TaxTMI 
TaxTMI 
2023 (9) TMI 776
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....2019 filed by the Revenue against the order of the CIT(A) dated 25/04/2019, 16/11/2018, 31/01/2019, 19/04/2019 and 18/03/2019 respectively. 2. The grounds of Appeal taken by the Assessee and the Revenue are as under:- ITA No.5167/Del/2019 for AY 2015-16 (Assessee) "1. Ld. CIT(A) has erred in confirming the addition made by Ld. AO of Rs. 8,02,16,000/- out of amount under Capital Reserve on 31st March, 2015 and failed to appreciate that: 1.1 Out of Rs. 8,02,16,000/-, only Rs. 1,69,78,655 relates to AY 2015-16. 1.2 Rs. 8,51,62,091/- has been added by Ld. AO in AY 2014- 15 on this account for periods upto that date, and that addition was accepted by the appellant. 1.3 Addition already accepted in AY 2014-15 had resulted in double taxation. 2. Ld. CIT(A) has erred in disallowing the expenses of Rs. 12,00,000/- being contingent liability booked for Rent to be paid to DISDC. ITA No.4737/Del/2019 for AY 2015-16 (Revenue) "1. Whether on facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of advance excise deposited u/s 43B on Liquor Trade of Rs. 7,85,53,053/- made by the Assessing Officer. 2. Whether on facts and in cir....
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....IT Act made by the Assessing Officer. 7. The appellant craves, leave to add, amend or forego any ground(s) of appeal at any time before or during the hearing of this appeal." ITA No.5509/Del/2019 for AY 2011-12 (Assessee) "1. Ld. CIT(A) has erred both in law and facts of the case in confirming the disallowance made by Ld. AO u/s 40A(3) on account of reimbursements made by the assessee to its employees towards LTC and Children's Tuition fees as per statutory entitlements amounting to Rs. 11,37,541/-. 2. Ld. CIT(A) erred in confirming the rejection of claim of deduction u/s 80-IA to the extent of Rs. 3,07,11,517/- being interest earned on mobilization advance given to sub-contractors and treating it as "Income from Other Sources" not eligible for deduction u/s 80-IA. 3. Ld. CIT(A) erred in remitting to Ld. AO to verify the claim of TDS credit of Rs. 6,85,312/- deducted by Oriental Bank of Commerce and Form 16A provided to assessee. ITA No.4100/Del/2019 for AY 2013-14 (Revenue) "1. Whether on facts and in circumstances of the case and in law, the CIT(A) has erred in directing to compute the disallowance of Proportionate expenses related to rental receipts/income at Dilli....
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....42,08,388/- made by the Assessing Officer. 2. Whether on facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance on account of unspent revenue grants of Rs. 5,52,60,490/- made by the Assessing Officer. 3. Whether on facts and in circumstances of the case and in law, the CIT(A) has erred in deleting the disallowance on account of prior period expenses claim of Rs. 43,96,415/- made by the Assessing Officer. 4. The appellant craves, leave, modify, add or forego in any ground(s) of appeal at any time before or during the hearing of this appeal." 3. The above seven appeals pertaining to single assessee for the assessment years 2011-12, 2013-14, 2014-15, 2015-16 and 2016-17, since the issues are identical, all the Appeals are clubbed and also heard together. For the sake of convenience, the brief facts of the assessment year 2015-16, are taken into consideration which are as per the order of the learned CIT(A). The brief facts are as under: "The brief facts of the case are that the appellant company is wholly owned State Govt. Company (PSU under Govt. of NCT of Delhi). During the year, the appellant was engaged in the business of ....
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.... Revenue has preferred the appeal in ITA No.4737/Del/2019. 5. Learned counsel for the assessee filed separate Chart and also the written submission in all the Appeals by dealing with thirteen issues involved in the instant appeals. The LD. DR has also made submissions on the issues involved in the present Appeal. Advance Excise Duty - Section 80B of the Act: 6. In Ground No.1 of ITA No.5920/Del/2019, ITA No.184/Del/2019 and ITA No.4737/Del/2019, for the A.Y 2011-12, 2014-15 and 2015-16 respectively, the department of Revenue contended that the learned CIT (Appeals) erred in deleting the disallowance of advance excise and deposit under Section 43B of the Act on liquor trade made by the Assessing Officer. 7. Learned counsel for the assessee submitted that on the issue involved in the above grounds for the above A.Ys is covered in Assessee's own case for the assessment years 2008-09 and 2009-10 and also in assessment year 2010-11 and 2012-13 and by relying on the order of the Tribunal, sought for dismissal for the Ground urged by the Revenue. The Ld. DR relied on the assessment order and sought for allowing the Ground of the Revenue. 8. Heard. The issue of allowability of advance....
