DCIT, New Delhi V. M/s Kumara Kruppa Frontier Hotels Pvt. Ltd., New Delhi

ITA 489/DEL/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8826 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Assessee Lawyers: R S SINGHVICA SATYAJIT GOELCA
• Keywords: Assessment record

Judgement Text

ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH DNEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO. 850/DEL/2011 ASSTT.YEAR: 2004-05 ITA NO.3750/DEL/2011 ASSTT.YEAR: 2008-09 ACIT, VS M/S KUMARA KRUPPA FRONTIER HOTELS PVT. LTD. CIRCLE-5(1), ROOM NO.510, 5 TH FLOOR, SCOPE COMPLEX, NEW DELHI. CORE-8, 7 LODI ROAD, NEW DE LHI. ITA NO. 489/DEL/2013 ASSTT.YEAR: 2007-08 ITA NO. 490/DEL/2013 ASSTT.YEAR: 2009-10 DCIT, VS M/S KUMARA KRUPPA FRONTIER HOTEL S PVT. LTD. CIRCLE-5(1), NEW DELHI. NEW DELHI. (PAN: AABCK9184F) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI GAURAV DUDEJA, SR. DR RESPONDENT BY: S/SHRI R. S. SINGHVI,CA , SATYAJIT GOEL,CA O R D E R PER BENCH THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A)- VIII, NEW DELHI DATED 02.1 2.2010 IN APPEAL ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 2 NO.186/2008-09 FOR AY 2004-05, DATED 12.5.2011 IN A PPEAL NO. 120/2010 FOR AY 2008-09, DATED 15.11.2012 IN APPEAL NO. 604/2011 -12 FOR AY 2007-08 AND DATED 15.11.2012 IN APPEAL NO. 605/2011-12 FOR AY 2 009-10 RESPECTIVELY. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THES E APPEALS:- 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.19,69,850/- MADE BY THE A.O. ON ACCO UNT OF UNDERSTATEMENT OF LEASE RENT RECEIVED SHOWN BY IT A ND THE CONFIRMATION SUBMITTED BY M/S BHARAT HOTELS LTD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS 61,47,762/- MADE BY A.O. ON ACCOUNT OF RECONCILIATION AMOUNT RECEIVED BY THE ASSESSEE. 4. THE LD CIT (A) IGNORED THE FINDINGS RECORDED BY AO AND ALSO THE FACT THAT THE ASSESSEE DID NOT FILE REQUIR ED DOCUMENTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR NOT INCLUDING THE SUM IN QUESTION IN ITS INCOME OF THE YEAR OKED BY THE A.O. ' ITA NO. 3750/DEL/2011 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN D ELETING THE ADDITION OF RS.1,26,63,937/- MADE ON ACCOUNT OF UND ISCLOSED LEASE RENT. 2.1 THE LD. CIT(A) IGNORED THE FINDINGS RECORDED BY THE AO AND THE FACT THAT THE ASSESSEE CLAIMED CREDIT FOR T OS AND DID NOT OFFER THE MATCHING INCOME FOR TAXATION. 3. 0N THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.35,000/- MADE U/S. 40(A) OF THE ACT ON ACCOUNT O F PRIOR PERIOD EXPENSES. ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 3 3.1 THE ID. CIT(A) IGNORED THE FINDINGS RECORDED BY THE AO AND THE FACT THAT THE ASSESSEE CLAIMED PRIOR PERIOD EXPENSES OF RS. 14,34,4621- IN PROFIT & LOSS ACCOUNT AND ADDED BACK ONLY RS. 13,99,462/- IN ITS COMPUTATION OF INCOME. ITA 489 & 490/DEL/2013 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) HAD ERRED IN DE LETING THE ADDITION OF RS 88,70,001/- MADE ON A/C OF UNDISCLOS ED LEASE RENT. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IGNORED THE FINDING RECO RDED BY THE AO AND THE FACT THAT THE ASSESSEE CLAIMED CREDIT FO R TDS AND DID NOT OFFER THE MATCHING INCOME FOR THE TAXATION AS PER PROVISION OF SECTION 199 OF THE IT ACT READ WITH RU LE 37BA. 3. THE APPELLANT CRAVES TO ADD, TO ALTER, OR AMEND ANY GROUND OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARI NG. GROUND NO. 2 AND 2.1 IN ITA NO. 840 AND 3570/DEL/20 11 & GROUND NO. 1 & 2 IN ITA 489 & 490/DEL/2013 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. LD. DR SUBMITT ED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNDISCL OSED LEASE RENT IGNORING THE FINDINGS RECORDED BY THE AO AND THE FACT THAT THE A SSESSEE CLAIMED CREDIT FOR TDS AND DID NOT OFFER THE MATCHING INCOME FOR TAXAT ION AS PER PROVISIONS OF SECTION 199 OF THE INCOME TAX ACT 1961 R/W RULE 37B A OF THE INCOME TAX RULES 1962. LD. DR SUBMITTED THAT THE ASSESSEE NEI THER FILED COPY OF LEASE AGREEMENT AND NOR ANY CONFIRMATION FROM M/S BHARAT HOTELS LTD. IN RESPECT OF SPECIFIC REQUIREMENT MADE IN THE ORDER SHEET DATED 16.11.2010. LD. DR FURTHER SUBMITTED THAT FROM TDS CERTIFICATES ISSUED BY M/S BHARAT HOTELS LTD. AVAILABLE ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 4 ON THE ASSESSMENT RECORD, IT WAS CLEAR THAT THE BHL HAS NOT ACCOUNTED FOR ANY SUCH ENTRY AS UNDISCLOSED BY THE ASSESSEE IN REGARD TO CLAIMED LEASE RENT. LD. DR SUPPORTING THE ASSESSMENT ORDER FINALLY SUBMITTE D THAT THERE WAS A CLEAR MISMATCH IN THE FIGURES SHOWN BY THE ASSESSEE AND R EVEALED FROM THE TDS CERTIFICATES ISSUED BY M/S BHARAT HOTELS LTD., THER EFORE, THE AO WAS RIGHT IN CONSIDERING THE FIGURES AS PER TDS CERTIFICATES. L D. DR FINALLY PRAYED THAT THE ORDER OF THE AO ON THIS ISSUE MAY BE RESTORED BY SE TTING ASIDE THE IMPUGNED ORDER OF THE FIRST APPELLATE AUTHORITY. 4. REPLYING TO THE ABOVE, LD. AR FAIRLY ACCEPTED TH AT THERE WAS A MISMATCH IN THE FIGURES CLAIMED BY THE ASSESSEE AS PER TDS CER TIFICATES ISSUED BY M/S BHL. LD. AR FURTHER SUBMITTED THAT THERE WAS A MISMATCH OF RECONCILIATION CONSIDERED BY THE AO WHICH WAS SUBSEQUENTLY PROPERLY ANALYSED BY THE CIT(A) WHILE GRANTING RELIEF FOR THE ASSESSEE. DURING THE ARGUM ENTS, THE LD. AR SUBMITTED THAT THE ASSESSEE SUBMITTED ALL REQUIRED DOCUMENTS VIZ. LEASE AGREEMENT, CONFIRMATION OF ACCOUNTS FROM BHL AND RECONCILIATIO N STATEMENT BUT THE SAME WAS NOT PROPERLY CONSIDERED BY THE AO AND THE CIT(A ) GRANTED RELIEF ON THE BASIS OF SAID DOCUMENTARY EVIDENCE AND RECONCILIATI ON. LD. AR FURTHER PRAYED THAT IF IT IS FOUND JUST AND PROPER TO SEND THE MAT TER TO THE AO FOR PROPER VERIFICATION THEN THE ASSESSEE HAS NO SERIOUS OBJEC TION TO THAT. 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSION, WE NOTE THAT THE LD. DR HAS POINTED OUT THAT THE LEASE AGREEMENT, CONFIRMATION OF RECONCILIATION AND OTHER ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 5 RELEVANT DOCUMENTS WERE NOT SUBMITTED BEFORE THE AO AND THEREFORE, THE IMPUGNED ADDITION WAS MADE. LD. AR HAS CONTENDED T HAT ALL REQUIRED DOCUMENTS WERE PLACED BEFORE THE AO DURING ASSESSME NT PROCEEDINGS AND AT THE SAME TIME, LD. AR FAIRLY ACCEPTED CONTENTION OF THE REVENUE THAT IF IT IS FOUND JUST AND PROPER THEN THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE AO FOR A FRESH ADJUDICATION AFTER CONSIDERING ALL RELEVANT M ATERIAL AND SUPPORTING DOCUMENTS OF THE ASSESSEE. IN VIEW OF ABOVE, WE FI ND IT APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF AO FOR FRESH CONSIDERATIO N AND IMPUGNED ORDERS ON THIS ISSUE ARE SET ASIDE AND THE AO IS DIRECTED TO READJ UDICATE THE ISSUE AFRESH WITHOUT BEING PREJUDICED FROM THE EARLIER ORDERS AND AFTER PROVIDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE. ACCORDINGLY, AFOREMENTIO NED GROUNDS ON THIS ISSUE IN ALL FOUR APPEALS ARE DEEMED TO BE ALLOWED FOR STATI STICAL PURPOSES. GROUND NO. 3 & 3.1 IN ITA NO. 3570/D/11 FOR AY 2008 -09 6. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. AT THE VERY OU TSET, LD. DR HAS DRAWN OUR ATTENTION TOWARDS LETTER OF THE AO DATED 17.5.2012 AND SUBMITTED THAT IN RESPECT OF ADDITION OF RS.35,000 MADE U/S 40(A) OF THE ACT ON ACCOUNT OF PRIOR PERIOD EXPENSES IN AY 2008-09, THE CONTENTION OF THE ASSES SEE THAT THE ASSESSEE COMPANY HAD ALREADY ADDED BACK RS.35,000 IN THE COM PUTATION OF INCOME HAS BEEN VERIFIED FROM THE ASSESSMENT RECORD AND FOUND TO BE CORRECT. LD. AR ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10 6 SUPPORTED THE IMPUGNED ORDER AND SUBMITTED THAT ADD ITION IN THIS REGARD MADE BY THE AO WAS BASELESS AND IT IS ALSO FOUND CORRECT FR OM THE ASSESSMENT RECORD. 7. IN VIEW OF ABOVE, GROUND NO. 3 AND 3.1 OF THE RE VENUE BEING DEVOID OF MERITS ARE DISMISSED. 8. IN THE RESULT, THE APPEALS OF THE REVENUE ON THE MAIN ISSUE OF ADDITIONS MADE ON ACCOUNT OF UNDISCLOSED LEASE ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE AND APPEAL OF THE REVEN UE ON GROUND NO. 3 AND 3.1 FOR AY 2008-09 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.02.2015. SD/- SD/- (N.K. SAINI) (CHANDRAM OHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 9TH FEBRUARY, 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER AS STT. REGISTRAR