DCIT, New Delhi V. M/s Ion Bio Medicare (P) Ltd., Gurgaon

ITA 49/DEL/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5577 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 05-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY

Judgement Text

ITA NO. 49/DEL/2010 A.Y. 2005-06 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 49/DEL/2010 A.Y. : 2005-06 DY. COMMISSIONER OF INCOME TAX, VS. M/S ION BI O MEDICARE (P) LTD., CENTRAL CIRCLE-IX, ROOM NO. 357, (FORMERLY KNOW N AS USHA ARA CENTRE, E-2, JHANDEWALAN EXTN., DRAGER (P) LT D., PLOT NO. 486-487, NEW DELHI 110 055 PHASE-III, SECTOR-20, UDYO G VIHAR, GURGAON, HARYANA-122016 [PAN : AAACU1644F] (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SMT. MONA MOHANTY, SR. DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A) DATED 07.10.2009 AND PERTAINS TO ASSESSM ENT YEAR 2005- 06. 2. THE ISSUE RAISED IS THAT LD. CIT(A) HAS ERRED I N DELETING THE ADDITION OF RS. 12,33,247/- MADE BY THE AO BY WAY O F DISALLOWANCE OF 25% OF THE TOTAL RENT PAID TO M/S USHA INDIA LTD ., A SISTER CONCERN OF THE GROUP. 2.1 IN THIS CASE THE AO NOTED THAT ASSESSEE HAD PAI D RENT AND SERVICE CHARGES TO COMPANY WHERE THE COMPANY HAS S UBSTANTIAL INTEREST AND THUS COVERED UNDER THE PROVISIONS OF S ECTION 40A(2)(B) ITA NO. 49/DEL/2010 A.Y. 2005-06 2 OF THE IT ACT, 1961. THE PAYMENT MADE IN THIS REGA RD TOWARDS RENT WAS RS. 4932990/-. AO WAS OF THE OPINION THAT RENT OF RS. 4932889/- HAS BEEN PAID WHICH IS IN EXCESS OF WHAT THE RENTAL VALUE OF THE SAID PROPERTY WOULD HAVE TO BE. HENCE HE MADE THE DISALLOWANCE OF 25% AMOUNTING TO RS. 1233247/-. 2.2 BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THAT I DENTICAL DISALLOWANCE MADE BY THE AO IN THE IMMEDIATELY PREC EDING ASSESSMENT YEAR 2004-05 FOR EXACTLY THE SAME REASON S. HOWEVER, THIS DISALLOWANCE WAS DELETED BY THE CIT(A). FURTHE R, APPEAL FILED BY THE DEPARTMENT AGAINST THIS ORDER HAS BEEN DISMISSE D BY THE ITAT VIDE THEIR ORDER DATED 9.5.2008 IN ITA NO. 4491/DEL /07. IN THE LIGHT OF THE AFORESAID, LD. CIT(A) AGREED WITH THE CONTENTION OF THE ASSESSEE THAT THIS ISSUE IS COVERED IN FAVOUR OF TH E ASSESSEE AND HAS TO BE DECIDED IN THIS CASE, IN ITS FAVOUR. 2.3 AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEF ORE US. 2.4 NO ONE APPEARED ON BEHALF OF THE ASSESSEE. LD. DR FAIRLY CONCEDED THAT IN VIEW OF THE FINDING OF THE LD. CIT (A), THAT THE MATTER HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, THE ISSUE STANDS COVERED IN THE FAVOUR OF THE ASSES SEE. UPON CAREFUL CONSIDERATION, FOLLOWING THE PRECEDENT, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDIN GLY, WE UPHOLD THE SAME. ITA NO. 49/DEL/2010 A.Y. 2005-06 3 3. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2010 UPON CONCLUSION OF THE HEARING. SD/- SD/- (RAJPAL YADAV) [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 04/03/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES