITURE UNDER SECTION 24 (B) OF THE ACT. 2.2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER IGNORED THE BASIC FACT THAT T HE AMOUNTS OF RS. 1, 50, 00, 000/- AND RS. 47, 00, 000/- WERE PAID TO THE LESSEES TO SETTLE THE DISPUTE AND THEIR CLAIM, WITH REGARD TO THE EXPENSES INCURRED BY THEM FOR RECONSTRUCTION/ RENO VATION AND ALSO TO ACQUIRE THE SAID PROPERTY, AS THEY WERE NOT GIVING UP THE OCCUPATION OF THE SAID PROPERTY WITHOUT BEING R EIMBURSED FOR THE SAID EXPENDITURES INCURRED BY THEM IN PAST, AND AS SUCH, THE INTEREST ON THE SAME WAS DIRECTLY RELATAB LE TO ACQUISITION AND RECONSTRUCTION OF THE SAID PROPERTY , AND AS 3 ITA NO. 3757/DEL/2013 SUCH, ALLOWABLE UNDER SECTION 24 (B) OF THE ACT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN NOT GIVING THE DEDUCTION OF RS. 28, 16, 512 UNDER SECTION 24(B) OF THE ACT, AS THE LEARNED CIT (A) HAD ACCEPTED THAT THE PAYMENT MADE BY ASSES SEE WAS FOR THE EXPENDITURES ON CONSTRUCTION BEING INCURRED BY THE LESSEES BY GIVING A CATEGORICAL FINDING, AND AS SUC H, THE DISALLOWANCE SO SUSTAINED BY LEARNED CIT (A) IS CON TRARY TO MATERIAL AVAILABLE ON RECORD, AND IS LIABLE TO BE D ELETED. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITIONS IN TH E HANDS OF ASSESSEE COMPANY, WITHOUT GIVING ANY FAIR AND PROPE R OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY . THEREBY, VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED BY SUSTAINING OF LEVY OF INTEREST U/S 234B OF THE ACT, WHICH IS NOT LEVIABLE ON THE FACTS OF THE APPE LLANT COMPANY. 3. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSE E INFORMED US THAT THE ASSESSEE HAS FILED A DECLARATION UNDER VIVAD SE VI SHWASH SCHEME FOR THE SETTLEMENT OF PENDING TAX DISPUTES AND FILED A DECL ARATION IN FORM 1 AND FORM 2 AND FORM 3 IS AWAITED. THE LD. COUNSEL FOR THE AS SESSEE ALSO DREW OUR ATTENTION TO LETTER DATED 7/12/2020 FILED IN INCOME TAX APPELLATE TRIBUNAL GIVING INTIMATION FOR THE SAME. 4. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR ASSESSEE AS WELL AS THE LD. CIT(DR) SUBMITTED BEFORE US THAT THIS APPEA L MAY BE TREATED AS 4 ITA NO. 3757/DEL/2013 WITHDRAWN AND MAY BE DISMISSED ON ACCOUNT OF THE AF ORESAID VIVAD SE VISHWASH SCHEME SUBJECT TO SETTLEMENT OF THE DISPU TES IN THIS APPEAL, UNDER THE AFORESAID VIVAD SE VISHWASH SCHEME. AFTER DU E CONSIDERATION, IN VIEW OF THE FOREGOING; AND AS BOTH SIDES HAVE AGREE TO THIS ; WE TREAT THIS APPEAL AS WITHDRAWN ON ACCOUNT OF THE AFORESAID VIVAD SE VIS HWASH SCHEME. ACCORDINGLY, THIS APPEAL IS DISMISSED, SUBJECT TO S ETTLEMENT OF THE DISPUTES IN THE APPEAL, UNDER THE AFORESAID VIVAD SE VISHWASH SCHEME. HOWEVER, IF THE DISPUTE IS NOT SETTLED FOR SOME TECHNICAL REASON, T HE ASSESSEE CAN APPROACH THE TRIBUNAL FOR THE REVIVAL OF THE APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 6. DECISION ANNOUNCED IN THE OPEN COURT IN THE PRES ENCE OF THE REPRESENTATIVES OF BOTH SIDES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07TH D AY OF DECEMBER, 2020 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 07/12/2020 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI