ACIT, New Delhi V. M/s DLF Recreational Foundation Pvt. Ltd., New Delhi

ITA 5915/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0322 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-03-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 24-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: PRADEEP DINODIA R K KAPOOR CAS
• Keywords: Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN ITA NO. 5915(DEL)2010 ASSESSMENT YEAR: 2003-04 ASSTT.COMMISSIONER OF INCOME TAX, M/S. DLF R ECREATIONAL FOUNDATION CIRCLE 10(1), NEW DELHI. V. PV T. LTD., DLF CENTRE, 9 TH FLOOR, SANSAD MARG, NEW DELHI-01. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI H.K. LA L, SR. DR RESPONDENT BY: S/SHRI PRADEEP DINODIA &R.K. KAPOOR, CAS ORDER PER A.D. JAIN, J.M . THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2003-04, CONTENDING THAT THE LEARNED CIT(A) HAS ERRED IN DEL ETING THE DISALLOWANCE MADE ON ACCOUNT OF PRIOR PERIOD EXPENDITURE. 2. THE AO MADE DISALLOWANCE OF ` 47,94,440/-, TREATING THE MAINTENANCE CHARGES REIMBURSED BY THE ASSESSEE TO DLF UNIVERSA L LIMITED AS PRIOR PERIOD EXPENSES. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE DISALLOWANCE. ITA 5915(DEL)2010 2 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS C ONTENDED THAT THE LD. CIT(A) HAS GONE WRONG IN DELETING THE DISALLOWANCE CORRECTLY MADE ON ACCOUNT OF PRIOR PERIOD EXPENSES, WITHOUT TAKING IN TO CONSIDERATION THE OBSERVATION OF THE AO THAT THE PAYMENT MADE BY THE ASSESSEE TO DLF UNIVERSAL LIMITED, AMOUNTED TO ` 9,86,451/- , IN PURSUANCE OF ARRANGEMENT RECORDED IN 1994 AND THE BALANCE FOR THE EXPENSES I NCURRED DURING THE PERIOD STARTING FROM 1.4.1994 TO 31.3.2002; AND THAT THIS EXPENDITURE WAS NOT RELATED TO THE YEAR UNDER CONSIDERATION, I.E., ASSE SSMENT YEAR 2003-04. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS STRONGLY SUPPORTED THE IMPUGNED ORDER. HE HAS PLACED ON RE CORD A COPY OF THE TRIBUNAL ORDER DATED 10.7.2009, PASSED IN ITA NOS. 808 & 809(DEL)07, FOR ASSESSMENT YEAR 2002-03, IN THE CASE OF DLF QUTAB E NCLAVE COMPLEX MEDICAL CHARITABLE TRUST, NEW DELHI. IT HAS BEEN P OINTED OUT THAT IT IS THIS ORDER WHICH HAS BEEN CORRECTLY FOLLOWED BY THE LD. CIT(A) IN DELETING THE DISALLOWANCE WRONGLY MADE. IT HAS BEEN CONTENDED, AS BEFORE THE AUTHORITIES BELOW, THAT THE AMOUNT OF THE MAINTENAN CE CHARGES RELATED TO THE DISPUTED SITES FOR THE PERIOD FROM 1.4.1994 TO 31.3 .2002 HAD BEEN PAID BY M/S. DLF UNIVERSAL LIMITED; THAT THE SAID SUM WAS R EIMBURSED BY THE ASSESSEE COMPANY TO M/S. DLF UNIVERSAL LIMITED IN T ERMS OF THE ARBITRATION ITA 5915(DEL)2010 3 AWARD HOLDING THE ASSESSEE TO BE THE OWNER OF THESE SITES; THAT SINCE THE LIABILITY TO PAY THE SAID AMOUNT CRYSTALLIZED DURIN G THE YEAR UNDER CONSIDERATION ON ACCOUNT OF THE SAID ARBITRATION A WARD, THE EXPENDITURE IS ALLOWABLE DURING THE YEAR. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E PERUSED THE MATERIAL ON RECORD. IN DLF QUTAB ENCLAVE COMPL EX MEDICAL CHARITABLE TRUST (SUPRA), THE TRIBUNAL ACCEPTED THE ASSESSEE S CONTENTION, HOLDING THAT THE LIABILITY FOR MAKING THE PAYMENT CRYSTALLIZED I N THE YEAR UNDER CONSIDERATION BEFORE THEM. 8. THE FACTS IN THE CASE BEFORE US ARE EXACTLY SIMI LAR TO THOSE IN DLF QUTAB ENCLAVE COMPLEX MEDICAL CHARITABLE TRUST (SU PRA). THEREFORE, FINDING NO ERROR IN THE ACTION OF THE LD. CIT(A) IN FOLLOWING THE SAID TRIBUNAL ORDER, WE HEREBY CONFIRM THE SAME. THUS, FINDING NO MERIT IN THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT, IT IS REJECT ED. 9. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.03.2011. SD/- SD/- (K.D. RANJAN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01.03.2011 *RM ITA 5915(DEL)2010 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR