ACIT, Circle- 19(2), New Delhi V. Payne Realtors (P) Ltd., New Delhi

ITA 6860/DEL/2018

AI Insights

The case involves the Revenue's appeal against the order of the Commissioner of Income Tax (Appeals)-7, New Delhi, which had deleted an addition made by the Assistant Commissioner of Income Tax, Circle-19(1), New Delhi. The addition pertained to a loan amount of Rs. 7,75,00,000 that had increased in the assessee's account without any corresponding change in assets. The assessee had claimed that the increase was due to loan swapping, which incurred mandatory fees considered as interest costs. The CIT(Appeals) accepted this explanation without scrutinizing the business exigency of the loan swapping. The Tribunal, upon reviewing the arguments and materials, agreed with the Revenue's stance and set aside the CIT(Appeals)'s order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108667 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 07-05-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 29-10-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3)

Judgement Text

1 ITA No. 6860/Del/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 6860 /DEL/2018 [Assessment Year: 2015-16 Asstt. CIT, Circle-19(2), New Delhi. Vs M/s Payne Realtors (P) Ltd., D-3, District Centre, Saket, New delhi-110017. PAN- AAECP6489R APPELLANT RESPONDENT Assessee represented by None Department represented by Shri Sanjay Tripathi, Sr. DR Date of hearing 08.05.2023 Date of pronouncement 09.05.2023 O R D E R PER ANUBHAV SHARMA, JM: The Revenue has come in appeal against the order dated 21.08.2018 passed by the Commissioner of Income Tax (Appeals)-7, New Delhi (hereinafter referred as “learned First Appellate Authority” or in short “FAA”) in appeal no. 10474/466/CIT(A)-7/Del/2017-18 for the assessment year 2015-16, arising out of 2 ITA No. 6860/Del/2018 assessment order dated 27.12.2017 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred as the “Act”), passed by the Assistant Commissioner of Income Tax, Circle-19(1), New Delhi (hereinafter referred in short as “Ld. AO”). 2. Heard and perused the record. 3. As the case was called for hearing, none appeared for the assessee. Record shows that assessee is not putting in appearance for long. On the last date of hearing, notices were issued through learned DR and report of service is filed. 4. Arguments of learned DR were heard, who submitted that learned CIT(Appeals) has fallen in error in deleting the addition without examining the commercial exigency of the borrowing cost of the loan. 5. Appreciating the material on record it can be observed that the learned AO had found that the sum of Rs. 7,75,00,000/- in the form of loan had increased in the account of assessee without any change in the assets. 6. Before learned CIT(Appeals) it was claimed that there was swapping of loan for which some mandatory fees were paid and these were considered to be interest cost. Learned CIT(Appeals) seems to have given benefit of Circular dated 20.08.1969, however, without examining the business exigency of swapping of the loan. Accordingly, ground nos. 1 to 3 of the Revenue’s appeal are allowed. The 3 ITA No. 6860/Del/2018 appeal of the Revenue is allowed and the impugned order of learned CIT(Appeals) is set aside. Order pronounced in open court on 09.05.2023. Sd/- Sd/- (SHAMIM YAHYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI