Chethan Dass, Bangalore V. The Assistant Commissioner of Income Tax Circle-6(3)(1), Bangalore

ITA 940/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4254 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO . 940 /BANG/201 8 ASSESSMENT YEAR : 20 1 3 - 1 4 SHRI CHETAN DASS, NO. 189, SANKEY ROAD, UPPER PALACE ORCHARDS, SADASHIVNAGAR, BANGALORE 560 080. PAN: ACCPD7140E VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6 (3)(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. SUMAN LUNKAR, CA RESPONDENT BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) DATE OF HEARING : 0 5 .0 2 .2019 DATE OF PRONOUNCEMENT : 08 . 0 2 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A)-6, BANGALORE DATED 30.11.2017 FOR ASSESS MENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED ASSESSING OFFICER HAD ERRED IN PASSI NG THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE SAME. THE IMPUGNED ORDERS BEING BAD IN LAW ARE REQUIRED TO BE QUASHED. 2. THE LEARNED ASSESSING OFFICER HAD ERRED IN THE D ISALLOWING THE CLAIM OF DEDUCTION OF INTEREST OF RS.23,94,375/- AN D THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE SAME. 3. THE LOWER AUTHORITIES HAVE ARRIVED AT AN ERRONEO US CONCLUSION ON AN IMPROPER APPRECIATION OF FACTS. ON CORRECT APPRE CIATION OF FACTS IT WILL BE CLEAR THAT DEDUCTION OF RS. 23,94,375/- WAS CORRECTLY CLAIMED BY THE APPELLANT AND THE SAME IS TO BE ALLOWED TO T HE APPELLANT. 4. THE LEARNED ASSESSING OFFICER HAS ALSO ERRED IN LEVYING INTEREST U/S. 234B, 234C OF THE I.T. ACT, 1961. THE APPELLAN T DENIES LIABILITY TO PAY INTEREST. THE INTEREST HAVING BEEN LEVIED ERRON EOUSLY IS TO BE DELETED. 5. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE DISALLOWANCE O UT OF INTEREST BE DELETED AND INTEREST LEVIED BE ALSO DELETED. ITA NO. 940/BANG/2018 PAGE 2 OF 3 3. AT THE VERY OUTSET, IT WAS SQUARELY CONSIDERED B Y LD. AR OF ASSESSEE THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED A GAINST THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSES SMENT YEAR 2011-12 IN ITA NO. 780/BANG/2016 DATED 19.10.2017. SHE SUBMIT TED A COPY OF THIS TRIBUNAL ORDER. SHE DRAWN OUR ATTENTION TO PARA NO . 10 OF THIS TRIBUNAL ORDER. THE LD. DR OF REVENUE SUPPORTED THE ORDER O F CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI RST REPRODUCE PARAS 10 TO 12 OF THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011- 12. THE SAME ARE AS UNDER. 10. FROM THE ABOVE, IT IS CLEAR THAT THE INITIAL LE ASE FOR A PERIOD OF TEN YEARS EXPIRED ON 19.05.1988 AND THERE WAS NO EXTENS ION OF LEASE AGREEMENT IN FAVOUR OF THE ASSESSEE. ON ACCOUNT OF THE ABOVE, WE ARE OF THE OPINION THAT ONCE THE ASSESSEE DID NOT HAVE ANY RIGHT TO REMAIN IN POSSESSION OF LEASE, THERE WAS NO OCCASION FOR T HE ASSESSEE TO ENTER INTO A SUB-LEASE AGREEMENT INITIALLY WITH TAPOVAN B UILDERS IN THE YEAR 1987 AND THEREAFTER WITH BANGALORE HOSPITALS LTD. M OREOVER THE EXISTENCE OF BOTH THE SUB-LEASE AGREEMENTS WAS DEPE NDENT UPON THE CLEAR AND MARKETABLE TITLE OF THE ASSESSEE, ON THE BASIS OF WHICH THE ASSESSEE CAN EXECUTE THE SUB-LEASE AGREEMENT IN FAV OUR OF THESE TWO SUB-LESSEES. ONCE THE TITLE OF THE ASSESSEE IS UNDE R CLOUD, THERE IS NO OCCASION FOR THE ASSESSEE TO EXECUTE THE SUB-LEASE AGREEMENT IN FAVOUR OF THESE TWO ENTITIES. FURTHER BOTH THE SUB-LEASE AGREEMENTS WERE ONLY A P RELUDE TO THE AGREEMENT AS NEITHER THE TITLE OF THE ASSESSEE WAS CLEAR NOR THE ASSESSEE COULD PUT THESE TWO ENTITIES INTO POSSESSI ON, NOR THESE TWO ENTITIES HAVE PAID THE REMAINING AMOUNT OF RS.10 LA KHS AND RS.45 LAKHS RESPECTIVELY. 11. IN VIEW OF THE ABOVE, THE CLAIM OF THE ASSESSEE THAT THE INTEREST WAS PAYABLE ON ADVANCES OF RS.9,50,000/- AND RS.40,00,0 00/- ARE NOT PAYABLE ON ACCRUAL BASIS. ONCE THE ASSESSEE WAS UNA BLE TO DISCHARGE ITS OBLIGATION UNDER THE AGREEMENT, IT IS FOR THE A SSESSEE TO TAKE A CALL AND RETURN THE AMOUNT RECEIVED BY HIM IMMEDIATELY W HEN HE WAS UNABLE TO PAY THE AMOUNT. FURTHER THE CREDIT OF INT EREST ACCRUED IN FAVOUR OF THESE TWO ENTITLES WAS RELATABLE TO THE B USINESS OF THE ASSESSEE, AS IT WAS NOT WHOLLY AND EXCLUSIVELY CONN ECTED WITH THE BUSINESS OF THE ASSESSEE. OUR VIEW IS FURTHER SUPPO RTED BY THE FACT THAT THESE TWO ENTITIES HAVE NOT SHOWN ANY INTEREST AMOU NT TOWARDS THESE ADVANCES AS RECEIVABLES IN THEIR BOOKS OF ACCOUNT. 12. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THA T THE LIABILITY IS ONLY SOUGHT TO BE CREDITED BY WAY OF CREDITING THE INTER EST AMOUNT WAS MERELY A CONTINGENT LIABILITY / OR RATHER NO LIABIL ITY IN THE EYES OF LAW. ITA NO. 940/BANG/2018 PAGE 3 OF 3 THEREFORE THE ASSESSEE WAS NOT ENTITLED TO CREDIT T HE SAME AMOUNT BY DEDUCTING IT UNDER THE PROVISIONS OF THE ACT. IN VI EW OF THE ABOVE, THE REASONING GIVEN BY THE CIT (A) IN PARA 3.17 AND 3.1 8 ARE CORRECT AND NO INTERFERENCE IS CALLED FOR. 5. IN THE PRESENT YEAR THE DISPUTE IS SAME AND ADMI TTEDLY, THIS IS COVERED AGAINST THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2011-12. RESPECTFULLY FOLLOWING TH E SAME, WE DECIDE THE ISSUE IN THE PRESENT YEAR ALSO AGAINST THE ASSESSEE . 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH FEBRUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.