Principal Commissioner Of Income Tax (Central) - 3 v. M/S Utech Developers Ltd

$~A-1826 IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 180/2022 & CM APPL.27816/2022 PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) - 3..... Appellant..... AppellantThrough:Mr.Ajit Sharma, Sr.Standing Counsel. versus M/S UTECH DEVELOPERS LTD. ..... Respondent %Date of Decision: 07[th]July, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORAJ U D G M E N T MANMOHAN, J (Oral): 1.Present Income Tax Appeal has been filed challenging the Orderdated 30[th]June, 2021 passed by the Income Tax Appellate Tribunal(‘ITAT’) in ITA No. 3736/Del/2016 for the Assessment Year 2009-10. 2.Learned counsel for the Appellant states that the ITAT has erred indeleting the additions made by the Assessing Officer on account ofdisallowance of travel expenses without considering that the assessee hadfailed to explain the purpose of the journey and that it was ‘wholly andexclusively’ for business. 3.He also states that the ITAT has erred in deleting the additions madeby the Assessing officer on account of disallowance of loan interestexpenses, without considering that there was no nexus between theutilization of borrowed funds and business activity of the assessee. Insupport of his submission, he relies on Section 36(1)(iii) of the Income TaxAct, 1961 (‘the Act’). 4.However, a perusal of the paperbook reveals that both the CIT(A) aswell as ITAT have given concurrent findings of fact that in the year underconsideration, the assessee had provided the details vis-à-vis name of itsemployees as well as justification/ purpose of travel. It was further held byboth the authorities below that the assessing officer arbitrarily made anaddition on an estimated basis @ of 20% of the total travelling expenditurewhich includes domestic as well as foreign travel and conveyance of theemployees. Both the CIT (A) and ITAT emphasised that the assessingofficer had failed to provide any cogent reasoning or working, based onwhich such disallowances were made. 5.Further, both the CIT(A) as well as ITAT have held that the assesseehad carried out its business of real estate and infrastructure developmentduring the year under consideration as it had undertaken more than nineprojects and had carried inventory of Rs.53.87 crores of traded goods in theform of apartments which were ready for sale and which were sold in thesubsequent years. The two authorities below have also found that therespondent-assessee had participated in joint venture projects outside Indiain consonance with its Memorandum of Association and there was clearconnection between the money borrowed and its utilization for the purposesof business of real estate and infrastructural development. Both the appellate authorities also observed that the assessee duly demonstrated that the fundsborrowed had been deployed/invested for various business projects of theassessee such as Rs.10 crores utilized for furnishing bank guarantee forbidding for lease hold rights from Rail Land Development Authority,Rs.25.50 crores for aggregation of land to develop residential/commercialcomplex-which is main business of the company, Rs.6.05 crore for paymentof interest and other expenses, Rs.22 crores paid to AKC Developers Ltd. asequity contribution in JV of Municipal Solid Waste Project and Rs.7.35crores to Qcell Ltd. Gambia as its contribution for Joint Venture of ITenabled services etc. 6.Consequently, this Court is of the view that the appellant, by way ofthe present appeal, seeks interference with finding of facts arrived at by theCIT(A) and ITAT by asking this Court to re-appreciate the evidence. 6.Consequently, this Court is of the view that the appellant, by way ofthe present appeal, seeks interference with finding of facts arrived at by theCIT(A) and ITAT by asking this Court to re-appreciate the evidence. 7.In State of Haryana & Ors. vs. Khalsa Motor Limited & Ors., (1990)4 SCC 659, the Supreme Court has held that the High Court would not bejustified in law in reversing in second appeal, the concurrent finding of factrecorded by two Courts below. This Court is further of the opinion that theimpugned order calls for no interference as it suffers from no perversity. Nosubstantial questions of law arise in this matter. Accordingly, the presentappeal and application are dismissed. MANMOHAN, J JULY 7, 2022 TS MANMEET PRITAM SINGH ARORA, J