M/s Infrasoft Technologies Ltd., Mumbai V. ACIT, New Delhi

ITA 4415/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2900 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GUPTA
• Keywords: Unexplained cash credit; Question of law; Notional interest
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA A. PILLAI , JM ITA NO. 4415 /DEL/2014 : ASSTT. YEAR : 2011 - 1 2 ACIT, CIRCLE - 31(1), NEW DELHI VS RATIONAL BUILDERS & DEVELOPERS, DLF CENTRE, 9 TH FLOOR, SANSAD MARG, NEW DELHI - 110001 (APPELLANT) (RESPONDENT) PAN NO. A A FFR2590B ASSESSEE BY : SH. R. S. SINGHVI, CA REVENUE BY : SH. SHRAVAN GUPTA, SR. DR DATE OF HEARING : 19 .06 .201 7 DATE OF PRONOUNCEMENT : 19 . 0 6 .201 7 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 22.05 .2014 OF LD. CIT(A) - XXVI , NEW DELHI . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE CIT (A) HA S ERRED IN DELETI NG THE DISALLOWANCE OF RS.71,27,02 4 / - MADE BY THE AO ON ACCOUNT OF NOTIONAL INTERE ST ON INTEREST FREE LOAN OF RS. 5,93,91,870 / - GIVEN TO THE VARIOUS PARTIES FOR NON - BUSINESS PURPOSE. 2. THE DEPARTMENT HAS FILED APPEAL IN ITAT ON IDENTICAL ISSUES IN THE CASE OF THE ASSESSEE IN A.Y. 2009 - 10 & A.Y. 2010 - 11 AND THE SAME ARE STILL PENDING. ITA NO. 4415 /DEL /201 4 RATIONAL BUILDERS & DEVELOPERS 2 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF APPEAL. 3 . FROM THE ABOVE GROU NDS, IT IS GATHERED THAT ONLY GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF DISALLOWANCE OF RS.71,27,024/ - MADE BY THE AO ON ACCOUNT OF NOTIONAL INTEREST. 4 . DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS COVERED IN ASSESSEE S OWN CASE IN ITA NO. 670/DEL/2014 FOR THE ASSESSMENT YEAR 2010 - 11 VIDE ORDER DATED 01.07.2016. 5. IN HIS RIVAL SUBMISSIONS THE LD. DR ALTHOUGH SUPPORTED THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE AFORESAID CO NTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED IN ASSESSEE S OWN CASE IN ITA NO. 67 0/DEL/2014 FOR THE ASSESSMENT YEAR 2010 - 11 WHER EIN VIDE ORDER DATED 01.07.2016, T HE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 2 TO 5 WHICH READ AS UNDER: 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED A COPY OF THE ORDER OF THE ITAT, NEW DELHI F BENCH DATED 29.10.2014 ITA NO. 4415 /DEL /201 4 RATIONAL BUILDERS & DEVELOPERS 3 PASSED IN ASSESSEES OWN APPEAL FOR AY 2009 - 10 AND CONTENDED THAT THE SIMILAR ISSUE OF NOTIONAL INTEREST HAS BEEN DECID ED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. THE LD. AR ALSO SUBMITTED A COPY OF THE ORDER DATED 11.8.2015 OF HON BLE HIGH COURT OF DELHI PASSED IN ITA NO. 559/2015 AND CONTENDED THAT THE REVENUE S APPEAL AGAINST THE ORDER OF THE TRIBUNAL FOR AY 2009 - 10 ( SUPRA) HAS BEEN DISMISSED BY HON BLE JURISDICTIONAL HIGH COURT AND THE ISSUE OF NOTIONAL INTEREST HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE WHICH ALSO COVERED THE SAME ISSUE FOR AY 2010 - 11. 3. THE DR STRONGLY SUPPORTED THE ACTION OF THE AO. HOWEVER, WE COULD NOT POINTED OUT ANY BASIS TO US WHICH COULD LEAD US TO TAKE A DIFFERENT VIEW IN FAVOUR OF THE REVENUE KEEPING ASIDE THE ORDER OF THE TRIBUNAL WHICH HAS BEEN CONFIRMED BY HON BLE HIGH COURT, ON THE ISSUE OF NOTIONAL INTEREST. 4. IN VIEW OF ABOVE SUBMI SSIONS OF BOTH THE SIDES, FROM THE ORDER OF HON BLE HIGH COURT DATED 11.8.2015 IT IS AMPLY CLEAR THAT THE ISSUE OF NOTIONAL INTEREST HAS BEEN FINALLY DECIDED IN FAVOUR OF THE ASSESSEE, DISMISSING THE APPEAL OF THE REVENUE W ITH FOLLOWING OBSERVATIONS : - 3. THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST AN ORDER DATED 29TH OCTOBER, 2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL ( ITAT ) IN ITA NO. 2988/DEL/2013 FOR THE ASSESSMENT YEAR ( AY ) 2009 - 10. 4. THE FIRST ISSUE CONCERNS THE ADDITION OF RS. 2, 88,98,869/ - UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ( ACT ) ON ACCOUNT OF UNEXPLAINED CASH CREDITS. IT HAS BEEN CONCURRENTLY HELD BY BOTH THE CIT(A) AS WELL AS ITAT THAT THE CREDITORS IN QUESTION WERE HAVING RUNNING ACCOUNTS WITH THE ASSESSEE AND THAT THE BALANCE BELONGED TO THE EARLIER YEARS. THERE WAS NO FRESH CREDIT DURING THE YEAR IN QUESTION. ITA NO. 4415 /DEL /201 4 RATIONAL BUILDERS & DEVELOPERS 4 THE COURT FINDS NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE ABOVE FACTS AS FAR AS THIS ISSUE IS CONCERNED. 5. THE SECOND ISSUE CONCERNS THE ADDITION OF RS . 90,50,000/ - ON ACCOUNT OF NOTIONAL INTEREST ON INTEREST FREE LOANS/ADVANCES. THE ITAT HAS RIGHTLY OBSERVED THAT THERE IS NO PROVISION FOR TAXING NOTIONAL INCOME AS EXPLAINED BY THE SUPREME COURT IN EXCEL INDUSTRIES 358 ITR 295 (SC). CONSEQUENTLY, NO SUBS TANTIAL QUESTION OF LAW ARISES AS REGARDS THIS ISSUE AS WELL. THE APPEAL IS DISMISSED. 5. ON THE BASIS OF ABOVE, WE ARE INCLINED TO HOLD THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF HIGH COURT DATED 11.8.2015 (SUPRA) AND SOLE GROUND OF REVENUE DEVOID OF MERITS IS NOT SUSTAINABLE AND THUS WE DISMISS THE SAME. 7. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 01.07.2016, WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 8 . IN THE RESULT, THE A PPEAL ASSESSEE IS DISMISSED . (O RD ER PRONOUNCED IN THE OPEN COURT ON 19 /0 6 /2017 ) SD/ - SD/ - (BEENA A. PILLAI ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DAT ED: 19 /06 /2017 * SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR