RADCLIFFE SCHOOLS EDUCATION LIMITED,DELHI V. INCOME-TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI

ITA 581/DEL/2024

AI Insights

The case involves Radcliff Schools Education Limited, which appealed against the order of the National Faceless Appeal Centre (NFAC) and the subsequent order of the Assessing Officer for the assessment year 2018-19. The primary contention was regarding the disallowance of interest on a loan taken for purchasing two flats used for temporary accommodation for its staff, which was initially allowed in previous years. The Tribunal examined the consistency of the Revenue's treatment of the interest expenditure across different assessment years and found no valid reason for the change in the current year. The Tribunal also addressed the premature initiation of a penalty under section 270A, which was dismissed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471782 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2018-2019
• Other Referred Cases: NS Software 153 Taxmann.com 204
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: PRIYANSH JAIN
• Keywords: Set aside; Commercial expediency
• Section: 143(3); 153

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘F’: NEW DELHI) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:-581/Del/2024 (Assessment Year- 2018-19) Radcliff Schools Education Limited, B-II, 58 MCIE, Moha. Cooperative, Industrial Estate, New Delhi Vs. Income Tax National e- Assessment Centre Delhi PAN No:AAECR4307A APPELLANT RESPONDENT Appellant by: Shri Sh. Priyansh Jain, CA Respondentby: Ms. Harpreet Kaur Hansra, Sr.DR Date of Hearing :17.03.2025 Date of Pronouncement :21.03.2025 ORDER PER BENCH This appeal filed by the assessee is directed against the order dated 22.03.2023 passed by National Faceless Appeal Centre (in short “NFAC”) arising out the order dated 11.03.2021 passed by Assessing Officer for the A.Y. 2018-19. 2. Ground of appeal no. 1 & 2 are general in nature and does not deserves any meritorious adjudication. The same are therefore dismissed. 3. The First issue arising in the impugned appeal through ground of appeal no. 3 & 4 are regarding the action of the Ld. AO in making the addition of Rs. 28,08,360/- on account od interest on loan. The Ld. Council for the assessee submitted that it is entity which is engaged on the business of setting of infrastructure and creating of knowledge entities in education sector. It was submitted that for providing temporary accommodation to its consultants, support staff, professionals, sometimes during F.Y. 2013-14 it had purchased two flats in a residential society of Faridabad. For the Impugned purchase, assessee had taken loan from Deewan Housing finance corporation Ltd.(DHFL). The interest of Rs. 28,08,360/- was paid to DHFL which was disallowed by the AO. It is the case of the assessee that department has allowed the interest expenditure on impugned loan u/s 143(3) for A.Y. 2014-15, 2015-16 & 2017-18. Copies of the relevant orders were filed by the assessee during the course of hearing. It is the case of the assessee that once the claim of interest has been allowed in earlier years, the same considering principal of consistency cannot be allowed in subsequential years. In support of its contentions the assessee place reliance upon the decision of this tribunal in the case of NS software 153 Taxmann.com 204 holding that once a loan has obtained approval of its commercial expediency in earlier years cannot be rejected in subsequent year. The Ld. DR would like to make us believe on the correctness of order of lower authorities. 4. We have heard rival submission on the matter in the light of material available on records. It is undisputed facts of the case that the interest expenditure on impugned loan u/s 143(3) for A.Y. 2014-15, 2015- 16 & 2017-18 assessee has been allowed to the assessee by the Revenue. The Revenue therefore cannot change its position for a particular year without distinguishing the facts of present case with the years in which it was allowed. We have noted that nothing has been brought on record by the revenue to allude that facts are distinguished. Consequently, considering that Revenue has allowed the interest expenditure on impugned loan u/s 143(3) for A.Y. 2014-15, 2015-16 & 2017-18 to the assessee as also in respectful compliance to the decision of this tribunal in the case of NS software supra, we are of the considered view that there is no case for any addition in the hands of the assessee qua interest on impugned loans. We therefore set aside the order of lower authorities and direct the Ld. AO to delete the impugned addition. The grounds of the appeal raised by the assessee are therefore allowed. 5. The Ground of appeal no. 5 is regarding initiation of penalty u/s 270A. The initiation of penalty is premature and hence the ground of appeal is dismissed. 6. In the result appeal of the assessee is partly allowed. Sd/- Sd/- (SATBEER SINGH GODARA) (AMITABH SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER *Neha, Sr. PS* Dated:21/03/2025 "