Addi. CIT Special Range-6, NEW DELHI V. MONNET ISPAT & ENERGY LTD., NEW DELHI

ITA 7965/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4310 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 29-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Earning of tax free income; Liquidation; Bogus
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 7965/DEL/2019 [A.Y 2016-17) The Addl. C.I.T Vs. M/s Monnet Ispat and Energy Ltd Special Range - 6 Monnet House, 11, Masjid Moth New Delhi Commercial Complex, Greater Kailash – II, New Delhi PAN: AAACM 0501 D (Applicant) (Respondent) Assessee By : Shri V.K. Jain, CA Department By : Ms. Rinku Singh, CIT-DR Date of Hearing : 22.09.2022 Date of Pronouncement : 22.09.2022 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the Revenue is preferred against the order of the ld. CIT(A) - 6, New Delhi dated 09.07.2019 pertaining to Assessment Year 2016-17. 2 2. The grievances of the Revenue read as under: “1. Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in deleting the disallowance of Rs. 2,13,83,633/- on account of bogus depreciation claimed during the year without considering the fact that during post-search proceedings it was established that no assets were purchased by the assessee company in actual. 2. Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in deleting the disallowance us 14A of Rs. 93,57,50,260/- by relying on the case laws of Hon’ble Supreme Court in the case of Joint Investments Pvt. Ltd. without considering the fact that assessee itself has disallowed Rs.5,54,69,820/- which is more than the exempt income of Rs. 8,10,666/- which is the contrary to the decision of the Courts in above two case laws relied upon by the Ld. CIT(A).” 3. At the very outset, the ld. counsel for the assessee drew our attention to the decision of this Tribunal in assessee’s own case in ITA No. 4027/DEL/2019 and pointed out that by the order of National Company Law Tribunal, the appeals of the Revenue for earlier Assessment Years have been dismissed. 3 4. The ld. DR fairly conceded to this. 5. We have carefully perused the order of this Tribunal in ITA No. 4027/DEL/2019 for Assessment Year 2015-16 order dated 04.08.2022. We find force in the contention of the ld. counsel for the assessee. The relevant findings read as under: “5. We have carefully considered the orders of the authorities below and have also considered the decision of this Tribunal in ITA No.l73/Del/2018 for A.Y.2013-14 and ITA No.6961 to 6963/Del/2017 for A.Y.2005-06 to 2007-08. The relevant findings of the coordinate Bench read as under: “We have gone through the record in the light of submissions made on either side. Dues to the Income-tax Department are reflected in list - 8 appended to the order dated 24.07.2013 passed by the NCIT. By such order,-NCLT observed that there is a huge difference in the total amount of admitted secured financial creditors which is to the tune of Rs. 1,14,78,09,50,325/- and the liquidation value of the company to the tune of Rs. 23,56,35,25,186/- and, therefore, by application of the waterfall mechanism mentioned in Section 53 of the Code the liquidation value due to unsecured financial creditors, operational creditors and other credits as approved by the NCLT, all claims or demands or liabilities or obligations owed or payable to or 4 assessed by or assessable by the Central Government/State Government in relation to any period prior to the acquisition, will be written off in full and will be deemed to be permanently extinguished. This position of law is clear in view of the decision of Hon'ble Supreme Court in the case of Ghanshyam Mishara and Sons Vs. Edleweiss Assets Reconstruction Company. Ltd. (Civil appeal Na.8129/2019 - Order dated 13/04/2021}. 6. In these circumstances, we are of the considered opinion that the dues to the Income-tax Department for the assessment year 2013-14, which are reflected In the l!st-B appended to NCLT order stood fully extinguished and no useful purpose would be served by adjudicating this matter. With this view of the matter, we dismiss the appeal! of the Revenue. 7. In the result, the appeal of the Revenue is dismissed.” 6. Respectfully following the findings of the co-ordinate bench, this appeal by the Revenue is dismissed. 5 7. In the result, the appeal of the Revenue in ITA No. 7965/DEL/2019 is dismissed. The order is pronounced in the open court on 22.09.2022. Sd/- Sd/- [ANUBHAV SHARMA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22 nd September, 2022. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 6 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order