Bharat Sanchar Nigam Ltd., New Delhi V. Addl.CIT, New Delhi

ITA 934/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5687 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Non-deduction of tax; Assessment record; TDS; FORM 26AS
• Section: 271(1)(c); 43B; 244A; 115JB; 40(a)(ia); 250; 43; 194A; 13; 22; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: A NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.934/DEL/2017 ASSESSMENT YEAR: 2012-13 BHARAT SANCHAR NIGAM LTD., TAXATION SECTION, 1 ST FLOOR, BHARAT SANCHAR BHAWAN, JANPATH, NEW DELHI VS. ADDL. CIT, RANGE-4, NEW DELHI PAN :AABCB5576G (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE HAS BEEN PREFERRED AGA INST THE ORDER DATED 4 TH NOVEMBER, 2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-35, NEW DELHI [IN SHORT THE LEARNED CIT(A)] FOR ASSESSMENT YEAR 2012-13 RAISI NG THE FOLLOWING GROUNDS: APPELLANT BY SH. PULKIT VERMA, ADV. RESPONDENT BY SH. SATPAL GULATI, CIT (DR) DATE OF HEARING 16.09.2021 DATE OF PRONOUNCEMENT 16.09.2021 2 ITA NO.934/DEL/2017 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) - 35, NEW DELHI [LEARNED CIT(A)] UN DER SECTION 250 OF THE INCOME-TAX ACT, 1961 (ACT), IS A VITIATED ORDER HAVING BEEN PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E AND IS OTHERWISE ARBITRARY AND IS THUS BAD IN LAW AND VOID AB-INITIO . NO OPPORTUNITY OF BEING HEARD GRANTED TO THE APPELL ANT 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IS VOID AB-INITIO AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE AS NO OPPORTUNITY OF BEING HEARD / MAKING DETAILED SUBMISSIONS ON GROUND S RAISED BY THE APPELLANT BEFORE LEANED CIT(A) HAS BEEN GRANTED TO THE APPELLANT. ADDITION ON ACCOUNT OF DISCOUNT TO PREPAID DISTRIBU TORS 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 662,79,52,500 MADE BY THE LEARNED AO UNDER THE PROV ISIONS OF SECTION 40(A)(IA) ON ACCOUNT OF ALLEGED NON-DEDUCTI ON OF TDS ON THE DISCOUNTS OFFERED TO DISTRIBUTORS/ FRANCHISEES. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE BY MERELY RELYING UPON THE FACTS AND D ETAILS PROVIDED BY THE APPELLANT IN THE APPELLATE PROCEEDI NGS OF PREVIOUS AYS AND NOT GRANTING THE APPELLANT WITH AN OPPORTUN ITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSU E FOR THE SUBJECT AY. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE WITHOUT APPRECIATING THAT TAXES HAVE B EEN DULY DEDUCTED AND DEPOSITED BY THE APPELLANT ON THE DISC OUNTS OFFERED TO DISTRIBUTORS/ FRANCHISEES DURING THE PREVIOUS YE AR RELEVANT TO THE SUBJECT AY. ADDITION ON ACCOUNT OF INTERCONNECT CHARGES (IUC C HARGES) PAID TO FOREIGN / NON-RESIDENT TELECOM OPERATORS 6. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 53,39,84,585 MADE BY THE LEARNED AO UNDER THE PROVI SIONS OF SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF ALLEGED NON-DEDUCTION OF TDS ON IUC /INTERNATIONAL ROAMING CHARGES PAYABLE T O THE NON- RESIDENT TELECOM OPERATORS (NTOS) BY ALLEGING THE SAME TO BE IN THE NATURE OF ROYALTY UNDER THE PROVISIONS OF SEC TION 9(I)(VI) OF THE 3 ITA NO.934/DEL/2017 ACT AND THE APPLICABLE DOUBLE TAXATION AVOIDANCE AG REEMENTS (DTAA). 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE BY ALTERNATIVELY ALLEGING THE IUC CHAR GES TO BE IN THE NATURE OF FEES FOR TECHNICAL SERVICES UNDER THE P ROVISIONS OF SECTION 9(I)(VII) OF THE ACT AND THE APPLICABLE DTA AS. 8. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D DISALLOWANCE WITHOUT APPRECIATING THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY IN CASE OF PAYMENTS MADE TO RESIDEN TS. ADDITION ON ACCOUNT OF 15% OF THE LICENSE AND SPECT RUM FEES PAYABLE/ PAID TO DEPARTMENT OF TELECOMMUNICATIONS ( DOT) 9. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 529,15,80,000 MADE BY THE LEARNED AO, BEING 15% OF THE LICENSE FEES AND SPECTRUM FEES PAYABLE/ PAID TO DOT BOTH UN DER THE NORMAL PROVISIONS OF THE ACT AS WELL AS THE PROVISI ONS OF SECTION 115JB OF THE ACT. 10. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE WITHOUT PROVIDING THE APPELLANT WITH A N OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 11. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE IN COMPLETE DISREGARD OF THE FACT THAT THE SAID ISSUE STANDS SETTLED IN FAVOUR OF THE APPELLANT BY THE HO NBLE DELHI TRIBUNAL IN APPELLANTS OWN CASE FOR EARLIER AYS AN D NO APPEAL AGAINST THIS ISSUE HAS BEEN FILED BY THE INCOME TAX DEPARTMENT BEFORE THE HONBLE HIGH COURT. ADDITION ON ACCOUNT OF AMORTISATION OF EXPENSES PAI D FOR 3G AND BWA SPECTRUM 12. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLO WANCE OF RS. 925,01,00,000 MADE BY THE LEARNED AO BEING 1 /20TH OF THE SUM PAID FOR ACQUISITION OF RIGHT TO USE 3G AND BWA SPE CTRUM, CLAIMED DURING THE YEAR UNDER SECTION 35ABB OF THE ACT BY M ERELY FOLLOWING THE APPELLATE ORDER PASSED IN THE CASE OF THE APPELLANT FOR AY 2011-12. 13. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE WITHOUT PROVIDING THE APPELLANT WITH A N OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 4 ITA NO.934/DEL/2017 14. WITHOUT PREJUDICE TO GROUND 12 TO 13 ABOVE, THE LEARNED CIT (A) HAS ERRED IN NOT ALLOWING DEPRECIATION UNDER SECTIO N 32 OF THE ACT ON THE AMOUNT PAID BY THE APPELLANT FOR ACQUISITION OF RIGHT TO USE 3G AND BWA SPECTRUM, DESPITE A SPECIFIC NOTING MADE BY THE LEARNED AO IN THE ASSESSMENT ORDER FOR THE AY 2011- 12 THAT THE SAID AMOUNT IS PAID BY THE APPELLANT FOR ACQUISITIO N OF AN INTANGIBLE ASSET, ELIGIBLE FOR DEPRECIATION UNDER S ECTION 32 OF THE ACT. ADDITION ON ACCOUNT OF WRITE OFF OF ASSETS 15. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING AND RE FERRING BACK TO THE LEARNED AO, THE ISSUE OF DISALLOWANCE OF RS. 35 4,57,16,829 MADE BY THE LEARNED AO ON ACCOUNT OF WRITE OFF ASSE TS DEBITED TO THE PROFIT AND LOSS ACCOUNT. 16. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN REFERRING BACK THE SAID ISSUE TO THE LEARNED AO WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 17. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN REFERRING BACK THE SAID ISSUE TO THE LEARNED AO WITH A DIRECTION TO VERIFY CHALLAN OF PA YMENT FOR TAXES AND THEREAFTER GIVING CREDIT TO THE APPELLANT, WITH OUT APPRECIATING THE FACT THAT THE LIMITED ISSUE INVOLVED IS WHETHER THE SAID AMOUNT HAS BEEN DISALLOWED TWICE. ADDITION OF INTEREST U/S 244A OF THE ACT ON INCOME- TAX REFUND RECEIVED BY BSNL FOR AY 2010- 11 AND AY 2011-12 18. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING AND RE FERRING BACK TO THE LEARNED AO, THE ISSUE OF ADDITION OF RS. 90,59, 89,625 MADE BY THE LEARNED AO ON ACCOUNT OF INTEREST UNDER SECT ION 244A OF THE ACT ON INCOME TAX REFUND RECEIVED BY THE APPELL ANT. 19. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN REFERRING BACK THE SAID ISSUE TO THE LEARNED AO, WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. ADDITION ON ACCOUNT OF INCOME RELATABLE TO NON-DISC LOSURE OF TDS 20. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN NOT ADJUDICATING AND R EFERRING BACK, THE ADDITION OF RS. 80,02,53,768 MADE BY THE LEARNE D AO BEING EXTRAPOLATION OF THE DIFFERENCE BETWEEN AMOUNT OF T DS CLAIMED IN THE RETURN OF INCOME AND AMOUNT OF TDS APPEARING IN FORM 26AS 5 ITA NO.934/DEL/2017 AND TREATING THE SAME AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 21. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN REFERRING BACK THE SAI D ISSUE TO THE LEARNED AO, WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 22. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN REFERRING BACK THE SAI D ISSUE TO THE LEARNED AO WITH A DIRECTION TO VERIFY CHALLAN OF PA YMENT FOR TAXES AND THEREAFTER GIVING CREDIT TO THE APPELLANT, WITH OUT APPRECIATING THE FACT THAT THERE IS NO QUESTION OF VERIFICATION WITH TAX CHALLANS OR CREDIT OF TAXES AS THE APPELLANT HAS FULLY DISCL OSED/ OFFERED TO TAX ALL THE INCOME PERTAINING TO THE SUBJECT AY. 23. WITHOUT PREJUDICE TO GROUND 20 TO 22 ABOVE, THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE LEARNED AO TO ALLOW CREDIT OF TDS OF RS. 7,42,88,576 BEING TDS DEDUCTED, DEPOSITED USING THE PAN OF THE APPELLANT AND DULY DISCLOSED IN FORM 26AS. DISALLOWANCE OF INTEREST EXPENSES ON ACCOUNT OF NON -DEDUCTION OF TDS U/S 194A OF THE ACT 24. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 6,17,41,000 MADE BY THE LEARNED AO UNDER SECTION 40 (A)(IA) OF THE ACT ON ACCOUNT OF ALLEGED NON-DEDUCTION OF TAXE S FROM INTEREST PAYABLE TO BANKS. 25. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID D I S A 11 O WA N CE WJ T HOUT PROVIDING THE APPELLANT WITH AN O PPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAI D ISSUE. 26. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE IN COMPLETE DISREGARD OF PROVISIONS OF SECTION 194A OF THE ACT, WHICH DO NOT COVER INTEREST PAYMENT TO BANK WITHIN ITS AMBIT. DISALLOWANCE OF INTEREST EXPENSES U/S 43B OF THE AC T 27. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLO WANCE OF RS. 2,02,57,683 MADE BY THE LEARNED AO UNDER SECTION 43 B OF THE ACT. 28. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE WITHOUT PROVIDING THE APPELLANT WITH A N OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 29. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID 6 ITA NO.934/DEL/2017 DISALLOWANCE IN COMPLETE DISREGARD OF THE FACT THAT THE SAID AMOUNT HAS BEEN DULY PAID BY THE APPELLANT BEFORE T HE DUE DATE OF FILING OF INCOME TAX RETURN FOR THE SUBJECT AY A ND ACCORDINGLY, NO DISALLOWANCE CAN BE MADE IN THE CASE OF THE APPE LLANT. ADDITIONS MADE ON ACCOUNT OF CASH DEPOSITS AS APPEA RING IN AIR 30. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING AND RE FERRING BACK, THE ADDITION OF RS. 25,27,500 MADE BY THE LEARNED A O BEING CASH DEPOSITS ABOVE RS. 10 LAKHS APPEARING IN THE AIR ON ACCOUNT OF WRONG PAN ENTERED BY THE BANKS/ PAYEES. 31. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN REFERRING BACK THE SAI D ISSUE TO THE LEARNED AO WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 32. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN REFERRING BACK THE SAID ISSUE TO THE LEARNED AO WITH A DIRECTION TO VERIFY CHALLAN OF PA YMENT FOR TAXES AND THEREAFTER GIVING CREDIT TO THE APPELLANT, WITH OUT APPRECIATING THE FACT THAT THERE IS NO QUESTION OF VERIFICATION WITH TAX CHALLANS OR CREDIT OF TAXES AS THE SUCH AMOUNTS ARE NOT DEPO SITS MADE BY THE APPELLANT BUT ARE REFLECTING IN APPELLANTS AIR ON ON ACCOUNT OF WRONG PAN ENTERED BY THE BANKS/ PAYEES. ADDITION ON ACCOUNT OF DIFFERENCE BETWEEN OPENING A ND CLOSING BALANCE RECOVERABLE FROM DOT 33. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 1139,66,00,000 MADE BY THE LEARNED AO BY ALLEGING T HE DIFFERENCE BETWEEN THE CLOSING AND OPENING RECOVERA BLE BALANCE OF THE CURRENT ACCOUNT MAINTAINED BY THE APPELLANT WIT H DOT TO BE IN THE NATURE OF UNEXPLAINED AMOUNT RECOVERED FROM DOT , BY MERELY RELYING UPON THE ORDER PASSED BY HER PREDECESSOR FO R THE AY 2011-12 34. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE AFORESA ID DISALLOWANCE WITHOUT PROVIDING THE APPELLANT WITH A N OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. 35. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE SAI D DISALLOWANCE IN COMPLETE IGNORANCE OF THE FACT THAT THE TRANSACTION BETWEEN DOT AND THE APPELLANT IS TRANSACTION BETWEE N A GOVERNMENT OF INDIA OWNED COMPANY AND A DEPARTMENT OF GOVERNMENT, HENCE, THE PARAMETERS FOR TRANSACTION/S OURCE OF FUNDS TO BE QUALIFIED AS UNEXPLAINED CAN NEVER BE S ATISFIED. 7 ITA NO.934/DEL/2017 RESERVATION MADE BY AO ON ACCOUNT OF DIFFERENCE BET WEEN GENERAL LEDGER AND STORE LEDGER 36. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN DISMISSING THE GRO UND RAISED BY THE APPELLANT AGAINST THE RESERVATION MAD E BY THE LEARNED AO ON THE RIGHT FOR RECTIFICATION OF THE AS SESSMENT ORDER PURSUANT TO DECISION OF THE LEARNED CIT(A) ON SIMIL AR ISSUE FOR AY 2010-11, WITHOUT PROVIDING THE APPELLANT WITH AN OP PORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAI D ISSUE. RESERVATION MADE BY AO ON ACCOUNT OF DIFFERENCE BET WEEN GENERAL LEDGER AND CONTROL ACCOUNTS UNDER INTER/ INTRA CIRC LE REMITTANCE 37. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DISMISSING THE GROUND R AISED BY THE APPELLANT AGAINST THE RESERVATION MADE BY THE LEARN ED AO ON THE RIGHT FOR RECTIFICATION OF THE ASSESSMENT ORDER PUR SUANT TO DECISION OF THE LEARNED CIT(A) ON SIMILAR ISSUE FOR AY 2010- 11, WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEIN G HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. DISALLOWANCE OF PROPORTIONATE TAX DEPRECIATION BY T REATING THE LOAN OF RS. 720 CRORES RECEIVED BY BSNL FROM THE GO L TO BE A CAPITAL SUBSIDY, REQUIRED TO BE REDUCED FROM THE BL OCK OF FIXED ASSETS 38. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 151,20,00,000 MADE BY THE LEARNED AO BOTH UNDER THE NORMAL PROVISIONS OF THE ACT AND UNDER SECTION 115JB OF TH E ACT BY TREATING THE LOAN OF RS. 720 CRORES RECEIVED BY THE APPELLANT DURING FY 2002-03 TOWARDS THE GOVERNMENTS 'VILLAGE TELEPHONY (VPT) PROJECT TO BE CAPITAL SUBSIDY AND THUS DISALL OWING DEPRECIATION ON THE SAID AMOUNT. 39. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D DISALLOWANCE WITHOUT PROVIDING THE APPELLANT WITH AN OPPORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSU E. 40. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D ADDITION WITHOUT APPRECIATING THAT HER PREDECESSOR IN THE OR DER PASSED IN THE CASE OF THE APPELLANT FOR AY 2011-12 HAD DELETE D THE AFORESAID ADDITION MADE IN CASE OF THE APPELLANT. 41. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D ADDITION IN COMPLETE DISREGARD OF THE FACT THAT THE SAID ADDITI ON HAS RESULTED IN DOUBLE ADDITION, SINCE SUCH LOAN HAS ALREADY BEE N CONSIDERED 8 ITA NO.934/DEL/2017 AS REVENUE RECEIPT IN THE ASSESSMENT PROCEEDINGS FO R AY 2003-04, WHICH HAS ALSO BEEN CONFIRMED BY THE HONBLE ITAT V IDE THEIR ORDER DATED JANUARY 22, 2016. 42. WITHOUT PREJUDICE TO GROUNDS 39 TO 42 ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) HAS ERRED IN CONFIRMING THE AFORESAID DISALLOWANCE WITH OUT APPRECIATING THAT THE FACT THAT THE LEARNED AO HAS ERRED IN APPLYING A NOTIONAL/ AD-HOC RATE OF 30% FOR CALCULA TING THE EXCESS DEPRECIATION. DISALLOWANCE BY ALLEGING THAT CAPITALISATION OF EXP ENSES RESULTS EXCESSIVE CLAIM OF LOSS 43. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 2,08,00,000 MADE BY THE LEARNED AO BOTH UNDER THE N ORMAL PROVISIONS AND UNDER SECTION 115JB OF THE ACT BY AL LEGING THAT UNDER-CAPITALIZATION OF EXPENDITURE RESULTS EXCESSI VE CLAIM OF LOSS. 44. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D DISALLOWANCE WITHOUT GRANTING THE APPELLANT AN OPPORTUNITY OF BE ING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAID ISSUE. DISALLOWANCE MADE BY ALLEGING THAT EXCESS DEPRECIAT ION HAS BEEN CLAIMED BY THE APPELLANT 45. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 990,200 MADE BY THE LEARNED AO BOTH UNDER THE NORMA L PROVISIONS AND UNDER SECTION 115JB OF THE ACT BY AL LEGING THE SAID AMOUNT TO BE EXCESS DEPRECIATION CLAIMED ON TH E DECOMMISSIONED ASSETS, 46. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 336,000 BOTH UNDER THE NORMAL PROVISIONS OF THE ACT AND UNDER SECTION 115JB OF THE ACT BY ALLEGING THE SAID AMOUN T TO BE EXCESS DEPRECIATION CLAIMED BY THE APPELLANT. 47. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFORESAI D DISALLOWANCES WITHOUT GRANTING THE APPELLANT AN OPP ORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAI D ISSUES. DISALLOWANCE UNDER SECTION 43B BY TREATING ANNUAL R OYALTY PAID TO WPC WING OF DOT AS IN THE NATURE OF TAX/DUTY/CES S 48. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS 59,73,12,500 MADE BY THE LEARNED AO BY ALLEGING THE ANNUAL 9 ITA NO.934/DEL/2017 ROYALTY PAID TO WPC WING OF DOT FOR USE MICROWAVE S PECTRUM IN THE NATURE OF TAX/ DUTY/ CESS AND DISALLOWING THE S AME PER THE PROVISIONS OF SECTION 43B OF THE ACT. 49. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFOR ESAID DISALLOWANCES WITHOUT GRANTING THE APPELLANT AN OPP ORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAI D ISSUES. DISALLOWANCE OF MEMBERSHIP FEES PAID TO EUROPE INDI A CONSORTIUM BY TREATING IT AS A CAPITAL EXPENSE 50. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS 20,55,07,963 BEING ADDITION MADE BY HOLDING THE MEM BERSHIP FEES PAID TO EUROPE INDIA CONSORTIUM TO BE A CAPITA L EXPENSE. 51. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE AFOR ESAID DISALLOWANCES WITHOUT GRANTING THE APPELLANT AN OPP ORTUNITY OF BEING HEARD/ MAKING DETAILED SUBMISSIONS ON THE SAI D ISSUES. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT 52. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE LEARN ED AO TO DROP THE PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT. THE ABOVE GROUNDS AND SUB GROUNDS OF APPEAL ARE MUT UALLY EXCLUSIVE AND WITHOUT PREJUDICE TO EACH OTHER. 2. IN THE GROUNDS OF APPEAL, ALMOST IN EACH AND EVERY ISSUE, THE ASSESSEE HAS RAISED THE GROUNDS THAT NO OPPORTUNITY OF BEING HEARD/MAKING DETAILED SUBMISSIONS, HAS BEEN GRANTED TO THE ASSESSEE. THE GROUNDS RAISED IN THIS REGARD ARE AT SERIAL NOS. 2, 4, 10, 13, 16, 19, 21, 25, 28, 31, 34, 36, 39, 44, 47, 49 AND 51. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIN CE NO SUFFICIENT OPPORTUNITY OF BEING HEARD WAS GRANTED T O THE ASSESSEE BY THE LEARNED CIT(A), THE APPEAL MAY BE RESTORED B ACK TO THE FILE OF THE LEARNED CIT(A) FOR DECIDING AFRESH. 3. THE LEARNED CIT(DR) DID NOT OBJECT TO THIS REQUEST OF THE LEARNED COUNSEL OF THE ASSESSEE. 10 ITA NO.934/DEL/2017 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND TH AT THAT THE ISSUES IN DISPUTE HAVE BEEN DECIDED BY THE LEARNED CIT(A) IN ABSENCE OF EVIDENCE FURNISHED BY THE ASSESSEE. FOR READY REFERENCE FEW SUCH PARAGRAPHS OF THE ORDER OF LEARN ED CIT(A) ARE REPRODUCED AS UNDER: 4.5 GROUND NO. 4 IS WITH RESPECT TO DISALLOWANCE OF 15% OF THE LICENCE AND SPECTRUM FEES OF RS.52,91,580,000/- PAI D/PAYABLE TO DOT. FROM THE PERUSAL OF ASSESSMENT ORDER DATED 31. 03.2015 AS WELL AS APPELLANT ORDERS IN THE PRESENT CASE FOR EA RLIER YEARS, IT IS OBSERVED THAT THE PRESENT ISSUE HAS COME UP FOR CON SIDERATION IN EVERY YEAR. IT WOULD BE RELEVANT TO NOTE THAT THE A PPELLANT/AR DID NOT FURNISH ANY DETAILS/EVIDENCE/CALCULATIONS ETC. DURING APPELLATE PROCEEDINGS WHICH COULD SUBSTANTIATE THE CLAIM OF R S.3,52,772/- LAKHS AS EXPENDITURE ON LICENCE AND SPECTRUM FEES. PERUSAL OF ASSESSMENT RECORD FOR THE RELEVANT YEAR (REF: PAGES 16, 17, 18, 19 OF THE ASSESSMENT ORDER) SHOWS THAT AS IN EARLIER YEAR S, THE EXPENDITURE TOWARDS SUCH FEES AS LICENCE/SPECTRUM, HAVE NOT BEEN MADE AT ANY REASONABLE LEVEL OF ARITHMETICAL ACCURA CY, IN VIEW OF THE POSITION ABOVE GROUND NO. 4 IS DISMISSED. 4.6.1 DURING APPELLATE PROCEEDINGS, THE AR FAILED T O PROVIDE ANY DETAILS WITH RESPECT TO THE ABOVE GROUND. I OBSERVE THAT THE ISSUE CAME UP FOR CONSIDERED ALSO IN A.Y. 2011-12, AND IN 1ST APPEAL, THE SAME WAS EXAMINED IN DETAILS BY LD.CIT(A) VIDE ORDE R DATED 28.12.2015 (REF: PAGES 60, 61, 62 OF THE ORDERS) AN D DECISION OF AO. WAS UPHELD. SINCE THE FACTS OF THE CASE REMAINS THE SAME IN THE RELEVANT YEAR ALSO, I RESPECTFULLY FOLLOWING THE DE CISION OF MY PREDECESSOR UPHOLD THE DISALLOWANCE OF RS.925.01 CR ORES MADE BY THE AO. 4.9.1 THE ADDITION IS UPHELD ON ACCOUNT OF NON SUBM ISSION OF ANY EVIDENCE THAT THE INTEREST OF RS.2.03 CRORES WAS PA ID. THE ADDITIONS ARE ALSO CONFIRMED FOR WANT OF EVIDENCE THAT TAX WA S DEDUCTED ON SUCH INTEREST FOR WHICH IT HAD A LIABILITY TO DO. G ROUND NO. 11 IS DISMISSED. 4.10 GROUND NO. 13 : IS DISMISSED FOR WANT OF SUBMISSIONS/EVIDENCE TO SUBSTANTIATE THE GROUND RAI SED. 11 ITA NO.934/DEL/2017 4.11 GROUND NOS. 14, 15, 16 & 20: DURING APPELLATE PROCEEDINGS, THE AR HAS RAISED THESE GROUNDS HOWEVER NO EVIDENCE HAS BEEN FURNISHED FOR DEFENDING THESE GROUNDS DURING APPELL ATE PROCEEDINGS, HENCE THE SAME IS ALSO NOT ALLOWED FOR WANT OF EVID ENCE TO PROVE THAT THESE PAYMENTS HAVE BEEN MADE. 4.13 GROUND NO. 21 : IS DISMISSED FOR WANT OF EVIDENCE TO SUBSTANTIATE THIS GROUNDS. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE APPEAL HAS BEEN DECIDED BY THE LEARNED CIT(A) WITHOUT TAKING INTO C ONSIDERATION DETAILED ARGUMENTS OF THE LEARNED REPRESENTATIVE OF THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE FEEL IT APPROPR IATE TO RESTORE THIS APPEAL TO THE FILE OF THE LEARNED CIT(A) WHO SHALL DECIDE THE SAME AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE ALL THE NECESSARY DOCUMENTS/EVIDENCES WHICH IT WOULD LIKE TO RELY IN SUPPORT OF ITS CLAIM. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( DIVA SINGH ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH SEPTEMBER, 2021. RK/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI