ACIT, New Delhi V. M/s ELEL Hotels and Investments Ltd., Mumbai

ITA 5063/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97127 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD MOHSIN ALAM
• Assessee Lawyers: AJAY WADHWA CA MS ARUNA
• Section: 143(3)

Judgement Text

ITA NO. 5063/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 5063 /DEL/201 3 A.Y. : 200 7 - 0 8 ACIT, CENTRAL CIRCLE - 13 , NEW DELHI ROOM NO. 3 3 2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. M/S ELEL HOTELS AND INVESTMENTS LTD., 9 TH FLOOR, HOTEL SEA ROCK, BAND STAND, BANDRA (W), MUMBAI (PAN:AAACE2846D) (APPELLANT) (RESPONDENT) DEPARTMENT BY : MD. MOHSIN ALAM, CIT(DR) ASSESSEE BY : SH. AJAY WADHWA, CA, MS. ARUNA, CA DATE OF HEARING : 2 0 - 0 8 - 201 5 DATE OF ORDER : 2 6 - 0 8 - 201 5 ORDER PER H.S. SIDHU, JM REVENUE HAS FILED THIS APPEAL AGAINST THE O RDER DATED 3 . 6 .201 3 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - I ) , NEW DELHI P ERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 . 2. THE GROUNDS RAISED BY THE DEPARTMENT READ AS UNDER: - 1. THE ORDER OF THE LD. CIT(A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ITA NO. 5063/ DEL/ 2013 2 PENALTY U/S. 271(1)(C) AMOUNTING TO RS. 2,01,67,817/ - IMPOSED BY AO. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY / ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN WAS FILED DECLARING A LOSS OF RS. 5,58,61,376/ - . THE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 1961 ON 31.12.2008 ASSESSING THE TOTAL IN COME AT RS. 71,76,39,240/ - AFTER MAKING CERTAIN ADDITIONS AND DISALLOWANCES. IN APPEAL, TWO OF THE ADDITIONS / DISALLOWANCES WERE SUSTAINED BY THE LD. CIT(A) IN HIS ORDER DATED 11.5.2010. HE DIRECTED THAT INSTEAD OF ADDITION OF RS. 51,28,50,000/ - U/S. 69 C, AN ADDITION OF RS. 4,96,68,535/ - BE MADE U/S. 2(24). HE FURTHER UPHELD THE ADDITION ON ACCOUNT OF SCRAP SALES AMOUNTING TO RS. 25 CRORES TO THE EXTENT OF RS. 1,02,47,738/ - . THE AO INITIATED PENALTY PROCEEDINGS U/S. 271 R.W.S. 274 OF THE INCOME TAX AC T, 1961 DURING THE ASSESSMENT PROCEEDINGS U/S. 143(3), AND FINALLY IMPOSED A PENALTY OF RS. 2,01,67,817/ - U/S. 271(1)(C) ON THE AMOUNTS UPHELD IN APPEAL VIDE ORDER DATED 16.3.2011. 4. AGGRIEVED WITH THE PENALTY ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 03 . 6 .2013 DELETED THE PENALTY IN DISPUTE BY ALLOWING THE APPEAL FILED BY THE ASSESSEE. ITA NO. 5063/ DEL/ 2013 3 5. NOW AGGRIEVED WITH THE IMPUGNED ORDER, REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTION RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL . 7. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY AND STATED THAT IN THIS CASE SINCE THE QUANTUM DELETED/ SET ASIDE BY THE ITAT AND THEREFORE, PENALTY DOES NOT SURVIVE. HE FURTHER SUBMITTED THAT LD. CIT(A) HAS CORRECTLY APPRECIATED THE LEGAL POSITION BY DELETING THE PENALTY FOLLOWING THE ORDER OF THE ITAT DATED 17.5.201 2 ON QUANTUM ADDITIONS. HE FURTHER STATED THAT THE DEPARTMENT HAS FILED A FRIVOLOUS APPEAL AGAINST THE ORDER OF THE LD. CIT(A) KNOWING WELL THAT QUANTUM HAS ALREADY BEEN DECIDED BY THE ITAT. HE PLACED RELIANCE UPON THE DECISION OF THE ITAT IN THE CASE OF ACIT VS. RPG CREDIT & CAPITAL LTD. WHEREIN THE STRICTURES HAVE BEEN PASSED AGAINST THE DEPARTMENT FOR FILING FRIVOLOUS APPEAL. HE ALSO FILED THE COPY OF THE LETTER WRITTEN BY THE MEMBER, CBDT DIRECTING THE COMMISSIONERS OF INCOME TAX NOT TO FILE FR IVOLOUS APPEALS. IN VIEW OF THE ABOVE, HE REQUESTED THAT THE IMPUGNED ORDER OF THE LD. CIT(A) MAY BE UPHELD BY DISMISSING THE APPEAL FILED BY THE REVENUE. ITA NO. 5063/ DEL/ 2013 4 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDER S PASSED BY THE REVENUE AUTHORITY. WE ARE OF THE CONSIDERED THAT THE LD. CIT(A) HAS DELETED THE PENALTY IN DISPUTE BY THOROUGHLY EXAMINING THE ASSESSMENT ORDER, PENALTY ORDER, SUBMISSION FILED BY THE ASSESSEE AND THE ORDER OF THE ITAT, DELHI DAT ED 17.5.2012 IN ITA NO. 3148/DEL/2010 FILED BY THE ASSESSEE AND CROSS APPEAL FILED BY THE REVENUE IN ITA NO. 3477/DEL/2010. WE FIND THAT THE ADDITION OF RS. 4,96,68,535/ - DIRECTED TO BE MADE U/S. 2(24) BY THE LD. CIT(A) WAS DELETED VIDE PARA NO. 78. W E ALSO FIND THAT AS THE QUANTUM ADDITION HAS BEEN DELETED, THE PENALTY RELATING THERETO DOES NOT SURVIVE AND WAS RIGHTLY DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE DECISION OF THE LD. CIT(A) ON THIS ISSUE. 8.1 AS REGARDS THE ADDITION OF RS. 1,02,47,738/ - , WE FIND THAT THE ITAT HAS VIDE AFORESAID ORDER DATED 17.5.2012 VIDE PARA 110 OF THE ORDER RESTORED THE MATTER TO THE AO WITH THE DIRECTION TO DECIDE THE SAME AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING IN THIS REGARD. WE NOTE THAT AS THE QUANTUM ADDITION HAS BEEN RESTORED TO THE AO FOR FRESH DECISION, THE PENALTY IMPOSED RELATING THERETO WAS RIGHTLY CANCELLED BY THE LD. CIT(A ). 8. 2 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED ITA NO. 5063/ DEL/ 2013 5 OPINION THAT IN THE PRESENT CASE, THE PENALTY UNDER SECTION 271(L)(C) IS NOT LEVIABLE AND IT DESERVES TO BE DELETED , HENCE, LD . CIT(A) HAS RIGHTLY DELETED THE PENALTY MADE BY THE ASSESSING OFFICER. THEREFORE, W E DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINST THE REVENUE BY DISMISSING THE APPEAL FILED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 2 6 / 0 8 /20 1 5 . S D / - S D / - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 2 6 / 8 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES