This appeal was filed by the Deputy Commissioner of Income Tax (DCIT), Circle-21(1), New Delhi (the appellant) against the order dated 15.04.2019 passed by the Commissioner of Income Tax (Appeals)-38, New Delhi, for the assessment year 2015-16. The case was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘F’, through video conferencing.
The respondent, Religare Housing Development Finance Corporation Ltd., filed its return of income for the assessment year 2015-16. The Assessing Officer (AO) disallowed a deduction of Rs. 2,98,92,835/- claimed under section 36(1)(viii) of the Income Tax Act, 1961. The disallowance was made on the grounds that the allocation of interest expenses between the eligible housing finance business and other business segments was not properly established.
The appellant raised the following grounds of appeal:
During the hearing on 29.11.2022, it was brought to the Tribunal’s notice that this issue had been previously adjudicated by the Tribunal in the assessee’s own case for the assessment years 2013-14 and 2014-15 (ITA Nos. 6433 & 7679/Del/2017) vide order dated 29.06.2021.
The Tribunal noted the following from the earlier decision:
In the assessment year 2013-14, the AO had disallowed an interest amount of Rs. 2,27,56,710/- u/s 36(1)(viii) on the grounds that the allocation of interest regarding segmental reporting in respect of housing loan business, loan against property, and other business was not properly done. The CIT(A) had found that similar issues were decided in favor of the assessee for the assessment year 2012-13. The CIT(A) directed the AO to re-compute the profit of eligible business deduction by allocating interest expenditure on the basis of turnover ratio of the two segments rather than the balance of outstanding housing loan and loan against property recoverable at the end of the year.
The Tribunal observed that the issue was similar for the current assessment year (2015-16) and, in the absence of any change in material facts and legal propositions, upheld the decision of the CIT(A).
Thus, the appeal of the Revenue was dismissed.
The Tribunal’s decision to dismiss the appeal underscores the importance of consistency in adjudicating similar issues across different assessment years. This case highlights how established precedents and proper allocation methodologies play a crucial role in tax litigation.
The order was pronounced in open court on 30th November 2022.
Order pronounced in open court on this 30th day of November 2022.
Sd/-
(Yogesh Kumar US)
Judicial Member
Sd/-
(Dr. B. R. R. Kumar)
Accountant Member
Date: 30.11.2022
Copy forwarded to:
Assistant Registrar
ITAT, Delhi Benches
Delhi
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform