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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI YOGESH KUMAR U.S
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
The above captioned cross appeals by the assessee and the
Revenue are preferred against the order of the ld. CIT(A)-1, New Delhi
dated 09.06.2017 pertaining to Assessment Year 2013-14 and the ld.
CIT(A)-1, New Delhi dated 12.06.2017 pertaining to Assessment Year
2014-15.
Since common issues are involved in all these cross appeals, they
were heard together and are disposed of by this common order for the
sake of convenience and brevity.
ITA No. 5010/DEL/2017 [Assessment Year 2013-14] Assessee’s appeal
Ground No. 1 relates to the Annual Letting Value [ALV] of unsold
flats shown as stock in trade.
This issue is no more integra as the same has been decided
against the assessee by the Hon'ble Jurisdictional High Court in the
case of Ansal Housing and Leasing Finance 354 ITR 180. Accordingly,
Ground No. 1 and 1.2 stand dismissed.
Ground No. 2 of assessee’s appeal relates to the non-exclusion of
ALV of spaces/flats under litigation/disputes admeasuring 7511 sq. ft
in Jyoti Shikar Building.
Briefly stated, the facts of the case are that the Assessing Officer
has included ALV in respect of 23 spaces/flats measuring 7511 sq ft in
Jyot Shikar Building, Janakpuri which was completed 20 years back but
was not approved by the Municipal Corporation of Delhi for occupation
on the ground that the same were not as per the actual plan.
The assessee strongly contended that notional ALV in respect of
such spaces needs to be excluded, as the same has not been approved
by the MCD for occupation.
The ld. CIT(A) dismissed this ground of the assessee following the
findings given in earlier assessment years.
Before us, the ld. counsel for the assessee prayed for restoration
of this grievance to the Assessing Officer as the assessee is now in a
position to furnish necessary documentary evidences in support of its
claim.
We find that since the evidences have not been submitted before
the lower authorities, this grievance has been decided against the
assessee. In the interest of justice and fair play, we restore this issue
to the file of the Assessing Officer. The assessee is directed to furnish
necessary documentary evidences to justify its claim of non inclusion
of ALV of storage spaces of 7511 sq. ft in Jyoti Shikar, Janakpuri. The
Assessing Officer is directed to examine the evidences and decide the
issue afresh. Ground No. 2 is allowed for statistical purposes.
Ground No. 3 relates to the addition notional ALV taking market
value which is not comparable to closing stock.
This ground was not seriously contested by the ld. counsel for the
assessee and the same is accordingly dismissed.
In the result, the appeal of the assessee is allowed in part for
statistical purposes.
ITA No. 5679/DEL/2017 [Assessment Year 2013-14] Revenue’s appeal
Ground No. 1 has three sub grounds:
i) ALV of properties Rs. 28,61,269/-
ii) Considered by the ld. CIT(A) as occupied for business purposes
iii) 5% increase on ALV Rs. 45,56,555/-
Facts on record show that the Assessing Officer has included ALV
of certain properties which have been claimed by the assessee to be
occupied for its own business purposes. These properties have been
claimed to have been used for storage purposes or for office purposes.
The Assessing Officer has not accepted the claim of the assessee and
made addition in respect of notional value of the ALV.
Before the ld. CIT(A), the assessee contended that it has filed
evidences in support of usage of spaces by the assessee alongwith
copies of property tax, bills issued by the NDMC, New Delhi.
After considering the evidences and after perusing the decision
given in Assessment Year 2010-11, 2011-12 and 2012-13, the ld. CIT(A)
directed the Assessing Officer to exclude the ALV of the said 12
properties.
Before us, the ld. DR strongly supported the findings of the
Assessing Officer.
Per contra, the ld. counsel for the assessee relied upon the
decision of the ld. CIT(A).
In our considered opinion, section 22 of the Act itself excludes
ALV of such properties of which the assessee is owner and has occupied
for the purpose of any business or profession carried on by him. Since
the assessee has furnished necessary evidences which have been duly
verified by the ld. CIT(A), we decline to interfere with the findings of
the ld. CIT(A). Ground No. 1(a) is dismissed.
Ground No. 1(b) relates to ALV of properties where rent has been
considered as business income.
Facts on record show that the assessee has shown certain
spaces/units which are given on rent and has been declared under the
Schedule Sales and other income of the accounts. Copy of such account
was filed before the Assessing Officer. Since no findings have been
given in the assessment order by the Assessing Officer, the issue was
raised by the assessee before the ld. CIT(A).
Before the ld. CIT(A), the assessee furnished assessment orders
for Assessment Year 2011-12 and 2012-13 wherein the Assessing Officer
has excluded the properties which have been given on rent for
calculation of notional rental value. Following the findings given in
Assessment Years 2011-12 and 2012-13, the ld. CIT(A) directed to
exclude such properties.
Since the ld. CIT(A) has followed the findings of the Assessing
Officer himself given in Assessment Years 2011-12 and 2012-13, we do
not find any merit in this grievance of the Revenue. Ground No. 1(b) is
dismissed.
Ground No. 1(c) relates to deletion of 5% increase per annum on
ALV.
We find that the Assessing Officer has increased the notional
value by 5% on estimated basis without bringing any evidence on
record.
Before the ld. CIT(A), the assessee contended that such unsold
spaces lying in closing stock are in the areas which are not easily
saleable and most of the spaces are basement areas and in distant
localities for which the assessee could not find any suitable market.
After considering these facts, the ld. CIT(A) directed the
Assessing Officer to delete the impugned addition.
Before us, the ld. DR strongly supported the findings of the
Assessing Officer.
Per contra, the ld. counsel for the assessee relied upon the
findings of the ld. CIT(A).
It is a fact that for increase by 5%, the Assessing Officer has
neither brought any comparable case on record nor there is any
evidence to justify such increase. In the absence of any evidence, we
decline to interfere with the findings of the ld. CIT(A). Ground No. 1(c)
is dismissed.
Ground No. 2 relates to the deletion of addition of Rs.
6,46,77,024/- made by the Assessing Officer on account of
disallowance u/s 14A r.,w.r 8D of the Rules.
A perusal of the assessment order shows that the Assessing
Officer has made disallowance u/s 14A r.w.r 8D on a dividend income
of Rs. 10,200/-. Disallowance has been computed at Rs. 6,46,77,024/.
Before the ld. CIT(A), it was strongly contended that the assessee
has sufficient own funds to make investment.
The ld. CIT(A) was convinced after verification and deleted the
disallowance.
Before us, the ld. DR strongly supported the findings of the ld.
CIT(A).
On the other hand, the ld. counsel for the assessee relied upon
the orders of the ld. CIT(A).
The Hon'ble Supreme Court in the case of South India Bank Ltd
130 Taxmann.com 178 has held that where the assessee has sufficient
own funds, it will be presumed that the investments are made from
own funds available with the assessee.
As the assessee has own sufficient own funds, we do not find any
reason to interfere with the findings of the ld. CIT(A). Ground No. 2 is
accordingly dismissed.
Ground No. 3 relates to allowing claim of the assessee which was
claimed for the first time before the ld. CIT(A).
Facts on record show that the assessee has claimed deduction of
Rs. 5,16,000/- being advance lease rent money. This claim of the
assessee was rejected by the Assessing Officer on the ground that since
it was not claimed in the original return of income, the Assessing
Officer is not empowered to reduce the returned income. The
Assessing Officer also did not entertain the claim of the assessee
stating that the assessee has not filed any revised return of income.
Before the ld. CIT(A), it was claimed that the assessee has made
lease payment to M/s Suzlon Gujarat Wind Park Ltd for a period of 20
years and the assessee has been given land on sub lease which Suzlon
Gujarat Wind Park Ltd has taken from the Government of Gujarat for
its development of Wind Farm and installation of wind turbine
generators.
In support of its claim, strong reliance was placed on the decision
of the Hon'ble Gujarat High Court in the case of Sun Pharmaceutical
Industries Limited 329 ITR 479.
After considering the facts and submissions, the ld. CIT(A),
following the earlier years findings, allowed the claim of deduction.
The ld. DR strongly contended that this claim was made for the
first time before the ld. CIT(A) and without giving any opportunity to
the Assessing Officer, the ld. CIT(A) has deleted the disallowance.
Per contra, the ld. counsel for the assessee strongly relied upon
the findings of the ld. CIT(A).
We have carefully perused the orders of the authorities below.
There is no dispute that the claim was made for the first time before
the ld. CIT(A). It is also not in dispute that neither the ld. CIT(A)
called for any remand report nor he has given any opportunity to the
Assessing Officer to examine the claim as per the evidences furnished
before him. Therefore, in the interest of justice and fair play, we
restore this issue to the file of the Assessing Officer. The assessee is
directed to furnish necessary evidence in support of its claim and the
Assessing Officer is directed to examine the same and decide the issue
afresh. Ground No. 3 is allowed for statistical purposes.
In the result, the appeal of the Revenue is allowed in part for
statistical purposes.
ITA No. 5011/DEL/2017 [Assessment Year 2014-15] Assessee’s appeal
Ground No. 1 alongwith its sub-grounds is identical to Ground No.
1 with sub-ground No. 1 in ITA No. ITA No. 5010/DEL/2017 of
assessee’s appeal. For the reasons given therein, this ground is
dismissed.
Ground No. 2 is identical to Ground No. 2 in ITA No.
5010/DEL/2017 of assessee’s appeal. For the reasons given therein,
this ground is allowed for statistical purposes.
Ground No. 3 is same as Ground No. 3 in ITA No. 5010/DEL/2017
of assessee’s appeal. For the reasons given therein, this ground is
allowed for statistical purposes.
In the result, the appeal of the assessee is allowed in part for
statistical purposes.
ITA No. 5680/DEL/2017 [Assessment Year 2014-15] Revenue’s appeal
Ground No. 1 alongwith its sub-grounds is identical to Ground No.
1 with sub-ground No. 1 in ITA No. 5679/DEL/2017 of Revenue’s
appeal. For the reasons given therein, this ground is dismissed.
Ground No. 3 is identical to Ground No. 2 in ITA No.
5679/DEL/2017 [supra]. For the reasons given therein, this ground is
allowed for statistical purposes.
Ground No. 4 relates to deletion of disallowance of Rs.
26,76,056/- made by the Assessing Officer on account of employee’s
contribution to PF.
During the course of scrutiny assessment proceedings, the
Assessing Officer found that the employee’s contribution of Rs.
26,76,056/- which was supposed to be deposited on 15.11.2013 has
actually be deposited on 23.11.2013. The Assessing Officer,
accordingly, made disallowance.
Before the ld. CIT(A), it was strongly contended that the amount
has been deposited before filing return of income and, therefore, the
ratio laid down by the Hon'ble Supreme Court in the case of Alome
Extrusions 319 ITR 366 squarely apply.
The ld. CIT(A) was convinced with the contention of the assessee
and deleted the disallowance.
Before us, the ld. DR strongly supported the findings of the
Assessing Officer.
Per contra, the ld. counsel for the assessee relied upon the
decision of the ld. CIT(A).
We have carefully perused the orders of the authorities below.
There is no dispute that there was a delay in depositing the
employee’s PF. It is also not in dispute that the same has been
deposited before filing return of income. The Hon'ble High Court of
Delhi in the case of AMIL Ltd 321 ITR 508 has held that if the
employee’s contribution is deposited before filing return of income, no
disallowance could be made. Respectfully following the decision of
the Hon'ble Jurisdictional High Court of Delhi [supra], we decline to
the interfere with the findings of the ld. CIT(A). Ground No. 4 is
dismissed.
Ground No. 5 relates to the claim of lease rent of Rs. 5.16 lakhs.
An identical issue has been considered by us in ITA No. 5679/DEL/2017 vide Ground No. 3. For our detailed reasons given therein, this ground is allowed for statistical purposes.
In the result, the appeal of the Revenue is allowed in part for statistical purposes.
To sum up:
Assessee’s appeals in ITA No. 5010/DEL/2017 for A.Y 2013-14 and (i) ITA No. 5011/DEL/2017 for A.Y 2014-15 are allowed in part for statistical purposes.
(ii) Revenue’s appeals in ITA No. 5679/DEL/2017 for [A.Y 2013-14 are partly allowed for statistical purposes.
The order is pronounced in the open court on 23.02.2022.
Sd/- Sd/- [YOGESH KUMAR U.S] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 23rd February, 2022. VL/