ACIT, NEW DELHI vs. M/S. K.S. HOTELS PVT. LTD., NEW DELHI

ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER

This is an appeal filed by the Revenue directed against the order of the Ld. Commissioner of Income Tax (Appeals)-VIII, New Delhi dated 13.12.2013 pertaining to the Assessment Year (hereinafter referred to as the A.Y.) 2010-11.

ITA 1432/Del/2014 A.Y. 2010-11 M/s K.S.Hotels Pvt.Ltd. 4. The issue before us is whether the Ld. CIT (A) was justified in deleting the addition of Rs.2,19,97,449/– made by the AO u/s 40 (a) (ia) r.w.s 194C of the Income Tax Act, 1961 (hereinafter called “the Act”), on the ground that the assessee had not deducted tax at source on payments made to M/s ZEN Chinese Food as per the terms of agreement dated 13.07.2005 in the name and style of “Food Supply Arrangement”.

5. We find that a similar issue has come up before the “D’ Bench of the ITAT, Delhi in the case of K. S. Hotels (P) LTD. In order dated 11/05/2012. The Tribunal on the very same facts of payments made to M/s ZEN Chinese Food for food supply arrangement as per agreement, held as follows.

“4. Accordingly in the aforementioned peculiar facts and circumstances and considering the submissions advanced by the parties before the Bench. We are of the view the impugned order cannot be upheld. Section 250(6) of the Act mandates that the order of the CIT(A) while disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. The requirement of recording of reasons for the decision. The requirement of recording of reasons and communication thereof by the quasi-judicial authorities has been read as an integral part of the concept of fair procedure and is an important safeguard to ensure observance of the rule of law. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and minimizes arbitrariness in the decision making process. Hon’ble Jurisdictional High Court in their decision in Vodafone Essar Ltd. vs. DRP, 196 Taxman 423 (Delhi) held that when a quasi judicial authority deals with a list, it is obligatory on its part to ascribe cogent and germane reasons as the same is the heard and soul of the matter and further, the same also facilitates appreciation when the order is called in question before the superior forum. A ‘decision’ does not merely mean the ‘conclusion’. It embraces within its fold the reasons forming basis for the conclusion. (Mukhtiar Singh vs. State of Punjab (1995) 1 SCC 760 (SC).

ITA 1432/Del/2014 A.Y. 2010-11 M/s K.S.Hotels Pvt.Ltd. order, which should reflect application of mind by the concerned authority to the issues/points raised before it. The application of mind to the material facts and the arguments should manifest itself in the order. In view of the foregoing discussion as the Ld.Commissioner of Income Tax (Appeals) has not passed a speaking order on the issues raised in the appeal, we consider it fair and appropriate to set aside the order of the Ld.Commissioner of Income Tax (Appeals) and restore the matter to his file for deciding the aforesaid issue. Needless to say that while keeping in mind, inter alia, the mandate of provisions of s.250(6) of the Act. With these observations, ground nos.1 and 2 in the appeal of the Revenue are disposed of." 2.2. As in these years the Ld.Commissioner of Income Tax (Appeals) followed the order of his predecessor for the A.Y. 2006-07, we apply the decision of the Coordinate Bench in the assessee's own case and set aside the issue to the file of the Ld.Commissioner of Income Tax (Appeals) for fresh adjudication in accordance with law while keeping in mind the observations of the Tribunal in its order dt.11.5.2012.”

5.1. Consistent with the view taken therein we set aside the issue to the file of the Assessing Officer for fresh adjudication.

Order pronounced in the Open Court on 26th May, 2016.