ACIT, New Delhi V. M/s. Plaza Partner, New Delhi

ITA 709/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6984 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NANDITA KANCHAN
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SRI G.D. AGARWAL, HONBLE V.P. AND SRI C.M. GARG, JM ITA NO. 709/DEL./2014 : A SSTT. YEAR : 2010-11 ACIT CIRCLE-31(1) NEW DELHI VS PLAZA PARTNER DLF CENTRE, 9 TH FLOOR, SANSAD MARG NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAFFP2318B ASSESSEE BY : SH. R.S.SINGHVI, CA REVENUE BY MRS. NANDITA KANC HAN, CIT(DR) DATE OF HEARING : 30.05.2016 DATE OF PRONOUNCEMENT : 01.07.2016 ORDER PER C.M.GARG, J.M. THIS APPEAL BY THE REVENUE HAS BEEN FILED AGAISNT THE ORDER OF THE CIT(A)XXVI, NEW DELHI DATED 25.11.2013 PASSED I N FIRST APPEAL NO. 229, 230 & 240/2012-13 FOR AY 2010-11. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOWS : 1. THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE O F RS. 4,62,87,174/- MADE BY THE AO U/S 24A OF THE IT ACT, AS THE PROPER TY WAS CONSTRUCTED AND DEVELOPED BY THE PARTNERS/ DLF GROUP OF THE FIR M. ITA NO. 709/DEL/2014 PLAZA PARTNER 2 2. THE CIT(A) HAS ERRED IN DIRECTING THAT RENTAL INCOM E FO THE ASSESSEE SHOULD BE ASSE4SSED UNDER THE HEAD INCOME FORM HOU SE PROPERTY AND NOT AS BUSINESS INCOME. 3. THE CIT(A) HAS ERRED IN RESTRICTING THE DISALLOWANC E TO RS. 3,00,000/- OUT OF TOTAL DISALLOWANCE OF RS. 7,92,244/- MADE BY THE AO U/S 57(III) OF THE IT ACT. GROUND NO. 1 & 2 : 2. APROPOS GROUND NO. 1 & 2 AT THE VERY OUTSET THE LD. AR SUBMITTED A COPY OF THE ORDER OF THE TRIBUNAL ITAT F BENCH DATED 15.10.2014 PASSED IN ITA NO. 1265.DEL.2012 & 695.DE L.2013 FOR AY 2008-09 & 2009-10 IN ASSESSEES ORDER APPEALS AND C ONTENDED THAT THE ORDERS OF THE CIT(A) ON SIMILAR ISSUE HAS BEEN UPHE LD BY THE TRIBUNAL FOR THE PRECEDING AYS, HENCE, ISSUE IS SQUARELY COV ERED IN FAVOUR OF THE ASSESSEE FOR AY 2010-11. THE LD. DR STRONGLY SU PPORTED THE ACTION OF THE AO. HOWEVER HE COULD NOT CONTROVERT T HIS FACT THAT IN THE SIMILAR ISSUE APPEALS OF THE REVENUE FOR AY 2008-9 & 2009-10 HAVE BEEN DISMISSED BY THE TRIBUNAL ORDER DATED 15.10.20 14 (SUPRA). 3. ON CAREFUL AND VIGILANT READING OF TRIBUN AL ORDER (SUPRA) FOR PRECEDING AYS, WE NOTE THAT THE ISSUE OF RENTAL INCOME M/S. BUSINESS INCOME HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE WITH FOLLOWING OBSERVATIONS : GROUND NOS. 1 AND 2 : SIMILAR ARGUMENTS HAVE BEEN ADVANCED BY THE PARTIES AS THEY ARGUED ON ISSUE NO. A HEREINABOVE IN THE APPEAL FOR THE ASSESSMENT YEAR 2008-09. IN T HE PRESENT YEAR THE ASSESSEE HAD DECLARED RENTAL INCOME OF RS. 15,4 ,40,614/- UNDER THE HEAD HOUSE PROPERTY AND CLAIMED 30% DEDUCTION AMOUNTING TO RS. 4,51,32,144/- AS PER THE PROVISINS LAID DOWN IN SECTION 24(1) ITA NO. 709/DEL/2014 PLAZA PARTNER 3 OF THE IT ACT. THE AO DID NOT AGREE AND DISALLOWED THE CLAIMED DEDUCTION. THE LD. CIT(A) HAS, HOWEVER, ALLOWED THE CLAIMED DEDUCTION. UNDER SIMILAR FACTS AN IDENTICAL ISSUE H AS BEEN ADJUDICATED UPON AND DECIDED IN FAVOUR OF THE ASSES SEE HEREINABVOE IN THE APPEAL FOR THE ASSESSMENT YEAR 2 008-09. FOLLOWING THE SAME, WE DO NOT FIND REASON TO INTERF ERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS U PHELD. THE GROUND NOS. 1 AND 2 ARE ACCORDINGLY REJECTED. 4. IN VIEW OF ABOVE RESPECTFULLY FOLLOWING THE O RDER OF THE TRIBUNAL FOR AY 2008-09 & 2009-10, WE ARE INCLINED TO HOLD THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE T RIBUNAL ORDER (SUPRA) CONSEQUENTLY GROUND NOS. 1 & 2 OF THE REVEN UE FOR AY 2010- 11 ARE DISMISSED. GROUND NO. 3 : 5. APROPOS GROUND NO. 3 : THE LD. AR ALSO DRAWN O UR ATTENTION TOWARDS RELEVANT PARAS 15 TO 17 OF THE TRIBUNAL ORD ER (SUPRA) AND CONTENDED THAT IN THE SIMILAR SET OF FACTS AND CIRC UMSTANCES THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE DISMISSI NG THE APPEAL OF THE DEPARTMENT. THE LD. DR SUPPORTED THE ACTION OF THE AO. HOWEVER, HE COULD NTO CONTROVERT THE FACT THAT SIMILAR ISSUE HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE FOR AY 2009-10 BY THE TRIBUN AL ORDER (SUPRA). 6. FROM RELEVANT OPERATIVE PARAS OF TRIBUNAL ORD ER (SUPRA) FOR AY 2009-10. WE NOTE THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE WITH FOLLOWING OBSERVATIONS & FINDINGS : ITA NO. 709/DEL/2014 PLAZA PARTNER 4 15. GROUND NO. 3 : THE LD. AR AT THE OUTSET OF HEA RING POINTED OUT THE ISSUE RAISED IS COVERED BY THE ORDER DATED 12.3 .2014 OF THE TRIBUNAL IN THE CASE OF ACIT VS. MESSERS ATIRIA PAR TNERS, ITA NO. 2490/DEL/2012 (AY2008-09). IN THIS REGARD, HE REFER RED CONTAINS OF PARA NO. 14 OF THE ORDER. 16. IN SUPPORT OF THE GROUND THE LD. SR. DR PLACED RELIANCE ON THE ASSESSMENT ORDER. 17. HAVING GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW, WE FIND THAT THE AO DISALLOWED EXPENSES AMOUNTING TO RS. 7, 06200/- CLAIMED BY THE ASSESSEE AGAINST INCOME FROM OTHER SOURCES. THE ASSESSEE HAD DECLARED INCOME FROM OTHER SOURCES AMOUNTING TO RS. 80,46,782/-. THE TOTAL EXPENSES OF RS. 12,07,029 WAS CLAIMED OUT OF WHICH THE ASSESSEE DISALLOWED A SUM OF RS. 4,30,829/-. THE AS SESSEE CLAIMED DEDUCTION OF RS. 7,76,200/- AGAINST INCOME FROM OTH ER SOURCES. THE AO NOTED THAT IN ASSESSMENT YEAR 2008-09 THE TOTAL EXPENSES CLAIMED AGAINST INCOME FROM OTHER SOURCES WERE DISALLOWED. THE ASSESSEE PLEADED THE ADMISSIBILITY OF THE EXPENSES BE CONSID ERED AFRESH. THE AO HELD THAT SINCE THE ASSESSEE HAS NO GROUND TO CL AIM DEDUCTION OF EXPENSES AMOUNTING TO RS. 7,76,200/- AGAINST THE IN COME FROM OTHER SOURCES AMOUNTING TO RS. 80,46,782/-, THE SAME WAS DISALLOWED. CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS O F THE ASSESSEE THE LD. CIT(A) HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO JUSTIFY THE CLAIM OF THE ENTIRE EXPENSES. HE, HOWEVER, CONSIDERING TH E NATURE OF EXPENDITURE BEING OFFICE MAINTENANCE, SALARY PAID, CONVEYANCE, LEGAL AND PROFESSIONAL EXPENSES FOUND IT UNJUSTIFIABLE TO ASSUME THAT NO EXPENSES WHATSOEVER HAS BEEN INCURRED FOR EARNING A N INCOME OF OVER RS. 80,00,000/- FROM OTHER SOURCES. HE, THUS, KEEPI NG IN VIEW THE PROVISION OF SECTION 57 (III) OF THE ACT AND JUDICI AL DECISIONS CITED BEFORE HIM ALLOWED A RELIEF OF RS. 1,20,000/- I.E. AT THE RATE OF RS. 10,000/- PER MONTH ON ACCOUNT OF EXPENSES OR MAINTE NANCE OF ITS STATUS AS A FIRM. HE ACCORDINGLY, SUSTAINED THE ADD ITION OF RS. 6,06,200/-. WE FIND THAT THE FIRST APPELLATE ORDER IS REASONED ONE, HENCE, NO INTERFERENCE THEREWITH IS REQUIRED. THE S AME IS UPHELD. GROUND NO. 3 IS ACCORDINGLY REJECTED. ITA NO. 709/DEL/2014 PLAZA PARTNER 5 7. FACTS OF CIRCUMSTANCES OF THE PRESENT AY 2 010-11 ARE SIMILAR HENCE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBU NAL (SUPRA) WE HOLD THAT KEEPING IN VIEW THE PROVISIONS OF SECTION 57(III) OF THE INCOME TAX ACT, 1961 AND RATIO OF THE RELEVANT JUD ICIAL PRONOUNCEMENTS ON THE ISSUE IN THE PRESENT CASE. TH E CIT(A) IN RELEVANT PARA 6 OF THE FIRST APPELLATE ORDER, ALLOW ED RELIEF OF RS. 3,00,000/- I.E. AT THE RATE OF 25,000/- PER MONTH ON ACCOUNT OF EXPENSES OR MAINTENANCE OF ITS STATUS AS A FIRM. CO NSEQUENTLY THE CIT(A) SUSTAINED ADDITION OF RS. 4,92,244/-. WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE IMPUGNED ORD ER. CONSEQUENTLY, GROUND NO. 3 OF THE REVENUE BEING DEV OID OF MERITS IS ALSO DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE COURT ON 01/07/2016. SD/- SD/- ( G.D.AGARWAL ) (C.M.GARG) VICE PRESIDENT J UDICIAL MEMBER DATED: 01/ 07/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) ITA NO. 709/DEL/2014 PLAZA PARTNER 6 DATE INITIAL 1. DRAFT DICTATED ON (HAND WRITTEN) HANDWRITTEN 2. DRAFT PLACED BEFORE AUTHOR 20.06.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.