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....nd the amounts relate to the assessee's duty liability, falling within the description u/s 43B; ++section 43B in clear terms provides that the deduction claimed by the assessee in respect of any sum paid by way of tax, duty, cess or fee, shall be allowed only in computing the income I.T.A. 6 No.2814- 4756/Del/2012 referred to in section 28 of that previous year in which it was actually paid, irrespective of the previous year in which the liability was incurred for the payment of such sum as per the method of accounting regularly employed by the assessee. For the purpose of claiming benefit of deduction of the sum paid against the liability of tax, duty, cess, fee, etc., the year of payment is relevant and is only to be taken into account. The year in which the assessee incurred the liability to pay such tax, duty, etc., has no relevance and cannot be linked with the matter of giving benefit of deduction u/s 43B. Ins this view of the matter, the appeal deserves to be allowed. This court also notices that the Supreme Court has upheld the view which allows assessee's to claim credits, such as Modvat, etc, falling within the description of liability paid, to escape the mischief of se....
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....irmed. 13. We have heard the parties and perused the material. The issue of allowability of prior period expenses involved in the above ground of appeals of the Revenue is no more Res-integra, the jurisdictional High Court in the case of CIT vs. Jagjit Industries Ltd. (2010) 194, Taxmann 158 held as under: "The assessee had been debiting the expenditure spill over to the subsequent years and the Assessing Officer had been allowing the same. The said accounting practice had been consistently followed by the assessee and accepted by the department. If a particular accounting system has been followed and accepted and there is no acceptable reason to differ with the same, the doctrine of consistency would come into play. In the instant case, the said accounting system had been followed for a number of years and there was no proof that there had been any material change in the activities of the assessee as compared to earlier years. Nothing has been brought on record to show that there had been distortion of profit or the books of accounts did not reflect the correct picture. In the absence of any reason whatsoever, there was no warrant or justification to depart from the previous ac....
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....al Appeals in ITA Nos. 5920/Del/2019, 4100/Del/2019, 184/Del/2019, 4737/Del/2019 and 3922/Del/2019 respectively. Dilii Haat Rental Income: 16. The Department's Ground No.3 in ITA No.5920/Del/2019, Ground No.1 in ITA No.4100/Del/2019, Ground No.5 in ITA No.184/Del/2019, Ground No.4 in ITA No.4737/Del/2019 are regarding disallowance of proportionate disallowance of business expenses to rental receipts/income at Dilii Haat. 17. Learned counsel for the assessee submitted that the Co-ordinate Bench of the Tribunal for assessment years 2004-05 to 2009-10, 2010-11 and 2012- 13 held that the rental income from temporary structure as income from business and rental income from permanent structure as income from house property. Further submitted that no appeal has been preferred by the Department of Revenue, thus the order reached finality, therefore, prayed for dismissal of the above ground of appeals of the Revenue. 18. Per contra, learned Departmental Representative relied on the assessment order. 19. Heard the parties. The Co-ordinate Bench of the Tribunal in ITA No.3457/Del/2007 and connected Appeals (A.Y. 2004-05 to 2009-10) held as under: "19. When we examine the facts of the i....
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.... both the sides in support of their respective claims as to whether or not the assessee was owner of 'Dilli Haat', which is a mandatory condition for computing income under the head 'Income from house property' and rule of consistency etc. 22. Turning to the remaining amount of Rs. 54.00 lac, we find that the same consists of Rs. 41.00 lac, being, income from space rented on regular basis and Rs. 12.99 lac, being, licence fee for allowing activities of food court, souvenir shops, bank and PCO. This amount of Rs. 54 lac has been earned by the assessee from the letting out of its permanent structures. The same cannot be equated with income of Rs. 1.82 crore discussed above, being, licence fee for use of craft stalls on 15 day basis. The ld. AR was fair enough not to contest the taxability of Rs. 54.00 lac as income held by the lower authorities to be falling under the head 'Income from house property.' 23. To sum up, we hold that income of Rs. 1.82 crore be considered as 'Business income' and Rs. 54.00 lac as 'Income from house property.' The Assessing Officer is directed to allow necessary deductions against these incomes as per law, after allowing a reasonable opportunity of be....
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....of Tourism and Travel Management (affiliated to IITTM- Gwalior) was given to the assessee on 1.1.1993 initially for a period of five years. On perusal of the Tax Audit Report, it was noticed that the excess of income over expenditure of IITTM-D for the year was Rs. 18,33,132/- and accumulated profit carried over was Rs. 27,88,043/- , both totaling Rs. 46,21,175/-. Since the income of this entity was not included by the assessee in its total income, the Assessing Officer made this addition. The learned CIT(A) deleted the addition. 65. Having heard both the sides and perused the relevant material on record, it is observed that the assessee has claimed that income of IITTM-D was not liable to be included in the income of the assessee as has been set up by the Revenue. On the other hand, the learned DR submitted that the assessee has itself claimed deduction for loss of IITTM-D its return for the A.Y. 2012-13 on the premise that it was its own loss. On a specific query, the learned AR submitted that some change took place in the arrangement on 1.4.2009 as a result of which the income/loss of IITTM-D became that of the assessee. The Revenue is aggrieved in its appeal for the A.Y. 2012....
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....he addition. 27. We have heard both the parties and perused the material available on record. It is the specific contention of the assessee that during the assessment proceedings the A.O. has not provided reasonable opportunity of being heard to the assessee and the A.O. had not asked documentary evidence in support of the expenses and disallowed 50% of the expenditure on ad-hoc basis. Before the CIT(A), the assessee had filed copy of the ledger account of the expenses along with supporting bills and vouchers on sample basis. The expenses claimed by the assessee has been made through cheques and the assessee had incurred the expenses on tourism promotion and hiring of tent and all the expenses are accounted for in the books of accounts. Assessee being corporation which is a Government undertaking requires to maintain proper account and also require to be audited by qualified CA/CAG, despite of the same, the CIT(A) has taken very reasonable view on this issue, since the Assessee is not in appeal before us, we are constrained to confirm the order of the CIT(A). Accordingly, we find no merit in the Ground No. 5 of the Revenue in ITA No. 5920/Del/2019, accordingly, the same is dismiss....
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....ide letter No.68 (Refer issued by Deptt. of PWD of State Govt. of NCT of Delhi). 3. That out of the margin/gross income in the form of 5% development charges allowed to the assessee on value work done, there shall be met out the consultancy and establishment cost as per terms. 4. That during the year under assessment, the net income earned by assessee Corporation as per audited accounts was Rs. 5,52,84,970/- for signature bridge and Rs. 1,53,57,300/- towards RUB & ROB at Nand Nagri, Road No.68. That both these income were included in the net audit profit of Rs. 16,30,33,565/- shown and certified by Statutory Auditors in the annual accounts for the previous year ending 31.3.2011 and also reflected in the statement of assessable filed with returned income on 30.9.2011. 5. That above infrastructure income of assessee is fully derived from the eligible business as defined u/s 80IA(4) of ITA. 6. That assessee Corporation DTTDC Ltd. has assigned the construction job to various contractors based on competitive successful tenders/bids. Thus, the income restricted at Rs. 6,20,48,900/- may please be considered for allowing the claim of deduction against the gross total income det....
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....d the return in time as per provision u/s 139(5) of ITA. The assessee on being asked the reason why this claim could not be filed earlier by revising the return within the prescribed time period, could not furnish any bonafide satisfactory reply. Viewing these facts, this fresh claim of assessee is rejected due to infirmity in timely compliance of legal requirements and procedure of tax laws u/s 80IA of ITA." 32. During the appellate proceedings, the CIT(A) restricted the disallowance of Rs. 6,96,68,015/- made by the A.O. to Rs. 3,07,11,517/- in following manners:- "15.4 I have considered the facts of the case, finding of the AO and submission of the appellant. During the course of assessment proceedings, appellant has made fresh claim of deduction u/s 80IA on the infrastructural facilities developed by it during the year. It is submitted by the appellant that it has undertaken the project of signature bridge at Wazirabad and RUB & ROB at Nand Nagri, Delhi. This is the first year of operation when appellant has earned income from infrastructure facilities developed by it, but did not AY 2011-12, 143(3) Delhi Tourism & Transport M/S Development 2011- 12; 14 11-12; 143(3) and Wa....
