LOTUS PERMISES PVT. LTD., Jaipur V. ITO, Jaipur

ITA 147/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2145 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 19-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Capital asset
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 147/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S LOTUS PREMISES PVT. LTD., 12-13, PATEL COLONY, SARDAR PATEL MARGE, C- SCHEME, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD -2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCL 0876 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA ( ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 04/08/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT (APPEALS)-I, JAIPUR DATED 12.01.2016 PERTAINING TO A.Y. 2011-12. THE ASSESSEE HAS RAISED FOLLOWINGS GROUNDS OF APPEA L. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF RS. 2 7,56,797/- DEBITED IN PROFIT & LOSS ACCOUNT WITHOUT ANY REASON. 2. THE ASSESSEE CRAVE YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. THE ASSESSEE HAS ALSO TAKEN AN ADDITIONAL GROUND THAT READS AS UNDER:- 2 ITA NO. 147/JP/2016. M/S LOTUS PREMISES PVT. LTD., JAIPUR. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IF, THE EXPENDITURE OF RS. 27,56,797/- IS NOT ALLOWED TO CARRIED FORWARD AS BU SINESS LOSS THAN THE EXPENDITURE INCURRED ON INTEREST AND OTHER RELATED EXPENSES SHOULD BE ALLOWED FOR CAPITALIZATION ALTERNATIVELY. 2. GROUND NO. 2 OF ASSESSEES APPEAL IS GENERAL IN NATURE AND NEED S NO SEPARATE ADJUDICATION. 3. FIRST WE TAKE UP THE ADDITIONAL GROUND IN ASSESS EES APPEAL THAT READS AS UNDER:- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IF, THE EXPENDITURE OF RS. 27,56,797/- IS NOT ALLOWED TO CARRIED FORWARD AS BU SINESS LOSS THAN THE EXPENDITURE INCURRED ON INTEREST AND OTHER RELATED EXPENSES SHOULD BE ALLOWED FOR CAPITALIZATION ALTERNATIVELY. 4. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 31/10/2013, WHILE FRAMING THE ASSESSMENT, THE ASSES SING OFFICER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION NO BUSINESS ACT IVITY WAS CARRIED OUT BY THE ASSESSEE COMPANY. THE ASSESSEE HAS PURCHASED ONE PR OPERTY OF RS. 5,16,94,410/- IN THE COMPUTATION OF INCOME THE ASSESSEE HAS CLAIM ED LOSS OF RS. 27,56,797/- THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISALLOWED THE CLAIM OF THE LOSS. AGAINST THIS, THE ASSESSEE PREF ERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. 5. NOW, THE ASSESSEE IS IN FURTHER APPEAL. 6. BY WAY OF ADDITIONAL GROUND THE ASSESSEE IN SEEK ING CAPITALIZATION OF EXPENSES SO INCURRED. 3 ITA NO. 147/JP/2016. M/S LOTUS PREMISES PVT. LTD., JAIPUR. 7. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED T HAT THE EXPENDITURE WAS INCURRED FOR PURCHASE OF CAPITAL ASSETS. FURTHER H E REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. 8. LD. D/R OPPOSED THE SUBMISSIONS AND SUBMITTED TH AT IT IS NOT A LEGAL ISSUE AND THEREFORE, CANNOT BE ADMITTED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR VIEW ALLOWABILITY OF CAPITALIZATION OF EXPENSES IS NECESSARILY A LEGAL ISSUE. THEREFORE, THE GROUND IS ADMITTED FOR ADJUD ICATION. AFTER CONSIDERING THE TOTALITY OF THE FACT AND MORE PARTICULARLY WHEN THI S ASPECT IS NOT EXAMINED BY THE ASSESSING OFFICER, UNDER THESE FACTS WE HEREBY DIRE CT THE ASSESSING OFFICER FOR VERIFYING THE CLAIM OF THE ASSESSEE AND ALLOW THE S AME IN ACCORDANCE WITH LAW. THE ADDITIONAL GROUND IS ALLOWED FOR STATISTICAL PU RPOSE. 10. NOW, COMING TO GROUND NO. 1 AS THIS GROUND IS CONNECTED WITH ADDITIONAL GROUND, WE DEEM IT PROPER TO RESTORE THIS ISSUE AS WELL TO AO. THUS, GROUND NO. 1 IS ALSO ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 04 TH DAY OF AUGUST 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 04/08/2017. POOJA/ 4 ITA NO. 147/JP/2016. M/S LOTUS PREMISES PVT. LTD., JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S LOTUS PREMISES PVT. LTD. JAI PUR. 2. THE RESPONDENT- INCOME TAX OFFICER, WARD-2(2), J AIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 147/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR