DCIT, CIRCLE- 7(1), NEW DELHI V. DLF EMPORIO LTD., NEW DELHI

ITA 4154/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1141 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. H. S. SIDHU, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4153/DEL/2017 : ASSTT. YEAR : 2011-12 ITA NO. 4154/DEL/2017 : ASSTT. YEAR : 2012-13 DEPUTY COMM ISSIONER OF INCOME TAX, CIRCLE-7(1), NEW DELHI VS M/S DLF EMPORIO LTD., 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI-110001 (APPELLANT) (RESPONDENT) PAN NO. AACCR0093B ASSESSEE BY : SH. R. S. SINGHVI, CA REVENUE BY : MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEAR ING: 10 . 12 .201 9 DATE OF PRONOUNCEMENT: 16 .12 .201 9 ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDERS DATED 14.03.2017 OF THE LD. CIT (A)-3, DELHI. 2. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS A RE COMMON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY COMMON ORDER. 3. IN ITA NO. 4153/DEL/2017, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.44,17,99,718/- MADE BY THE A.O. U/S 24(B) OF THE I.T. ACT ON ACCOUNT OF INTEREST ON TERM LOAN TAKEN AFTER CONSTRUCTION/DEVELOPMENT OF COMMERCIAL PROPERTY FRO M ICICC BANK AND NOT ALSO UTILIZED TO REPAY THE EXISTING LO AN FOR CONSTRUCTION/DEVELOPMENT OF COMMERCIAL PROPERTY. ITA NOS. 4153 & 4154/DEL/2017 DLF EMPORIO LTD. 2 4. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E COMPANY WAS ENGAGED IN THE BUSINESS OF LEASING AND MAINTENANCE OF CONSTRUCTED PROPERTIES (RENTAL INCOME IS OFFERED FOR TAX UNDER INCOME FROM HOUSE PROPERTY AND SERVICE RECEIPTS IS OFFERED FOR TAX UN DER PROFITS AND GAINS FROM BUSINESS AND PROFESSION). DURING THE YEAR, THE ASSESSEE HAS CLAIMED INTEREST COST AND FINANCE CHARGES AMOUNTING TO RS.5 3,59,56,913/- WHICH INCLUDES RS.38,54,50,563/- AS INTEREST ON LOAN FROM ICICI BANK FOR F.Y. 2010-11 AND RS.5,63,49,155/- AS 1/5 TH OF INTEREST PAID FOR PRE- CONSTRUCTION PERIOD. THE ASSESSING OFFICER DISALLOW ED THE INTEREST EXPENSES OF RS.44,17,99,718/- (RS.38,54,50,563 + 5,63,49,155 ) RELATING TO THE TERM LOAN FROM ICICI BANK ON THE GROUNDS THAT IT IS A POST PROPERTY ACQUISITION INTEREST. 5. THE LD. CIT (A) HELD THAT THE INTEREST IS AN ALL OWABLE EXPENDITURE. 6. HEARD THE ARGUMENTS OF BOTH THE PARTIES WHO RELI ED ON THE ORDERS OF THE RESPECTIVE AUTHORITIES. WE FIND THAT THE ISSUE HAS BEEN BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEARS 2009-10 AND 2010- 11. IN THE EARLIER YEARS, THE CO-ORDINATE BENCH OF THE ITAT REFERRED T HE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE THAT THE NEW LOAN WAS SANCTIONED BY ICICI BANK AND UTILIZED FOR REPAYMENT OF OLD LOANS WHICH IN TURN UTILIZED FOR ACQUISITION AND CO NSTRUCTION OF PROPERTY. SINCE, THE FACT OF UTILIZATION OF NEW LOAN WHETHER FOR REPAYMENT OF OLD LOAN OR NOT HAS NOT BEEN CLEARLY ESTABLISHED BEFORE US, WE HEREBY REMAND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO RE-EXAMINE THE ISSUE AND ALLOW THE DEDUCTION IN ACCORDANCE WITH THE PROV ISIONS OF SECTION 24(B) OF THE INCOME TAX ACT, 1961. ITA NOS. 4153 & 4154/DEL/2017 DLF EMPORIO LTD. 3 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/12/2019. SD/- SD/- (H. S. SIDHU) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 16/12/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR