INDOUNIQUE FLAME LIMITED,NAGPUR V. DCIT CIRCLE-1, NAGPUR

ITA 361/NAG/2024

AI Insights

The case involves Indounique Flame Ltd., the appellant, contesting an order from the Commissioner of Income Tax (Appeals) which confirmed an addition of Rs.1,29,08,000 under section 50C of the Income Tax Act, 1961. The appellant argued that the CIT(A) passed an ex-parte order without sufficient opportunity for the assessee to be heard, and that the CIT(A) erred in confirming the addition and the interpretation of section 50C as it applied to specified capital assets. The respondent, Deputy Commissioner of Income Tax, supported the CIT(A)'s decision, asserting that adequate opportunities were provided to the assessee. The Tribunal, after considering the submissions, decided to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474248 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: HIMESH DEMLE
• Keywords: Set aside; Capital asset; Opportunity of being heard; Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 250; 50C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGARAO, JUDICIAL MEMBER AND SHRIK.M. ROY, ACCOUNTANT, MEMBER ITA no.361/Nag./2024 (Assessment Year : 2015–16) Indounique Flame Ltd. 301, Kothari Bhavan WHC Road, Dharampeth Nagpur 440 010 PAN – AAACI3496D ……………. Appellant v/s Dy. Commissioner of Income Tax Circle–1, Nagpur ……………. Respondent Assessee by : Shri Himesh Demle Revenue by : Shri Abhay Y. Marathe Date of Hearing – 07/01/2025 Date of Order – 27/01/2025 O R D E R PER V. DURGA RAO, J.M. This appeal by the assessee is emanating from the impugned order dated 02/05/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015–16. 2. In its appeal, the assessee has raised following grounds:– “1. That, on the facts and in the circumstances of the case and as per the prevailing law, the order framed u/s 250 of the I.T. Act, 1961 by the Ld. CIT(A) is unjustified, bad-in-law, and devoid of proper reasoning. 2. That, on the facts and in the circumstances of the case and as per the prevailing law, the Ld. CIT(A) ought to have provided an opportunity of being heard before framing the order u/s 250 of the I.T. Act, 1961. 2 Indounique Flame Ltd. ITA no.361/Nag./2024 3. That, on the facts and in the circumstances of the case and as per the prevailing law, the Ld. CIT(A) erred in confirming the addition made by the Ld. A.O. of Rs.1,29,08,000/- u/s 50C of the I.T. Act, 1961. 4. That, on the facts and in the circumstances of the case and as per the prevailing law, the e prevailing law, the CIT(A) erred in confirming the order of the Ld. A.O. in interpreting the application of provisions of sec 50C of the I.T. Act, 1961 to specified capital assets. 5. That, on the facts and in the circumstances of the case and as per the prevailing law, the Ld. CIT(A) erred in upholding the order and contention of the Ld. A.O. that the assessee is the absolute owner of the land under consideration, whereas, the assessee holds merely leasehold rights. 6. That, the assessee carves to, leave to, add to, alter, amend, modify, substitute, delete, and/or, rescind any of the ground/grounds of the appeal on or before the final hearing of the appeal. 3. When this appeal is taken up for hearing, the learned A.R. appearing for the assessee submitted that the learned CIT(A) passed an ex-parte order without granting sufficient opportunity for hearing and prayed that one opportunity may be granted by restoring the matter to the file of the learned CIT(A) to enable the assessee to substantiate its case before the learned CIT(A). 2. On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assessee, however, the assessee did not appear before the learned CIT(A) and not furnished relevant details. He strongly supported the orders passed by the learned CIT(A). 3. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. We find that though the learned CIT(A) granted opportunities to the assessee to substantiate its case, ultimately, the order passed by him is an ex-parte order. Therefore, we are of the opinion that by following the principles of natural justice, one 3 Indounique Flame Ltd. ITA no.361/Nag./2024 opportunity should be given to the assesse to substantiate the case before the learned CIT(A). In view of the above, the order passed by the learned CIT(A) is set aside and remit the matter to the file of the learned CIT(A) and direct him to adjudicate the matter afresh on merit and in accordance with law after providing reasonable opportunity of being heard to the assessee. It is also directed that the assessee should not seek adjournment without there being a justified reason. Accordingly, all the grounds raised by the assessee in this appeal are allowed for statistical purposes. 4. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/01/2025 Sd/- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 27/01/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "