Adani Properties Pvt. Ltd., Ahmedabad V. The Dy.CIT, Circle-1, Ahmedabad

CO 77/AHD/2014

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4016 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Assessee Lawyers: P M MEHTA WITH SHRI G M THAKOR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , ITA. NO.2541/AHD/2013 (ASSESSMENT YEAR:2007-08) DCIT, CIRCLE-1, AHMEDABAD APPELLANT VS. M/S. ADANI PROPERTIES LTD., 8 TH FLOOR, SHIKHAR, NR. MITHKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD RE SPONDENT & C.O. NO.77/AHD/2014 (ASSESSMENT YEAR:2007-08) M/S. ADANI PROPERTIES LTD., 8 TH FLOOR, SHIKHAR, NR. MITHKHALI SIX ROADS, NAVRANGPURA, AHMEDABAD APPELLA NT VS. DCIT, CIRCLE-1, AHMEDABAD RESPONDENT PAN: AABCA3182H ITA NO.2541/AHD/13 & C.O. NO.77/AHD/14 A.Y. 07-08 [DCIT VS. M/S. ADANI PROPERTIES LTD.] PAGE 2 / BY REVENUE : SHRI ADITYA SHUKLA, SR. D.R. / BY ASSESSEE : SHRI P. M. MEHTA WITH SHRI G. M. THAKOR, A.R. /DATE OF HEARING : 13.07.2016 /DATE OF PRONOUNCEMENT : 14.07.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THESE TWO APPEALS OF WHICH ONE IS FILED BY REVENUE AND THE OTHER APPEAL I.E. CROSS OBJECTION BY ASSESSEE A RE AGAINST THE ORDER OF CIT(A)-VI, AHMEDABAD, DATED 05.08.2013 FOR A.Y. 2007-08. 2. IN ITA NO.2541/AHD/2013, THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING PENALTY U/S.271(1)(C) OF RS.15.74 LACS DESPITE THE FACT THAT THE QUANTUM ADDITION ON THE BASIS OF WHIC H THE SAID PENALTY WAS LEVIED WAS ALREADY CONFIRMED B Y THE CIT(A). 2. THE ASSESSEE HAD WRONGLY CLAIMED INTEREST EXPENS ES TO THE EXTENT OF RS.46.76 LACS WHICH WERE ATTRIBUTABLE FOR GIVING INTEREST FREE LOANS. THE ASSESSEE HAD THEREFORE, FURNISHED INACCURATE PARTICULARS OF INCOME AND WAS LIABLE TO PENALTY U/S.271(1)(C). 2. AT THE OUTSET OF HEARING, LD. AUTHORIZED REPRESE NTATIVE POINTED OUT THAT QUANTUM ADDITION WHICH IS THE BASI S OF PENALTY HAS BEEN DELETED BY ITAT C BENCH IN ITA N OS. 869 & ITA NO.2541/AHD/13 & C.O. NO.77/AHD/14 A.Y. 07-08 [DCIT VS. M/S. ADANI PROPERTIES LTD.] PAGE 3 881/AHD/2011 FOR A.YS. 2006-07 & 2007-08. FOR THE SAME, LD. AUTHORIZED REPRESENTATIVE TOOK US THROUGH THE P APER BOOK PAGE NOS. 91 TO 98 WHEREIN QUANTUM APPEAL WAS DISCUSSED AND DECIDED IN FAVOUR OF ASSESSEE BY OBSE RVING AS UNDER: 17. AS FAR AS ASSESSMENT YEAR 2007-08 IS CONCERNED , ASSESSEE HAS LIQUIDATED ITS INVESTMENT OF RS. 100 C RORE, THEREFORE, A SUM OF RS. 100 CRORE WAS AVAILABLE WIT H THE ASSESSEE. DURING THE COURSE OF HEARING, WE HAVE CONFRONTED THE LD. COUNSEL TO SHOW THAT ON LIQUIDAT ION OF INVESTMENT, ASSESSEE HAD REALIZED 100 CRORE. BECAUS E, IF THE VALUE OF SHARES WAS DIMINISHED ON ACCOUNT OF FLUCTUATION IN MARKET, THEN HOW CREDIT OF RS. 100 C RORE CAN BE GIVEN FOR QUANTIFYING THE INTEREST FREE FUND S WITH THE ASSESSEE. LD. COUNSEL SHOWED US THE REALIZATION OF THE INVESTMENT AT RS. 100 CRORE ACCOUNTED IN THE ACCOUN TS. SIMILARLY, IT HAS RESERVE AND SURPLUS OF RS. 165 CR ORE. IF RS. 24 CRORE TAKEN OUT FROM THIS WHICH WAS ADDED ON ACCOUNT OF REVALUATION IN THE LAST YEAR, THEN, THE SUM AT RS. 141 CRORE WILL BE AVAILABLE TO THE ASSESSEE. IF THE INVESTMENT REALIZED BY THE ASSESSEE OUT OF LIQUIDAT ION OF RS. 100 CRORE IN THE SHARES IS ADDED WITH INTEREST FREE FUNDS AT RS. 141 CRORE, THEN, ASSESSEE HAS THE FUND S OF RS. 241 CRORE. IT HAS GIVEN INTEREST FREE ADVANCES OF RS. 153.52 CRORE ONLY. IT HAS DEMONSTRATED THAT IT HAS MORE INTEREST FREE FUND THAN THE ONE GIVEN TO THE SISTER CONCERN. THERE IS NO DISPUTE ON FACTS BETWEEN BOTH THE ASSES SMENT YEARS. THEREFORE, CONSIDERING THE DISCUSSION IN ASSESSMENT YEAR 2006- 07, NO DISALLOWANCE IS SUSTAI NABLE IN THIS YEAR ALSO. THESE GROUNDS OF APPEALS ARE ALL OWED AND DISALLOWANCE AT RS. 44,65,790/- AS WELL AS RS. 46,76,672/- IN ASSESSMENT YEAR 2006-07 AND 2007-08 ARE DELETED. 2.1 THUS, WE FIND THAT QUANTUM ADDITION HAS ALREADY BEEN DELETED, SO, QUANTUM ADDITION, WHICH IS BASIS OF PE NALTY, DOES NOT SURVIVE. IN VIEW OF THE TRIBUNALS DECISI ON IN ITA NO.2541/AHD/13 & C.O. NO.77/AHD/14 A.Y. 07-08 [DCIT VS. M/S. ADANI PROPERTIES LTD.] PAGE 4 QUANTUM, PENALTY U/S.271(1)(C) OF THE ACT DOES NOT SURVIVE. SAME IS DIRECTED TO BE DELETED. 3. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. C.O. NO.77/AHD/2014 4. LD. A.R. HAS NOT PRESSED THE CROSS OBJECTION. T HUS, THE C.O. FILED BY ASSESSEE IS DISMISSED AS NOT PRESSED. 5. IN THE RESULT, THE REVENUES APPEAL AND ASSESSEE S C.O. BOTH ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF JULY, 2016. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER AHMEDABAD: DATED 14/07/2016 TRUE COPY S.K.SINHA ! / COPY OF ORDER FORWARDED TO:- $% / REVENUE 2% / ASSESSEE '%()(*+ , / CONCERNED CIT 4% ,- / CIT (A) 1%23 45*+6 *+67 ) / DR, ITAT, AHMEDABAD 8%4 9:; < / GUARD FILE. BY ORDER / 6 /7 ( *+67 )