INCOME TAX OFFICER, C.R. I P ESTATE, NEW DELHI V. MILLENIUM MERITECH PRIVATE LIMITED, NEW DELHI

ITA 3184/DEL/2024

AI Insights

The case involves the Income Tax Officer (ITO) as the appellant and Millenium Meritech Private Limited as the respondent. The dispute centered on the deduction of the cost of improvement amounting to Rs. 9,80,19,310/- claimed by the respondent under the head of Capital Gains in their return of income for the Assessment Year 2023-24. The Assessing Officer (AO) initially disallowed this deduction in the intimation order under section 143(1) of the Income Tax Act, leading to an increased taxable income. The respondent appealed this decision, and the CIT(A) allowed the deduction, identifying the AO's disallowance as a clerical error. The revenue's appeal to the Tribunal contested this decision, but the Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708800 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: AMIT ARORA
• Keywords: Set aside; Capital Gains
• Section: 234B

Judgement Text

" ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E” NEWDELHI BEFORESHRISUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3184/Del/2024 Assessment Year: 2023-24 Income Tax Officer, C. R. I.P. Estate, New Delhi Vs. Millenium Meritech Private Limited, 715, Laxmee Deep Building, Laxmi Nagar, Central Delhi, Delhi-110092 PAN No.AAECA3739P (Appellant) (Respondent) ORDER PER SUDHIR KUMAR JM: The revenue preferred the appeal, challenging the order dated 07- 05-2024 passed by Commissioner of Income Tax Appeal Addl/ JCIT (A)-3, Bengaluru pertaining to A.Y. 2023-24. Appellant by Sh. Dheeraj Kumar Jain,Sr. DR Respondent by Sh.Amit Arora, CA Sh. Pranav Yadav, Advocate Date of hearing 03.07.2025 Date of pronouncement 18.07.2025 ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 2 2. The revenue has raised following grounds of appeal :- 1) \"Whether, on the facts and circumstances of the case and in law, the Ld.JCIT(Appeal) has rightly allowed the deduction of cost of improvement under the head Capital Gain amounting to Rs. 9,80,19,310/- claimed in its return of income, thereby ignoring the addition made by the AO CPC in the intimation order passed u/s 143(1) of the Act? 2) Whether, on the facts and circumstances of the case and in law, the Ld..JCIT(Appeal) has rightly allowed the deduction of cost of improvement under the head Capital Gain amounting to Rs. 9,80,19,310/- claimed in its return of income after considering it to be clerical error made on the part of the AO CPC without even verifying the claims of indexed cost of improvement claim by the assessee? 3) That the department craves to add or amend the grounds of appeal before Hon'ble ITAT is finally heard or disposed of.\" 3. The brief facts of the case are that the assessee filed its return of income declaring total income of Rs.18,29,35,390/- on 28-10-2023 for A.Y. 2023-24. In the intimation u/s. 143 (1), of the Act the income of the assessee has been computed at Rs.28,09,54,700/- after making addition / adjustments of Rs.9,80,19,310/- by not allowing the ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 3 deduction of cost of improvement under the head capital gain. The AO CPC has disallowed the total cost of improvement amounting to Rs.9,80,19,317/- as claimed by the assessee without giving any opportunity of hearing. Aggrieved by the order of the AO, the assessee filed the appeal before the Ld. CIT(A), who vide order dated 07-05- 2024 allowed the appeal of the assessee by observing as under :- Ground of appeal 2: From the facts on record, it is evident that the AO CPC in the intimation order passed u/s 143(1) has disallowed the cost of improvement along with the cost of indexation amounting to Rs. 9.80.19.317/- as claimed by the appellant in the return of income under the head of Capital Gains. The AO CPC has not given any reason for the disallowance made. Therefore, the disallowance made seems to be a clerical error and the whole cost of improvement amounting to Rs. 9.80.19.317/- cannot be disallowed in the intimation u/s 143(1), as this is not prima facie adjustment. Hence the AO is directed to pass the correct speaking order i. e order u/s 143(3)/147, if any discrepancy is found in the cost of improvement claimed by the appellant after dual verification. Therefore, the disallowance made by the AO CPC appears to be a clerical error, Hence the contention of ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 4 the appellant is accepted in the benefit of doubt. The disallowance of Rs. 9,80,19,317/- made in the intimation order u/s 143(1) is hereby deleted. The appellant gets relief of Rs. Rs. 9,80,19,317/-. The appeal filed on the ground of appeal 2 is allowed. Ground of appeal 3 & 4 : The AO is directed to calculate the correct tax payable along with accurate interest u/s. 234B and 234C as per provisions of the IT Act. The appeal filed on the grounds of appeal 3 & 4 is allowed. The appeal filed on ground of appeal 1 is general in nature does not require any specific adjudication. 6. In the result, the appeal is Allowed. 4. The Ld. Sr. DR submitted that the order was passed without any reasons. He prayed that order be set aside. Ld. AR of the assessee submitted that LD. CIT(A) has directed the AO to pass the correct and speaking order, now order has been passed by the AO. During the course of hearing the assessee has filed the copy of the order which as under: ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 5 ITA No. 3184/Del/24 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 6 5.We have heard the rival contentions and perused the material available on record. 6. Perusal of the order of the Ld. CIT(A) reveals that the AO has passed the order without reasons. Ld. CIT(A) has examined the issue in the correct prospective and rightly directed the AO to pass the correct speaking order. In the Compliance of the order of the Ld. CIT(A), the AO passed the fresh order. We do not find any reasons to interfere with the findings of the Ld. CIT(A). The appeal of the revenue is liable to be dismissed and dismissed accordingly. Order pronounced in the open court on 18 /07/2025. Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIALMEMBER Dated: 18 July,2025 “Neha, Sr. PS” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi "