M/s. DSL Properties Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 112/DEL/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7164 (ITAT-DELHI)
• Duration Of Justice: 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UC DUBEY
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1278/DEL/2012 & 1279/DEL/2012 1278/DEL/2012 & 1279/DEL/2012 1278/DEL/2012 & 1279/DEL/2012 1278/DEL/2012 & 1279/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2007 2007 2007 2007- -- -08 & 2008 08 & 2008 08 & 2008 08 & 2008- -- -09 0909 09 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOM INCOM INCOM INCOME TAX, E TAX, E TAX, E TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, 8,8, 8, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 060. 110 060. 110 060. 110 060. PAN : AABCD9629E. PAN : AABCD9629E. PAN : AABCD9629E. PAN : AABCD9629E. (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS.111/DEL/2012 & 112/DEL/2012 CROSS OBJECTION NOS.111/DEL/2012 & 112/DEL/2012 CROSS OBJECTION NOS.111/DEL/2012 & 112/DEL/2012 CROSS OBJECTION NOS.111/DEL/2012 & 112/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2007 2007 2007 2007- -- -08 & 2008 08 & 2008 08 & 2008 08 & 2008- -- -09 0909 09 M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., M/S DSL PROPERTIES PVT.LTD., 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, 6/3, EAST PATEL NAGAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 060. 110 060. 110 060. 110 060. PAN : AABCD9629E. PAN : AABCD9629E. PAN : AABCD9629E. PAN : AABCD9629E. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, 8,8, 8, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, JHANDEWALAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI U.C.DUBEY, SR.DR. ASSESSEE BY : SHRI R.S.SINGHVI, CA. ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH : :: : THE ONLY GROUND RAISED BY THE REVENUE IN ITS APPEA L IN ITA NO.1278/DEL/2012 FOR AY 2007-08 READS AS UNDER:- ITA-1278 & 1279 & CO-111 & 112/D/2012 2 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRE D IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITI ON OF RS.85,79,187/- MADE BY THE ASSESSING OFFICER BY WAY OF DISALLOWANCE OF BUSINESS LOSS SHOWN BY THE ASSESSEE IN ITS COMPUTATION OF INCOME, WITHOUT PROPERLY APPRECIATIN G THE FACT THAT NO BUSINESS WAS CARRIED OUT BY THE ASSESS EE DURING THE YEAR. 2. IN AY 2008-09, IN ITA NO.1279/DEL/2012 ALSO, IDE NTICAL GROUND IS RAISED EXCEPT VARIATION IN THE QUANTUM OF THE ADDIT ION. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY THE LEARNED DR T HAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD NO BUSINESS. IT WOULD BE EVIDENT FROM THE AUDITED PROFIT & LOSS ACCOUNT THAT THERE WAS NEITHER ANY SALES NOR ANY PURCHASES. SINCE THERE WAS NO BU SINESS, THE ASSESSING OFFICER RIGHTLY DISALLOWED THE BUSINESS L OSS CLAIMED BY THE ASSESSEE. THE LEARNED CIT(A), WITHOUT PROPERLY APP RECIATING THE FACTS OF THE ASSESSEES CASE, REVERSED THE ORDER OF THE C IT(A) AND ALLOWED THE LOSS INCURRED BY THE ASSESSEE FROM DISCONTINUED BUSINESS. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT( A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER SHOULD B E RESTORED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, SUBMITTED THAT THE ASSESSEE DERIVES INCOME FROM PUR CHASE AND SALE OF REAL ESTATE. IN THESE TWO YEARS UNDER APPEAL, THOU GH THERE WAS NO PURCHASE AND SALE BUT THERE WAS SUBSTANTIAL TRADING STOCK WHICH WAS MORE THAN ` 5 CRORES. DUE TO ADVERSE MARKET CONDITIONS, THE AS SESSEE WAS NOT ABLE TO SELL THOSE STOCK. THAT MERELY BECA USE DURING THESE TWO YEARS UNDER APPEAL THERE WAS NO PURCHASE AND SA LE OF ANY PROPERTY, IT CANNOT BE SAID THAT THE ASSESSEE DISCO NTINUED THE BUSINESS. HE ALSO POINTED OUT THAT IN AY 2005-06, THE ASSESSING OFFICER ITA-1278 & 1279 & CO-111 & 112/D/2012 3 HAD DISALLOWED THE LOSS ON THE SAME GROUND I.E. THE BUSINESS WAS DISCONTINUED BY THE ASSESSEE. 4. ON APPEAL, THE LEARNED CIT(A), VIDE ORDER DATED 23 RD OCTOBER, 2009, ALLOWED THE ASSESSEES APPEAL AND DIRECTED FO R ALLOWING THE BUSINESS LOSS. THIS ORDER OF THE CIT(A) IS ACCEPTE D BY THE REVENUE AS NO APPEAL IS FILED BEFORE THE ITAT. THAT IN AY 200 6-07, IN THE ORDER PASSED UNDER SECTION 143(3), THE REVENUE ITSELF HAS ACCEPTED THAT THE BUSINESS OF THE ASSESSEE IS CONTINUED. MOREOVER, I N AY 2009-10 ALSO IN THE ORDER PASSED UNDER SECTION 143(3), IT IS ACCEPT ED THAT THE ASSESSEE CONTINUED THE BUSINESS AND THE ASSESSING OFFICER DE TERMINED THE BUSINESS LOSS AS WELL AS UNABSORBED DEPRECIATION AN D ALSO ALLOWED THE SAME TO BE CARRIED FORWARD. HE, THEREFORE, SUBMITT ED THAT WHEN IN THE PRECEDING AS WELL AS SUBSEQUENT YEARS THE REVENUE H AS ACCEPTED THAT THE BUSINESS OF THE ASSESSEE IS CONTINUING, A DIFFE RENT VIEW CANNOT BE TAKEN IN IN-BETWEEN YEARS. HE ALSO RELIED UPON THE ORDER OF LEARNED CIT(A) AND STATED THAT HE HAD GIVEN ADEQUATE REASON S FOR ACCEPTING THE ASSESSEES CONTENTION THAT THE BUSINESS WAS CON TINUED. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE REVENUE HAS ACCEPTED THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS TILL AY 2006-07. THE REVENUE HAS ALSO ACCEPTED THA T THE ASSESSEE IS CARRYING ON THE BUSINESS IN AY 2009-10. ADMITTEDLY , THE FACTS OF THE YEAR UNDER APPEAL ARE SIMILAR TO THOSE YEARS. THER EFORE, IT CANNOT BE SAID THAT IN IN-BETWEEN THESE TWO YEARS, THE ASSESS EE DISCONTINUED THE BUSINESS AND RE-STARTED THE SAME IN AY 2009-10. WH ILE TAKING THIS VIEW, WE DERIVE SUPPORT FROM THE DECISION OF HONBL E APEX COURT IN THE CASE OF RADHA SOAMI SATSANG VS. CIT - 193 ITR 321. ITA-1278 & 1279 & CO-111 & 112/D/2012 4 6. EVEN ON MERITS, WE AGREE WITH THE LEARNED CIT(A) THAT MERELY BECAUSE IN THE YEAR UNDER CONSIDERATION THERE WAS N O ACTIVITY OF PURCHASE AND SALE OF PROPERTY, IT CANNOT BE SAID TH AT THE ASSESSEE HAD CLOSED DOWN THE BUSINESS, SPECIALLY WHEN THE ASSESS EE HAD SUBSTANTIAL STOCK-IN-TRADE. IT IS NOT IN DISPUTE THAT THE STOC K-IN-TRADE DURING THE YEAR UNDER APPEALS WAS MORE THAN ` 5 CRORES. THE ASSESSEE IS IN THE BUSINESS OF PURCHASE AND SALE OF REAL ESTATE AND IN SUCH LINE OF BUSINESS, IT IS NOT EXPECTED THAT THE TRANSACTION O F PURCHASE AND SALE OF REAL ESTATE WOULD TAKE PLACE EVERYDAY. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF LEARNED CIT(A). THE SAME IS SUSTAINED. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. 8. IN BOTH THE CROSS-OBJECTIONS, THE COMMON GROUND RAISED READS AS UNDER:- THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS WRONGLY CONFIRMED THE ACTION OF ASSESSING OFFIC ER IN ASSUMING JURISDICTION U/S 153C, READ WITH SECTION 1 53A OF THE INCOME TAX ACT, EVEN THOUGH NO ASSESSMENT WAS PENDING AT THE TIME OF RECORDING OF SATISFACTION U/ S 153C OF THE INCOME TAX ACT AND THERE WAS NO CASE OF ANY INCRIMINATING MATERIAL IN THE CONTEXT OF ANY UNDISC LOSED INCOME. 9. AT THE TIME OF HEARING BEFORE US, IT WAS STATED BY THE LEARNED COUNSEL THAT IF THE REVENUES APPEALS ARE DISMISSED , THEN THE ASSESSEES CROSS-OBJECTIONS SHOULD BE TREATED AS IN FRUCTUOUS AND ACCORDINGLY, NOT PRESSED. ITA-1278 & 1279 & CO-111 & 112/D/2012 5 10. AS WE HAVE ALREADY UPHELD THE ORDER OF LEARNED CIT(A) AND DISMISSED THE APPEALS OF THE REVENUE, WE TREAT THE CROSS-OBJECTIONS FILED BY THE ASSESSEE AS NOT PRESSED. ACCORDINGLY, BOTH THE CROSS- OBJECTIONS ARE DISMISSED AS NOT PRESSED. 11. IN THE RESULT, THE APPEALS OF THE REVENUE AS WE LL AS THE CROSS- OBJECTIONS OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 18 TH MAY, 2012. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 18.05.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR