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

ITA 4155/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7604 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Rule 8D
• Section: 14A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (E-COURT MODULE) ITA NO. 4155/DEL/2017 : ASSTT. YEAR : 2012-13 DCIT, CIRCLE-7(1), NEW DELHI-110002 DLF HOMES DEVELOPERS LTD., 9 TH FLOOR, DLF CENTRE, SANSAD MARG, NEW DELHI0110001 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SATYAJEET GOEL, ADV. REVENUE BY : MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEAR ING: 04 . 0 8 .20 20 DATE OF PRONOUNCEMENT: 31 .0 8 .20 20 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)-3, DELHI DATED 16.03.20 17. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1. LD. CIT (A) HAS ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF SCHOOL RUNNING EXPENSES AMOUNTING TO RS.27,47,546/- WITHOUT APPRECIATING THE FACTS OF THE CASE THAT THE SCHOOL RUNNING EXPENSES CANNOT BE CLAIMED AS AN EXPENDITURE FOR BUSINESS PURPOSE IN THE CASE OF THE ASSESSEE. 2. THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITI ON MADE BY THE AO ON ACCOUNT OF NON REFUNDABLE GOLF CLUB MEMBERSHIP AMOUNTING TO RS.4,74,17,236/- WHICH IS A REVENUE RECEIPT. 3. THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY THE AO OF RS.143,22,59,240/- ITA NO. 4155/DEL/2017 DLF HOMES DEVELOPERS LTD. 2 U/S 14A READ WITH RULE 8D(2)(II) & (III) OF THE I.T . ACT WITHOUT APPRECIATING THE FACTS OF THE CASE. SCHOOL RUNNING EXPENSES : 3. THE SIMILAR MATTER HAS BEEN ADJUDICATED BY THE C O- ORDINATE BENCH OF ITAT DELHI IN ITA NO. 2567/DEL/20 16 FOR THE ASSESSMENT YEAR 2011-12 IN FAVOUR OF THE ASSESSEE W HEREIN IT WAS HELD THAT RUNNING OF THE SCHOOL IS INTEGRALLY R ELATED TO THE BUSINESS ACTIVITIES OF THE ASSESSEE AND HAS BEEN RI GHTLY TREATED SO BY THE LD. CIT (A). IN THE ABSENCE OF ANY MATERI AL DIFFERENCE IN THE FACTS OF THE CASE BEFORE US, WE HEREBY DECLI NE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). NON-REFUNDABLE GOLF CLUB MEMBERSHIP : 4. THE SIMILAR MATTER HAS BEEN ADJUDICATED BY THE C O- ORDINATE BENCH OF ITAT DELHI IN ITA NO. 2567/DEL/20 16 FOR THE ASSESSMENT YEAR 2011-12 IN FAVOUR OF THE ASSESSEE W HEREIN THE LD. CIT (A) HELD THAT THE APPROACH OF THE ASSESSEE IN SPREADING OUT THE MEMBERSHIP FEE RECEIPTS FOR THE PERIOD OF M EMBERSHIP CANNOT BE FAULTED WITH. THE DECISION OF THE LD. CIT (A) HAS BEEN ACCEPTED BY THE ITAT, HONBLE HIGH COURT OF DELHI A ND THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED BY THE HON BLE APEX COURT. IN THE ABSENCE OF ANY MATERIAL DIFFERENCE IN THE FACTS OF THE CASE BEFORE US, WE HEREBY DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). ITA NO. 4155/DEL/2017 DLF HOMES DEVELOPERS LTD. 3 DISALLOWANCE U/S 14A : 5. DURING THE YEAR, THE ASSESSEE EARNED DIVIDEND IN COME OF RS.40,32,638/- ON ACCOUNT OF INVESTMENTS IN SHARES WORTH RS.2007.06 CR. THE TOTAL INTEREST FREE FUND AVAILAB LE WITH THE ASSESSEE WAS RS.2482.74 CR. THE AO HAS DISALLOWED A N AMOUNT OF RS.143.22 CR. THE LD. CIT (A) HAS DELETED THE AD DITION RELYING ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF MAXOPP INVESTMENT LTD. VS CIT 247 CTR 162 AND HO LDING THAT THE ASSESSING OFFICER HAS NOT RECORDED THE PROCEDUR AL DISSATISFACTION REQUIRED TO BE RECORDED IN ACCORDAN CE WITH THE PROVISIONS OF SUB-SECTION 2 OF SECTION 14A. THE LD. CIT (A) HELD THAT THE SUO MOTO DISALLOWANCE OF RS.3,90,760/- MADE BY THE ASSESSING OFFICER IS SUFFICIENT TO MEET THE EXPENSE S DISALLOWABLE. SINCE, THE ASSESSEE HAS SUFFICIENT OW N FUNDS REQUIRE FOR THE INVESTMENTS, SUO MOTO DISALLOWED RS.3,90,760/- ON ACCOUNT OF EXPENDITURE AND SINCE NO DISSATISFACT ION HAS BEEN RECORDED BY THE ASSESSING OFFICER, WE HEREBY DECLI NE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/2020. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 31/08/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR