DLF Limited Vs. JCIT | DCIT Vs. DLF Ltd.

This case involves cross-appeals by DLF Limited and the Deputy Commissioner of Income Tax concerning the assessment year 2010-11. The appeals address the disallowance of expenses under Section 14A of the Income Tax Act and the inclusion of notional rent as taxable income. DLF argued that no disallowance was warranted as they had already self-disallowed a portion, and that notional rent should not be taxed as it was not actually received. The tribunal also considered the classification of registration fees for windmills as capital expenditure.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI

BEFORE SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND

SH. K. N. CHARY, JUDICIAL MEMBER

(Through Video Conferencing)

ITA No. 4187/DEL/2015

Assessment Year: 2010-11

ITA No.4793/DEL/2015

Assessment Year: 2010-11

ORDER

P ER PRASHANT MAHARISHI, AM:

1. These are the cross appeals filed by the assessee as well as The Deputy Commissioner Of Income Tax, Circle 7 (1)), New Delhi (the Learned Assessing Officer/AO) against the order of Commissioner Of Income Tax (Appeals) – 3, New Delhi (the learned that CIT A) dated 14 May 2015 for assessment year 2010 – 11.

2. The assessee in its appeal in ITA number 4187/del/2015 has raised following grounds of appeal.

That the learned CIT(A) has grossly erred in law and on the facts in restricting the disallowance made by Assessing Officer u/s 14A read with Rule 8D(ii) of the Income-tax Act, 1961, to Rs.37,97,74,00/- when no disallowance u/s 14A read with Rule 8D(ii) is warranted as the appellant had itself disallowed / added back Rs. 19,15,695/- u/s 14A. [Page 101-115 of CIT(A)’s Order]

That learned CIT(A) has grossly erred in law and on the facts in confirming the net addition of Rs.7,69,038/- [i.e. after allowing standard deduction @ 30% on gross addition of Rs. 10,98,626/- which works out to Rs.3,29,588/-] made by the Assessing Officer on account of notional rent, whereas in fact the appellant has not received any rental income from these tenants. [Page 136-140 CIT(A)’s Order]

That learned CIT(A) has grossly erred in law and on the facts in not appreciating the fact that the taxable income means real income and not a fictional income.

3. That learned CIT(A) has grossly erred on the facts and in law in confirming the disallowance made by the Assessing Officer to the Rs.20,42,053/- on account of registration fee for the Gujarat and Karnataka windmills by treating the same as capital in nature. [Page 151-177 of CIT(A)’s Order]

4. That the appellant reserves its right to assail the same on such other ground or grounds as may be advanced at the time of hearing for which the appellant craves leave to amend, vary or add to the grounds hereinbefore appearing.

To read more in details, find the enclosed file