AI Insights
The case involves Sahara Prime City Ltd, the appellant, contesting various additions and disallowances made by the Assessing Officer, which were later addressed by the CIT(A). The Tribunal's original order contained several errors in the reproduction of the CIT(A)'s decisions, which were brought to light by the assessee through miscellaneous applications. The Tribunal acknowledged these errors and corrected them, thereby affirming the CIT(A)'s decisions on the grounds of non-disallowance of expenses related to exempt income, deletion of additions concerning interest-free loans, and the allowance of higher depreciation rates on UPS/Printers. The Tribunal's corrections ensured that the legal interpretations and applications of tax provisions were accurately reflected in the order.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 398416 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
06-06-2025
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2012-2013
Judgement Text
"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER Sl No. MA No In ITA No. AY 1. 85/Del/2024 6242/Del/2013 2009-10 2. 79/Del/2024 72/Del/2014 2010-11 3. 80/Del/2024 3234/Del/2016 2011-12 4. 81/Del/2024 5601/Del/2016 2012-13 5. 82/Del/2024 6054/Del/2016 2013-14 6. 83/Del/2024 5506/Del/2017 2014-15 Sahara Prime City Ltd, 1, Kapoorthala Complex, Aligarh, Lucknow Vs. DCIT, Central Circle-6, New Delhi (Appellant) (Respondent) PAN: AABCS7893P Assessee by : Shri Neeraj Jain, Adv Shri Kunal Pandey, Adv Revenue by: Shri Akhilesh Kumar Yadav, Sr. DR Date of Hearing 06/06/2025 Date of pronouncement 10/06/2025 O R D E R PER M. BALAGANESH, A. M.: 1. By virtue of these miscellaneous applications, the assessee seeks to rectify the consolidated order passed by this Tribunal by making certain modifications thereon. 2. We have heard the rival submissions and perused the material available on record. At the outset, the ld counsel for the assessee drew our attention to various typographical errors that had crept in the order either Page | 2 in the date of the order of the ld CIT(A) or in reproduction of order of the ld CIT(A) on various issues by missing certain contents thereon. 3. In page 1 of the order of the Tribunal, the date of order of the ld CIT(A) has been wrongly mentioned for AYs 2009-10 and 2010-11 as 14.09.2023 and 18.10.2023 respectively instead of 14.09.2013 and 18.10.2013 respectively. This typographical error is found to be correct and accordingly, the order of the Tribunal stands modified. 4. In page 8 of the order of the Tribunal while reproducing the relevant portion of the order of the ld CIT(A), there has been some omission that were brought to the knowledge of this tribunal which on verification was found to be correct. Hence, the modified para 4.3 of the Tribunal order shall be read as under:- “4.3. We have heard rival submissions and perused the material available on record. We find that the learned CIT(A) has given a finding of fact at paras 4 to 4.5 of his order. For the sake of clarity the operative paras 4.4 & 4.5 are reproduced below:- “4.4 Reading the above provisions of law (section 14A and Rule 8D), and the CBDT circular, the inescapable conclusion that can be reached is that Rule 8D provides for allocation of expenditure relatable to exempt income and that such expenditure is to be disallowed even when there is actually no exempt income during the previous year as the Rule speaks of \"income from which does not or shall not form part of the total income\", and the phrase 'shall not' here refers to the future income as juxtaposed to the phrase 'does not', which in turn refers to the present income. This interpretation is further amplified by the use of the word 'or' between the phrase 'does not' and 'shall not'. In this view of the legal position, it is my respectful opinion that the interpretation adopted by some of the Hon'ble Courts / Tribunals to the contrary may not be the correct interpretation of the extant law in the matter. 4.5 Having observed as above, in this particular case it is seen that despite having dividend income, which is exempt from tax, the appellant has not claimed exemption in respect of such income and has offered the said income to taxation. Having offered the said exempt income to tax, the appellant cannot be subjected to disallowance in respect of the expenses relating to such income. That would amount to double taxation and impinge on the fundamental right of the appellant. In this view of the Page | 3 matter, no disallowance can be made u/s 14A. I hold accordingly. The addition made is deleted. Appellant gets relief of Rs.3,02,89,518/-.” 5. In page 11 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 6.3 of the Tribunal order shall be read as under:- “6.3 We have heard rival submissions and perused the material available on record. The learned CIT(A) has deleted the addition in question inter alia, by observing as under: “6.2 I have considered the assessment order and submissions made. I find that the amount was advanced by the appellant was to its subsidiary company for the purpose of business, i.e. for purchase of asset at Gurgaon, and was not in the nature any loan. There is nothing to establish the amount was advanced out of borrowed funds. The interest paid by the appellant to customers on refunds of money for cancelled flat bookings has no connection to the money advanced by the appellant to M/s Sahara India Club Royal Ltd. In view of these facts, its cannot be held that appellant has failed to charge interest on loan given for which corresponding interest paid it to be disallowed. The disallowance made is not legally sustainable and is deleted. Appellants gets relief of Rs. 19,19,288/-. 6. In page 15 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 11.1 of the Tribunal order shall be read as under:- “11.1 We have heard rival submissions and perused the material available on record. The Assessing Authority made addition of Rs. 70,86,600/- by disallowing the claim of interest relating to funds used for loan given to M/s Sahara India Club Royal Ltd. In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under:- Page | 4 5.2. I have considered the assessment order and submissions made. I find that the amount was advanced by the appellant was to its subsidiary company for the purpose of business, i.e. for purchase of asset at Gurgaon, and was not in the nature of any loan. There is nothing to establish the amount was advanced out of borrowed funds. The interest paid by the appellant to customers on refunds of money for cancelled flat bookings has no connection to the money advanced by the appellant to M/s Sahara India Club Royal Ltd. In view of these facts, it cannot be held that appellant has failed to charge interest on loan given for which corresponding interest paid is to be disallowed. I have held so in appellant's own case in Appeal No.506/11-12 for AY 2009-10 and I hold so accordingly for this AY also. The disallowance made is not legally sustainable and is deleted. Appellants gets relief of Rs. 70,86,600/-.” 7. In page 16 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 12.1 of the Tribunal order shall be read as under:- “12.1 We have heard rival submissions and perused the material available on record. The Assessing Authority made addition of Rs.1,32,348/- on account of excess depreciation claimed on UPS/Printers. In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under: “6.2. I have considered the assessment order and the submission made. The ruling of Hon'ble Jurisdictional High Court is clear in the matter. UPS is part and parcel of the computer system. The disallowance made is not sustainable and is deleted. Appellant gets relief of Rs. 1,32,348/-.” 8. In page 17 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 15.2 of the Tribunal order shall be read as under:- “15.2 In our considered view the learned CIT(A) has given a finding of fact which has not been controverted by the learned CIT(DR). Therefore, we see no reason to interfere with the finding and conclusion of the learned Page | 5 CIT(A) on the issue in question. The same is hereby affirmed. Ground is rejected. 16. Ground no. 3 relates to the deletion of addition of Rs. 70,86,600/- made by the Assessing Authority on account of interest free loan given to M/s Sahara India Club Royal Ltd. In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under: “4.3.2 In this view of the matter the AO has not been able to establish nexus between the borrowed funds and the interest paid, and his observation that interest paid on both accounts are for non-business purposes is incorrect. The interest paid to PNB is for the purposes for which loan was taken are related to the business of the appellant, and the cancellation charges too are related to the business of the appellant, and there is no nexus between the borrowed funds from PNB and advance given to SICRL, and therefore there is no justification in disallowance of interest u/s 36(1)(iii) of the Act. The addition is therefore deleted.” 9. In page 18 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 17 of the Tribunal order shall be read as under:- “17. Ground no. 4 is against deleting the addition of Rs. 36,702/- made by Assessing Officer on account of disallowance of excess depreciation claimed on UPS/Printers. In appeal, the learned CIT(A) deleted the addition, inter alia, by observing as under: “4.4 Ground no. 07 and 08 relate to disallowance of Rs. 36,702/- out of depreciation on UPS / Printer which were part of computers by reducing the depreciation allowable to 15% as against 60% claimed by the appellant. The AO has held that Printers are not an integral part of computers and are not eligible for depreciation @60% claimed by the appellant, and allowed depreciation @15% and 7% for plant and machinery. The appellant has relied on the decisions of the Hon'ble Delhi High Court in CIT v Orient Ceramic 358 ITR 49 (Del.) and CIT v BSES Yamuna Powers Ltd. 358 ITR 47 (Del.) wherein it has been held that the printers are integral part of the computer and therefore, they are entitled to higher rate of depreciation that of 60%. It is a matter of common Page | 6 understanding that the printers cannot function on its own but needs to be installed on the computer hard disk for it to generate prints and the computer by itself cannot generate printouts, and UPS is an integral part of computers for uninterrupted functioning of the computers and for providing power backup and saving data in case of power failure. Even otherwise the Hon'ble Delhi High Court has decided in favour of the appellant and any opinion postulated herein above. In this view of the matter, the addition made on this account is deleted.” 10. In page 22 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 22.3 of the Tribunal order shall be read as under:- “22.3 We have heard the rival contentions and perused the material available on record. In para 4.4 the learned CIT(A) has given a finding of fact by observing as under: “4.4 Ground nos. 7(a) & 7(b) relate to disallowance of Rs.2,05,32,572/- out of rent and utility charges paid by the appellant u/s 40A(ia) of the Act on the ground that TDS deductible u/s 1940 of the Act on the payment of Rs.2,05,32,572/- made to Sahara Hospitality Limited was not made. The appellant has submitted that the expenditure related to room rent charges paid by the appellant company to hotel Sahara Star Mumbai in lieu of the stay of the appellant's employees at the hotel during their visits for the purpose of business of the appellant company, and that there was no rate agreement or contract with the said hotel. It is also to be noted that the hotel Sahara Star is a hotel of the Sahara group of which the appellant is one of the companies and it is natural that the employees of the Sahara group companies, on their visits to Mumbai for the purpose of business/official work of the relevant Sahara group company, would have stayed at the hotel of the Sahara group for reasons of commercial expediency. Besides the appellant has filed copy of the certificate dt. 08.06.2011 u/s 197 of the Act issued by the DCIT(TDS)-3(2), Mumbai vide ref. no: 197/AADCB7619L/2011-12/12 and 197/AADCB76191/2011-12/19 for no deduction of tax at source u/s 1941 & 194C respectively in the case of M/s Sahara Hospitality Ltd. (Sahara Star) (though the rate mentioned is 0.01% due to systemic problem of the application software which is valid from 01.06:2011 to 31.03.2012. Thus, it is apparent that even if the appellant had rate contract with hotel Sahara Star TDS was not required to be made the addition is therefore deleted.” 11. In page 25 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the Page | 7 knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 27.1 of the Tribunal order shall be read as under:- “27.1 We have heard rival contentions and perused the material available on record. The AO made disallowance of Rs. 9,81,06,116/- on account of expenses relating to income not forming part of total income u/s 14A of the Act read with Rule 8D. In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under: “4.2 Ground nos. 02 to 05 relate to disallowance of Rs.9,81,06,116/- u/s 14A of the Act-read with Rule 8D of the Income Tax Rules 1962 (the Rules hereinafter). The facts in this year are similar (except that the related amounts are different) to that of the AY 2011-12 and AY 2012-13. In fact during the year the appellant had only Rs.60/- as dividend income which was also not claimed as exempt income. In terms of my findings at paras- 4.2 to 4.2.3 and para-4.2of my orders dt. 28.03.2016 and 18.08.2016 for AY 2011-12 and AY 2012-13 in Appeal No.120/14-15 and in Appeal No.62/15-16 respectively in the case of the appellant, the addition made is deleted.” 12. In page 26 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 28 of the Tribunal order shall be read as under:- “28. Ground no. 3 is against deleting the addition of Rs. 70,86,600/- on account of \"Disallowance of interest free loan given to Group Concerns\". The AO made addition of Rs. 70,86,600/- on account of interest free loan given to M/s Sahara India Club Royal Ltd. In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under: “Ground Nos. 06 to 08 relate to addition of Rs.70,86,600/- by way of disallowance of interest by imputing interest income on hypothetical basis in respect of loan given to subsidiary companies. In this respect too the facts in this year are similar (even the related amount is same) to that of the AY 2011-12 and AY 2012-13. In terms ms of my findings at paras-4.2 to 4.2.3 and para-4.2of my orders dt. 28.03.2016 and 18.08.2016 for AY Page | 8 2011-12 and AY 2012-13 in Appeal No.120/14-15 and in Appeal No.62/15- 16 respectively in the case of the appellant, the addition made is deleted.\" 13. In page 29 of the order of the Tribunal, there was a mistake in reproduction of the order of the ld CIT(A) which was brought to the knowledge of this Bench by the assessee, which on verification was found to be correct. Hence, the modified para 33 of the Tribunal order shall be read as under:- “33. Ground no. 3 is against deleting the addition of Rs. 70,86,600/- on account of \"Disallowance of interest free loan given to Group Concerns\". In appeal the learned CIT(A) deleted the addition, inter alia, by observing as under: \"Ground nos. 06 to 08 relate to addition of the same amount of Rs.70,86,600/- by way of disallowance of interest by imputing interest income on hypothetical basis in respect of loan given to subsidiary companies in this year as well. In this respect too the facts in this year are similar (even the related amount is same) to that of the AY 2011-12, AY 2012-13 and 2013-14. In terms of my findings at paras 4.3 of my orders dt. 28.03.2016, 18.08.2016 and 06.09.2016 for AYs 2011-12, AY 2012-13 and 2013-14 in Appeal Nos. 120/14-15, 62/15-16 and 406/15-16 respectively in the case of the appellant, the addition made is deleted.” 14. The aforesaid modifications are to be read together with the original Tribunal order dated 31.10.2023. 15. In the result, the miscellaneous applications filed by the assessee are hereby allowed. Order pronounced in the open court on 06/06/2025. -Sd/- -Sd/- (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 06/06/2025 A K Keot Copy forwarded to Page | 9 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "
