TMI Blog2022 (4) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... en accrued to the assessee, therefore, no disallowance u/s 14A can be made. It is an admitted fact that here, the assessee has received exempt dividend income of ₹ 6,31,308/-, out of which the assessee had made suo moto disallowance of ₹ 5,45,245/-. Ld. CIT (A) restricted the disallowance to the extent of exempt income, therefore, we do not find any reason to interfere in such a finding in the light of the judgment of Hon ble Delhi High Court in the case of Joint Investments Pvt. Ltd. [ 2015 (3) TMI 155 - DELHI HIGH COURT] and Cheminvest Ltd.[ 2015 (9) TMI 238 - DELHI HIGH COURT] therefore, this ground is dismissed. - ITA Nos. 6431 And 6432/Del./2019 - - - Dated:- 11-4-2022 - Shri Amit Shukla, Judicial Member And Dr. B.R.R. Kumar, Accountant Member For the Assessee : Shri Satyajeet Goel, CA For the Revenue : Ms. Yagya Saini Kakkar, CIT DR ORDER PER AMIT SHUKLA, JM : The aforesaid appeals have been filed by the Revenue against the separate impugned orders dated 19.01.2017 18.01.2018, passed by the ld. CIT (A)-3, New Delhi for the quantum of assessment passed u/s 143(3) of the Income-tax Act, 1961 (for short the Act ) for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been given on account of Commercial Expediency, therefore, no notional interest can be charged on such business advances. It is pertinent to mention that this issue has already' been decided by the learned CIT(A)-3, New Delhi in favour of the Assessee Company in the Assessment Years - 2009-10 to 2011-12. A copy of the appellate order for the A.Y. 2011-12 is enclosed herewith at Annexure-1. 7. The case of the AO is that, apart from M/s. DLF Ltd., the assessee had used borrowed funds for investments, capital work-in-progress and other loans/advances. As per AO, Assessee should have adjusted the advances given to M/s. DLF Ltd. for purchase of plots and land with the loan taken from M/s. DLF Ltd. On this premise, he proceeded to make proportionate disallowance of interest of ₹ 6,53,18,819/-. 8. Before the ld. CIT (A), the assessee had filed very detailed submissions which have been noted in Para 6.2 of his appellate order from pages 2 to 6, wherein the assessee had explained that, firstly, this issue has been decided in favour of the assessee by Ld. CIT (A) exactly on similar observation and finding made by the AO from AYs 2009-10 to 2013-14. Secondly, this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the decision of Hon ble Delhi High Court in the case of Joint Investments Pvt. Ltd. in ITA 117/2015 and Chem Invest Ltd. vs. CIT 378 ITR 333 has deleted the said addition. 10. On the other hand, ld. DR for the Revenue submitted that principles of res judicata are not applicable in the income-tax proceedings. She pointed out even the ld. CIT (A) had not examined the factual matrix in the light of the finding of the AO that there was nothing on record to show business expediency, therefore, she cited several judgments which, on perusal of the same, are purely distinguishable on facts. She has also filed her written submissions on this issue, which has been filed for the AY 2015-16 will also apply for both the years are as under :- I) On issue of 36(1)(iii) - Ws dated 8-3-2022 and further that - Reliance on AOs order - as regards resjudicata and distinguishing feature with reference to orders cited wrt sec36(1)(iii) aspect in ITA 2209/D/2016 dt 19.6.2018 of Hon'ble Delhi HC which states that- 3. The AO disallowed the amount of ₹ 2.75 crore under Section 36(1)(iii) of the Act. The assessee's appeal was accepted by the CIT. The Appellate Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich may very kindly be appreciated and which shall not act as resjudicata in view of following decision - [2018] 92 taxmann.com 101 (Delhi)HIGH COURT OF DELHI Rakesh Kumar Gupta v. Commissioner of Income-tax-XIII .... 6. It is apparent from the above factual narrative that the Revenue authorities - including the CIT(A) and the ITA T carried out a detailed analysis of the transactions in question including the volume of holding, duration of holding and the dividend earned and other essential details. The lower authorities-including the AO considered the cumulative effect of these factors and also all the relevant authorities, starting from the judgment of the Supreme Court in Raja Bahadur Visheshwara Singh v. CII' [1961] 41 ITR 685. In this background the assessee s assertion that the previous year's assessment- which had accepted the reporting of the transaction which he claims to be identical, is unpersuasive. The previous year's assessment order (for AY 2008-09) in fact did not lead any discussion on this aspect and appear to have merely accepted the assessee's contention. Those cannot by any stretch of imagination be conclusive. At any rate in such cases, one ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the rule of consistency would lead to anomalous results, for the reason that it would engender the unequal application of laws, and direct the tax authorities to adopt varied interpretations, to suit individual assesses, subjective to their convenience, - a result at once debilitating and destructive of the rule of law. A previous Division Bench of this Court, in Rohitasava Chand v. CfT 120081 306 ITR 242/171 Taxman 147 had held that the rule of consistency cannot be of inflexible application. 16. In view of the above reasons, this court is of opinion that the reasoning and conclusions of the Tribunal do not call for interference. The question of law framed is answered accordingly, against the appellant, and in favour of the revenue. The appeals are dismissed, with no order as to costs. (unquote)(emphasis supplied). [2011] 198 Taxman 443 (Delhi) HIGH COURT OF DELHI AII India J.D. Educational Society vs. Director General of Income-tax (Exemptions):, Delhi ... 13. Further, we are in agreement with Ms. Prem Lata Bansal, learned counsel for the respondent that the principle of res judicata is not applicable to the facts of the present case. We believe that not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA 4155/de1/2017 of assessee is inapplicable besides the fact that factual matrix of funds position is also different as depicted by assessing officer in assessment order rendering resjudicata inapplicable perse read with aforestated decisions .. (b) Further decision in ITA 2567/D/2016(GOAno4 of Revenue appeal) and ITA 2209/D/2016(GOA no l of assessee appeal) in a different case of DLF Home Developers is also not applicable as nowhere has it been demonstrated by day to day investment as regards flow of available funds into investment made and is a blanket contention of assessee unsupported by any cogent evidence and is a mere (gross /net funds) mathematical exercise perse as even during Assessment stage assessee has merely elucidated the legal principles without satisfying and proving factual matrix of investments flowing from available funds and the exclusion of secured loans /unsecured loans of ₹ 13033650000 and ₹ 9328646757 respectively as depicted at para 3.11 of assessment order .... The CIT(A) has not examined the factual matrix and has merely relied upon Takshika c (satisfaction aspect) which has to be now read with 76 taxmann.com 268 India Bulls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Now, this issue stands covered on the reasoning that, firstly, these advances were business advances and is covered under commercial expediency; and secondly, if the assessee had huge interest free funds which far exceeds the advances given, therefore, no deduction u/s 36(1)(iii) can be made. Here, in this case, on both the count, we hold that no disallowance can be made as these loans and advances were purely business advances which are not being rebutted by the AO except for making the disallowance on conjectures and hypothesis and what the businessman do first; and secondly, if assessee had surplus interest free funds then it can be presumed that the borrowed funds which have been utilized for some other business purpose, proportionate disallowance could be made. Accordingly, this ground raised by the Revenue is dismissed. 14. Insofar as disallowance u/s 14A is concerned it is an admitted fact that in AY 2014-15, no exempt income has been accrued to the assessee, therefore, no disallowance u/s 14A can be made. 15. Similar issues and facts are permeating in AY 2015-16 also wherein similar observation were made in para 3.2 is as under :- 3.2 The plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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