M/s. Unitech Reliable Projects Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5035/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2275 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 06-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH A, NEW DELHI ] BEFORE SHRI N. K. SAINI, VICE PRESIDENT A N D SHRI S. SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5034/DEL/2015 ITA NO. 5035/DEL/2015 ASSESSMENT YEARS: 2010-11 & 2011-12. UNITECH RELIABLE PROJECTS PVT. LTD. 6, COMMUNITY CENTRE, SAKET NEW DELHI PIN: 110017 VS. DCIT, CIRCLE : 18(1), NEW DELHI. PAN: AAACU8206H (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. KANIKA JAIN, ADVOCATE DEPARTMENT BY : SHRI SRIDHAR DORA, SR. DR DATE OF HEARING : 14-11-2018 DATE OF PRONOUNCEMENT : 14-11-2018 O R D E R PER N. K. SAINI, VP : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 03.06.2015 OF THE CIT(A)-22, NEW DELHI. SINCE THE ISSUES INVOLVED ARE COMMON AND THE APPEALS WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. IN ITA NO. 5034/DELHI/2015 FOR THE ASSESSMENT YEAR 2010-11, FOLLOWING GROUNDS HAVE BEEN RAISED:- 2 I. THAT ORDER MADE U/S 250 OF THE INCOME TAX ACT DATED 03.06.2015 BY THE LEARNED CIT (APPEALS)-22 IS ERRONEOUS IN NATURE AS HE HAS CONFIRMED THE ORDER OF LD. AO WHO MADE THE ADDITION IN THE TOTAL INCOME WHICH WAS ARBITRARY AND UNCALLED FOR. II. THAT THE DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY WAS INTO CONSTRUCTION & DEVELOPMENT OF HOUSING PROJECT AND WHILE INCURRING DEVELOPMENT EXPENSES ON THE PROJECT REDUCED THE INTEREST ON FDR OF RS. 5,39,740/- FROM THE DEVELOPMENT EXPENSES THEREBY REDUCING THE CONSTRUCTION & DEVELOPMENT COST OF THE PROJECT WHICH IS AS PER ACCOUNTING NORMS AND AS PER LAWS OF THE LAND. III. THAT ABOVE INTEREST WAS ACCRUED ON FDRS WHICH WERE PROVIDED TO BANK AS A MARGIN MONEY FOR OBTAINING BANK GUARANTEES TO SUBMIT BEFORE VARIOUS GOVERNMENT AUTHORITIES. IV. THAT THE LEARNED AO MADE ADDITION OF RS. 5,39,740/- IN THE TOTAL INCOME OF THE ASSESSEE WITHOUT GIVING CONSIDERATION TO THE ABOVE FACTS THAT FDRS WERE PLEDGED TO BANK FOR OBTAINING BANK GUARANTEES FOR CONSTRUCTION AND DEVELOPMENT WORK. V. THAT THE AFORESAID ADDITION OF RS. 5,39,740/- IS UNJUSTIFIED AND BAD IN LAW PARTICULARLY IN THE LIGHT OF FACTS OF THE CASES OF RESPONDENT. NAME OF THE CASES:- CIT VS JAYPEE DSC VENTURES LTD (2011) ITA 357/2010 (DELHI HC). CIT VS BOKARO STEEL LTD (1999) 236 ITR 315 (SC). TUTICORIAN ALKALI CHEMICALS & FERTILIZERS LTD VS CIT (SC). FOR THE ASSESSMENT YEAR 2011-12 IN ITA NO. 5035/DELHI/2015 IDENTICAL GROUNDS ARE RAISED. THE ONLY DIFFERENCE IS IN THE AMOUNT INVOLVED. 3. DURING THE COURSE OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE ORDER DATED 17.07.2015 IN ITA NO. 922/DELHI/2013 FOR THE ASSESSMENT YEAR 2009- 10 IN ASSESSEES ON CASE DECIDED BY THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH, H, NEW DELHI. COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD. IT WAS FURTHER SUBMITTED THAT THE FDRS ON WHICH INTEREST ACCRUED FOR THE YEARS UNDER CONSIDERATION ARE THE SAME WHICH WERE THERE FOR THE ASSESSMENT YEAR 2009-10. 4. IN HIS RIVAL SUBMISSIONS THE LEARNED SR. DR ALTHOUGH SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 3 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT AN IDENTICAL ISSUE HAVING SIMILAR FACTS WAS A SUBJECT MATTER OF THE ASSESSEES APPEAL FOR THE PRECEDING ASSESSMENT YEAR 2009-10 IN ITA NO. 922/DELHI/2013 WHEREIN VIDE PARA NO. 5 OF THE ORDER DATED 17.07.2015, THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH, H, NEW DELHI HELD AS UNDER: WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE INTEREST INCOME IN QUESTION HAD ARISEN ON ACCOUNT OF MARGIN MONEYS PLACED WITH BANKERS FOR THE PURPOSES OF OBTAINING BANK GUARANTEES. THESE BANK GUARANTEES SO REQUIRED FOR FURNISHING LANDLORDS FOR RENTED PREMISES AND SALES TAX AUTHORITIES. RENTING UP OF PREMISES AS WELL AS REGISTRATION OF THE SALES TAX AUTHORITIES ARE INEXTRICABLY CONNECTED WITH THE EXECUTION OF THE PROJECTS AND THEREFORE FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. BOKARO STEEL LTD. (SUPRA) AS WELL AS BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. JAYPEE DSC LTD.(SUPRA) AND CIT VS. K AND CO.(SUPRA), WE DIRECT THE ASSESSING OFFICER NOT TO TREAT AS AN INCOME FROM OTHER SOURCES BUT REDUCE IT FROM THE COST OF PROJECT. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 17.07.2015, THE ISSUE UNDER CONSIDERATION IS DECIDED IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.2018). SD/- SD/- (SHRI S. SRIVASTAVA) (SHRI N. K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED: 14.11.2018 BCG 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 5 DRAFT DICTATED ON 14.11.2018 DRAFT PLACED BEFORE AUTHOR 14.11.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON DATE OF UPLOADING ORDER ON THE WEBSITE FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE OF DISPATCH OF ORDER