DCIT, Gurgaon V. M/s. DLF Cyber City Developers Ltd., Gurgaon

ITA 5946/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5594 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R MISHRA
• Keywords: Business income; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 5946 /DEL/201 4 A.Y. : 20 0 6 - 07 DCIT, CIRCLE 1 (1), NEW DELHI VS. M/S DLF CYBER CITY DEVELOPERS LTD., 3 RD FLOOR, B-WING SHOPPING MALL, ARJUN NAGAR, DLF CITY, PHASE-I, GURGAON (PAN: AACCD3572H) (ASSESSEE) (RESPONDENT) REVENUE BY : SH. B.R. MISHRA, SR. DR ASSESSEE BY : SH. R.S. SINGHVI, CA ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUGN ED ORDER DATED 19.8.2014 OF THE LD. CIT(A), FARIDABAD RELEVANT TO ASSESSMENT YEAR 2006-07. 2. THE GROUND RAISED IN THIS APPEAL READ AS UNDER:- I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND HAVING REGARD TO THE NATURE OF THE ISSUE SOUGHT TO BE RECTIFIED, THE LD. CIT(A) WAS RIGHT IN LAW IN 2 QUASHING THE ORDER PASSED BY THE A.O U/S 154 OF THE 1.T ACT, 1961? II) WHETHER ON THE FACTS AN IN THE CIRCUMSTANCES OF THE CASE, THE LD. CJT(A) WAS RIGHT IN LAW IN QUASHING THE ORDER PASSED BY THE AO U/S 154 OF THE LT. ACT, 196 I IGNORING THE FACT THAT 'RECORD' FOR THE PURPOSE OF RECTIFICATION DOES NOT MEAN ONLY THE ORDER OF ASSESSMENT BUT IT COMPRISES OF ALL PROCEEDINGS ON WHICH THE ASSESSMENT ORDER IS BASED AND WHILE EXERCISING THE POWER OF RECTIFICATION WHOLE EVIDENCE AND THE LAW APPLICATION THERETO CAN BE LOOKED INTO? III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CJT(A) WAS RIGHT IN LAW IN QUASHING THE ORDER PASSED BY THE AO U/S 154 OF THE I. T. ACT, 1961 IGNORING THE FACT THAT THE ASSESSEE HAD ITSELF SHOWN THAT THERE WAS NO BUSINESS RECEIPT DURING THE YEAR UNDER CONSIDERATION AND CLAIMING EXPENSES RELATING TO BUSINESS WAS A MISTAKE APPARENT FROM RECORD AND WAS COVERED U/S 154 OF THE IT ACT? IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CJT(A) WAS RIGHT IN LAW IN QUASHING THE ORDER PASSED BY THE AO U/S 154 OF THE LT. ACT, 196 I IGNORING THE FACT THAT SINCE WHILE PASSING ORDER U/S 3 143(3) AND 147, THE AO HAD COMMITTED APPARENT MISTAKE OF THE LAW WHICH WERE RECTIFIED BY THE ORDER U/S 154 OF THE ACT, 1961? V) THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED THE ORIGINAL INCOME TAX RETURN ON 31.11.2006 DECLARING TAXABLE INCOME OF RS. 1,32,13,198/-. THE ASSESSMENT U/S 143(3) OF T HE I.T. ACT, 1961 WAS COMPLETED ON 30.12.2008 AT RETURNED INCOME. SUBSEQUENTLY, THE ASSESSEE WAS ISSUED NOTICE U/S. 148 OF THE ACT ON 21.3.2011 AFTER RECORDING REASONS U/S. 147 OF THE ACT . IN THIS CASE ASSESSMENT WAS COMPLETED U/S. 147/143(3) OF THE ACT O N 29.10.2011 AT RS. 2,37,94,579/- MAKING AN ADDITION OF RS. 1,05,81,381/- TO THE RETURNED INCOME. THE ADDITION O F RS. 1,05,81,381/- PERTAINS TO DISALLOWANCE OF INTERES T EXPENDITURE WHICH WAS SET OFF AGAINST RENTAL INCOME. FURTHER, NOTI CE U/S. 154 OF THE ACT WAS ISSUED ON 22.12.2012 AND ORDER WAS PASSED ON 4.3.2013 AT AN INCOME OF RS. 3,97,04,580/- MAKING A N ADDITION OF RS. 1,59,10,000/-. THE ADDITION OF RS.1,59,10,000/- PERTAINS TO DISALLOWANCE OF ESTABLISHMENT EXPENSES OF RS. 80,27,0 00/- AND ADMINISTRATION EXPENSES OF RS. 78,83,000/-. AGAINST THE AFORESAID ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CI T(A), FARIDABAD, WHO VIDE HIS IMPUGNED ORDER DATED 19.8.2 014 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING TH AT AO CANNOT RECOURSE U/S. 154 OF THE ACT ON THE ISSUE IN DISPUTE. AGGRIEVED WITH 4 THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. HE STA TED THAT LD. CIT(A) HAS IGNORED THE FACT THAT ASSESSEE HAD ITSELF SHOWN THAT THERE WAS NO BUSINESS RECEIPT DURING THE YEAR UNDER CO NSIDERATION AND CLAIMING EXPENSES RELATING TO BUSINESS WAS A MISTA KE APPARENT FROM RECORD AND WAS COVERED U/S. 154 OF THE IT ACT. IT WAS FURTHER SUBMITTED THAT LD. CIT(A) IGNORED THE FACT THAT SINCE WH ILE PASSING ORDER U/S 143(3) AND 147, THE AO HAD COMMITTED APPAREN T MISTAKE OF THE LAW WHICH WERE RECTIFIED BY THE ORDER U/S 154 OF THE ACT, 1961. IN VIEW OF ABOVE, HE REQUESTED TO CANCEL THE O RDER OF THE LD. CIT(A) AND APPEAL OF THE REVENUE MAY BE ALLOWED. 5. ON THE OTHER HAND, LD. A.R. OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED ORDER BY APPLYING THE PRINCIPLE OF CONSISTEN CY, WHICH NEEDS TO BE UPHELD AND REQUESTED TO DISMISS THE APPEAL OF THE REVENUE. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS, ESPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT AO HAS ACCEPTED THE CONTENTION OF THE ASSESSEE NOT ONCE BUT TWICE IN THIS ASSESSMENT YEAR I.E. AY 2006-07, U/S. 143(3) OF THE ACT AND SUBSEQUENTLY U/S. 143/147 OF THE ACT. IN BOTH THE S AID ORDERS THE GENUINENESS OF THE EXPENSE HAS NOT BEEN DOUBTED. SUBSE QUENT TO PASSING THESE ORDERS, NO FRESH MATERIAL HAS COME ON RECORD TO INDICATE THAT THE EXPENSES ARE NOT FOR BUSINESS PURPOS E. IN THE SUBSEQUENT YEARS ALSO THE CONTENTION OF THE ASSESSEE W ITH REGARD TO THESE EXPENSES HAS BEEN ACCEPTED BY THE DEPARTMENT. ALL THESE 5 FACTS CLEARLY SHOWS THAT THE ORDER U/S. 154 OF THE A CT ORIGINATES FROM A CHANGE OF OPINION AND THE REVIEW AND REAPPRAISAL O F THE SAME FACTS. IT IS AGAIN EVIDENT THAT MISCHIEF OF MORE THAN ON E VIEW IS POSSIBLE, AS PER SETTLED LAW. CONSIDERING THE ABOVE FACTS WE ARE OF THE OPINION THAT THE ISSUE IS NOT A MISTAKE APPARENT FR OM RECORDS AND IS A DEBATABLE ISSUE AND DEPENDENT ON ELABORATE A RGUMENTS AND HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF RE ASONING. HENCE, THE AO CANNOT TAKE RECOURSE U/S. 154 OF THE ACT ON TH E ISSUE IN DISPUTE AND THE GROUND OF THE ASSESSEE THAT THE AO HAS ERRED IN PASSING THE ORDER U/S. 154 OF THE ACT WAS RIGHTLY AL LOWED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME AND REJECT THE GROUNDS RAISED BY TH E REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED ON 16/04/2018. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 16/04/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES