DCIT CENTRAL CIRCLE-30, DELHI vs. AVANTHA REALTY LTD., DELHI

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ITA 936/DEL/2022Status: DisposedITAT Delhi30 November 2022AY 2016-173 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, finding that interest paid was an allowable deduction and that Section 14A disallowances are notional and cannot be added back to book profits under Section 115JB. The revenue failed to provide contrary arguments.

What were the facts?

The revenue appealed against the CIT(A)'s order deleting disallowances of interest paid and expenses under Section 14A. The CIT(A) had followed previous years' orders in the assessee's own case.

What were the issues?

Whether interest paid is an allowable deduction and whether Section 14A disallowances are applicable for computing book profits under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 24(b),Section 14A,Section 115JB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH “H”: NEW DELHI

For Appellant: Shri Upvan Gupta, Adv
For Respondent: Ms. Yamini, Sr. DR
Hearing: 28/11/2022Pronounced: 30/11/2022

O R D E R PER ANUBHAV SHARMA, J. M.:

1. 1. The present appeal has been preferred by the revenue against the order dated 15.02.2022 of Ld. CIT(A)-27, New Delhi (hereinafter referred as Ld. First Appellate Authority) in appeal No. CIT(A), Delhi- 01/10157/2018-19 before it against the order dated 07.12.2018 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the Assessing Officer, ACIT/ DCIT, CC-20,/ ACIT(3(2), Delhi.

2. The assessee company field its return of income claiming loss of Rs. 6,50,25,917/- under normal provisions at an income of Rs. 49,02,948/- and under MAT provisions u/s 115JB of the Act and the case was selected for complete scrutiny. Thereafter, the ld AO had made disallowance of the interest u/s 24(b) of the Act at Rs. 5,01,33,879/- and u/s 14A read with Rule 8D of the Income Tax Rules, 1962 at Rs. 3,57,61,254/- and recalculated the total income of the assessee at Rs. 2,08,69,216/- under normal provisions of the Act at Rs. Page | 1 4,06,64,202/- u/s 115JB of the Act. The ld CIT(A) had allowed the appeal of the assessee primarily following the orders of the previous Assessment Years in assessee’s own case for AYs 2010-11 to 2014-15 and the revenue has come in appeal raising following grounds of appeal:- 1) The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of interest paid to Ballarpur Industries Ltd. of Rs.5,01,33,879/- u/s 24(b) of the IT, Act 1961. 2) The Ld. C1T(A) has erred in law and on facts in deleting the addition of Rs.3,57,61,254/- made by the AO on account of disallowance u/s 14A of the IT Act, 1961 read with Rule 8D of the Income Tax Rules , 1962. 3) The Ld. CIT(A) has erred in law and on facts, in relying upon the Ld. ITAT, Delhi’s order dated 25.10.2021, in the assessee’s own case for AYs 2010-11 to 2014-15, without appreciating that the said decision of the Hon’ble ITAT has not been accepted by the Department on merits. 4) (a) The Ld. Commissioner of Income Tax (Appeals) is erroneous and not tenable in law and on facts.”

3.

Heard and perused the record.

4.

The ld DR submitted that the ld CIT(A) has fallen an error in not discussing the merits of the case and following previous years orders while principle of res judicata is not applicable. 5. On the other hand the ld AR placed on record the copy of the order in case of assessee for AYs. 2010-11 and 2014-15 in 4361, 4362/Del/2016 and 6147,6148/Del/2017 decided vide order dated 25.10.2021. 6. Giving thoughtful consideration to the matter on record, it can be observed that in regard to ground No. 1 in assessee’s own case the Tribunal has held in para No. 7 as under:- “7. We agree with the argument of the ld. DR. We find that the ld. CIT(A) has not solely adjudicated based on the earlier assessments but has also so considered the various judgments

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