M/s. Ramada Hospitality Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 6718/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4674 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Assessee Lawyers: SANJAY MEHRA
• Keywords: Business expenditure; Opportunity of being heard; Principle of natural justice; Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6718/DEL/2015 A.Y.: 2012-13 M/S RAMADA HOSPITALITY PVT. LTD. VS DCIT, CC-28, C/O E-94, GROUND FLOOR, NEW DELHI G.K.-1, NEW DELHI 110 048 (PAN: AADCR7908Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SANJAY MEHRA, FCA DEPARTMENT BY : SH. SHRAVAN GOTRU, SR. DR . ORDER PER H.S. SIDHU, JM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-29, NEW DELHI RELATING TO ASSESSMENT YE AR 2012-13 ON THE FOLLOWING GROUNDS:- 1. THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW, IN FRAMING THE ASSESSMENT AND THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO FOR INITIATING ACTION U/S 14A READ WITH RULE 8D IN THE ABSENCE OF ANY TAX EXEMP T INCOME ARISING TO / CLAIMED BY THE. 2. WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW, IN FRA MING THE ASSESSMENT AND THE CIT(A) ERRED IN CONFIRMING THE AC TION 2 OF THE AO IN TAKING INTO ACCOUNT THE VALUE OF INVESTME NT NOT GIVING RISE TO ANY TAX EXEMPT INCOME FOR THE PURPOS E OF ARRIVING AT THE DISALLOWANCE UNDER SECTION 14A R EAD WITH RULE 8D. 3. WITHOUT PREJUDICE TO GROUND NO. 1 & 2 ABOVE, THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW, IN FRA MING THE ASSESSMENT AND THE CIT(A) ERRED IN CONFIRMING THE AC TION OF THE AO IN TAKING INTO ACCOUNT THE VALUE OF DIRECT BUSINESS EXPENSES NOT RELATED TO ANY TAX EXEMPT INCOME/ NON BUSINESS PURPOSES FOR THE PURPOSE OF ARRIVING AT THE DISALLOWANCE UNDER SECTION 14A READ WI TH RULE 8D. 4. WITHOUT PREJUDICE TO GROUND NO. 1 & 2 ABOVE, THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW, IN FRA MING THE ASSESSMENT AND THE CIT(A) ERRED IN CONFIRMING THE AC TION OF THE AO IN NOT RESTRICTING THE DISALLOWANCE UNDER SECTION 14A READ WITH RULE 80 TO THE TAX EXEMPT INCO ME ARISING THERE FROM. 5. THE LD CIT(A) ERRED, ON FACTS AND IN LAW, IN CONFIRMING THE ACTION OF THE AO WITHOUT GIVING ADEQU ATE OPPORTUNITY OF HEARING, IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 3. DURING THE HEARING, LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE LD. CIT(A) HAS PASSED THE ORDER AGAINST THE PRINCIPLES OF NATURAL JUSTICE BY WAY OF EXPARTE ORDER IN NOT PROVID ING SUFFICIENT 3 OPPORTUNITIES TO THE ASSESSEE AND NOT DECIDED THE AP PEAL ON MERITS. HOWEVER, AT THE TIME OF HEARING, LD. COUNSEL OF THE ASS ESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 13 IN WHICH HE HAS ATTACHED THE COPY OF AUDITED ACCOUNTS FOR AY 2011-12 AN D CA CERTIFICATE OF NON-INTEREST BEARING FUNDS AND STATED T HAT LD. CIT(A) HAS NOT CONSIDERED THE AFORESAID DOCUMENTARY EVIDENCES AND DID NOT GIVE PROPER OPPORTUNITY TO SUBSTANTIATE THE CASE OF TH E ASSESSEE. THEREFORE, HE REQUESTED THAT THE ISSUES IN VOLVED IN THIS APPEAL MAY BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH AND PASS A SPEAKING ORDER THEREON. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER O F THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS ESPECIALLY THE IMPUGNED ORDER AND PAPER BOOK FILED B Y THE LD. COUNSEL OF THE ASSESSEE CONTAINING PAGES 1 TO 13 IN W HICH HE HAS ATTACHED THE COPY OF AUDITED ACCOUNTS FOR AY 2011-12 AN D CA CERTIFICATE OF NON-INTEREST BEARING FUNDS. AFTER PERUS ING THE AFORESAID RECORDS, WE FIND THAT LD. CIT(A) HAS PASSE D THE ORDER AGAINST THE PRINCIPLES OF NATURAL JUSTICE BY WAY OF EX PARTE ORDER IN NOT PROVIDING SUFFICIENT OPPORTUNITIES TO THE ASSESSEE. HENCE, THE ISSUES INVOLVED IN THIS APPEAL NEEDS TO BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH ON MERITS AND PA SS A SPEAKING 4 ORDER THEREON. THEREFORE, WE HOLD AND DIRECT ACCORD INGLY. LD. CIT(A) IS ALSO DIRECTED TO CONSIDER THE PAPER BOOK AS MENTI ONED ABOVE, A FTER GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E PARTIES AND PASS A SPEAKING ORDER. HOWEVER, THE ASSESSEE IS ALSO DIRE CTED TO FULLY COOPERATE WITH THE LD. CIT(A) AND PRODUCE ALL THE DOCUMENTS B EFORE HIM TO SUBSTANTIATE ITS CLAIM AND NOT TO TAKE ANY UNNECE SSARY ADJOURNMENT. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA ND ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 11/09/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 11/09/2017 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR