ADDL. CIT, SPECIAL RANGE- 7, NEW DELHI V. PNB HOUSING FINANCE LTD., NEW DELHI

ITA 6352/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3192 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL GANDHI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: F NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.6352/DEL/2018 ASSESSMENT YEAR: 2015-16 ADDL. CIT, SPECIAL RANGE-7, NEW DELHI VS. PNB HOUSING FINACE LTD., 9 TH FLOOR, ANTRIKSH BHAWAN, 22, K. G. MARG, NEW DELHI PAN :AAACP3682N (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) - 38, DELHI [I N SHORT LEARNED CIT(A)], DATED 30.07.2018, RAISING THE FOL LOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A), ERRED IN LAW IN DELETING DISALLOWANCE OF RS .3,08,75,079/- U/S 36(1)(VIII) OF THE INCOME TAX ACT, 1961. 2. THE APPELLANT CRAVES TO BE ALLOWED TO ADD AND AL TER ANY FRESH GROUND(S) OF APPEAL AND/OR DELETE OR AMEND ANY OF T HE GROUND(S) OF APPEAL. APPELLANT BY SH. ANIL GANDHI, SR. DR RESPONDENT BY NONE DATE OF HEARING 14.10.2021 DATE OF PRONOUNCEMENT 14.10.2021 2 ITA NO.6352/DEL./2018 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HE ARD LEARNED DR AND PERUSED THE RELEVANT MATERIAL AVAILA BLE ON RECORD. 3. THE SOLITARY GROUND RAISED BY THE REVENUE IN THIS APPEAL RELATES TO DELETION OF DISALLOWANCE OF RS. 3,08,75, 079/- U/S 36(1)(VII) OF THE ACT BY THE LEARNED CIT(A). 4. ON BARE PERUSAL, WE FIND THAT IDENTICAL ISSUE RAIS ED BY THE REVENUE HAS ALREADY BEEN ADJUDICATED IN FAVOUR OF T HE ASSESSEE BY THE ORDER OF THE TRIBUNAL, DATED 04.12.2019 PASS ED IN ITA NO. 2810/DEL/2015 FOR THE ASSESSMENT YEAR 2010-11. THE LEARNED DR DID NOT CONTRADICT THIS FACTUAL MATRIX. THE REL EVANT FINDINGS OF THE ORDER OF THE TRIBUNAL (SUPRA) ARE REPRODUCED AS UNDER: 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS. THE APPELLANT IS A SUBSIDIARY OF PUNJAB NATIONAL BANK A ND IS ENGAGED IN THE BUSINESS OF RETAIL LENDING AND ALSO OFFERS LONG TERM FINANCE FOR CONSTRUCTION OF HOMES. THE ASSESSEE THE BUSINESS IN COME OF RS. 876230348/- BEFORE DEDUCTION U/S 36(1)(VIII) OF THE ACT. SUBSEQUENTLY, ASSESSEE CLAIMED DEDUCTION STATING TH AT RS. 2817156893/- WAS ON ACCOUNT OF TOTAL INTEREST ON HO USING LOANS AND OUT OF IT RS. 1767869838/- WAS ON ACCOUNT OF IN TEREST ON LONG TERM HOUSING LOAN. THUS ASSESSEE STATED THAT 62.75% IN ON ACCOUNT OF INTEREST ON LONG TERM HOUSING LOAN AND WORKED OU T APPLYING THAT PERCENTAGE ON THE TOTAL BUSINESS INCOME CALCULATED A SUM OF RS. 549834543/- PERTAINING TO LONG TERM HOUSING LOAN AN D COMPUTED DEDUCTION @20% OF RS. 10.99 CRORES AS DEDUCTION. TH E ID ASSESSING OFFICER CHANGED THE ABOVE RATIO FROM 62.75 % TO 55. 89% AS HE CONSIDERED THE TOTAL RECEIPT OF BUSINESS FOR THE PU RPOSE OF WORKING OUT PROPORTION. IN THE PRESENT CASE THE METHODOLOGY ADOPTED BY THE ASSESSEE IS CONSISTENTLY FOLLOWED FOR LAST EIGHT YE ARS. SAME WAS ACCEPTED BY THE REVENUE WITHOUT ANY OBJECTION. THE ONLY ISSUE IS WITH RESPECT TO HOW THE PROFIT OF THE BUSINESS FOR THE PURPOSE OF LONG TERM HOUSING FINANCE SHALL BE WORKED OUT. THE ONLY ISSUE IS THAT ASSESSEE IS COMPUTED WITH RESPECT TO THE TOTAL INCO ME WITH RESPECT TO THE INTEREST INCOME WHEREAS THE ID AO HAS APPLIED T HE ABOVE RATIO TO THE TOTAL RECEIPT. WHEN THE METHOD HAS BEEN CONSIST ENTLY ACCEPTED FOR THE ABOVE YEAR WE DO NOT FIND ANY REASON TO DEF ER FROM THAT. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN ALLOWI NG THE ASSESSEE CLAIM OF DEDUCTION U/S 36(L)(VIII) OF THE ACT APPLY ING THE RATIO OF 62.75%. IN THE RESULT WE DO NOT FIND ANY MERIT IN G ROUND NO. 1 OF THE APPEAL. HENCE, IT IS DISMISSED. 3 ITA NO.6352/DEL./2018 4.1 FURTHER, IN ASSESSMENT YEAR 2014-15 (ITA NO. 5969/DEL/2017, ORDER DATED: 24.08.2021), THIS ISSUE AGAIN DECIDED IN FAVOUR OF THE ASSESSEE. THE RELEVANT FIN DINGS ARE REPRODUCED AS UNDER: IN SO FAR AS THE ADDITION OF RS.1,88,65,937/- IS C ONCERNED, ID. ASSESSING OFFICER RECORDED THAT FOR THE ASSESSMENT YEAR 2010-11 ALSO, WHILE NOT ACCEPTING THE METHOD ADOPTED BY THE ASSESSEE, SIMILAR ADDITION WAS MADE AND, THEREFORE, WHILE FOL LOWING THE SAME FOR THIS YEAR ALSO, THE DISALLOWANCE U/S. 36(L)(VII I) OF THE ACT TO THE TUNE OF RS.1,88,65,937/- WAS MADE. ON THIS ASPECT, LEARNED CIT(A) RECORDED THAT, AS A MATTER OF FACT, THIS ISSUE IS F ALLING FOR CONSIDERATION FROM THE ASSESSMENT YEAR 1998-99 TO 2 012-13 AND EVERY YEAR IN APPEAL, CIT(A) HAS BEEN GRANTING RELI EF. LEARNED CIT(A) PLACES RELIANCE ON THE ORDERS OF HER PREDECESSORS F OR THE ASSESSMENT YEARS 2007-08 AND 2010-11 AND GRANTED RELIEF. LEARNED AR BROUGHT TO OUR NOTICE THAT FOR THE ASSES SMENT YEAR 2009-10 AND 2010-11 ALSO, THIS ISSUE WAS CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NO. 2123/D EL/2015 AND BATCH OF CASES AND GRANTED RELIEF. THE COORDINATE B ENCH, ON THIS ASPECT, OBSERVED THUS: '16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTEN TIONS. THE APPELLANT IS A SUBSIDIARY OF PUNJAB NATIONAL BANK A ND IS ENGAGED IN THE BUSINESS OF RETAIL LENDING AND ALSO OFFERS LONG TERM FINANCE FOR CONSTRUCTION OF HOMES. THE ASSESSE E THE BUSINESS INCOME OF RS. 876230348/- BEFORE DEDUCTION U/S 36(L)(VIII) OF THE ACT. SUBSEQUENTLY, ASSESSEE CLAI MED DEDUCTION STATING THAT RS. 2817156893/- WAS ON ACCOUNT OF TOT AL INTEREST ON HOUSING LOANS AND OUT OF IT RS. 1767869 838/- WAS ON ACCOUNT OF INTEREST ON LONG TERM HOUSING LOAN. T HUS ASSESSEE STATED THAT 62.75% IN ON ACCOUNT OF INTERE ST ON LONG TERM HOUSING LOAN AND WORKED OUT APPLYING THAT PERC ENTAGE ON THE TOTAL BUSINESS INCOME CALCULATED A SUM OF RS . 549834543/- PERTAINING TO LONG TERM HOUSING LOAN AN D COMPUTED DEDUCTION @20% OF RS. 10.99 CRORES AS DEDU CTION. THE ID ASSESSING OFFICER CHANGED THE ABOVE RATIO FR OM 62.75 % TO 55.89% AS HE CONSIDERED THE TOTAL RECEIPT OF B USINESS FOR THE PURPOSE OF WORKING OUT PROPORTION. IN THE PRESE NT CASE THE METHODOLOGY ADOPTED BY THE ASSESSEE IS CONSISTENTLY FOLLOWED FOR LAST EIGHT YEARS. SAME WAS ACCEPTED BY THE REVE NUE WITHOUT ANY OBJECTION. THE ONLY ISSUE IS WITH RESPE CT TO HOW THE PROFIT OF THE BUSINESS FOR THE PURPOSE OF LONG TERM HOUSING FINANCE SHALL BE WORKED OUT. THE ONLY ISSUE IS THAT ASSESSEE IS COMPUTED WITH RESPECT TO THE TOTAL INCOME WITH RESP ECT TO THE 4 ITA NO.6352/DEL./2018 INTEREST INCOME WHEREAS THE ID AO HAS APPLIED THE A BOVE RATIO TO THE TOTAL RECEIPT. WHEN THE METHOD HAS BEEN CONS ISTENTLY ACCEPTED FOR THE ABOVE YEAR WE DO NOT FIND ANY REAS ON TO DEFER FROM THAT. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN ALLOWING THE ASSESSEE CLAIM OF DEDUCTION U/S 36(1 ) (VIII) OF THE ACT APPLYING THE RATIO OF 62.75%. IN THE RESULT WE DO NOT FIND ANY MERIT IN GROUND NO. 1 OF THE APPEAL. HENCE, IT IS DISMISSED.' IN VIEW OF THE CONSISTENT VIEW TAKEN BY THE FIRST A PPELLATE AUTHORITY RIGHT FROM 1998-99 TO 2012-13 AND ALSO TH E TRIBUNAL FOR ASSESSMENT YEARS 2009-10 AND 2010-11, IN THE ABSENC E OF ANY CHANGE OF EITHER FACTS OR LAW, WE FIND IT DIFFICULT TO TAKE A DIFFERENT VIEW AND CONSEQUENTLY UPHOLD THE FINDINGS OF THE ID . CIT(A). HENCE, GROUND NO. 1 OF THE REVENUE'S APPEAL IS DISMISSED. 5. IN VIEW OF ABOVE, RESPECTFULLY FOLLOWING THE DECISI ONS OF THE TRIBUNAL MENTIONED HEREIN ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A), THEREFORE, WE UPH OLD THE SAME. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCTOBER, 2021 SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH OCTOBER, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI