ACIT, New Delhi V. M/s College Group Infrastructure Pvt. Ltd., New Delhi

ITA 6684/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4176 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Earning of tax free income
• Section: 143(3); 142(1); 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.6684/DEL/2016 A.Y. : 2013-14 ACIT, CENTRAL CIRCLE-17, ROOM NO. 103, FIRST FLOOR, HALL NO. 1, ARA CENTRE, E-2 JHANDEWALAN, NEW DELHI VS. M/S COLLAGE GROUP INFRASTRUCTURE PVT. LTD., 56-58, COMMUNITY CENTRE, EAST OF KAILASH, NEW DELHI 110 065 (PAN: AADCC0322P) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUGN ED ORDER DATED 27.10.2016 OF THE LD. CIT(A)-27, NEW DELHI RELE VANT TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- 1. THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE U/S. 14A OF RS. 49,84,566/- WITHOUT APPRECIATING THE FACTS OF THE CASE 2 WHICH WERE CONSIDERED BY THE AO WHILE MAKING THE ABOVE DISALLOWANCE. 2. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME AT RS. 1,93,54,370/-. THE STATUTORY NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) WAS ISSUED ON 25.09.2014. NOTICE U/S. 142(1) OF THE ACT ALONGWITH QUESTIONNAIRE WAS ISSUED ON 21.10.2014. IN RESPONSE TO THE NOTICES U/S. 143(2) AND U/S. 142(1) OF THE ACT, T HE A.R. OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED REPLY AND DETAILS. DURING THE YEAR ASSESSEE HAS DECLARED INCOME UNDER T HE HEAD INCOME FROM BUSINESS OR PROFESSION. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY FAILED T O DISALLOW THE EXPENSES U/S. 14A OF THE I.T. ACT, IN ITS RETURN OF INCOME AND THEREFORE, THE ASSESSEE WAS REQUESTED TO JUSTIFY ITS C LAIM IN RESPECT OF LARGE INTEREST EXPENSES RELATABLE TO EXEMPT INVES TMENT U/S. 14A OF THE ACT. AO OBSERVED THAT ASSESSEE COMPANY FAILED TO SUBMIT ITS SATISFACTORY REPLY. THEREFORE, THIS WORKING IS MADE O N THE BASIS OF AVAILABLE ON RECORDS AND IT COMES IN VIEW OF SECTION 14A OF THE I.T. ACT, 1961 READ WITH RULE 8D OF THE I.T. RULES, 1962 , AN AMOUNT 3 EQUAL TO ONE-HALF PER CENT OF THE AVERAGE OF THE VAL UE OF INVESTMENT, INCOME FROM WHICH DOES NOT OR SHALL NOT FORM PART OF THE TOTAL INCOME SHALL BE DISALLOWED. THEREFORE, THE AMOUNT OF RS. 49,84,566/- WAS DISALLOWED U/S. 14A OF THE ACT B EING ONE HALF PER CENT OF RS. 99,69,13,257/- AND ACCORDINGLY ASSES SED THE INCOME AT RS. 2,44,99,900/- AND PASSED THE ORDER U/S. 143(3) OF THE ACT ON 18.3.2016. AGAINST THE AFORESAID ASSESSMENT ORDER, ASS ESSEE APPEALED BEFORE THE LD. CIT(A)-27, NEW DELHI, WHO VI DE HIS IMPUGNED ORDER DATED 27.10.2016 HAS ALLOWED THE APPE AL OF THE ASSESSEE. AGGRIEVED WITH 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. 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FA CTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE P RESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THEREFORE, WE ARE DECID ING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD S, ESPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT ASSESSEE HA S FURNISHED COMPLETE PARTICULARS OF ITS ACTUAL INCOME AND NO TAX EXEMPT INCOME HAS BEEN RECEIVED BY THE ASSESSEE. WE FURTHER NOTE THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE CASE BEFORE THE HONBLE A NDHRA PRADESH HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS. CIT, 20 15-TIOL-2070-HC-DEL WHEREIN IT HAS BEEN HELD THAT WHETHER THERE SHOULD BE AN ACTUAL RECEIPT OF INCOME, WHICH IS NOT INCLUDIBLE IN THE TOTAL INCOME DURING THE RELEVANT 4 PREVIOUS YEAR, FOR THE PURPOSE OF DISALLOWING ANY E XPENDITURE U/S. 14A INCURRED IN RELATION TO THE SAID INCOME. HENCE, TH E LD. CIT(A) BY RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, HAS RIG HTLY DELETED THE ADDITION IN DISPUTE AND ALLOWED THE APPEAL OF THE A SSESSEE, W HICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOL D THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUND RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 04/01/2018. SD/- SD/- [T.S. KAPOOR] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 04/01/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHE S