IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No.5653/MUM/2011 (Assessment Year:1998-1999)

The Indian Hotels Company Limited Mandlik House, Colaba Mumbai – 400001, Maharashtra.

[PAN:AAACT3957G] …………. Appellant Additional Commissioner of Income Tax Vs Range 2(2), Mumbai Mumbai. …………. Respondent Appearance For the Appellant/Assessee : Shri V. Sridharan, Sr. Advocate Shri Ravi Sawana &

Ms. Neha Sharma For the Respondent/Department : Shri Hemanshu Joshi Date Conclusion of hearing : 08.01.2025 Pronouncement of order : 27.03.2025

O R D E R

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Per Rahul Chaudhary, Judicial Member:

1. The present appeal preferred by the Assessee is directed against the order, dated 14/06/2011, passed by the Commissioner of Income Tax (Appeals) - 5 [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had partly-allowed the appeal against the Assessment Order, dated 31/03/2006, passed under Section 143(3) read with Section 147 of the Act for the Assessment Year 1998-1999.

2. The Assessee has raised following grounds of appeal :

“1. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) [CIT(A)'] has, legally erred in upholding the proceedings u/s 147 of the Income- tax Act, 1961 (the "Act').

2. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in not cancelling, quashing or annulling, the impugned assessment, inspite of inordinate delay of more than six years from the end of the Assessment Year in supplying the reasons for reopening

3. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in not cancelling, quashing or annulling the impugned assessment order inspite of non- compliance of the decision of the Hon'ble Supreme Court in the case of G. K. N. Driveshafts 259 ITR 19 (SC)

4. Without prejudice to above grounds, and in the alternative, it is submitted that in view of the first proviso to section 147 of the Act and in view of absence of a categorical finding either in the reasons recorded or in the assessment order, that the appellant has failed to disclose fully and truly all material facts, no action of reassessment can be made after a period of four years from the end of the relevant Assessment Year.

5 On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in upholding the impugned assessment order, inspite of the fact that the said order was passed in violation of principles of natural justice

6. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in confirming an addition u/s 68 of the Act, of USD 1.75 million (equivalent to Rs 6,25,61,785) received on account of operating fees, already recognised as income on accrual basis in an earlier year.

7. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in confirming an addition u/s 68 of the Act, of Rs 1,05,34,940 received on account of operating fees, already recognised as income on accrual basis in an earlier year.

8. On the facts and in the circumstances of the case, the learned CIT(A) has, legally erred in not granting relief on alternate ground that if what was received was not recovery of operating fees accrued, then such non recovery is deductible as bad debt or as business loss.

9. On the facts and in the circumstances of the case, the learned CIT(A) has legally erred in confirming an addition u/s 68 of the Act, of USD 0.25 million (equivalent to Rs 91,28,417) received by the appellant for and on behalf of Taj International HongKong Ltd. as an unexplained cash credit.

10. On the facts and in the circumstances of the case, the learned CIT(A) has legally erred in not giving specific directions to grant due consequential deduction under Chapter VIA of the Act.

11. On the facts and in the circumstances of