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....s being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or develops an industrial park or develops a special economic zone referred to in clause (ii) of sub-section (4) or generates power or commences transmission or distribution of power or undertakes substantial renovation and modernization of the existing transmission or distribution lines" Provided that where the assessee develops or operates and maintains or develops, operates and maintains any infrastructure facility referred to in clause (a) or clause (b) or clause (c) of the Explanation to clause (1) of sub-section (....
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...... ................... (7) The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub- section (2) of section 288, and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form 82 duly signed and verified by such accountant." 15.6 The appellant is involved in the development of infrastructure facilities at Nand Nagri and Wazirabad, as per the provisions of section 80IA(4)(1), the appellant satisfies the condition contained therein. It has maintained separate books of account and has duly get them audited and obtained certificate of CA in Form 10CCB as per requirements of sub section (7) of section 80IA. The claim of the deduction u/s 80IA may be allowed to the assessee even if it has been made during the assessment proceedings if it is eligible for claiming deduction as per the provisions of the Act. It is held by the judicial authorities that assessing authorities are bound to ....
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....llected as per the provision of the Act. If an assessee, under a mistake, misconceptions or on being not properly instructed is over assessed, the concerned authority under the Act is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible. If particular levy is not permissible under the Act, the tax cannot be collected. In view of above, the CIT(A) was justified in holding that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and the assessee society is eligible for deduction u/s 80P(2)(a)(i) of the Act on merit as well, as discussed above. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same 15.9 Hon'ble Delhi High Court in the case of CIT vs. Contimeters Electricals (P.) Ltd. [(2009) 178 TAXMAN 422], taken a view regarding the non-filing of Form 10CCB with the Income Tax Return and observed at Para 8 of the order that: 8. In view of this long line on decisions of various High Courts in considering the provisions of section 80J(6A) which are similar to the provisions of section 80-IA(7), we feel that the Tribunal has arrived at the correct conclusion that the req....
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....No. 5509/Del/2019 has challenged the rejection of claim of deduction in 80IA to the extent of Rs. 3,07,11,517/- being interest earned on mobilization advance given to sub contractor and treating the same as income from other sources not allowable for deduction u/s 80IA of the Act. 35. Originally the assessee claimed deduction u/s 80IA at Rs. 6,96,68,015/, however, it was revised by the assessee at Rs. 3,89,56,498/- and thereby reduced the said claim by Rs. 3,07,11,517/- wherein excluded the interest earned on mobilization advance and other interest. In our opinion, mobilization advance is having direct proximate relationship with business of the assessee. In other words, it is integral and directly related to the business of the assessee which emerged from the business activities of the assessee and the same has to be considered as business income of the assessee and not otherwise. Accordingly, the assessee is entitle for deduction u/s 80IA of the Act. The other interest for which details are not furnished by the assessee, the assesssee is not entitled for deduction u/s 80IA of the Act, on the said interest income. The A.O. has to verify the records and grant the deduction accordi....
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....enable when even tax auditor has covered for disallowance. Accordingly, relying upon the Tax Audit Report, a sum of Rs. 11,37,541/- is disallowed and added to the income of the assessee. Since the assessee furnished inaccurate particulars, penalty proceeding u/s 271(1)(c) of the Act, are initiated separately." 40. During the appellate proceedings, the above said addition made by the A.O. has been confirmed by the CIT(A) in following manners:- "6.3 During the course of appellate proceedings, appellant has submitted that as per appellant's internal company policy, during the year the appellant reimburses to its employees the payment of school tuition of their children to the extent of Rs. 1000/- per month per child subject to maximum of two children. The appellant has reimbursed the same once in a year on an aggregate basis. Further in view of the provision of clause (vill) of sub section (2) to section 17 of the Act read with clause (ix) of sub rule (7) to rule 3 of Income Tax Rules, these reimbursement of school tuition fees paid by the employees for their children is a perquisites in the hands of the employees and is forming part of salary which is offered to tax. The appel....
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....is, thus, cash payment of each employees exceeds Rs. 20,000/-. The assessee has not brought on record any evidence which proves that the case of the assessee is covered as per the proviso of Rule 6DD (j) of the Rules, apart from the same, in the auditor report, the auditor has qualified that the said amount falls u/s 40A(3) of the Act as the cash payment exceeds Rs. 20,000/- made to a person and therefore, the assessee is not entitled to claim deduction on account of such expenditure. Considering the above facts and circumstances, we find no error or infirmity in the order of the CIT(A) in confirming the disallowance of Rs. 11,37,541/- u/s 40A(3) of the Act and find no merit in Ground No. 1 of the assessee. Accordingly, Ground No. 1 in ITA No. 5509/Del/2019 for Assessment Year 2011-12 is dismissed. TDS CREDIT 42. The assessee vide Ground No. 3 in ITA No. 5509/Del/2019 for Assessment Year 2011-12 has contended that the CIT(A) has erred in remanding the issue of claim of TDS Credit of Rs. 6,85,315/- deducted by Oriental Bank of Commerce and also the Form No. 16A provided by the assessee. 43. The Ld. Assessee's Representative submitted that the CIT(A) committed error in remandi....
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....P) Ltd. to continue to pay license fees and other dues regularly. 49. The CIT(A) while deleting the addition held as under:- " 9.4. I have considered facts of the case, finding of the AO. and submission of the Appellant. The A.O. has disallowed the claim of deduction on the basis that income has been duly certified by the audited accounts and covered by the clauses of the agreement. No reason was given by the AO for not accepting the submission of the appellant. The appellant has tried to justify the reversal on the basis that no recovery was made by that amount and inadvertently it debited the income on accrual basis as per AS-9. This income was in penal in nature i.e. damage charges on violation of the clauses of the agreement. The matter went up to High Court and in interim order High Court directed the licensee to continued to pay license fee and other dues regularly. Since appellant has not received any income in FY 2011-12 and 2012-13 on account damage charges and which was reversed by it during the year under consideration, the AO is not justified in rejecting the claim of deduction of income of Rs. 55,71,115/- on account of reversal of income and addition made by the AO ....
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....ability was written back by the appellant only on 31.03.2015 and the corresponding amount has been shown as income in AY 2015-16. As the appellant has written back by the appellant only on 31.03.2015 and the corresponding amount has already been shown as income in AY 2015-16, the addition made in this year is deleted and the ground of appeal is allowed." 53. We have heard the parties perused the material on record. During the assessment proceedings the A.O. noticed from the sundry creditors/ liabilities appearing in the audited accounts that the ability to M/s Utopia Consultancy Services Pvt. Ltd. for Rs. 6,56,661/- has ceased to exist and is required to be liquidated. The assessee had written back the said liability in the subsequent financial year without furnishing any explanation on the query why this should not written back in the previous year. As per the audited accounts, the said liability has ceased to exist in this year as such the same was required to be added to the income in the previous year, rather than postponing it to the subsequent years. Thus, in our opinion, the CIT(A) has committed error in deleting the said addition, further the Ld. AR/Assessee has also not c....
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....completion of work, the appellant is required to submit utilization certificate to the Delhi Government and the funds are utilized for the prescribed purpose only. In case of any unspent grants, the same are shown as liability in the balance sheet as per the accounting standard 12 and these unspent grants are adjusted by the government from the future grants to be received in subsequent years. The appellant has also shown sanction orders in this regard from which this fact is verifiable. It is observed that the appellant on a consistent basis, is treating the utilized amount as income and the unspent grant as liability and the same is treated as income in the year in which it is spent. The AR has argued on the basis of matching concept in order to recognize revenue and related expenditure in the same financial year. After perusal of the complete facts, it is observed that the appellant is following the consistent method of accounting the grants received, utilized by it as well as the unspent grants. Merely because the grant could not be utilized in the year of receipt, the same cannot be treated as the income of the appellant as the unspent grant is adjusted by the government again....
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....qualified the amount for the year under consideration at Rs. 8,02,16,000/- on the basis of financial statements of the assessee and the A.O, has correctly made addition on the basis of the observation of the auditors, therefore, sought for dismissal of the above ground. 60. We have heard both the parties and perused the material available on record. The CIT(A) while confirmed the addition made by the A.O. in following manners:- "5.4 I have considered the facts of the case, finding of the AO and submissions of the appellant. In the case of the appellant addition was made on account upfront money received by the appellant from various Ministries and its authorized agencies for allotment of stalls of Delhi Haat Pitampura in different AYS. The statutory auditors qualified that such onetime payment needs to be spread over the period of lease which is up to the date of lease with DDA i.e. June 2023. The statutory auditors made qualification in the FY 2013-14 and said qualification continued in the FY 2014-15. On the basis of the qualifications relates to financial statements for the year ended 31st March, 2014 AO has made the addition of Rs. 8.51 Crore which was accepted by the appell....