ITO, WARD- 25(2), NEW DELHI V. TELESPICE WIRELESS PVT. LTD., NEW DELHI

ITA 4521/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2875 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade; Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4661/DEL/2018 : ASSTT. YEAR : 2010-11 ITA NO. 4520/DEL/2018 : ASSTT. YEAR : 2012-13 ITA NO. 4521/DEL/2018 : ASSTT. YEAR : 2013-14 INCOME TAX OFFICER, WARD-25(2), NEW DELHI-110002 VS TELESPICE WIRELESS PVT. LTD., A-4, HIRAMAL APARTMENTS, 44, AMRITA SHERGIL MARG, NEW DELHI-110003 (APPELLANT) (RESPONDENT) PAN NO. A A CCT8354P ASSESSEE BY : SH. ASHWANI KUMAR, CA REVENUE BY : SH. H. K. CHOUDHARY, CIT DR DATE OF HEAR ING: 2 1 . 10 .20 2 1 DATE OF PRONOUNCEMENT: 21 .10 .20 2 1 ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-42, NEW DELHI DATED 15.12.2017, ORDER OF LD. CIT(A)-32, NEW DELHI DATED 23.11.2017 AND THE ORDER OF LD. CIT(A)-33, NEW DELHI DATED 15.12.2017 . 2. SINCE, THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDENTICAL, THEY WERE HEARD TOGETHER AND BEING ADJUD ICATED BY A COMMON ORDER. ITA NOS. 4520, 4521 & 4661/DEL/2018 TELESPICE WIRELESS PVT. LTD. 2 3. IN ITA NO. 4520/DEL/2018, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE IN DELE TING THE ADDITION OF RS.127,31,43,600/- MADE BY THE AO O N ACCOUNT OF INTEREST FREE LOANS AMOUNTING RS. 14,14,60,40,000/- GIVEN TO VARIOUS PARTIES BY MEREL Y RELYING ON DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DAULAT RAM RAWAT MALL 1973 87 ITR 3 49 WITHOUT APPRECIATING THE FACTS OF PRESENT CASE AS I N ITA NO. 562 OF 2008 DATED 01.06.2012 IN VIT V. SUNGERO LTD., THE HONBLE HIGH COURT OF DELHI AFTER DISCUSS ING THE AFORESAID DECISION OF DAULAT RAM RAWAT MULL (SUPRA), OPINED THAT THE ORDER MUST BE READ AS A WHOLE TO SEE WHETHER TEST OF PERVERSITY IS SATISFIE D. 4. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 5. THE SOLITARY GROUND TAKEN UP BY THE REVENUE IS A GAINST THE ORDER OF THE LD. CIT(A) DELETING THE NOTIONAL INTER EST DETERMINED BY THE ASSESSING OFFICER. 6. THE ASSESSEE COMPANY WAS INCORPORATED WITH THE O BJECT OF PROVIDING SERVICES NAMELY BASIC TELEPHONE SERVICES, CELLULAR/MOBILE TELEPHONE SERVICES, INTERNET BROADB AND SERVICES AND OTHER VALUE ADDED SERVICES. THE ASSESSEE FILED RETURN OF INCOME ON 29.09.2012 SHOWING CURRENT YEAR LOSS OF R S.46,169/-. 7. THE ASSESSING OFFICER MADE ADDITION OF RS.127,30 ,97,431/- ON ACCOUNT OF IMPUTED INTEREST @9% PER ANNUM ON THE OUTSTANDING AMOUNT OF LOAN/ADVANCES TO VARIOUS PART IES OF RS.1414.60 CRORES AS PER TABLE BELOW: ITA NOS. 4520, 4521 & 4661/DEL/2018 TELESPICE WIRELESS PVT. LTD. 3 S. NO. NAME AND ADDRESS OF THE PARTY AMOUNT (IN RS.) 1. M/S DRIVE DEVELOPMENT (P) LTD. 4,50,000/- 2. M/S NEW IDEA DEVELOPMENT PVT. LTD. 14,142,250,000/- 3. M/S MAJESTIC INFRACON (P) LTD. (FORMALLY KNOWN AS DB INFRACON PVT. LTD.) 33,40,000/- TOTAL 14,14,60,40,000/- 8. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE AS SESSEE HAD OWN FUNDS IN FORM OF SHARE CAPITAL, RESERVES & SURP LUS TO THE TUNE OF RS.1414.60 CRORES IN WHICH THE ASSESSEE HAS NOT INCURRED ANY INTEREST EXPENSES AND LOANS WERE ALSO GIVEN IN THE ORDINARY COURSE OF BUSINESS WITHOUT INTEREST. FURTH ER, THE ASSESSEE HAS NOT CLAIMED ANY INTEREST IN THE P&L AC COUNT. WE HAVE GONE THROUGH THE JUDGMENTS REFERRED BY THE REV ENUE AND FIND THAT THEY ARE NOT EVEN REMOTELY RELATED TO THE FACTS OF THE INSTANT CASE. IN THE ABSENCE OF ANY PROVISION OF TH E INCOME TAX ACT TO DETERMINE THE NOTIONAL INTEREST RECEIVED /RE CEIVABLE ON PRESUMPTIVE BASIS, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2021. SD/- SD/- (AMIT SHUKLA) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 21/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR