ACIT, Circle- 4(2), New Delhi V. Bharat Hotels Ltd., New Delhi

ITA 4141/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3062 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ALKA GAUTAM
• Assessee Lawyers: R L GA RG
• Keywords: Depreciation; Rule 8D
• Section: 14A; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S. PANNU, HONBLE PRESIDENT & SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.4141/DEL/2017 ASSESSMENT YEAR : 2013-14 ACIT, CIRCLE-4(2), ROOM NO.398D, C.R. BUILDING, NEW DELHI VS M/S BHARAT HOTELS LIMITED, BARAKHAMBA LANE, NEW DELHI-110001 PAN-AAACB1298E APPELLANT RESPONDENT APPELLANT BY MRS. ALKA GAUTAM, SR. DR RESPONDENT BY SH. R. L. GARG, CA DATE OF HEARING 13.10.2021 DATE OF PRONOUNCEMENT 25 .10.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 31.03.2017 OF THE LEARNED CIT(A)-2, NEW DELHI , RELATING TO ASSESSMENT YEAR 2013-14. THE REVENUE HAS RAISED FO LLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING TH E DISALLOWANCE MADE U/S 14A OF THE IT ACT AMOUNTING TO RS.7,24,23, 249/-. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW IN DELE TING THE DISALLOWANCE OF DEPRECIATION ON WORLD TRADE CENTRE AND WORLD TRADE TOWER AMOUNTING TO RS.45,577/- ITA NO.4141/DEL/2017 2 | P A GE 2. THE FACTS, IN BRIEF, ARE THAT IN THIS CASE, THE ORIGINAL RETURN OF INCOME DECLARING LOSS OF RS.122,44,76,054/- WAS FIL ED ON 15.11.2013. THEREAFTER, THE RETURN OF INCOME WAS R EVISED AT THE SAME LOSS. THE CASE WAS SELECTED FOR SCRUTINY ASSES SMENT. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT DISA LLOWED THE EXPENDITURE RELATED TO AMALGAMATION OF ONE OF ITS S UBSIDIARY NAMELY M/S UDAIPUR HOTELS LIMITED WITH THE ASSESSEE AMOUNTING TO RS.13,97,226/-, DISALLOWANCE ON DEPRECIATION REL ATING TO WORLD TRADE CENTRE AND WORLD TRADE TOWER AMOUNTING TO RS. 45,577/- AND DISALLOWANCE MADE INVOKING THE PROVISIONS OF SE CTION 14A OF THE ACT OF RS.7,24,23,249/-. 3. AGGRIEVED AGAINST THIS, THE ASSESSEE FILED APPEA L BEFORE THE LD.CIT(A), WHO DELETED THE DISALLOWANCE OF DEPRECIA TION AND DISALLOWANCE ON ACCOUNT OF PROVISIONS OF SECTION 14 A OF THE ACT. 4. AGGRIEVED AGAINST THE IMPUGNED ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ISSUES AS RAISED BY THE REVENUE IN THE PRE SENT APPEAL ARE COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009-10, 2010-11, 2011-12 AND 2 012-13. ITA NO.4141/DEL/2017 3 | P A GE FURTHER, IT IS SUBMITTED THAT THE APPEAL FILED BY R EVENUE HAVE BEEN DISMISSED BY THE HONBLE DELHI HIGH COURT. 6. ON THE CONTRARY, THE LD. SR. DR OPPOSED THE SUBM ISSIONS OF THE ASSESSEE, HOWEVER, SHE FAIRLY CONCEDED THAT THE ISSUES ARE COVERED AGAINST THE REVENUE BY THE DECISION OF THE TRIBUNAL AND THE HONBLE DELHI HIGH COURT. THE LD. SR. DR, HOWEV ER STRONGLY RELIED UPON THE ASSESSMENT ORDER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. APROPOS TO GROUND NO.1, LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT TO OUR NOTICE THE ORDER OF HONBLE DELHI HI GH COURT RENDERED IN ITA NO.535 & 536/DEL/2015, BOTH TITLED AS PCIT VS BHARAT HOTELS LTD. DATED 11.098.2015 WHEREIN HONBLE DELHI HIGH COURT HAS DECIDED THE ISSUES AGAINST THE REVENUE BY OBSERVING AS UNDER:- 2. AS FAR AS THE ISSUE RELATING TO DEPRECIATION B EING ALLOWED TO THE ASSESSEE IN RESPECT OF THE WORLD TRADE CENTR E AND THE WORLD TRADE TOWER BUILDINGS UNDER SECTION 32 OF THE ACT, THE QUESTION STANDS ANSWERED AGAINST THE REVENUE BY AN ORDER DATED 24 TH JULY 20 I 5 PASSED BY THIS COURT IN ITA NO.69/200 0 (CIT VS BHARAT HOTELS LTD.). ITA NO.4141/DEL/2017 4 | P A GE 3. THE OTHER ISSUE IN THESE APPEALS IS WHETHER THE ADDITION MADE BY THE ASSESSING OFFICER (ASSESSING OFFICER) INVOKING SECTION 14A OF THE ACT READ WITH RULE 8D OR THE INC OME TAX RULES. 1962 WAS JUSTIFIED? IN THIS REGARD, THE ITAT HAS IN THE IMPUGNED ORDER NOTED THE FOLLOWING 'UNDISPUTED FACT S': '(I) THE ASSESSEE DID NOT RECEIVE DIVIDEND DURING T HE YEAR UNDER CONSIDERATION. (II) THE INVESTMENT WAS MADE BY ASSESSEE COMPANY IN SUBSIDIARY COMPANIES FOR STRATEGIC PURPOSES. (III) THE INVESTMENT DURING THE YEAR WAS MADE IN U SUBSIDIARY COMPANY WHICH WAS SITUATED OUTSIDE INDIA AND, THEREFORE THE DIVIDEND INCOME IF ANY RECEIVED FROM FOREIGN COMPANIES WAS NOT EXEMPT.' 4. THE ITAT HAS RIGHTLY FOLLOWED THE DECISION OF TH IS COURT IN CLT V HOLCIM INDIA PVT. LTD. (2014) 272 CTR (DEL) 2 82 AND HELD THAT SINCE NO EXEMPT DIVIDEND INCOME WAS EARNED THE QUESTION OF INVOKING SECTION 14 A OF THE ACT READ WITH RULE 8D DID NOT ARISE. 5. THE REVENUE HAS NOT BEEN ABLE TO PERSUADE THIS C OURT THAT THE ABOVE TACTUAL DETERMINATION IS PERVERSE OR THAT IN THE FACTS AND CIRCUMSTANCES OF THE DECISION OF THIS COU RT IN CIT V. HOLCIM PVT. LTD. (SUPRA) WOULD NOT APPLY. 8. FACTS ARE IDENTICAL AS WERE IN THE ASSESSMENT YE ARS 2009-10 & 2010-11. THE REVENUE HAS NOT BROUGHT TO OUR NOTI CE ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND ANY OTHER CONTRARY ITA NO.4141/DEL/2017 5 | P A GE BINDING PRECEDENTS TO OUR NOTICE. THEREFORE, RESPE CTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL DELHI HIGH COUR T IN ITA NO.50/2018(SUPRA), WE DO NOT SEE ANY REASON TO INTE RFERE IN THE FINDING OF LD.CIT(A), THE SAME IS HEREBY AFFIRMED. THUS, GROUNDS RAISED BY THE REVENUE ARE REJECTED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 25 TH OCTOBER, 2021. SD/- SD/- (G.S. PANNU) (KUL BHAR AT) PRESIDENT JUDICIAL MEMBER DELHI; DATED: 25 / 1 0/2021. F{X~{T F{X~{T F{X~{T F{X~{T BT| T BT| T BT| T BT| T COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI