Sh. Gautam R Chadha, New Delhi V. ACIT, New Delhi

ITA 5448/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4453 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 08-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR YADAV SENIOR
• Keywords: Depreciation; Opportunity of being heard; Question of law
• Section: 143(3); 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5448/DEL./2014 (ASSESSMENT YEAR : 2003-04) ITA NO.5449/DEL./2014 (ASSESSMENT YEAR : 2003-04) ITA NO.5450/DEL./2014 (ASSESSMENT YEAR : 2005-06) ITA NO.5453/DEL./2014 (ASSESSMENT YEAR : 2007-08) ITA NO.5454/DEL./2014 (ASSESSMENT YEAR : 2007-08) SHRI GAUTAM R CHADHA, VS. ACIT, CIRCLE 32 (1), (L/H OF SMT. RATNA CHADHA), NEW DELHI. PROP. M/S. TIRUM TRAVEL MARKETING, 505, SALCON AURUM, 4, JASOLA DISTRICT CENTRE, NEW DELHI. (PAN : AADPC5798A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK SIKKA, ADVOCATE REVENUE BY : SHRI ARUN KUMAR YADAV, SENIOR DR DATE OF HEARING : 29.08.2017 DATE OF ORDER : 18 .09.2017 O R D E R ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 2 PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTION OF LAW AND FACTS IS INVOLVED IN ALL THE AFORESAID APPEALS FILED BY THE ASSESSEE AGAINST A SINGLE ORDER DATED 15.07.2014 PASSED BY THE LD. CIT (A), THE SAM E ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSION. 2. APPELLANT, SHRI GAUTAM R. CHADHA (HEREINAFTER RE FERRED TO AS THE ASSESSEE), BY FILING THE PRESENT APPEAL SOUGH T TO SET ASIDE THE IMPUGNED ORDER DATED 15.07.2014 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS)-XXVI, NEW DELHI, FOR THE ASSES SMENT YEARS 2003-04, 2005-06 & 2007-08 ON THE GROUNDS INT ER ALIA THAT :- ITA NO.5448/DEL/2014 (AY 2003-04) 1. THAT THE AUTHORITIES BELOW ERRED IN FACTS & IN LAW IN CHARGING INTEREST U/S 234B OF THE INCOME TAX ACT 1961 (AMOUNTING TO RS.2,47,926/-), 234D (AMOUNTING TO RS.,633 & 4,50,260) & 220(2)(AMOUNTING TO RS.57,118) TOTAL AMOUNTING TO RS.9,23,557/-. NEITHER THE ORDER U/S 154/260A/143(3) DT. 23.12.2013 AUTHORIZED THE CHARGE OF SUCH AN INTEREST NOR WAS A CHARGE AS PER LAW. AT ANY RATE, WITHOUT PREJUDICE, THE CALCULATIO N OF UNDER VARIOUS SECTIONS IS NEITHER ACCORDING TO THE LAW NOR CORRECTLY COMPUTED AS PER THE SPIRIT OF THE LAW AND IS ALSO UNJUST, ARBITRARY, ILLEGAL AND AT ANY RATE VERY EXCESSIVE. THE WITHDRAWAL OF INTEREST U/S 244 AMOUNTING TO RS.1,66,620 IS NOT ONLY ILLEGAL BUT ALSO NOR AUTHORIZED ORDER U/S 154/260A/143(3) DT. ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 3 23.12.2013. THE ADJUSTMENT OF REFUND ALREADY ISSUED AMOUNTING TO RS.19,42,040 & RS.10,48,862 OUGHT NOT TO HAVE CONSIDERED IN COMPUTING THE ADDITIONAL DEMAND PAYABLE BY THE APPELLANT. ITA NO.5449/DEL/2014 (AY 2003-04) 1. THAT THE AUTHORITIES BELOW ERRED IN FACTS & IN LAW IN CHARGING INTEREST U/S 220(2) OF THE INCOME TAX ACT 1961 AND NO OPPORTUNITY OF BEING HEARD WAS GIVEN BEFORE REJECTING THE APPELLANTS PETITION. VARIOUS FACTS AND CIRCUMSTANCES WHICH OUGHT TO HAVE BEEN CONSIDERED WERE EITHER NOT CONSIDERED OR WERE NOT GIVEN THE DUE CONSIDERATION AND DECISION WAS BASED UPON SURMISES, CONJECTURES AND GUESSWORK. AT ANY RATE WITHOUT PREJUDICE, THE CHARGE OF INTEREST U/S 220(2) OF THE ACT IS ILLEGAL, UNJUST, ARBITRARY AND UNDULY EXORBITANT. ITA NO.5450/DEL/2014 (AY 2005-06) 1. THAT THE AUTHORITIES BELOW ERRED FACT AND LAW IN NOT ALLOWING RELIEF OF CHARGING INTEREST AMOUNTING TO RS.19,63,109/- U/S 234B & 234D OF THE INCOME TAX ACT 1961. THE ENTIRE CALCULATION OF TAX AND INTEREST PAYABLE AS COMPUTED BY THE AO IS ARBITRARY, ILLEGAL, UNJUST AND WITHOUT PREJUDICE EXCESSIVE. ITA NO.5453/DEL/2014 (AY 2007-08) 1. THAT THE AUTHORITIES BELOW ERRED IN FACT AND IN LAW IN NOT ALLOWING RELIEF ON ACCOUNT OF CHARGING INTEREST AMOUNT TO RS.34,40,848/- U/S 234B & 234D OF THE INCOME TAX ACT 1961. THE ENTIRE CALCULATION OF TAX AND INTEREST PAYABLE AS COMPUTED BY THE AO IS ARBITRARY, ILLEGAL, UNJUST AND WITHOUT PREJUDICE EXCESSIVE. ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 4 ITA NO.5455/DEL/2014 (AY 2007-08) 1. THAT THE AUTHORITIES BELOW ERRED IN FACTS & IN LAW IN CHARGING INTEREST U/S 220(2) OF THE INCOME TAX ACT 1961 AND NO OPPORTUNITY OF BEING HEARD WAS GIVEN BEFORE REJECTING THE APPELLANTS PETITION. VARIOUS FACTS AND CIRCUMSTANCES WHICH OUGHT TO HAVE BEEN CONSIDERED WERE EITHER NOT CONSIDERED OR WERE NOT GIVEN THE DUE CONSIDERATION AND DECISION WAS BASED UPON SURMISES, CONJECTURES AND GUESSWORK. AT ANY RATE WITHOUT PREJUDICE, THE CHARGE OF INTEREST U/S 220(2) OF THE ACT IS ILLEGAL, UNJUST, ARBITRARY AND UNDULY EXORBITANT. 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE RECORDED FOR AY 2003-04, FO R THE SAKE OF BREVITY BECAUSE IN ALL OTHER APPEALS THERE IS ONLY DIFFERENCE OF AMOUNT INVOLVED. ASSESSEE BY FILING AN APPLICATION UNDER SECTION 154 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT ) SOUGHT TO INCORPORATE THE DIRECTIONS ISSUED BY HONBLE HIGH C OURT WHILE PASSING ORDER U/S 260A/143(3) OF THE ACT TO THE EFF ECT THAT, 25% OF THE BOOKING ADVANCES RECEIVED SHOULD BE TREATED AS INCOME OF THE ASSESSEE ASSUMING THAT THERE ARE NO CANCELLATIO NS. HOWEVER, THE ASSESSEE SHALL BE ENTITLED TO 10% CREDIT ON ACC OUNT OF TRAVEL AGENTS COMMISSION AFTER ASCERTAINING ACTUAL OUTGOIN G IN THIS REGARD. ASSESSEE CLAIMED THAT WHILE GIVING 10% CREDIT ON ACCOUNT OF TRAVEL AGENT COMMISSION IN THE APPEAL EF FECT ORDER, THE AO HAS TAKEN 10% OF 25% OF BOOKING ADVANCES RECEIVE D, WHEREAS ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 5 AS PER THE DIRECTION OF THE HONBLE COURT, 10% CRED IT HAD TO BE GIVEN AFTER ASCERTAINING ACTUAL OUTGOING IN THIS RE GARD. 4. AO ON THE BASIS OF VERIFICATION OF RECORD COMPUT ED THE INCOME AS UNDER :- INCOME ACCRUED TO THE ASSESSEE @ 25% AND CREDIT 10 % ON ADVANCE BOOKING AFTER ASCERTAIN THE ACTUAL OUTGOING IS DETERMINED AS UNDER :- 25% OF ADVANCE BOOKING (25% OF RS.1,44,76,873/-) RS.36,19,218/- LESS : COMMISSION PAYABLE/PAID TO TRAVEL AGENTS @ 10% (10% OF RS.1,44,76,873/ - ) RS.14,47,687 INCOME ACCRUED TO ASSESSEE RS.21,71,531/- 5. IN VIEW OF THE ABOVE FACTS, THE ASSESSED INCOME OF ASSESSEE IS COMPUTED AS UNDER :- I. ASSESSED INCOME AS PER ORDER OF THE CIT (A) : ASSESSED INCOME U/S 143(3) RS.2,48,09,680/- LESS : (I) RELIEF ON A/C OF ADVANCES RECEIVED (75% OF 14476873 + 10% OF 25% OF 14476873) RS.1,12,19,575/ - (II) RELIEF ON A/C OF PAYMENT U/S 40A(2)(B) RS.4,32 ,000/- (III) RELIEF ON A/C OF EXPENSES RELATED TO INTERZIGN SOLUTION P LTD. RS.42,100/ - (IV) RELIEF ON A/C OF TELEPHONE EXPENSES RS.30,741/ - (V) RELIEF ON A/C OF CAR EXPENSES & CAR DEPRECIATION RS.68,289/ - ASSESSED INCOME RS.1,30,16,975/- II. ASSESSED INCOME AS PER ORDER OF THE ITAT ASSESSED INCOME AS PER ORDER OF THE CIT (A) RS.1,30,16,975/ - LESS : (I) RELIEF ON A/C OF ADVANCES RECEIVED (RELIEF OF RS.1,12,19,575 OUT OF TOTAL ADDITION OF RS.1,44,76,873/- ON THIS ISSUE HAS ALREADY BEEN ALLOWED IN PURSUANCE TO THE ORDER OF THE CIT (A). ACCORDINGLY, THE BALANCE OF RS.32,57,298/ - IS BEING ALLOWED HERE.) RS.32,57,298/- ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 6 (II) RELIEF ON A/C OF LO SS OF SHARES RS.17,41,940/ - ASSESSED INCOME RS.80,17,737/ - III. ASSESSED INCOME AS PER ORDER OF THE HONBLE HIGH CO URT OF DELHI. ASSESSED INCOME AS PER ORDER OF THE ITAT RS.80,17,737/ - ADD : ADDITION ON A/C OF ADVANCES RECEIVED RS.21,71,531/ - NET ASSESSED INCOME RS.1,01,89,268/- 6. ACCORDINGLY, THE ASSESSED INCOME IS DETERMINED A T RS.1,01,89,268/-. ISSUE DEMAND NOTICE, ITNS & NECE SSARY FORMS AND ALLOW CREDIT OF TAXES PAID. 5. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EALS BEFORE THE LD. CIT (A) WHO HAS DISMISSED THE APPEALS. FEE LING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUGNED ORDER PASSED BY LD. CIT (A ) BY FILING AFORESAID APPEALS. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. UNDISPUTEDLY, APPEAL EFFECT HAS BEEN GIVEN BY TH E AO BY COMPUTING THE INCOME OF THE ASSESSEE QUA ASSESSMENT YEARS 2003- 04, 2005-06 & 2007-08 WHEN ASSESSMENT COMPLETED BY THE AO HAS BEEN UPHELD BY THE HONBLE HIGH COURT. IT IS ALSO NOT IN DISPUTE THAT THE AO HAS PASSED THE APPEAL EFFECT ORDER U/S 260A/ 143 (3) OF ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 7 THE ACT AFTER THE ASSESSMENT ORDER PASSED BY THE AO HAS BEEN FINALLY UPHELD BY THE HONBLE HIGH COURT. 8. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMST ANCES OF THE CASE, THE FIRST QUESTION ARISES FOR DETERMINATION I N ALL THE AFORESAID APPEALS IS :- AS TO WHETHER AO WAS NOT AUTHORIZED TO CHARGE INTEREST U/S 234B, 234D AND 222 WHILE PASSING ORDER U/S 154/260A/143(3) OF THE ACT AND WITHOUT PREJUDICE THE INTEREST HAS NOT BEEN COMPUTED AS PER SPIRIT OF LAW? 9. LD. CIT (A) HAS DETERMINED THIS ISSUE PRIMARILY BY INVOKING THE DOCTRINE OF MERGER BY FOLLOWING THE JUDGMENT CITED AS CIT VS. TONY ELECT. LTD. 185 TAXMAN 12 . IT IS SETTLED PRINCIPLE OF LAW THAT ONCE THE APPEAL FILED AGAINST THE COMPLETED AS SESSMENT IS DECIDED BY THE APPELLATE AUTHORITY, THE ASSESSMENT ORDER MERGES INTO THE ORDER PASSED BY APPELLATE AUTHORITY. SINC E THERE IS NO DISPUTE THAT WHEN THE AO HAS PASSED ORIGINAL ASSESS MENT ORDER IN ALL THE AFORESAID CASES, HE HAS CATEGORICALLY ORDERED TO CHARGE THE INTEREST AS PER LAW AND IN ACCORDANCE WITH ITNS 150 AND HE HAS SPECIFICALLY ENCLOSED COMPUTATION OF TAX AND IN TEREST AS PER ITNS 150 ALONG WITH ASSESSMENT ORDER . 10. SO, IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE C ONSIDERED VIEW THAT WHEN THERE WAS SPECIFIC ORDER PASSED BY T HE AO FOR ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 8 CHARGING THE INTEREST UNDER THE ACT AND THE SAID OR DER MERGES INTO THE APPEAL ORDER, THERE IS NO ILLEGALITY OR PERVERS ITY IN THE FINDINGS RETURNED BY LD. CIT (A). THE LD. AR FOR THE ASSESS EE THOUGH RAISED GROUND IN THE ALTERNATIVE THAT WITHOUT PREJUDICE TH E CALCULATION UNDER VARIOUS SECTIONS IS NEITHER CORRECT NOR AS PE R SPIRIT OF LAW, BUT HAS FAILED TO POINT OUT AS TO HOW AND UNDER WHAT CI RCUMSTANCES, THE CALCULATION OF THE INTEREST MADE BY THE AO IS NOT I N ACCORDANCE WITH LAW. 11. THE LD. AR FOR THE ASSESSEE CONTENDED THAT SINC E THE SPECIAL LEAVE PETITION FILED BY THE ASSESSEE HAS BEEN ADMIT TED BY HONBLE SUPREME COURT, THIS ISSUE CANNOT BE DECIDED. HOWEV ER, WHEN THE LD. AR FOR THE ASSESSEE IS CONFRONTED WITH THE FACT THAT ONLY INTEREST HAS BEEN CALCULATED ON THE QUANTUM OF INCOME ON THE BASIS OF FACTS WHICH HAVE NOT BEEN DISPUTED IN QUANTUM PROCEEDINGS RATHER QUESTION OF LAW HAS BEEN CHALLENGED THE LD. AR HAS FAILED TO REPLY OTHERWISE. EVEN OTHERWISE, IN CASE THE ASSESSEE GE TS ANY FAVOURABLE ORDER FROM THE HONBLE APEX COURT, THE I NTEREST CHARGED SHALL BE REFUNDED IN ACCORDANCE WITH LAW AN D THE APPEALS CANNOT BE KEPT PENDING. 12. SO FAR AS SECOND CONTENTION RAISED BY THE LD. A R FOR THE ASSESSEE IN AY 2003-04 THAT THE WITHDRAWAL OF INTER EST U/S 244 OF ITA NO.5448,5449 & 5450/DEL./2014 ITA NO.5453 & 5455/DEL./2014 9 THE ACT AMOUNTING TO RS.1,66,620/- IS NOT ONLY ILLE GAL BUT ALSO NOT AUTHORIZED UNDER THE ORDER PASSED U/S 144/260A/143( 3), AGAINST THE REFUND ALREADY ISSUED, IS CONCERNED, WHEN CERTAIN A MOUNT IS FOUND TO BE DUE AGAINST THE ASSESSEE THE SAME CAN BE ADJU STED AGAINST THE REFUND DUE TO THE ASSESSEE BY ISSUING A DEMAND NOTI CE AS PROVIDED U/S 244A(1). IN THE INSTANT CASE, THE REFUND HAS B EEN ADJUSTED AGAINST THE INTEREST LEVIED ON THE ASSESSEE AS PER ASSESSMENT ORDER AND AGAIN, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE L D. CIT (A). 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, LD. C IT (A) HAS PASSED A COMPREHENSIVE ORDER BY APPRECIATING THE LA W AND FACTS AND WE FIND NO ILLEGALITY OR PERVERSITY IN THE IMPU GNED ORDER, HENCE ALL THE AFORESAID APPEALS FILED BY THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (B.P. JAIN) (KULDIP SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 18 TH DAY OF SEPTEMBER, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.