DCIT, New Delhi V. M/s. Bhartiya Urban Infrastructure & Land Development Co. Pvt. Ltd., New Delhi

ITA 4772/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2766 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: ANIL GOEL
• Keywords: Difference of opinion; Assessment record; Reason to believe; Change of opinion
• Section: 143(3); 147; 148; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DLEHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO.4772/DEL/2014 ASSESSMENT YEAR: 2007-08 DY. COMMISSIONER OF INCOME-TAX , VS BHART IYA URBAN INFRASTRUCTURE & CIRCLE 2(1), NEW DELHI. LAND DEVELOPMENT CO. P. LTD./ E-52, NEW MANGLA PURI, MANDI ROAD, MEHRAULI, NEW DELHI. (PAN: AACCB8412A) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RAVI KANT GUPTA, SR . DR RESPONDENT BY: S/SHRI ANIL GOEL AND NIPUN M ITTAL DATE OF HEARING: 20.03.2018 DATE OF PRONOUNCEMENT: 22 .03.2018 ORDER PER NARASIMHA K. CHARY, JM CHALLENGING THE ORDER DATED 17.6.2014 IN APPEAL NO. 04/2013-14 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V, NEW DELHI (FOR SHORT LD. CIT(A)), REVENUE PREFERRED THIS APPEAL ON THE FOL LOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT REASSESSMENT ORDER IS BAD IN LAW AND QUASHING THE ASSESSMENT BY IGNORING THE PROVISIONS OF SECTION 147 CLAUSE (C) OF EXPLANATION 2 OF THE L.T. ACT AND ALSO WHEN STATUTE DOES NOT REQUIRE THAT THE INFORMATION MUST BE EXTRANEOUS TO THE RECO RD. 2. ORIGINAL RETURN DATED 26.10.2008 DECLARING A LOS S OF RS.5,48,38,562/- WAS SCRUTINIZED AND ASSESSMENT U/S 143(3) WAS COMPLETED AT THE RETURNED LOSS. HOWEVER, BY WAY OF NOTICE DATED 30.3.2012 U/S 148 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT), THE AO RECORDED THE FOLLOWIN G REASONS: THE ASSESSMENT U/S 143(3) OF THE I.T. ACT WAS COMP LETED ON 11/11/2009 AT LOSS OF RS.5,48,38,652/- I.E. THE RET URNED LOSS. ON EXAMINATION OF THE ASSESSMENT RECORD, IT IS NOTICED THAT THE ASSESSEE HAD CLAIMED IN ITS PROFIT AND LOSS ACCOUNT A SUM OF RS.5,22,58,437/- UNDER THE HEAD INTEREST PAID. FURTHER IT IS NOTICED THAT THE ASSESSEE HAD PAID THIS INTEREST ON BORROWED CAPITAL FROM ITS SISTER CONCERNS AND HAD ADVANCED INTEREST FREE LOANS AND INVESTED SHARE APPLICATION MONEY WITH SISTER CONCERNS AND HAD THUS USED COLORFU L DEVICE FOR DIVERSION OF FUNDS AND CLAIMING INTEREST WHICH IS N OT ALLOWABLE AS PER THE PROVISIONS OF SECTION 37 OF THE I.T. ACT. SINCE THE INCOME OF THE ASSESSEE HAS BEEN UNDER ASS ESSED OWING TO FAILURE ON THE PART OF ASSESSEE TO DISCLOSE THE FUL L AND TRUE PARTICULARS OF ITS INCOME, I HAVE THE REASON TO BELIEVE THAT IN COME AMOUNTING TO RS.5,22,58,437/- ESCAPED TAXATION.' 3. ASSESSEE SUBMITTED THAT ALL THE NECESSARY DETAILS OF THE INTEREST PAID, LOANS RECEIVED AND GIVEN WERE ALREADY FILED DURING THE COU RSE OF ORIGINAL ASSESSMENT. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT SINCE THE INTEREST HAS BEEN PAID ON THE BORROWED AMOUNT UTILIZED FOR THE PURPOSE OF BUS INESS, NO ADVERSE INFERENCE WAS REQUIRED TO BE MADE. HOWEVER, LEARNED AO PROCE EDED FURTHER AND MADE AN ADDITION OF RS.5,22,58,437/- BY DISALLOWING THE INTE REST. 4. ASSESSEE CARRIED THE MATTER TO THE CIT(A) AND RA ISED SEVERAL GROUNDS INCLUDING THE LEGALITY AND VALIDITY OF THE NOTICE U/S 148 OF THE ACT. LEARNED CIT(A) CONSIDERED THIS AT LENGTH AND HELD THAT DURING THE REGULAR ASSESSMENT PROCEEDINGS, THE ASPECTS NOW RAISED BY ISSUING NOTIC E U/S 148 WERE CONSIDERED, AS SUCH, THE REOPENING OF THE PROCEEDINGS FOR THE VERY SAME PURPOSE IS BAD IN LAW. CHALLENGING THIS FINDING, THE REVENUE IS IN APPEAL BEFORE US. 5. IN SO FAR AS THE FINDINGS OF THE LEARNED CIT(A) TO THE EFFECT THAT AT THE TIME OF THE ORIGINAL ASSESSMENT, THE ASSESSEE FURNISHED ALL THE DETAILS AND WORKING OF INTEREST PAID TO BHARTIYA INTERNATIONAL LTD. IS CONC ERNED, ABSOLUTELY THERE IS NO DISPUTE. FURTHER, THE REASONS RECORDED BY THE LEAR NED AO ALSO CLEARLY READ THAT IT IS ONLY ON EXAMINATION OF THE ASSESSMENT RECORD, IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED IN ITS PROFIT AND LOSS ACCOUNT, A SUM O F RS.5,22,58,437/- UNDER THE HEAD INTEREST PAID . IT IS, THEREFORE, CLEAR THA T IN RESPECT OF THE VERY SAME ASPECT WHICH WAS CONSIDERED EARLIER BY WAY OF QUESTIONNAIRE DATED 3.9.2009, AND THE LEARNED AO ISSUED NOTICE U/S 148 OF THE ACT. 6. LEARNED AR PLACED RELIANCE ON THE DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDU LATA RANGWALA VS DCI T (2017) 80 TAXMANN.COM 102(DELHI) AND THE DECISION OF THE HONBLE APEX COU RT IN CIT VS. KELVINATOR OF INDIA LTD. (2010) 187 TAXMAN 312 (SC). IN THESE TWO DECI SIONS, IT IS CLEARLY HELD THAT THE POWER OF RE-ASSESSMENT U/S 147/148 OF THE ACT CANNO T BE EXTENDED FOR THE PURPOSE OF IMPROVING UPON THE ORIGINAL ASSESSMENT B Y DEVISING MEANS TO REVIEW THE ORIGINAL ASSESSMENT ORDER IN THE ABSENCE OF ANY FRESH MATERIAL. UNDOUBTEDLY, THE EXERCISE UNDERTAKEN BY THE LEARNED AO IN THIS MA TTER IS NOTHING BUT CHANGE OF OPINION AND CANNOT BE SUSTAINED. 7. WITH THIS VIEW OF THE MATTER, WE ARE OF THE CONS IDERED OPINION THAT THE FINDINGS OF THE LEARNED CIT(A) IN THE IMPUGNED ORDE R DO NOT INVITE ANY INTERFERENCE AT OUR END. WE ACCORDINGLY WHILE UPHOL DING THE SAME FIND THAT THE APPEAL IS DEVOID OF MERITS AND IS LIABLE TO BE DISM ISSED. WE ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH, 2018. SD/- SD/- (G.D. AGARWAL) (K. NARASIMHA CHARY ) PRESIDENT JUDICIAL MEMBER DATED: 22 ND MARCH, 2018 VJ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) BY ORDER 5. DR, ITAT ASSTT. REGISTRA R, ITAT