Kumara Kruppa Frontier Hotels (P) Ltd., ... vs Department Of Income Tax

ACIT, Vs M/s Kumara Kruppa Frontier Hotels Pvt. Ltd. Circle-5(1), Room No.510, 5th Floor, Scope Complex, New Delhi. Core-8, 7 Lodi Road, New Delhi.

ITA NO. 489/DEL/2013 ASSTT.YEAR: 2007-08

ITA NO. 490/DEL/2013 ASSTT.YEAR: 2009-10

DCIT, Vs M/s Kumara Kruppa Frontier Hotels Pvt. Ltd. Circle-5(1), New Delhi. New Delhi. (PAN: AABCK9184F) (Appellant) (Respondent) Appellant by: Shri Gaurav Dudeja, Sr. DR Respondent by: S/Shri R. S. Singhvi,CA, Satyajit Goel,CA

ORDER

PER BENCH

The above captioned appeals have been preferred by the revenue against

the order of the CIT(A)- VIII, New Delhi dated 02.12.2010 in Appeal

1 ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10

No.186/2008-09 for AY 2004-05, dated 12.5.2011 in Appeal No. 120/2010 for

AY 2008-09, dated 15.11.2012 in Appeal No. 604/2011-12 for AY 2007-08 and

dated 15.11.2012 in Appeal No. 605/2011-12 for AY 2009-10 respectively.

2. The revenue has raised following grounds in these appeals:-

"1. The order of the learned CIT(A) is erroneous & contrary to facts & law.

2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs.19,69,850/- made by the A.O. on account of understatement of lease rent received shown by it and the confirmation submitted by M/s Bharat Hotels Ltd.

3. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs 61,47,762/- made by A.O. on account of reconciliation amount received by the assessee.

4. The Ld CIT (A) ignored the findings recorded by AO and also the fact that the assessee did not file required documents during the course of assessment proceedings for not including the sum in question in its income of the year oked by the A.O. " ITA No. 3750/Del/2011

"2. On the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of RS.1,26,63,937/- made on account of undisclosed lease rent.

2.1 The Ld. CIT(A) ignored the findings recorded by the AO and the fact that the assessee claimed credit for TOS and did not offer the matching income for taxation.

3. 0n the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in deleting the addition of Rs.35,000/- made u/s. 40(a) of the Act on account of prior period expenses.

2 ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10

3.1 The Id. CIT(A) ignored the findings recorded by the AO and the fact that the assessee claimed prior period expenses of Rs. 14,34,4621- in profit & loss account and added back only Rs. 13,99,462/- in its computation of income." ITA 489 & 490/DEL/2013

"1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) had erred in deleting the addition of Rs 88,70,001/- made on a/c of undisclosed lease rent.

3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) ignored the finding recorded by the AO and the fact that the assessee claimed credit for TDS and did not offer the matching income for the taxation as per provision of section 199 of the IT Act read with Rule 37BA.

3. The appellant craves to add, to alter, or amend any ground of the appeal raised above at the time of the hearing. "

Ground No. 2 and 2.1 in ITA No. 840 and 3570/Del/2011 & Ground no. 1 & 2 in ITA 489 & 490/Del/2013

3. We have heard arguments of both the sides and carefully perused the

relevant material placed on record. Ld. DR submitted that the CIT(A) has erred

in deleting the addition made on account of undisclosed lease rent ignoring the

findings recorded by the AO and the fact that the assessee claimed credit for

TDS and did not offer the matching income for taxation as per provisions of

section 199 of the Income Tax Act 1961 r/w Rule 37BA of the Income Tax

Rules 1962. Ld. DR submitted that the assessee neither filed copy of lease

agreement and nor any confirmation from M/s Bharat Hotels Ltd. in respect of

specific requirement made in the order sheet dated 16.11.2010. Ld. DR further

submitted that from TDS certificates issued by M/s Bharat Hotels Ltd. available

3 ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10

on the assessment record, it was clear that the BHL has not accounted for any

such entry as undisclosed by the assessee in regard to claimed lease rent. Ld.

DR supporting the assessment order finally submitted that there was a clear

mismatch in the figures shown by the assessee and revealed from the TDS

certificates issued by M/s Bharat Hotels Ltd., therefore, the AO was right in

considering the figures as per TDS certificates. Ld. DR finally prayed that the

order of the AO on this issue may be restored by setting aside the impugned

order of the first appellate authority.

4. Replying to the above, ld. AR fairly accepted that there was a mismatch in

the figures claimed by the assessee as per TDS certificates issued by M/s BHL.

Ld. AR further submitted that there was a mismatch of reconciliation considered

by the AO which was subsequently properly analysed by the CIT(A) while

granting relief for the assessee. During the arguments, the ld. AR submitted that

the assessee submitted all required documents viz. lease agreement,

confirmation of accounts from BHL and reconciliation statement but the same

was not properly considered by the AO and the CIT(A) granted relief on the

basis of said documentary evidence and reconciliation. Ld. AR further prayed

that if it is found just and proper to send the matter to the AO for proper

verification then the assessee has no serious objection to that.

5. On careful consideration of above submission, we note that the ld. DR has

pointed out that the lease agreement, confirmation of reconciliation and other

4 ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10

relevant documents were not submitted before the AO and therefore, the

impugned addition was made. Ld. AR has contended that all required

documents were placed before the AO during assessment proceedings and at the

same time, ld. AR fairly accepted contention of the revenue that if it is found

just and proper then the issue may be restored back to the file of the AO for a

fresh adjudication after considering all relevant material and supporting

documents of the assessee. In view of above, we find it appropriate to restore

the matter to the file of AO for fresh consideration and impugned orders on this

issue are set aside and the AO is directed to readjudicate the issue afresh without

being prejudiced from the earlier orders and after providing due opportunity of

hearing for the assessee. Accordingly, aforementioned grounds on this issue in

all four appeals are deemed to be allowed for statistical purposes.

Ground No. 3 & 3.1 in ITA No. 3570/D/11 for AY 2008-09

6. We have heard arguments of both the sides and carefully perused the

relevant material placed on record. At the very outset, ld. DR has drawn our

attention towards letter of the AO dated 17.5.2012 and submitted that in respect

of addition of Rs.35,000 made u/s 40(a) of the Act on account of prior period

expenses in AY 2008-09, the contention of the assessee that the assessee

company had already added back Rs.35,000 in the computation of income has

been verified from the assessment record and found to be correct. Ld. AR

5 ITA 850, 3750/D/11, 489, 490/D/13 AY: 2004-05, 08-09, 07-08, 09-10

supported the impugned order and submitted that addition in this regard made by

the AO was baseless and it is also found correct from the assessment record.

7. In view of above, ground no. 3 and 3.1 of the revenue being devoid of

merits are dismissed.

8. In the result, the appeals of the revenue on the main issue of additions

made on account of undisclosed lease are deemed to be allowed for statistical

purposes as indicated above and appeal of the revenue on ground no. 3 and 3.1

for AY 2008-09 are dismissed.

Order pronounced in the open court on 09.02.2015.

Sd/- Sd/-

(N.K. SAINI) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER

DT. 9th February, 2015 'GS'

Copy forwarded to:-

1. Appellant 2. Respondent 3. C.I.T.(A) 4. C.I.T. 5. DR By Order

Asstt. Registrar

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