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Income Tax Appellate Tribunal, DELHI BENCH ‘G’: NEW DELHI
ORDER PER ANADEE NATH MISSHRA, AM (A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-9, New Delhi [“Ld. CIT(A)”, for short], dated 21/08/2018 for Assessment Year 2014-15.
Grounds of appeal are as under:
“1) That the Id. CIT(A) has erred in law and on facts in confirming an unwarranted addition of Rs. 7,91,45,494/- made by the Assessing officer.
2) That on the facts and in the circumstances of the confirming an addition of Rs. 6,84,47,1747-being interest received on fixed deposit made out of funds which were inextricably linked to the setting up of the project, thus being a capital receipt. 2.1) That on the facts and in the circumstances of the case and in law the learned CIT(A) ought to have appreciated, inter alia, that the appellant's case in respect of this particular item of interest was based on the ratio of the decision of the Hon'ble Supreme Court in CIT vs. Bokaro Steel Ltd. (236 ITR 315) and being such, it was not open to him to uphold the impugned addition on the ground that the same was taxable in terms of the decision of the Supreme Court in Tuticorin Alkali Chemcals and Fertilizers Ltd.’s case (227 ITR 172). 2.2) That the order passed by the Id. CIT(A) is bad in law as he has misinterpreted all the case laws cited by the appellant. 3.) That the order passed by Id. CIT(A) is bad in law due to divergence in findings of the Id. CIT(A) and the A.O. Whereas the A.O. taxed the interest income on the basis of the same being out of surplus funds but the CIT(A) upheld the addition on the basis of his being not able to find a link between the interest earned on F.D.R. and the project execution. 4.) That the order passed by the Id. CIT(A) is erroneous and deserves to be set aside as he has wrongly assumed that the appellant has stated that F.D.R's were made out of borrowed funds on account of some business or statutory restrictions imposed by the lender whereas no such submission was made by the appellant either during assessment or appellate proceedings. 5) That on the facts and in the circumstances of the case and in law the Id. CIT(A) has erred in confirming an addition on account of Rent received Rs. 1,06,98,320/- on sub-letting of premises, being a capital receipt due to its peculiar nature. 5.1) That without prejudice to above the Id. CIT(A) has further erred in not appreciating that the Rent receipt would not be taxable under the Head Income from other Sources as the Rent recovered was without any mark up and expenditure earned on earning Rent would be eligible for deduction u/s 57 of the Income Tax Act, 1961. Page 2 of 6
6) That on the facts and in the circumstances of the case and in law the Id. CIT(A) has misconstrued the facts of the case and wrongly applied the principle of res-judicata despite the fact that the matter was squarely covered under the principle of consistency thereby overlooking the ratio laid down by the Hon'ble Supreme Court in the case (i) Radhasoami Satsang vs. Commissioner of Income Tax (193 ITR 321) and (ii) Bharat Sanchar Nigam Ltd. Union of India (282 ITR 273/3 STT 245) 7) That the appellant craves the leave to add, modify, amend or delete any or all the grounds of appeal.”
(B) In this case, the assessee is a public sector undertaking of the Government of Sikim. Assessment order dated 28/12/2016 was passed u/s 143(3) of Income Tax Act, wherein the assessee’s income was determined at Rs.9,02,68,782/- as against returned income of Nil. In the aforesaid assessment order, addition amounting to Rs.7,95,70,462/- was made on account of interest income from fixed deposits. Further, addition of Rs.1,06,98,320/- was made on account of rental income from sub-lease of property.
The assessee’s appeal was dismissed by the learned CIT(A) vide impugned appellate order dated 21/08/2018, wherein the Ld. CIT(A) confirmed the aforesaid additions of Rs.7,95,70,462/- and Rs.1,06,98,320/-. Aggrieved, the assessee has filed this present appeal in Income Tax Appellate Tribunal (“ITAT” for short). In the Page 3 of 6 course of appellate proceedings, the assessee filed certain details and evidences under direction of the Bench, vide order sheet dated 25/05/2022. At the time of hearing before us, as representatives of both sides, the learned AR for the assessee as well as the Ld. Sr. DR for Revenue were in agreement that the details and evidences filed by the assessee needed to be verified at the end of the Assessing Officer. The representatives of both sides were also in agreement at the time of hearing before us, that sufficient facts are not available on record to decide the disputes regarding the aforesaid additions of Rs.7,95,70,462/- and Rs.1,06,98,320/-; and they were further in agreement, that both the issues in dispute regarding the aforesaid additions of Rs.7,95,70,462/- and Rs.1,06,98,320/- may be restored to the file of the Assessing Officer for passing fresh order in accordance with law, after providing reasonable opportunity to the assessee.
(C) In view of the foregoing, and as representatives of both sides are in agreement with this, we set aside the impugned appellate order dated 21/08/2018 of Ld. CIT(A) and restore all the issues in dispute regarding the aforesaid additions of Rs. Rs.7,95,70,462/- and Rs.1,06,98,320/- to the file of the Assessing Officer with the direction to pass fresh order on these specific issues in accordance with law, after providing reasonable opportunity to the assessee.
All the grounds of appeal are treated as disposed off in terms of the aforesaid directions.
(D) In the result, for statistical purposes, this appeal is treated as partly allowed.
This order was already pronounced orally on 31st August, 2022 in Open Court, in the presence of representatives of both sides. Now this order in writing is signed today on 31/08/2022.