DAHILA INFRASTRUCTURE PVT LTD PRESENTLY KNOWN AS GALAX MINERAL PVT. LTD,HARYANA V. DCIT, CIR 7(1), DELHI

SA 16/DEL/2025

AI Insights

The case involves Dahlia Infrastructure Private Limited, now known as Galax Mineral Pvt. Ltd, which filed a stay application against the Deputy Commissioner of Income-Tax concerning an outstanding demand of Rs. 53,89,569 for the assessment year 2015-16. The demand arose from an assessment order that recalculated the assessee's income, disallowing significant short-term capital losses and other deductions. The Tribunal considered the application during a hearing where both parties presented their arguments. The Tribunal's decision to grant a partial stay was based on the assessee's compliance with procedural requirements, including the deposit of a substantial portion of the disputed demand.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473072 (ITAT-DELHI)
• Appeal Type: Stay Application
• Pronouncement Date: 14-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: DCIT v. Azalea Infrastructure Private Limited in ITA No.3667/Del/2017
• Laws Referred To: Income-tax Act, 1961, Income-tax Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: MANOJ KUMAR
• Keywords: Capital Gains; Earning of tax free income; Rule 8D; Application of stay
• Section: 143(3); 14A

Judgement Text

" SA No. 16/Del/2025 Arising out of ITA no. 5172/Del/2024 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” NEW DELHI BEFORE SHRI MAHAVIR SINGH,VICE PRESIDENT AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER S A No. 16/Del/2025 (arising out of ITA No.5172/Del/2024) (Assessment Year: 2015-16) Dahlia Infrastructure PrivateLimited (presently known as Galax Mineral Pvt. Ltd) 2nd Floor, 591, Udyog Vihar, Phase- V, Industrial Complex Dundahera-122016 Haryana PAN: AADCD4141K v. The Deputy Commissioner of Income-Tax Circle – 7 (1) , C R Building Delhi-110002 (Appellant) (Respondent) Appellant by Sh. Manoj Kumar, CA Respondent by Sh. Sanjay Kumar, Sr. DR. Date of Hearing 14.02.2025 Date of Pronouncement 14.02.2025 O R D E R PER RAMIT KOCHAR,A.M. The assessee has filed this stay application bearing SA No.16/Del/2025 for assessment year 2015-16 arising out of ITA No. 5172/Del/2024, seeking stay of recovery of outstanding demand of SA No. 16/Del/2025 Arising out of ITA no. 5172/Del/2024 2 Rs.53,89,569/-. The total demand of Rs. 67,39,569/- towards income-tax and interest thereon had arisen vide notice of demand issued pursuant to assessment order dated 30.12.2017 passed by learned Assessing Officer u/s 143(3) of the Income-tax Act, 1961. It is claimed that Rs. 13,50,000/- stood already paid out of the aforesaid total demand raised by the AO aggregating to Rs.67,39,569/- , which constituted more than 20%,which also found mention in order dated 04.04.2022 u/s 220(6) passed by the AO (DIN & Order No. ITBA/COM/F/17/2022-23/1042476175(1)) 2. The Ld. Counsel for the assessee submitted that the assessee was engaged in the business of development of infrastructure and to undertake infrastructure projects and also in the business of real estate. It was submitted that the return of income was filed declaring loss of Rs. 3,92,92,800/-. It was stated that the case of the assesseewas selected by Revenue for framing scrutiny assessment ,and the income of the assessee was assessed at Rs. 2,03,48,962/- against returned loss of Rs. 3,92,92,800/-. The short termcapital loss of Rs.5,46,97,033/- on account of forfeiture of share warrant upfront money was disallowed by the AO. Further, there was disallowance of Rs. 49,44,460/- u/s 14A read with Rule 8D of the Income-tax Rules, 1962. It was submitted that the AO while passing order dated 04.04.2022 u/s. 220(6) had granted stay of recovery of balance outstanding demand of Rs. 53,89,569/- as the assessee has deposited Rs. 13,50,000/- being 20% of the total disputed demand of Rs.67,39,570/-.Prayers were made to stay the recovery of remainingoutstanding demand of Rs.53,89,569/-. SA No. 16/Del/2025 Arising out of ITA no. 5172/Del/2024 3 2.2 It was submitted by learned counsel for the assessee that the learned CIT(A) has dismissed the appeal of the assessee. It was submitted that the assessee has deposited more than 20% of the outstanding demand and the assessee will not seek adjournment and will cooperate with the Tribunal in early disposal of the appeal. It was submitted by learned counsel for the assesseethat the AO disallowed losson share warrants to the tune of Rs.5,46,97,033/- being claimed as short term capital loss under the head ‘Income from Capital Gains’. The assessee paid an up-front amount of Rs. 5,46,97,033/- (being 25%) to subscribe to share warrants issued by India Bulls Infrastructure and Power Limited(IIPL). The share warrants were allotted by the said company. It was submitted that the assessee has to pay remaining 75% to be eligible to get the warrants converted into shares, but for business reasons the assessee surrendered its rights of conversion of share warrants, and the assessee did not pay remaining 75%. It was submitted by learned counsel for the assessee that the said company IIPL forfeited the upfront amount of Rs. 5,46,97,033/- paid by the assessee, and hence short term capital loss had arisen which was claimed in return of income filed by the assessee with Revenue. The authorities below denied the said short term capital loss . The ld. Counsel for the assesseeplaced reliance on the order dated 28.01.2021 passed by ITAT, Delhi Bench in the case of DCIT v. Azalea Infrastructure Private Limited in ITA No.3667/Del/2017, to support its contentions that the said loss is allowable. With respect to the disallowance made by the AO towards disallowance u/s 14A SA No. 16/Del/2025 Arising out of ITA no. 5172/Del/2024 4 of the 1961 Act read with Rule 8D of the 1962 Rules, it was submitted by ld. Counsel for the assessee that the assessee did not earn any exempt income ,and hence no disallowance u/s 14A are warranted. Prays were made to stay the balance outstanding demand of Rs. 53,89,569/-. 3. The Ld. Sr. DR opposed the stay application and prayed for dismissal of the stay application. The ld. Sr. DR submitted that if the stay of recovery of demand is to be allowed , then the assessee be directed to deposit atleast20% of disputed demand. 4. After hearing both the parties and going through the material available on record and without commenting on the merits of the issues involved in the appeal in ITA No. 5172/Del/2024, we observe that the assessee has made out a prima facie case for the grant of partial stay on recovery of the outstanding demand of Rs. 67,39,569/-, on the condition that the assessee will deposit 20% of the aforesaid outstanding demand to secure the interest of Revenue, on or before 28th February, 2025. The claim of the assessee that it has already deposited Rs. 13,50,000/- which is more than 20% of the outstanding demand , shall also be verified by the AO, before giving effect to this order. On the fulfilment of aforesaid condition, the remaining outstanding demandof Rs. 53,89,569/- shall be stayed for a period of 180 days or till the disposal of appeal in ITA no. 5172/Del/2024 for ay:2015-16, whichever is earlier. The assesseeshall furnish the proof ofdeposit of the aforesaid amount of Rs. 13,50,000/-(already claimed to be deposited being more than 20%) as directed above , before the AO SA No. 16/Del/2025 Arising out of ITA no. 5172/Del/2024 5 as well before Registry of ITAT,latest by 28.02.2025.We once again clarify that we have not commented on the merits of the issue’s involved in the appeal. Further, that the assessee will fully co- operate in speedy disposal of the appeal by ITAT, and the assessee will not seek any un-necessary adjournments before the Tribunal in the appellate proceedings in ITA No. 5172/Del/2024. On breach of conditions, the stay shall stand vacated . The appeal of the assessee in ITA no. 5172/Del/2024 for ay:2015-16 is now directed to be listed for hearing before ‘B’ Bench, New Delhi on 20.03.2025. The date of hearing was announced in the open court and noted by both the parties, and accordingly issuance of notice stand dispensed with. The terms of stay were announced by Division Bench during the course of hearing of stay application in open Court. We order accordingly. 5. In the result, Stay Application is allowed in the manner as indicated above. Order pronounced in the open courton 14th February, 2025. Sd/- Sd/- (MAHAVIR SINGH) (RAMIT KOCHAR) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 14/02/2025 Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "