Chandigarh Housing Board, Chandigarh V. DCIT, Chandigarh

ITA 973/CHANDI/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1567 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NOS. 973 & 974/CHD/2014 (ASSESSMENT YEAR : 2010-11 & 2011-12 ) CHANDIGARH HOUSING BOARD, VS. THE D.C.I.T., 8, JAN MARG, SECTOR 9, CIRCLE 1(1), CHANDIGARH. CHANDIGARH. PAN: AAALC0132H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SHANKAR RESPONDENT BY : SHRI AMAR VEER SINGH, DR DATE OF HEARING : 22.07.2015 DATE OF PRONOUNCEMENT 03.08.2015 O R D E R PER BHAVNESH SAINI, J.M. : BOTH THE APPEALS FILED BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LEARNED COMMIS SIONER OF INCOME TAX (APPEALS), CHANDIGARH DATED 22.8.2014 FOR ASSESSMENT YEARS 2010-11 AND 2011-12. 2. IN BOTH THE APPEALS THE ISSUES ARE SAME. 3. IN ITA NO.973/CHD/2014, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 1. THAT THE ORDER OF THE LEARNED CTT(A) IS ERRONEO US BOTH IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS. 16,84,86,188 /- ON ACCOUNT OF INTEREST EARNED ON FDRS WHICH BELONGED TO THE CHANDI GARH ADMINISTRATION/ GOVT. OF INDIA AND THE APPELLANT IS ONLY ACTING AS A NODAL AGENCY FOR THEM. 2. THAT THE LEARNED CIT(A) HAS ERRED IN UPHOLDING T HE ADDITION OF RS. 10,21,33,842/- IN THE HANDS OF THE APPELLANT ON ACCOUN T OF INTEREST RECEIVED ON FDRS CREATED FROM FUNDS RECEIVED FROM RG CTP HABITAT - PROJECT AS THE SAID AMOUNT BELONGED TO THE CHANDI GARH ADMINISTRATION AND THE APPELLANT WAS MERELY ACTING AS A NODAL AGENCY DULY APPOINTED BY THE CHANDIGARH ADMINISTRAT ION. 3. THAT THE LEARNED CIT(A) HAS ERRED IN UPHOLDING T HE ADDITION OF RS. 10,21,33,842/-, ON ACCOUNT OF INTEREST RECEIVED ON FDRS CREATED FROM FUNDS RECEIVED FROM RGCTP HABITAT PROJECT, WHICH IS CONTRARY TO THE PROVISIONS OF SECTION 20, 23 & 63 OF THE HARYANA HO USING BOARD ACT AS EXTENDED TO THE UNION TERRITORY OF CHANDIGARH. 4. THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHO LDING THE ADDITION OF RS. 6,63,52,346/- ON ACCOUNT OF INTEREST INCOME ON F DRS CREATED FROM GRANT RECEIVED FROM GOVERNMENT OF INDIA UNDER ITS JNNURM SCHEME AS THE GRANT AS WELL AS THE INTEREST RECEIVED THE REON BELONGS TO GOVT. OF INDIA, ALSO AS PER INSTRUCTIONS OF MINIST RY OF FINANCE, GOVT. OF INDIA THE INTEREST EARNED AMOUNTING TO RS. 27,25,75,380/- (FROM A.Y. 2009-10 TO 2012-13) HAD BEEN ALREADY DEP OSITED ON 17.04.2013 IN THE CONSOLIDATED FUND OF INDIA. 5. THAT THE CIT(A) HAS FAILED TO CONSIDER THE EXPL ICIT PROVISIONS OF THE DEVELOPMENT AGREEMENT DATED 6.10.2006 IN WHICH IT H AS BEEN STATED CLEARLY THAT THE CHANDIGARH HOUSING BOARD IS ACTING AS A NODAL AGENCY ON BEHALF OF THE CHANDIGARH ADMINISTRATION F OR DEVELOPMENT OF RGCTP PROJECT. 4. GROUND NO.L IS GENERAL WHICH IS TOTAL OF THE ADDITIONS OF GROUND NOS.2, 3 AND 4. 3 5. ON GROUND NOS. 2 AND 3, WITH REGARD TO ADDITION OF RS.10,21,33,842/- ON ACCOUNT OF INTEREST INCOME ACC RUED ON FDRS OUT OF FUNDS RECEIVED FOR RGCTP HABITAT PROJEC T, THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAD NOT OFFERED ITS INTEREST INCOME AMOUNTING TO RS.10.21 CRORES RE LATING TO RGCTP FDRS FOR TAXATION AND WHEN THE ASSESSING OFFI CER QUESTIONED, THE ASSESSEE HAD EXPLAINED THAT SINCE T HE FUNDS OF THESE FDRS BELONGED TO CHANDIGARH ADMINISTRATION, T HE INTEREST INCOME ALSO BELONGED TO THEM. THE ASSESSI NG OFFICER ASSESSED THIS INTEREST INCOME IN THE HANDS OF THE A SSESSEE. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT (APPE ALS) THAT THE ADDITION MADE ON THIS ISSUE IN EARLIER ASSESSME NT YEARS HAS BEEN CONFIRMED BY I.T.A.T., CHANDIGARH BENCH. SIMILAR ADDITION WAS MADE IN ASSESSMENT YEAR 2007-08 AND TH E I.T.A.T., CHANDIGARH BENCH VIDE ORDER DATED 14.3.2 012 IN ITA NO.1075/CHD/2010 HAS CONFIRMED THE ADDITION SO MADE . THE LEARNED CIT (APPEALS) FOLLOWING THE ORDER OF THE TR IBUNAL CONFIRMED THE ADDITION AND DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 6. AS REGARDS THE ADDITION OF RS.6,63,52,346/- ON ACCOUNT OF INTEREST INCOME ON FDRS CREATED OUT OF G RANT RECEIVED FROM GOVERNMENT OF INDIA UNDER JNNURM SCHE ME, IT WAS FOUND THAT THE ASSESSEE HAD ALSO NOT DECLARED I NTEREST INCOME OF RS.6.63 CRORES ON FDRS MADE OUT OF THE FU NDS OF JNNURM SCHEME. THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE INTEREST EARNED ON THIS FUND RECEIVED FROM GOVERNMENT OF INDIA UNDER JNNURM SCHE ME 4 WAS NOT TAXABLE SINCE THE SAME BELONGED TO GOVERNME NT OF INDIA. THE ASSESSING OFFICER WAS NOT SATISFIED WI TH THE EXPLANATION OF THE ASSESSEE AND TAXED THE ENTIRE AM OUNT OF INTEREST. 7. THE LEARNED CIT (APPEALS) CONSIDERING THE EXPLANATION OF THE ASSESSEE DISMISSED THIS GROUND O F APPEAL OF THE ASSESSEE AS WELL. HIS FINDINGS IN PARAS 5.3 A ND 5.3.1 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 5.3 I HAVE CONSIDERED THE FACTS OF THE ISSUE. ACCORDING TO THE APPELLANT, IT HAD RECEIVED GRANT FROM GOVERNMENT OF INDIA UNDE R JNNURM SCHEME OF GOVERNMENT OF INDIA AND AS PER LE TTER DATED 18.02.2013 OF DEPUTY DIRECTOR (BSUP) TO THE F INANCE SECRETARY, CHANDIGARH, THE INTEREST EARNINGS FOR ON GOING PROJECTS UNDER JNNURM WAS TO BE CREDITED TO THE RELEVANT ACCO UNTING HEAD MEANT FOR INTEREST RECEIPT OF GOVERNMENT OF INDIA I N ORDER TO BRING BACK THE SAME TO CONSOLIDATED FUND OF INDIA. IT HAS BEEN CONTENDED THAT AS THE APPELLANT WAS NOT THE LEGAL O WNER OF THE FUNDS AS WELL AS ANY INTEREST ACCRUED ON THESE FUNDS ; THE APPELLANT, INSTEAD OF CREDITING THIS INTEREST PERTAIN ING TO GOVERNMENT FUNDS TO THE PROFIT & LOSS ACCOUNT, DIREC TLY CREDITED THE AMOUNT TO THE GOVERNMENT OF INDIA ACCOUNT I.E. JNN URM ACCOUNT, MAINTAINED IN THE BOOKS OF THE APPELLANT. 5.3.1 THE CHARACTER OF INTEREST EARNED ON FUNDS RECEI VED FROM GOVERNMENT OF INDIA UNDER THE JNNURM SCHEME IS IN N O WAY DIFFERENT FROM INTEREST EARNED ON FUNDS RECEIVED FR OM CHANDIGARH ADMINISTRATION FOR RGCTP HABITAT PROJECT. THE ARGUM ENT OF THE APPELLANT THAT THE IMPUGNED INTEREST WAS DIRECTLY CR EDITED TO THE GOVERNMENT OF INDIA ACCOUNT IS NOT MATERIAL FOR TAXA BILITY OF THIS INTEREST. AS THE INTEREST EARNED ON FUNDS RELATING T O RGCTP PROJECT HAS BEEN HELD TO BE TAXABLE (PARA 4.2 OF THIS ORDER) AND SO THE INTEREST EARNED ON FUNDS RECEIVED FROM GOVERNMENT OF INDIA UNDER JNNURM SCHEME IS ALSO TAXABLE. HENCE, THE ADDITION MADE ON 5 THIS ACCOUNT IS CONFIRMED. GROUND OF APPEAL NO. 5 I S DISMISSED. 8. THE ASSESSEE IS IN APPEAL ON THE ABOVE GROUNDS OF APPEAL RAISING COMMON GROUND THAT THE INTEREST RECE IVED ON FDRS ON DIFFERENT PROJECTS FUNDS FROM CHANDIGARH ADMINISTRATION AND GOVERNMENT OF INDIA ARE NOT TAXA BLE IN THE HANDS OF THE ASSESSEE. 9. THE LEARNED COUNSEL FOR THE ASSESSEE VERY FAIRL Y SUBMITTED THAT ALL THE ISSUES RAISED IN THE GROUNDS OF APPEAL ARE COVERED BY THE ORDER OF THE I.T.A.T., CHANDIGAR H BENCH IN DIFFERENT YEARS IN WHICH THE TRIBUNAL HAD DISMISSED ALL THESE GROUNDS OF APPEAL OF THE ASSESSEE AND SUBMITTED THA T ALL THE ISSUES ARE, THEREFORE, COVERED AGAINST THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL AND COPIES OF THE SAME ARE P LACED ON RECORD, WHICH ARE AS UNDER : I) ORDER OF I.T.A.T., CHANDIGARH BENCH DATED 14.3.2012 IN ITA NO.1075 & 1198/CHD/2010 FOR ASSESSMENT YEAR 2007-08. II) ORDER OF I.T.A.T., CHANDIGARH BENCH DATED 30.10.2012 IN ITA NO.386 & 549/CHD/2012 FOR ASSESSMENT YEAR 2008-09. III) ORDER OF I.T.A.T., CHANDIGARH BENCH DATED 31.1.2013 IN ITA NO.402 & 550/CHD/2012 FOR ASSESSMENT YEAR 2009-10. 10. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THESE ORDERS HAVE BEEN PASSED BY THE TRIBUNAL I N THE CASE OF THE SAME ASSESSEE DECIDING THE ISSUE AGAINST TH E ASSESSEE. 6 THE ORDER OF ASSESSMENT YEAR 2007-08 HAS BEEN FOLLO WED IN THE REMAINING ASSESSMENT YEARS. THE LEARNED D.R F OR THE REVENUE ALSO SUBMITTED THAT ALL THE ISSUES ARE COVE RED BY THE ABOVE EARLIER ORDERS OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE. 11. ON CONSIDERATION OF THE FACTS AND SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW THAT ALL THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE PRESENT APPEAL ARE CO VERED AGAINST THE ASSESSEE BY DIFFERENT ORDERS OF THE TRI BUNAL REFERRED TO ABOVE FOR PRECEDING ASSESSMENT YEARS 20 07-08 AND 2008-09 AND 2009-10(SUPRA). IT MAY ALSO BE NOTED HERE THAT THE TRIBUNAL IN THESE DECISIONS HAVE CONFIRMED THE FINDINGS OF THE LEARNED CIT (APPEALS) THAT THE ASSESSEE WAS NOT AN AGENT OF CHANDIGARH ADMINISTRATION. THE LEARNED CIT (APP EALS), THEREFORE, CORRECTLY FOLLOWED THE ORDER OF THE TRIB UNAL WITH REGARD TO FUNDS RECEIVED FROM CHANDIGARH ADMINISTRA TION. THE OTHER ISSUE WITH REGARD TO FUNDS RECEIVED FROM GOVERNMENT OF INDIA UNDER JNNURM SCHEME IS ALSO IDE NTICAL AS OF THE CHANDIGARH ADMINISTRATION. THE LEARNED C IT (APPEALS) WAS, THEREFORE, JUSTIFIED IN DECIDING THE ISSUE AGAINST THE ASSESSEE. ADMITTEDLY, ALL THE ISSUES ARE COVERED AGAINST THE ASSESSEE BY THE EARLIER ORDERS OF THE T RIBUNAL IN THE CASE OF THE ASSESSEE FOR PRECEDING ASSESSMENT YEARS NOTED ABOVE. WE, THEREFORE, DO NOT FIND ANY MERIT IN AL L THE GROUNDS OF APPEALS OF THE ASSESSEE AND THE SAME ARE ACCORDINGLY, DISMISSED. 7 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO.973/CHD/2014 IS DISMISSED. 13. IN ASSESSMENT YEAR 2011-12 ALSO, THE ASSESSEE HAS RAISED THE SIMILAR FIVE GROUNDS OF APPEAL WHICH REA D AS UNDER: 1. THAT THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS B OTH IN LAW AND FACTS IN UPHOLDING THE ADDITION OF RS. 9,50,96,069/ - ON ACCOUNT OF INTEREST EARNED ON FDRS WHICH BELONGED TO THE CHANDI GARH ADMINISTRATION/ GOVT. OF INDIA AND THE APPELLANT IS ONLY ACTING AS A NODAL AGENCY FOR THEM. 2. THAT THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ADD ITION OF RS.3,83,18,771/- IN THE HANDS OF THE APPELLANT ON ACC OUNT OF INTEREST RECEIVED ON FDRS CREATED FROM FUNDS RECEIV ED FROM RGCTP HABITAT PROJECT AS THE SAID AMOUNT BELONGED TO THE CHANDIGARH ADMINISTRATION AND THE APPELLANT WAS MERELY ACTING AS A NODAL AGENCY DULY APPOINTED BY THE CHANDIGARH ADMINISTRAT ION. 3. THAT THE LEARNED C1T(A) HAS ERRED IN UPHOLDING THE A DDITION OF RS. 3,83,18,771/-, ON ACCOUNT OF INTEREST RECEIVED ON F DRS CREATED FROM FUNDS RECEIVED FROM RGCTP HABITAT PROJECT, WHICH IS CONTRARY TO THE PROVISIONS OF SECTION 20, 23 & 63 OF THE HARYANA HO USING BOARD ACT AS EXTENDED TO THE UNION TERRITORY OF CHANDIGARH. 4. THAT THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDI NG THE ADDITION OF RS. 5,67,77,298/- ON ACCOUNT OF INTEREST INCOME ON FDRS CREATED FROM GRANT RECEIVED FROM GOVERNMENT OF INDIA UNDER ITS JNNURM SCHEME AS THE GRANT AS WELL AS THE INTEREST RECEIVE D THEREON BELONGS TO GOVT. OF INDIA, ALSO AS PER INSTRUCTIONS OF MINISTRY OF FINANCE, GOVT. OF INDIA THE INTEREST EARNED AMOUNTING TO RS. 27,25 ,75,3807- (FROM A.Y. 2009-10 TO 2012-13) HAD BEEN ALREADY DEPOSITED ON 17.04.2013 IN THE CONSOLIDATED FUND OF INDIA. 5. THAT THE CIT(A) HAS FAILED TO CONSIDER THE EXPLICIT PROVISIONS OF THE DEVELOPMENT AGREEMENT DATED 6.10.2006 IN WHICH IT H AS BEEN STATED CLEARLY THAT THE CHANDIGARH HOUSING BOARD IS ACTING AS A NODAL AGENCY ON BEHALF OF THE CHANDIGARH ADMINISTRATION F OR DEVELOPMENT OF 8 RGCTP PROJECT. 14. THE FINDINGS OF THE LEARNED CIT (APPEALS) ARE SAME AS HAVE BEEN GIVEN IN THE ASSESSMENT YEAR 2010-11. ADMITTEDLY, ALL THE GROUNDS OF APPEAL OF THE ASSESS EE ARE COVERED AGAINST THE ASSESSEE BY THE EARLIER ORDER O F THE TRIBUNAL REFERRED TO ABOVE. THEREFORE, FOLLOWING THE FINDINGS IN ITA NO.973/CHD/2014 FOR ASSESSMENT YEAR 2010-11 ABOVE, WE DISMISS THIS APPEAL OF THE ASSESSEE AS WELL. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.974/CHD/2014 IS DISMISSED. 16. IN THE RESULT, BOTH THE APPEALS FILED BY THE A SSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF AUGUST, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 RD AUGUST, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 9