The Ajay G. Piramal Foundation, New Delhi V. DDIT (E), New Delhi

ITA 808/DEL/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2005 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 14-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT KISHORE
• Keywords: Depreciation; Charitable institution; Principle of natural justice; Rule 8D
• Section: 14A; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US, Judicial Member ITA No. 808/Del/2016 : Asstt. Year : 2010-11 The Ajay G. Piramal Foundation, 320, Tower-B, 11, DLF Tower, Jasola, New Delhi-110025 Vs DDIT(E), Trust Circle-IV, New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AABTT1789N Assessee by : Sh. Ankit Agrawal, CA & Ms. Yamini Khuteta, CA Revenue by : Sh. Lalit Kishore, Sr. DR Date of Hearing: 25.05.2022 Date of Pronouncement: 29.06.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of the ld. CIT(A)-21, New Delhi, dated 04.12.2015. 2. Following grounds have been raised by the assessee: “GROUND I: NOT GRANTING DEDUCTION OF INTEREST EXPENSES 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) - 21, New Delhi (“the CIT(A)”) erred in upholding the action of the. Deputy Director of Income Tax (Exemptions), Trust Circle - IV, New Delhi, (“the A.O.”) of not granting deduction of interest expense amounting to Rs. 15,50,137/- paid on loan borrowed by the Appellant on the alleged ground that there is no direct nexus between the loans borrowed and loans given by the Appellant. ITA No. 808/Del/2016 The Ajay G. Piramal Foundation 2 2 The Appellant prays that the deduction of the aforesaid interest expenses be allowed. GROUND II: DIRECTION OF THE CIT (A) IS VOID AB- INTIO OR/AND BAD IN LAW: 1. On the facts and in the circumstances of the case and in law, the direction of Ld. CIT (A) to take remedial actions to disallow expenses u/s. 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 (‘the Rules’) is void ab-intio or/and bad in law as the CIT (A) did not give any opportunity/notice for enhancement as required under section 251 (2) of the Act and thus, violated the principle of natural justice. 2. The Appellant prays that the direction of the CIT (A) be held as void ab-intio or/and bad in law. GROUND III: NOT GRANTING DEDUCTION OF DEPRECIATION AND OTHER EXPENDITURE 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of the A.O. in not granting deduction for depreciation and other expenditure of Rs. 6,18,683/- and Rs. 1,87,65,685/-, respectively on the alleged ground that the said expenses were not incurred wholly and exclusively for earning income.” 3. The assessee was filed return of income on 31.03.2011 declaring a loss of Rs 1,25,77,773/-. The assessee is a charitable Trust registered u/s 12A/12AA of the Income Tax Act, 1961 and claimed exemption u/s 11/12 of the I.T Act in its return of income during the A.Y under consideration as it was in infringement with section 13(1)(d) read with section 11(5) of the I.T. Act. As such the assessee has computed the total income in accordance with the provisions of section 14 of the I.T Act as is normally computed in the case of AOPs. ITA No. 808/Del/2016 The Ajay G. Piramal Foundation 3 4. The issue of deduction of interest expenses of Rs. 15,50,137/- has been examined in the earlier years in assessee’s own case . The netting of interest has to be allowed and the matter is being referred to the AO for re-computation purpose. 5. With regard to disallowance u/s 14A of the Income Tax Act, 1961 as directed by the ld. CIT(A), we hold that due opportunity may be given to the assessee before taking up any action. 6. With regard to allowing the depreciation and other expenditure, we hereby direct based on the earlier order of the Tribunal, the assessee is entitled to compete the taxable income in accordance with the various provisions of the Income Tax Act. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 29/06/2022. Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 29/06/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR