ACIT, New Delhi V. M/s HCL Comnet Ltd., New Delhi

ITA 465/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69563 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 24-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Depreciation; Revenue expenditure; Capital expenditure
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .465/DEL/2013 465/DEL/2013 465/DEL/2013 465/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -12(1), 12(1), 12(1), 12(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, 806 806 806 806- -- -SIDHARTHA, SIDHARTHA, SIDHARTHA, SIDHARTHA, 96, NEHRU PLACE, 96, NEHRU PLACE, 96, NEHRU PLACE, 96, NEHRU PLACE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. PAN : PAN : PAN : PAN : AAACH9667H. AAACH9667H. AAACH9667H. AAACH9667H. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATPAL SINGH, SR.DR. RESPONDENT BY : SHRI RAKESH GUPTA, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRA D.AGRA D.AGRA D.AGRAWAL, WAL, WAL, WAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVII, NEW DELHI DATED 8 TH OCTOBER, 2012 FOR THE AY 2004-05. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENALT Y LEVIED U/S 271(1)(C) IN RESPECT OF ADDITION OF RS.39,41,59 3/- RELATING THE EXPENDITURE INCURRED ON PREMISES TAKEN ON LEASE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX A CT, 1961 AMOUNTING TO ` 21,57,954/- IN RESPECT OF FOLLOWING TWO ADDITIONS/DISALLOWANCES:- ITA-465/DEL/2013 2 (I) ALLOCATION IN RESPECT OF DISALLOWANCE U/S 14A [I.E. 25% OF 8294433/-] RS.2073610/- (II) ADDITION ON A/C OF LEASE HOLD IMPROVEMENT RS.3 941593/- 4. LEARNED CIT(A) CANCELLED THE PENALTY IN RESPECT OF DISALLOWANCE OF LEASEHOLD EXPENSES BUT HE KEPT THE PENALTY IN RE SPECT OF SECTION 14A IN ABEYANCE. THE REVENUE IS IN APPEAL IN RESPE CT OF PENALTY CANCELLED ON DISALLOWANCE OF DEDUCTION CLAIMED ON L EASEHOLD IMPROVEMENT EXPENSES. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE ASSESSEE HAS CLAIMED THE EXPENDITUR E OF ` 43,95,598/- IN RESPECT OF REPAIR/RENOVATION OF LEASEHOLD PREMIS ES. IN THE BOOKS OF ACCOUNT, THE SAME WAS CAPITALIZED, BUT, IN THE RETU RN OF INCOME, THE SAME WAS CLAIMED AS REVENUE EXPENDITURE. THE ASSES SING OFFICER TREATED THE SAME AS CAPITAL EXPENDITURE. HOWEVER, HE ALLOWED DEPRECIATION THEREON AND, ACCORDINGLY, SUSTAINED TH E ADDITION AT ` 39,41,593/-, I.E., THE EXPENDITURE CLAIMED MINUS DE PRECIATION ALLOWED. IN THE QUANTUM APPEAL, THE ITAT PARTLY ALLOWED THE RELIEF TO THE ASSESSEE BY HOLDING THAT THE EXPENDITURE INCURRED O N FALSE CEILING, PARTITION AND CIVIL WORKS ETC. HAS TO BE TREATED AS REVENUE EXPENDITURE. ON THESE FACTS, IN OUR OPINION, THE DECISION OF HON BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. [2010] 322 ITR 158 (SC) WOULD BE SQUARELY APPLICABLE, WHEREIN THEI R LORDSHIPS HELD AS UNDER:- WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE TAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANN OT AMOUNT TO FURNISHING INACCURATE PARTICULARS. ITA-465/DEL/2013 3 6. THE GENUINENESS OF THE EXPENDITURE INCURRED AND THAT THE ASSESSEE DISCLOSED ALL THE FACTS IN THIS REGARD ARE NOT IN DISPUTE. THAT ON THESE FACTS, MERELY BECAUSE THE REVENUE DID NOT ACCEPT THE ASSESSEES CLAIM THAT THE EXPENDITURE INCURRED ON R ENOVATION/REPAIR OF LEASEHOLD PREMISES SHOULD BE TREATED AS REVENUE EXP ENDITURE AND THE SAME IS TREATED BY THE ASSESSING OFFICER AS CAPITAL EXPENDITURE, IT CANNOT BE SAID THAT THE ASSESSEE EITHER CONCEALED T HE INCOME OR FURNISHED INACCURATE PARTICULARS. THE ITAT HAS PAR TLY ACCEPTED THE CLAIM OF THE ASSESSEE AND ACCEPTED PART OF THE EXPE NDITURE TO BE REVENUE EXPENDITURE. ON THESE FACTS, IN OUR OPINIO N, THE DECISION OF HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. (SUPRA) WOULD BE SQUARELY APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS T HE REVENUES APPEAL. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE P VICE P VICE P VICE PRESIDENT RESIDENT RESIDENT RESIDENT DATED : 29.11.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -12(1), NEW DELHI. 12(1), NEW DELHI. 12(1), NEW DELHI. 12(1), NEW DELHI. 2. RESPONDENT : M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, M/S HCL COMNET LIMITED, 806 806 806 806- -- -SIDHARTHA, 96, NEHRU PLACE, SIDHARTHA, 96, NEHRU PLACE, SIDHARTHA, 96, NEHRU PLACE, SIDHARTHA, 96, NEHRU PLACE, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 019. 110 019. 110 019. 110 019. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR