DCIT, Circle-12(1), New Delhi V. IFCI Ltd., New Delhi

ITA 5354/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8759 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 18-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Depreciation; Principle of natural justice; Revised return; Rule 8D
• Section: 14A

Judgement Text

1 ITA NO. 5354/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 5354/DEL/20 17 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) DCIT C. R. BUILDING, I. P. ESTATE, NEW DELHI (APPELLANT) VS IFCI IFCI TOWER, 61, NEHRU PLACE, NEW DELHI AAACT0668G (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 29.06.2017 PASSED BY CIT(A)-16, NEW DELHI FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON DEPRECIATION OF F INANCE LEASED ASSETS AMOUNTING TO RS. 1,31,63,444/- HOLDING THAT IT IS O NE OF THE BUSINESS OF ASSESSEE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE U/S 14A R.W. RULE 8D, AMO UNTING TO RS. 6,13,33,967/- HOLDING THAT THE AO HAD NO OCCASION T O RESORT TO COMPUTATION APPELLANT BY SH. S. VASUDEVAN, ADV RESPONDENT BY SH. MAHESH THAKUR, SR. DR DATE OF HEARING 22.03.2021 DATE OF PRONOUNCEMENT 25.03.2021 2 ITA NO. 5354/DEL/2017 U/S 14A R.W. RULE 8D. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT (A) HAS ERRED IN IGNORING THAT DISALLOWANCE U/S 14A R.W. RULE 8D OF THE ACT CANNOT BE IMPORTED INTO BOOK PROFIT. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFOR E OR DURING THE HEARING OF APPEAL. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING ASSISTANCE IN THE FORM OF SHORT, MEDIUM OR LONG TERM LOANS FO R WORKING CAPITAL FACILITIES OR EQUITY PARTICIPATION INDIVIDUALLY OR IN SYNDICATES OR IN ANY OTHER FORM OR SCHEME AS MAY BE DEEMED EXPEDIENT AND THERE IS NO C HANGE IN THE BUSINESS OF ASSESSEE. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30 TH SEPTEMBER, 2011 SHOWING TOTAL INCOME OF RS.53,05,09,599/- AFTER SET OFF AGAINST CARRIED FORWARD BUSINESS LOSS OF RS. 336,89,42,409/- AND BOOK PROFI TS OF RS. 469,18,16,779/- U/S 115JB. THE ASSESSEE FILED REVISED RETURN OF IN COME ON 28 TH MARCH, 2013 SHOWING THE TOTAL INCOME AT RS.52,28,02,154/- AFTER SET OFF AGAINST CARRIED FORWARD BUSINESS LOSS OF RS. 336,94,74,409/- AND BO OK PROFITS OF RS.468,69,16,779/- U/S 115JB. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE A SSESSEE. 5. THE LD. AR SUBMITTED THAT BOTH THE ISSUES CONTE STED IN THE PRESENT APPEAL BY THE REVENUE IS ALREADY COVERED IN ASSES SEES OWN CASE FOR AY 1999- 2000, 2000-01,2002-03, 2008-09 (ITA NO. 1200 & 1201 /DEL/2011, 2934/DEL/2010 & 2062/DEL/2012 ORDER DATED 31/08/202 0). 6. THE LD. DR SUBMITTED THAT THE REVENUE IS RELYING UPON THE ASSESSMENT ORDER. THE LD. AR FURTHER SUBMITTED THAT AS REGARD S GROUND NO. 2, THE ASSESSEE HAS ONLY DISALLOWED RS. 10 LACS FOR EXPENS ES ON EARNING DIVIDEND 3 ITA NO. 5354/DEL/2017 INCOME OF RS. 6,13,33,967/-. THE ASSESSEE IS DISAL LOWING RS. 10 LACS FOR LAST SO MANY YEARS AND IT IS NOT QUANTIFIED AS PER THE REQU IREMENT OF SECTION 14A READ WITH RULE 8D. THEREFORE, THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN DELETING THE SAID DISALLOWANCE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RELATED TO GROUND NO.1 REL ATING TO DISALLOWANCE MADE ON DEPRECIATION OF FINANCE LEAST ASSETS AMOUNTING T O RS. 1,31,63,444/-. IT IS RELATED TO THE BUSINESS OF THE ASSESSEE AND THIS FA CTUAL ASPECT WAS NOT AT ALL CHANGED FROM THE EARLIER YEAR AND SUBSEQUENT YEARS. THEREFORE, GROUND NO. 1 OF REVENUES APPEAL IS DISMISSED. AS REGARDS GROUN D NO.2, THE DISALLOWANCE WHICH IS SUO-MOTO MADE BY THE ASSESSEE IS NOT PROPE RLY QUANTIFIED AND THE SAME NEEDS TO BE VERIFIED IN LIGHT OF THE VARIOUS D ECISIONS OF THE HONBLE DELHI HIGH COURT AS WELL AS THE APEX COURT DECISION IN CA SE OF MAXOPP INVESTMENT LTD. 402 ITR 640 (SC ). THEREFORE, WE REMAND BACK THIS ISSUE TO THE FILE O F THE ASSESSING OFFICER FOR PROPER ADJUDICATION AS PER TH E PROVISIONS OF INCOME TAX STATUTE. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OP PORTUNITY OF BEING HEARD BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. GROUND NO. 2 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. AS REGARDS GROUND NO.3 RELATI NG TO DISALLOWANCE U/S 14A R.W. RULE 8D OF THE ACT WHETHER IMPORTED INTO BOOK PROFIT OR NOT, THE TRIBUNAL IN EARLIER ASSESSMENT YEARS HAS REMANDED BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER AND THE FACTS ARE IDENTICAL IN TH IS YEAR AS WELL. THUS, WE ARE REMANDING THE ISSUE OF TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION AFTER VERIFYING THE CLAIM OF THE ASSES SEE. THUS, GROUND NO. 3 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 4 ITA NO. 5354/DEL/2017 8. IN RESULT, THE APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25/03/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 5354/DEL/2017