Sports Authority of India, New Delhi V. ADIT (E), New Delhi

ITA 6318/DEL/2012

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3991 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 02-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 21-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Capital expenditure
• Section: 12A; 195; 13; 11

Judgement Text

ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 6318/DEL/2012 ( ASSESSMENT YEAR: 2004-05) SPORTS AUTHORITY OF INDIA. VS. AO, ADIT(E), TRUST CIR - IV, NEW DELHI. APPELLANT RESPONDENT PAN NO: AACTS4979C ASSESSEE BY : NONE REVENUE BY : SHRI H.K CHOUDHERY, CIT(DR) PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY ASSESSEE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XXI, NEW DELHI, DATED 16-10-2012 FOR ASSESSMENT YEAR 2004-05. GROUNDS TAKEN IN THIS APPEAL OF ASSESSEE ARE AS UNDER: 1. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN WITHDRAWING THE EXEMPTION U/S 11 ON THE GROUND THAT INCURRENCE OF CERTAIN EXPENSES AMOUNTING IN AGGREGATE TO RS. 28,00,995/-, WERE UNAUTHORISED AND ULTRA-VIRES AND RESULTING IN ANY BENEFIT TO THE OFFICE BEARERS OF THE SOCIETY IN CONTRAVENTION OF SECTION 13 OF THE ACT AND WERE NOT SPENT FOR THE PURPOSE & OBJECTS OF THE SOCIETY. 2. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, FOR ARGUMENTS AND IN ALTERNATIVE BUT WITHOUT ADMITTANCE, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN WITHDRAWING THE EXEMPTION U/S 11, EVEN IF ANY PART OF THE IMPUGNED AMOUNT OF RS 28,00,995/-, WERE IN CONTRAVENTION OF SECTION ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 2 OF 6 13(1) AND IT WAS THAT VERY PART OF SUCH IMPUGNED AMOUNT, WHICH WAS ONLY LIABLE FOR WITHDRAWAL OF EXEMPTION INSTEAD OF THE WHOLE OF INCOME OF THE GOVERNMENT GRANT IS NOT INCOME: 3. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN ALTERING THE RETURNED TOTAL INCOME AS THE WHOLE OR SUBSTANTIALLY THE WHOLE OF INCOME OF THE SOCIETY IS MET BY GOVERNMENT GRANTS (PLAN & NON-PLAN) AND WERE MEANT FOR ONLY NON-TRADING PURPOSES AND THUS IS OUTSIDE THE SCOPE OF SECTION 2(24). GROUNDS AFFECTING QUANTUM OF INCOME: CAPITAL EXPENDITURE 4. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND HAVE ARBITRARILY MAKING AN ADDITION OF UNDISPUTED CAPITAL EXPENDITURE OF RS 6,51,27,842/-, ACTUALLY INCURRED ON THE PURPOSE & OBJECTS OF SOCIETY, EVEN IF THE EXEMPTION U/S 11 IS DENIED ON ALLEGATION OF CONTRAVENTION OF SECTION 13 OF THE ACT, DURING THE VALIDITY OF THE REGISTRATION U/S 12A OF THE ACT. 5. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND HAVE ARBITRARILY MAKING AN ADDITION OF UNDISPUTED CAPITAL EXPENDITURE OF RS. 6,51,27,842/-, WHICH HAS BEEN MET OUT OF THE GRANTS FROM THE GOVERNMENT. 6. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, FOR SAKE OF ARGUMENTS AND IN ALTERNATIVE, THE LOWER AUTHORITIES HAVE ERRED IN NOT ALLOWING THE DEPRECIATION ON SUCH IMPUGNED CAPITAL EXPENDITURE INCURRED DURING THE YEAR AS WELL AS CAPITAL EXPENDITURE IN THE PAST IF SUCH CAPITAL EXPENDITURE IS NOT TO BE ALLOWABLE. ACCRUAL OF INCOME: 7. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN MAKING AN ADDITION OF RS 2,51,01,220/- AS INCOME ACCRUED EVEN UNDER THE MERCANTILE SYSTEM OF ACCOUNTING. 8. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, FOR THE SAKE OF ARGUMENTS AND IN ALTERNATIVE, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN IGNORING THE FACT THAT AFORESAID UNREALISED ACCRUED INCOME OF RS 2,51,01,220/- RESULTS IN APPROPRIATION BY NATURAL INFERENCE FOR THE PURPOSE AND OBJECTS OF THE SOCIETY AND THUS NO ADDITION WAS WARRANTED. TAXES PAID ARE APPLICATION U/S 11 9. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN IGNORING THE WELL SETTLED PRINCIPLE THAT ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 3 OF 6 TAX PAID IS AN APPLICATION OF INCOME FOR THE PURPOSE OF SECTION 11, AS WAS HELD BY THE JURISDICTIONAL HIGH COURT IN CASE OF NASSCOM. PRIOR PERIOD EXPENSES: 10. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 6,13,44,739/- AS PRIOR PERIOD EXPENSE, WHICH WERE ADMITTED TO BE PAYABLE ON SANCTION AND THUS BECAME DUE DURING THE RELEVANT YEAR ITSELF, EVEN UNDER THE MERCANTILE SYSTEM OF ACCOUNTING. ADDITION U/S 40(A)(III) 11. ON FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED IN MAKING AN ADDITION OF RS. 1,97,45,476/- U/S 40(A)(III) WITHOUT ANY FINDING WHETHER ANY DEFAULT WAS ACTUALLY OCCURRED IN ACCORDANCE WITH SECTION 192/ 195 OF THE ACT. GENERAL 12. THE LOWER AUTHORITIES HAVE ACTED ARBITRARILY IN HASTE AND HAS FAILED TO FULLY APPRECIATE THE FACTS, CIRCUMSTANCES AND WRITTEN SUBMISSIONS OF THE APPELLANT ON RECORD AND WERE NOT JUSTIFIED BY NOT SHARING THEIR OPINIONS OR POINTS OF CONTENTIONS SO THAT THE SAME COULD HAVE BEEN FURTHER & PROPERLY MET BY THE APPELLANT. 13. THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT WITHOUT PREJUDICE TO EACH OTHER. 14. THE APPELLANT CRAVES TO ADD, MODIFY ANY GROUND OF APPEAL OR TO ADDUCE NEW EVIDENCE DURING THE COURSE OF HEARING OF APPEAL, AS MAY BE NECESSARY FOR DISCHARGE OF DUE JUSTICE. (B) AT THE TIME OF HEARING, WE TOOK NOTICE OF EMAIL DATED 3 RD SEPTEMBER, 2021 SENT BY SRI P GIRI RAO, DIRECTOR OF THE ASSESSEE COMPANY; WHEREIN, IT HAS BEEN INTIMATED THAT THE ASSESSEE HAS SUBMITTED APPLICATION FOR SETTLEMENT OF THE DISPUTE IN THE VIVAD SE VISHWAS SCHEME (VSVS, FOR SHORT) AND FURTHER; THAT FORM-3 HAS ALREADY BEEN ISSUED BY INCOME TAX DEPARTMENT. IN VIEW OF THIS, THE LEARNED COMMISSIONER OF INCOME TAX DEPARTMENTAL REPRESENTATIVE [LD. CIT(DR), FOR SHORT] SUBMITTED BEFORE US THAT THIS APPEAL MAY BE ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 4 OF 6 TREATED AS WITHDRAWN AND MAY BE DISMISSED ON ACCOUNT OF THE AFORESAID VSVS. AFTER DUE CONSIDERATION, AND IN VIEW OF THE FOREGOING; WE TREAT THIS APPEAL AS WITHDRAWN ON ACCOUNT OF THE AFORESAID VSVS. ACCORDINGLY, THIS APPEAL IS DISMISSED, AS WITHDRAWN. (B.1) BEFORE WE PART, WE HEREBY CLARIFY, BY WAY OF ABUNDANT CAUTION, THAT IF FOR SOME REASON IT IS FOUND BY THE ASSESSEE THAT THE DISPUTES UNDER THIS APPEAL BEFORE US ARE NOT FULLY SETTLED UNDER THE AFORESAID VSVS, THEN ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THIS APPEAL, IN ACCORDANCE WITH LAW. (C) IN THE RESULT, THIS APPEAL IS DISMISSED. THIS ORDER WAS ORALLY PRONOUNCED ON 05 TH OCTOBER, 2021 IN OPEN COURT, IN THE PRESENCE OF CIT(DR) FOR THE REVENUE, AFTER CONCLUSION OF THE HEARING. NOW THIS ORDER IN WRITING IS SIGNED TODAY ON 7 TH OCTOBER, 2021. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 7 TH OCTOBER, 2021. (POOJA) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 5 OF 6 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA-6318/DEL/2012 SPORTS AUTHORITY OF INDIA. PAGE 6 OF 6 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER