DCIT, New Delhi V. M/s. Mahima Hospitality Pvt. Ltd., New Delhi

ITA 549/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5280 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Bad and doubtful debts; Revised return
• Section: 143(3); 32

Judgement Text

ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUN AL DELHI BENCH E NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 549/DEL/2014 AY: 20 09-10 DCIT, VS MAHIMA HOSPITALITY PVT. LTD. , CIRCLE-6(1), F-213D, GROUND FLOOR, LADO S ARAI, NEW DELHI. NEW DELHI. (PAN: AAECM0063C) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI RAJESH KUMAR, SR. DR ASSESSEE BY : NONE ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A)-IX, NEW DELHI FOR ASSESSMENT YEAR 2009- 10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF RUNNING RESTAURANTS CUM LOUNGE BARS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON WAS FILED ON 25.9.2009 DECLARING A LOSS OF RS. 44,02,460/-. AFTER THE RETURN BEING INITIALLY PROCESSED U/S 143(1) OF INCO ME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT), THE CASE WAS S UBSEQUENTLY SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLE TED U/S 143(3) OF THE ACT AT AN INCOME OF RS. 66,30,516/- W HICH, INTER ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 2 ALIA, INCLUDED DISALLOWANCE OUT OF FORFEITURE OF SE CURITY DEPOSIT OF RS. 22,50,000/-, BAD DEBTS OF RS. 24,449/-, CONTRIB UTION TO PF/ESI AMOUNTING TO RS. 12,58,527/- AND ALSO ADDITI ON OF RS. 21,81,600/- BEING RESTAURANT DEVELOPMENT EXPENSES W RITTEN OFF AND CAPITAL GAINS OF RS. 75,00,000/-. ON APPEAL BE FORE THE LD. CIT (A), THE LD. CIT (A) CONFIRMED THE ADDITION OF RS. 22,50,000/- ON ACCOUNT OF FORFEITURE OF SECURITY DEPOSITS. THE DISALLOWANCE OF RS. 12,58,527/- ON ACCOUNT OF LATE DEPOSIT OF EMPLO YEES CONTRIBUTION TO EPF AND ESIC WAS DELETED. THE ADDI TION OF RS. 75 LAKH UNDER THE HEAD CAPITAL GAINS WAS DELETED. THE AMOUNT OF RS. 24,449/- ON ACCOUNT OF BAD DEBTS ADDED TO THE I NCOME OF THE ASSESSEE WAS CONFIRMED AND AMOUNT OF RS. 21,81,600/ - BEING RESTAURANT DEVELOPMENT EXPENSES WRITTEN OFF BUT ADD ED BACK BY THE ASSESSING OFFICER WERE ALSO ALLOWED AS DEDUCTIO N. 3. NOW, THE DEPARTMENT FEELING AGGRIEVED BY THE DEL ETION OF RS. 75 LAKH ON ACCOUNT OF CAPITAL GAINS AND OF RS. 21,8 1,600/- ON ACCOUNT OF RESTAURANT DEVELOPMENT EXPENSES WRITTEN OFF HAS APPROACHED THE ITAT AND HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADD ITION OF ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 3 RS. 75,00,000/- MADE BY THE A.O. ON ACCOUNT OF CAP ITAL GAIN DETERMINED BY INVOKING PROVISION OF SECTION 50 C, ON THE GROUND THAT THE ASSESSEE HAS SOLD THE ENTIRE UNIT ALONG WITH THE FURNITURE AND FIXTURE WITHOUT APPREC IATING THE FACT THAT THE WORKING IN THE SALE DEED IS CLEAR AND NOT FURNITURE AND FITTINGS? 2. WHETHER ON THEFACTS AND CIRCUMSTANCES OF THE CA SE & IN LAW, THE LD. CIT (A)ERRED IN DELETING THE ADDITI ON OF RS. 2181599.75/-, DISALLOWED BY THEA.O. AS THE CLAIM WA S NOT MADE IN THE ORIGINAL RETURN OF INCOME, IN VIOLA TION OF THE JUDGMENT OF HONBLE APEX COURT IN CASE OF GOETZ E INDIA LTD. V. CIT [2006] 284ITR 323 (SC)? 3. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDIC E TO EACH OTHER. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR FORGO ANY GROUND (S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R, WE ARE PROCEEDING TO DISPOSE OF THE APPEAL ON MERITS. 5. LD. DR READ OUT EXTENSIVELY FROM THE ASSESSMENT ORDER AND SUBMITTED THAT THE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN ON SALE OF PROPERTY ARISING ON TRANSFER OF PROPERTY IN GOA. IT WAS SUBMITTED THAT THE SALE TRANSACTION WAS STATED TO B E PERTAINING TO THE YEAR UNDER CONSIDERATION ALTHOUGH THE SALE AGRE EMENT WAS REGISTERED IN SUBSEQUENT YEAR. LD. DR SUBMITTED TH AT IT WAS THE ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 4 CLAIM OF THE ASSESSEE THAT IT HAD GIVEN THE POSSESS ION OF PROPERTY AND HAD ALSO RECEIVED SUBSTANTIAL AMOUNT IN TERMS O F THE AGREEMENT OF SALE AND, THEREFORE, IT WAS A CASE OF TRANSFER FALLING WITHIN THE AMBIT OF SECTION 2(47) OF THE INCOME TA X ACT. LD. DR SUBMITTED THAT THE AGREEMENT TO SELL MENTIONED THE LAND COST AT RS. 15,00,00,000/-, BUILDING COST AT RS. 50,00,000/ - AND THE OTHER FIXED ASSETS AT RS. 75,00,000/- AND THE TOTAL CONSIDERATION AT RS. 27,500,000/-. IT WAS FURTHER SUBMITTED THAT THE DEED OF SALE EXECUTED ON 24.07.2009 HOWEVER REFLECTED THE A SSESSABLE VALUE OF PROPERTY FOR THE PURPOSE OF PAYMENT OF STA MP DUTY OF RS. 27,500,000/- ON WHICH STAMP DUTY @3% AMOUNTING TO R S. 8,25,500 WAS PAID. IT WAS SUBMITTED THAT IN THE SA LE DEED BEFORE THE STAMP VALUATION AUTHORITY, THE ASSESSEE HAD ACC EPTED THAT THE MARKET VALUE OF LAND AND BUILDING ITSELF WAS RS . 2.75 CRORES. IT WAS FURTHER SUBMITTED THAT THE SALE DEED DID NOT INCLUDE MENTION OF FIXED ASSETS AS STATED IN THE BIFURCATIO N OF VALUE GIVEN IN THE AGREEMENT TO SELL. IT WAS SUBMITTED THAT, A CCORDINGLY, RS. 75 LAKH CLAIMED TO HAVE BEEN PAID FOR FURNITURE AND FIXTURES CANNOT BE DEDUCTED FROM THE MARKET VALUE OF THE IMM OVEABLE PROPERTY. IT WAS FURTHER SUBMITTED BY THE LD. DR T HAT AFTER ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 5 INQUIRY FROM THE ASSESSEE, THE ASSESSING OFFICER HA D ARRIVED AT THE CONCLUSION THAT FURNITURE AND FIXTURES HAD NOT BEEN TRANSFERRED TO THE PURCHASER AND THAT AS PER THE PR OVISIONS OF SECTION 50C, THE VALUATION FOR THE PURPOSE OF STAMP DUTY VALUATION HAD TO BE TAKEN AS THE DEEMED VALUE OF SA LE CONSIDERATION WHICH WAS RS. 2.75 CRORE. 5.1 ON THE SECOND ISSUE BEING AGITATED BY THE DEPAR TMENT, LD. DR SUBMITTED THAT THE CLAIM OF WRITE OFF OF RESTAUR ANT DEVELOPMENT EXPENSES AMOUNTING TO RS. 21,81,600/- W AS NOT MADE BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCO ME AND, THEREFORE, THE LD. CIT(A) HAD ERRED IN ALLOWING REL IEF TO THE ASSESSEE ON THIS ACCOUNT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. AS FAR AS THE ISSUE OF CAPITAL GAINS AMOUNTING TO RS. 75 LAKHS IS CONCERNE D, IT IS SEEN THAT THE ASSESSING OFFICER HAD ADDED THIS AMOUNT BY INVOKING THE PROVISIONS OF SECTION 50C. THE ASSESSING OFFICER H AS HELD THAT STAMP DUTY OF RS. 8,25,500/- WAS PAID ON THE TOTAL SALE CONSIDERATION OF RS. 2.75 CRORES INCLUDING THEREIN THE COST OF FIXTURES AND FITTINGS AND OTHER ASSETS INSTALLED AT THE RESTAURANT ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 6 CUM LOUNGE AT GOA. THE ASSESSING OFFICER HAS STATE D THAT STAMP DUTY IS PAYABLE ONLY ON IMMOVEABLE ASSETS AND NOT O N FURNITURE AND FIXTURES AND HE ACCORDINGLY ADOPTED THE VALUE O F LAND AND BUILDING BEING SUBJECT TO STAMP VALUATION AT RS. 2. 75 CRORES AND DID NOT ALLOW THE DEDUCTION OF RS. 75 LAKHS CLAIMED TO HAVE BEEN PAID FOR FURNITURE AND FIXTURES, THUS MAKING AN ADD ITION OF RS. 75 LAKHS UNDER THE HEAD CAPITAL GAINS. LD. CIT (A) HA S DISCUSSED THE ISSUE IN PARA 6.4, 6.5, 6.6 AND 6.7 OF THE IMPU GNED ORDER WHICH ARE BEING REPRODUCED BELOW FOR A READY REFERE NCE:- 6.4 THE REASONS GIVEN BY AO IN ASSESSMENT ORDER, THE SUBMISSION OF THE APPELLANT AND THE FACTS ON RECORD ARE CONSIDERED. IT IS NOT UNDER DISPUTE THAT : 1. PROPERTY IS SOLD INCLUDING FIXTURES, FITTINGS, FURNITURE & OTHER ASSETS INSTALLED IN IT TOGETHER W ITH THE PROPERTY. 2. A SPECIFIC BIFURCATION OF SALE PROCEEDS OF ALL THE ASSETS INCLUDING RS. 75 LAKHS FOR THE OTHER ASSETS ALONG WITH SALE OF LAND & BUILDING FOR RS. 150 LAKH S AND RS. 50 LAKHS RESPECTIVELY IN AGREEMENT TO SALE IS SPECIFIED. 3. THE FIXTURES & FITTINGS, INSTALLED IN THE PROP ERTY WERE NOT SOLD SEPARATELY BUT SOLD ALONG WITH HOUSE. THESE ARE NEITHER DISMANTLED NOR DETACHED FROM THE HOUSE. 4. THE PAYMENT FOR SALE OF PROPERTY & FIXTURES, FITTINGS & OTHER ASSETS WERE RECEIVED BY ACCOUNT ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 7 PAYEE CHEQUES AS PER AGREEMENT TO SALE. 5. THE SALE DEED WAS REGISTERED INCLUDING SALE PROCEEDS OF LAND, BUILDING & OTHER ASSETS THE ONLY ISSUE IS WHETHER AS TREATED BY AO, THE SAL E CONSIDERATION OF RS.2.75 CRORE CAN BE TAKEN ONLY FO R LAND AND BUILDING AND RS.75 LAKHS TAKEN EXTRA FOR FURNITURE AND FIXTURE. THE AO DOES NOT INDICATE FRO M WHERE THIS RS.75 LAKHS EXTRA HAS COME AND WHERE IT HAS GONE. THEREFORE, EVEN IF THE STAMP DUTY HAS BEE N PAID ON RS.2.75 OR., THE CAPITAL GAINS ARE TO BE CALCULATED ON THE BASIS OF THE ASSETS SOLD CONSIDER ING THE TOTAL SALE PROCEEDS AT RS.2.75 OR. IF THE SALE PROCEEDS ARE TAKEN AT RS. 2.75 CRORE AT THE TIME OF CALCULATIONS OF CAPITAL GAINS, THERE IS NO GROUND F OR MAKING ANY ADDITIONS IN THE HANDS OF THE APPELLANT UNDER THE HEAD CAPITAL GAINS. 6.5 THE APPELLANT CALCULATED THE CAPITAL GAINS AS PER PROVISION OF LAW AND THE SEPARATE CALCULATION HAS B EEN GIVEN FOR CAPITAL GAINS EARNED ON DEPRECIABLE ASSET S AS PER SECTION 50 OF THE ACT AND THE NON DEPRECIABLE ASSET S I.E. LAND. THE SHORT TERM CAPITAL GAINS HAS BEEN DETERMI NED ON THE BASIS OF THE PROVISIONS OF BLOCK OF ASSETS AND THEREFORE SINCE THE BLOCK OF BUILDING IS COMPLETELY SOLD OFF, THE SHORT TERM CAPITAL GAINS ARE CALCULATED BY REDUCING THE W RITTEN DOWN VALUE FROM THE SALE VALUE. THE TOTAL SALE CONSIDERATION OF RS.75 LAKHS FOR SALE OF OTHER FIXE D ASSETS IS REDUCED FROM THE BLOCK OF FURNITURE & FIXTURE AN D DEPRECIATION IS CALCULATED ACCORDINGLY AS PER SECTI ON 32 OF THE ACT ON REMAINING BLOCK AFTER REDUCING THE SALE PROCEEDS. CONSIDERING ALL THE ABOVE FACTS AND PROVI SIONS OF THE LAW, IT CAN BE SEEN THAT THE CAPITAL GAINS ARE CORRECTLY COMPUTED AND SHOWN IN INCOME TAX RETURN BY THE APPELLANT. ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 8 6.6 THIS IS NOT THE CASE WHEREIN THE APPELLANT HAD SHOWN SALE CONSIDERATION OF THE PROPERTY SOLD LESS THAN T HE FIGURES ON WHICH STAMP DUTY WAS PAID. IT WAS ONLY THE APPLICATION OF SALE PROCEEDS IN THE BOOKS OF ACCOUN TS AS PER TERMS OF AGREEMENT TO SALE AND IT WAS DULY SUPPORTED BY THE CERTIFICATE OBTAINED FROM THE BUYE R AND THE AFFIDAVIT OF THE MANAGING DIRECTOR OF THE COMPA NY FILED BEFORE THE AO. THE LD AO HAS NOT GIVEN ANY BENEFIT OF WRITING OFF OF RS.75 LAKHS FROM BLOCK OF FURNITURE & FIXTURE WHILE MAKING ADDITION OF RS. 75 LAKHS UNDER THE HEA D CAPITAL GAINS. 6.7 THERE IS NO DEFECT EITHER IN THE BOOKS OF ACCOU NT OF THE ASSESSEE OR IN THE DOCUMENTS FILED BEFORE LD. AO AN D ANY ARBITRARY ADDITION IF MADE IS BAD IN LAW. THE SETTL ED PRINCIPLES OF LAW ARE THAT THE BURDEN TO DISPROVE I S HEAVILY ON THE PERSON WHO ALLEGES, THAT ADDITION ON ASSUMPT ION IS NOT SUSTAINABLE AND ADDITION WITHOUT EVIDENCE IS IN VALID AND THAT EVEN IF MATERIAL PLACED BY THE ASSESSEE AR E UNRELIABLE, IT DOES NOT EMPOWER AUTHORITY TO MAKE A N ARBITRARY ASSESSMENT AND THE ASSESSMENT MUST BE BAS ED ON SOME RELEVANT MATERIAL. THE AGREEMENT TO SELL AN D FURTHER CERTIFICATION BY THE BUYER HAS MADE THE THI NGS CRYSTAL CLEAR THAT THE SALE CONSIDERATION PAID FOR EACH CLASS OF ASSET IS CLEARLY DEFINED AND SPECIFIED. THE AO H AS NOT BEEN ABLE TO FIND ANY HIDDEN MOTIVE OF TAX AVOIDANC E IN THE AFFIDAVIT FILED ALONG WITH OTHER DOCUMENTS. THE REFORE, THE ADDITION OF RS 75 LAKHS MADE UNDER THE HEAD CAP ITAL GAINS IS DELETED AND THIS GROUND OF APPEAL IS ALLOW ED. 6.1 A PERUSAL OF THE ABOVE SHOWS THAT THE LD. CIT(A ) HAS DULY CONSIDERED THE ISSUE BEFORE HIM FROM ALL ANGLES AND HAS REPORTED A FINDING FAVOURABLE TO THE ASSESSEE ON THE FOLLOWI NG GROUNDS:- I) THE LD. CIT(A) HAS GIVEN A FINDING THAT THE CAP ITAL GAIN WAS CALCULATED BY THE ASSESSEE AS PER THE PROVISION S OF LAW ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 9 SHOWING SEPARATE CALCULATION FOR CAPITAL GAINS EARN ED ON DEPRECIABLE ASSETS AND ON NON-DEPRECIABLE ASSETS. II) THE LD. CIT (A) HAS ALSO UNDERLINED THE FACT T HAT IT WAS NOT THE CASE OF THE DEPARTMENT THAT THE ASSESSEE HA S SHOWN THE SALE CONSIDERATION OF THE PROPERTY SOLD AT A LE SSER FIGURE THAN A FIGURE ON WHICH THE STAMP DUTY WAS PAID AND THAT THE SALE PROCEEDS IN THE BOOKS OF ACCOUNTS WERE REC ORDED AS PER THE AGREEMENT TO SELL WHICH WAS DULY SUPPORTED BY THE CERTIFICATE OF THE BUYER AND THE AFFIDAVIT OF THE M ANAGING DIRECTOR OF THE COMPANY FILED BEFORE THE ASSESSING OFFICER. III) THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT EITHER IN THE BOOKS OF ACCOUNT OR IN THE DOCUMENTS FILED BEFORE THE ASSESSING OFFICER. 6.2 THEREFORE, CONSIDERING THE OVERALL FACTUAL MATR IX OF THE CASE, WE FIND NO REASON TO DIFFER WITH THE FINDINGS AND C ONCLUSIONS REACHED BY THE LD. CIT (A) AND WE DISMISS GROUND NO . 1 OF THE DEPARTMENTS APPEAL. 6.3 AS FAR AS GROUND NO. 2 REGARDING DEDUCTION OF RS.21,81,600/- ON ACCOUNT OF RESTAURANT DEVELOPMENT EXPENSES ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 10 WRITTEN OFF IS CONCERNED, THE LD. CIT(A) HAS OBSERV ED THAT THE ASSESSING OFFICER DID NOT ALLOW THE DEDUCTION WITHO UT GIVING ANY REASONS IN THE ASSESSMENT ORDER AND SINCE SUCH DEDU CTION HAD BEEN ALLOWED IN ALL THE PREVIOUS YEARS ASSESSED U/S 143(3)/154 OF THE ACT AND NO REASON HAD BEEN GIVEN BY THE ASSE SSING OFFICER AT THE TIME OF ASSESSMENT, REMAND REPORT WAS REQUIS ITIONED FROM THE ASSESSING OFFICER. THE LD. CIT (A) HAS ALSO TA KEN ON RECORD THE DETAILS OF RESTAURANT DEVELOPMENT EXPENSES ALLO WED IN EARLIER YEARS AND THE DETAILS OF UNADJUSTED RESTAURANT DEVE LOPMENT EXPENSES WHICH WERE BROUGHT FORWARD TO BE ADJUSTED AGAINST THE INCOME OF THE RELEVANT ASSESSMENT YEAR. THEREAFTER , THE LD. CIT (A) HAS CONCLUDED THAT THE CLAIM OF WRITE OFF WAS B ASED ON THE ACTION OF THE ASSESSING OFFICER IN EARLIER YEARS AN D WAS NOT THE CLAIM BY THE ASSESSEE WHICH WAS MADE AFRESH BEFORE THE LD. CIT (A). THE LD. CIT(A) HAS GIVEN A CATEGORICAL FINDIN G THAT THE ASSESSEE HAD CLAIMED 100% DEDUCTION IN THE PROFIT A ND LOSS ACCOUNT AS WELL AS IN THE RETURN OF INCOME TREATING ALL THESE EXPENSES AS REVENUE IN NATURE. LD. CIT (A) HAS FUR THER OBSERVED THAT THE ASSESSING OFFICER HAD TAKEN A DIFFERENT VI EW AT THE TIME OF ASSESSMENT U/S 143(3) AND HAD ALLOWED DEDUCTION @25% PER ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 11 YEAR OUT OF TOTAL AMOUNT IN ALL PREVIOUS ASSESSMENT YEARS AND THE BALANCE AMOUNT WAS CARRIED FORWARD FOR ADJUSTME NT IN SUBSEQUENT ASSESSMENT YEARS. THUS, IT WAS NOT THE CLAIM BY THE ASSESSEE IN THE RETURN OF INCOME OR IN THE REVISED RETURN OF INCOME. LD. CIT (A) HAS GIVEN A FINDING THAT THE A MOUNT OF RS. 21,81,600/- REMAINING TO BE ADJUSTED SHOULD HAVE BE EN ALLOWED BY THE ASSESSING OFFICER ON THE PRINCIPLE OF CONSIS TENCY. THE LD. CIT(A) HAS ALSO DISTINGUISHED THE JUDGMENT OF THE H ON'BLE APEX COURT IN THE CASE OF GOETZE INDIA LTD. VS CIT REPOR TED IN 284 ITR 323 (S.C.) AND HAS SAID THAT THIS DECISION OF THE H ONBLE APEX COURT ONLY RESTRICTED THE POWER OF THE ASSESSING OF FICER TO ACCEPT A FRESH CLAIM THAT HAS NOT BEEN MADE IN THE ORIGINA L RETURN OR THE REVISED RETURN AND SINCE THIS WAS NOT A CLAIM MADE BY THE ASSESSEE BUT RATHER THE TREATMENT BY THE ASSESSING OFFICER, THE ASSESSING OFFICER WAS DIRECTED TO GIVE THE SAME TRE ATMENT IN THE RELEVANT YEAR AS WELL. THE LD. CIT (A) HAS ALSO PL ACED HIS RELIANCE ON THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF CHI CAGO PNEUMATIC INDIA LTD. VS DCIT REPORTED IN 15 SOT 252 (MUMBAI) IN WHICH THE ITAT MUMBAI BENCH HAD CONSIDERED THE J UDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GOETZE IND IA LTD. (SUPRA). ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 12 THE RELEVANT PORTION OF THE ORDER OF THE ITAT MUMBA I IN CHICAGO PNEUMATIC INDIA LTD. IS BEING REPRODUCED FOR READY REFERENCE:- CIT (A), HAVING CO-TERMINUS POWERS WITH THE POWERS OF AO AND THE FACT THAT APPELLATE PROCEEDINGS ARE THE CONTINUATION OF ORIGINAL PROCEEDINGS, SHOULD HAVE ENTERTAINED THE CLAIM OF ASSESSEE AND ALLOWED IF OT HER CONDITIONS OF THE PROVISIONS OF THE LAW WERE SATISF IED. IN THIS VIEW OF THE MATTER, BOTH THE GROUNDS OF THE ASSESSEE ARE ACCEPTED AND THE CIT(A) IS DIRECTED TO CONSIDER THE CLAIM OF THE ASSESSEE AT THE REVISED F IGURES ON MERITS AND DECIDE THE SAME ACCORDING TO THE PROVISIONS OF SS. 80HH AND 80-1 AFTER HEARING THE ASSESSEE. THE ASSESSEE CLAIMED DEDUCTION IN THE ORIGINAL RET URN OF INCOME. THOUGH THE ASSESSEE REVISED ITS ORIGINAL RETURN, HOWEVER, CLAIM UNDER SS. 80HH AND 80-I WAS NOT REVISED. SUBSEQUENTLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE REVISED ITS CLAIM, WHICH THE AO DID NOT TAKE INTO COGNIZANCE AS THE ASSESSEE HAD NOT FILED REVISED RETURN TO THIS EFFEC T. THE CIT (A) ALSO CONFIRMED THE ACTION OF AO. AS PER THE LAW, THE ONUS LIES ON THE ASSESSEE TO MAKE RIGHT CLAIM A ND SUCH CLAIM MUST BE MADE WITHIN THE FRAMEWORK OF PROVISIONS OF ACT. HOWEVER, THIS SITUATION, THOUGH, IT IS PERFECTLY IN CONSONANCE WITH THE POSITION OF LAW MA Y RESULT INTO GENUINE HARDSHIP TO THE ASSESSEES AS TH E ASSESSEE WOULD BE LEFT WITH THE OPTION ONLY TO PROC EED UNDER S. 264 THAT TOO IN CASE THEY HAVE NOT GONE IN TO A APPEAL BEFORE THE CIT(A) ON THE SAME ISSUE OR THE LEARNED CIT(A) HAS NOT ADMITTED THOSE ISSUE. OTHER OPTION WOULD BE TO APPROACH CBDT UNDER S. 119 OF TH E ACT FOR GETTING THE SPECIFIC RELIEF. BOTH THESE OPT IONS INVOLVE TIME AS WELL AS ENGAGEMENT OF OTHER ADMINISTRATIVE AUTHORITIES WHICH CAN BE OTHERWISE DEVOTED TO OTHER IMPORTANT ISSUES. THIS SITUATION H AS COMPELLED US TO LOOK INTO THE DUTIES OF THE ASSESSI NG AUTHORITIES RATHER THAN POWERS OF ASSESSING AUTHORI TIES BECAUSE GOVERNMENT IS ENTITLED TO COLLECT ONLY THE TAX ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 13 LEGITIMATELY DUE TO IT OTHERWISE THE TAX NOT SO COL LECTED WOULD BE VIOLATIVE OF THE ARTICLE 265 TO THE CONSTI TUTION OF INDIA. IN SUCH PURSUIT, THE CBDT AS BACK AS IN 1 955 ISSUED CIRCULAR NO. 14 (XL-35), DATED. 11TH APRIL, 1955 AS TO WHAT SHOULD BE A DEPARTMENTAL ATTITUDE TOWARD S REFUND AND RELIEFS TO THE ASSESSEES. IN THIS CIRCUL AR, THE BOARD HAS RECOGNIZED THE FACT THAT RESPONSIBILITY F OR CLAIMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSE E AS IMPOSED BY LAW. EVEN THEN THE BOARD HAS DIRECTED TH E OFFICERS TO DRAW THE ATTENTION OF THE ASSESSEES IN RESPECT OF ANY REFUNDS OR RELIEFS TO WHICH THEY ARE ELIGIBLE, WHICH THEY HAVE NOT CLAIMED FOR SOME REAS ON OR THE OTHER. THE BOARD HAS ALSO GIVEN FEW EXAMPLES IN THIS REGARD AND HAS SPECIFICALLY CLARIFIED THAT, TH ESE EXAMPLES ARE NOT EXHAUSTIVE. FURTHER, THE BOARD ALS O ISSUED CIRCULAR F. NO. 81/27/65-IT(B), DATED 18TH M AY, 1965 DEFINING THE DUTIES OF P.R.OS. IN PROVIDING ASSISTANCE TO THE PUBLIC. IN THIS CIRCULAR, THE BOA RD HAS ALSO ADVISED THE P.R.O. TO VISIT THE GOVERNMENT/COMMERCIAL ESTABLISHMENTS TO PROVIDE THEM ASSISTANCE IN FILING CORRECT RETURNS AND MAKIN G ELIGIBLE CLAIMS. THESE CIRCULARS ISSUED BY THE BOAR D ALMOST 4-5 DECADES BEFORE CAST A DUTY ON THE ASSESS ING AUTHORITIES TO COLLECT ONLY THE LEGITIMATE TAX. CIR CULARS ISSUED BY THE BOARD ARE BINDING ON THE SUBORDINATE IT AUTHORITIES AND IF CBDT ISSUES DIRECTIONS WHICH ARE BENEFICIAL TO THE ASSESSEES ALTHOUGH THE SAME MAY N OT BE DIRECTLY IN CONSONANCE WITH THE PROVISIONS OF LA W, EVEN THEN THESE INSTRUCTIONS HAVE TO BE GIVEN EFFEC T AND ADHERED TO BY THE CONCERNED AUTHORITIES. THUS, THER E IS A STRONG CASE FOR RECIPROCITY TO BE SHOWN BY THE REVENUE AUTHORITIES WHILE COMPLETING ASSESSMENTS AN D TO AVOID ADMINISTRATIVE HARDSHIPS TO THE ASSESSEE. THE HONBLE APEX COURT, ON NUMEROUS OCCASIONS HAS LAID THE PROPOSITION THAT THE ASSESSING AUTHORITIES ARE BOUND TO COMPUTE THE CORRECT INCOME ONLY AND COLLECT ONLY LEGITIMATE TAX, HENCE, MERELY FOR A PROCEDURAL LAPS E OR TECHNICALITIES, THE ASSESSEE SHOULD NOT BE COMPELLE D TO PAY MORE TAX THAN WHAT IS DUE FROM HIM. THEREFORE, THIS SITUATION HAS NECESSARILY TO BE LOOKED UPON FROM TH E ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 14 ANGLE OF DUTIES OF ASSESSING AUTHORITIES AS STATED EARLIER, CBDT IS THE APEX BODY FOR TAX ADMINISTRATI ON AND IT CAN ALSO ISSUE DIRECTIONS WHICH ARE FOR THE BENEFIT OF THE ASSESSEES THOUGH SUCH DIRECTIONS MAY NOT BE IN CONSONANCE WITH THE PROVISIONS OF LAW, HENCE, IF A CIRCULAR IS NOW ISSUED DIRECTING THE ASSESSING AUTHORITIES TO GRANT RELIEFS/REFUNDS WHILE COMPLETI NG THE ASSESSMENT PROCEEDINGS, EVEN THOUGH SUCH CIRCULAR MAY BE AT VARIANCE WITH THE LAW, AS PRONOUNCED BY T HE HONBLE SUPREME COURT, BUT THE SAME WOULD BE BINDIN G ON THE SUBORDINATE IT AUTHORITIES. THEREFORE, CIRCU LARS OF SAME NATURE WHICH HAVE BEEN ALREADY ISSUED WOULD NOT BECOME IRRELEVANT OR CAN BE IGNORED. ADMITTEDLY , THE CIRCULAR ISSUED IN 1995 HAS NOT BEEN WITHDRAWN, HEN CE, IT HAS GOT BINDING FORCE ON THE SUBORDINATE AUTHORI TIES EVEN AS ON DATE. ACCORDINGLY, THE AO IS BOUND TO ASSESS THE CORRECT INCOME AND FOR THIS PURPOSE, THE AO MAY GRANT RELIEFS /REFUNDS SUO MOTU CAN DO SO ON BE ING POINTED OUT BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR WHICH ASSESSEE HAS NOT FILED REVISED RETURN, ALTHOUGH, AS PER LAW, THE ASS ESSEE IS REQUIRED TO FILE THE REVISED RETURN. 6.4 IN THE PROCEEDINGS BEFORE US, THE LD. SR. DR CO ULD NOT POINT OUT AS TO HOW THE RELIANCE OF THE LD. CIT (A) ON TH E ORDER OF THE ITAT MUMBAI BENCH IN THE CASE OF CHICAGO PNEUMATIC INDIA LTD. WAS MISPLACED. LD. SR. DR ALSO COULD NOT POINT OUT ANY CONTRADICTION IN THE FACTS AS RECORDED BY THE LD. C IT (A). THEREFORE, IN SUCH A CIRCUMSTANCE, WE FIND OURSELVE S UNABLE TO AGREE WITH THE CONTENTIONS OF THE LD. SR. DR ON THI S ISSUE AND WE FIND NO REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT (A). ITA NO. 549/DEL/2014 ASSESSMENT YEAR 2009-10 15 ACCORDINGLY, GROUND NO. 2 OF THE DEPARTMENTS APPEA L ALSO STANDS DISMISSED. 7. IN THE FINAL RESULT, THE APPEAL OF THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2017. SD/- SD/- (R.K. PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 1 ST AUGUST, 2017 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR