W L D INVESTMENTS PRIVATE LIMITED, DELHI V. DCIT Circle 25(1), DELHI

ITA 682/DEL/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4383 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 26-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 13-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 6; 143(3); 40(a)(ia); 139(4); 48; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.682/DEL/2023 Assessment Year 2018-19 WLD Investments Pvt. Ltd. 108, 3 rd Floor, Madangir Village, New Delhi. Vs. DCIT Circle-25(1) Delhi TAN/PAN: AAACW1081E (Appellant) (Respondent) Appellant by: Shri S. Krishnan, Adv. Respondent by: Shri Amit Katoch, Sr.DR Date of hearing: 27 12 2023 Date of pronouncement: 08 01 2024 O R D E R PER PRADIP KUMAR KEDIA-A.M. : T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the order of t he C o mmi ss ione r of Income Tax (A ppeals), National Facel ess Ap peal C ent re (N FA C ), Del hi (‘C IT (A) ’ in shor t) dated 12. 01.2023 aris i ng from the assess me nt order da ted 19. 04. 20 21 passed by the A ss essi ng O fficer (A O) under Secti on 143(3) r.w . Sect ion 144B of t he Income T ax A c t, 19 61 (t he A ct ) concerni ng A Y 2018-19. 2. T he grou nds of appea l ra ised b y the assesse e read as unde r: “ 1 . Th e or de r o f t h e Ld . C I T (A ) i s w r o n g o n f a c t s a n d b a d i n l aw , an d t h e r e f o r e , i s i l l e ga l . 2. Th e L d C I T (A ) e r r e d i n u p h o l di n g t he ac t i o n o f Ld A O f o r di s a l l ow i ng a s u m of R s . 4 , 3 5 , 9 2, 6 72 / - u / s 4 0 (a )( i a ), H e fa i l s t o I.T.A. No.682/Del/2023 2 ap pr e c ia t e t h at t h e s e e x p e ns e s w e r e no t c l a i m e d by t h e A p pe l l a nt as th e r e t u r n fi l e d w a s b e l a t e d ; 3. Th e L d . C I T ( A ) e r r e d i n d i s m i s s in g th e A pp e a l . T he Ld . C I T ( A ) ha s n ot p as s e d th e o r de r o n t he b a s i s o f m e r i t . 4. T h e Ld . C I T (A ) e r r e d i n p as s i ng t he s a i d o r d e r i n h as t e w i th o ut gi v i n g a de q u a t e o pp or tu n i ti e s o f h e ar i n g . ” 3. When the matter w as calle d fo r hearin g, the ld. couns el for the ass essee s ubmi ts as fol low s: (i ) T he ass essee e-fi led retur n of i ncome bel atedl y u nde r Sect ion 139(4) of the A ct s how i ng ‘ Nil ’ i nc ome. T he return fi le d by th e asses see w as subjecte d t o scr ut in y as sess m ent. In the cours e o f the scru tin y assess ment, the AO inter a li a observe d that fro m t he deta ils of pa yme nt on w hi ch ta x has been deduct ed but has not bee n p ai d on or before th e due date u nde r Sect ion 139( 1) of t he A ct as report ed i n fo rm 3 CD , sta nds a t Rs. 14, 53, 08, 907/ -. The A O obs e rve d tha t the i nt er est pa yme nts on w hic h T DS deduc te d bu t not de posi ted before the due da te under Se ct ion 139(1) o f t he A ct is liable t o be dis al low ed under Secti on 40(a) (i a) of th e A ct. The disa ll ow ance w as w ork ed out at 30% of the i nt erest pa yments o f Rs. 14, 53, 08, 907 /- and a disa llowanc e of Rs. 4, 35, 92, 672/- w as carrie d out b y th e A O without a ppreciat ing the fac ts i n pr os pe cti ve. 4. In the firs t appeal, the C IT (A) endorsed t he disa ll ow ance on the grou nd that t he ass essee h as not show n as to whet he r inte rest expen di ture of R s. 14,53, 08, 907/- i s taken int o acc ount w hi le dete rmining the tax able income or not, by a cr ypt ic and unreasone d order. T he C IT (A ) has endorse d the act i on of th e A O. 5. Befo re the T r ib una l, the l d. counse l f or the asse ssee adv er te d our atte nt io n t o the re turn of inco me and s ubmitted t hat as pe r I.T.A. No.682/Del/2023 3 Row 45 of t he re t urn of i nc ome, profit to b e taxed stands at a l oss of Rs. 23. 01 cro re and i nt er est on unsecu red loan cla im ed in Row N o. 38(4 ) stands at Rs. 23. 14 crore. The assess ee t hereafte r adverted to th e acknow ledge me nt of t he return f il ed and submi t te d that no s uch loss has bee n claimed b y the as sessee in t he retur n of inco me a nd the retur n w as filed a t ‘N i l’. T he A O has howe ve r adopted the loss return of t he asses see at Rs. 19, 43, 0 2, 157/ - and ma de an additi on of Rs. 4, 35,9 2, 672/ - on acc ount of di sallow a nce under Secti on 40(a)(ia) due to non-compl iance w ith t he provis ions of C ha pt er X VI IB. T he l d. C o uns el thus deter mi ned the t otal l oss at Rs. 11, 53, 15, 48 5/ - (i nc l uding s ome other dis al l owance wi th w hich w e ar e not conce rne d at pre sen t) as a gains t no l oss clai me d by t he assess ee. T he ld. Couns el sub mi tte d t hat t he R evenu e h as co mmi tt ed e rror f ir stl y, that no int eres t ex penditure has bee n cla imed and t he refor e, none coul d have been disa llow e d and second l y, when no loss has been cl ai med, t he A O has com mi tted er ror in dete rmi ning t he assess ed loss. T he C IT (A ) has not addressed i tsel f t o suc h is sue an d dis mi ssed t he appea l on a fl i ms y gro und tha t asses see h ad not been able t o s how as to wh et he r inte res t expe ndit ure of Rs. 14, 53,0 8, 907/ - w as pa rt of to tal interes t cla imed on R s. 23, 14, 11, 524/-. T he assesse e thus s ubmit ted t hat havi ng r egard to the fac t that the assesse e has neit her clai me d expen di ture on int eres t a mo unt w he rein tax has bee n deposi te d on time as we ll as on the i nt erest am ount w here the tax has bee n depos ited la te, no interes t e xpendit ure could be disa l lo wed which has n ot been c la i med at t he f irst ins tance. 6. T he l d. D R for the Revenue, o n the ot her han d, submit te d that the assess ee has filed belated r etur n and therefor e, the loss coul d not have be en cla imed for ca rr y forw ar d an d se t o ff i n the I.T.A. No.682/Del/2023 4 subs eque nt yea r by operat i on of la w. Conseq uentl y, and for this reas o n, the assessee has not clai me d t he inte re st expenditure. N o facts have been b rought on record as to wh en the i nt erest has b een act ua ll y c lai med a nd how t he act ion of the A O is e rroneous. T he ld. D R fo r the Revenue thus submi t te d t hat in the absen ce of fa cts, it is dif ficu lt t o as cer tain t he t rue state o f affairs. 7. O n ca reful co nsid erat ion of ri val s ub mi ssio ns and havi ng re ga rd to the mater ial placed on re cor d, it emerges t hat the A O has assessed l oss on c erta in a mou nt des pite t he fac t tha t no suc h l oss has b een cla imed. T he A O as w ell as the CIT (A ) has not exa mi ne d this aspec t of t he matt er. B oth t he A ut hor it ies ha ve a ls o not taken into ac count as to whet he r i nter est expendi ture has been c lai me d on payme nt bas is i n the ensuing ye ar s. The rele van t facts a re not clear. T he order of the C IT (A ) is brief and cr ypt ic and do not pro vi de an y re asoned answ e r t o th e is sues i n quest ion. T he C IT (A ) has not pass ed t he o rder on the basis of me rit as al leged b y th e assessee. 8. U nder t he ci rcu ms tan ces, w e cons ider i t ap prop riate t o set asi de the fi rs t appellat e order and re mi t t he ma tter bac k to t he AO for de ter mi ni ng th e iss ue af res h o n t he basis of relevant facts t hat ma y be placed b y the assess ee bef ore the A O . It shall be ope n t o the assess ee to place a ll ar guments and addu ce all e vi dences as ma y be cons idered expedient f or p rope r adj udicat ion o f t he iss ue in accorda nce w it h l aw . N eedless t o sa y, reasona bl e op portunit y sha ll be gi ve n t o the assessee to pres en t rele va nt facts and pos it ion of law on the poi nt in iss ue. T he mat ter is thus re mi t te d to the file o f the A O for redete rmi na tion of t he issue in a n obj ecti ve manner in accor da nce w it h law . I.T.A. No.682/Del/2023 5 9. In the r esu lt, the appeal of t he a ssessee is allow ed f or sta tis ti ca l purpos es . Order pronounced in the open Court on 08/01/2024 Sd/- Sd/- (SAKTIJIT DEY) [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /01/2024 Prabhat