Appeal details
Counselvise Citation
206021714 RSA 2014
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-03-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
26-02-2015
Assessment Year
2000-2001
Appeal Filed On
04-08-2014
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , ! . . ' , # $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NOS.2059 & 2060/MDS/2014 # % !&% / ASSESSMENT YEARS : 1999-2000 & 2000-2001 M/S CITI FINANCIAL RETAIL SERVICES (I) LTD., (NOW KNOWN AS CITI CORP FINANCE (INDIA) LTD.), 117, RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI - 600 004. PAN : AAACN 2379 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. (()/ APPELLANT) (+,()/ RESPONDENT) () - . / APPELLANT BY : SHRI V.S. JAYAKUMAR, ADVOCATE +,() - . / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT / ! - 0 / DATE OF HEARING : 26.02.2015 1& - 0 / DATE OF PRONOUNCEMENT : 11.03.2015 / O R D E R PER BENCH: THESE ASSESSEES APPEALS FOR ASSESSMENT YEARS 199 9- 2000 AND 2000-2001, ARISE FROM A COMMON ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNAI, D ATED 24.01.2014 PASSED IN ITA NOS.380 & 381/13-14 SUSTAI NING THE - - I.T.A. NOS.2059 & 2060/MDS/2014 2 ASSESSING OFFICERS ACTIONS ADDING SHORT TERM CAPIT AL GAINS OF ` 29,88,022/- AND WRITTEN BACK SUM OF ` 22,80,832/- UNDER SECTION 41(1) RESPECTIVELY, IN PROCEEDINGS UNDER SECTION 14 3(3) R.W.S. SECTION 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT ' THE ACT'). 2. A COMBINED PERUSAL OF BOTH CASES REVEALS THAT TH ESE APPEALS ARE TIME BARRED DUE TO DELAY OF 120 DAYS IN FILING. THE ASSESSEES MANAGING DIRECTOR HAS FILED A CONDONATIO N AFFIDAVIT DATED 08.09.2014 ATTRIBUTING THIS DELAY TO ITS AMAL GAMATION WITH ANOTHER IDENTITY AND PROCEDURAL REQUIREMENTS INVOLV ED THEREIN. THE REVENUE FAILS TO CONTROVERT THESE SOLEMN AVERME NTS. THEREFORE, WE ACCEPT THE ASSESSEES CONDONATION AFF IDAVITS, CONDONE DELAY OF 120 DAYS EACH IN BOTH CASES AND PR OCEED TO DEAL WITH THE MERITS. 3. WE TAKE UP I.T.A. NO. 2059/MDS/2014 FOR ASSESSME NT YEAR 1999-2000 FIRST RAISING SOLE SUBSTANTIVE ISSUE OF SHORT TERM CAPITAL GAINS OF ` 29,88,022/-. THE ASSESSEE IS A FINANCE COMPANY. IT HAD FILED ITS RETURN ON 16.12.1999 ADM ITTING INCOME OF ` 90,22,970/- UNDER NORMAL COMPUTATION WITH BOOK PR OFITS OF ` 3,00,76,566/-. THE SAME WAS SUMMARILY PROCESSED. THEREAFTER, THE ASSESSING OFFICER TOOK UP SCRUTINY . HE INTER ALIA - - I.T.A. NOS.2059 & 2060/MDS/2014 3 NOTICED A SUM OF ` 2,52,38,888/- AS OPENING BALANCE IN THE LAND ACCOUNT OF FIXED ASSET SCHEDULE. THE ASSESSEE HAD PUT UP A NOTE ABOUT THE LAND SOLD AND PENDING OF NECESSARY R EGISTRATION EVEN AFTER RECEIVING FULL CONSIDERATION MONEY. THE PURCHASE COST OF THESE TWO CHUNKS OF LAND WAS ` 24,35,450/- AND ` 1,96,00,000/- IN FINANCIAL YEAR 1997-98 ADDED BY STAMP DUTY OF ` 32,25,000/- TOTALLING TO ` 2.5 CRORES. THE ASSESSING OFFICER FOUND THAT THE POSSESSION HAS ALREADY BEEN DELIVERED TO THE VENDEE CONCERNED WHO HAD RAISED A BUILDING THEREUPON. HE QUOTES SEC TION 53A OF THE TRANSFER OF PROPERTY ACT AND PROPOSED TO COMPUT E THE IMPUGNED SHORT TERM CAPITAL GAINS. 4. THE ASSESSEE CONTESTED THE ASSESSING OFFICERS P ROPOSAL. IT PLEADED THAT THE GROSS AMOUNT OF ` 2,82,23,910/- INCLUDED COST OF LAND AS WELL AS BUILDING AND ITS VENDEE HAD BORN E THE LATTER OUTGO. IT WOULD CONTEND THAT THE TRANSFER OF PROPE RTY LAW AT THE TIME OF REGISTRATION COMPLETED ON 22.01.2003 HAD NO T BEEN CONSIDERED FOR DETERMINING VALUE OF THE LAND INCLUD ING BUILDING IN QUESTION. THE ASSESSING OFFICER ADVERTED TO CONTEN TS OF SALE DEED AND FOUND THAT THE ASSESSEE HAD ITSELF ACKNOWL EDGED TO HAVE RECEIVED ACTUAL SALE PRICE OF ` 2,82,23,910/-. IN LIGHT - - I.T.A. NOS.2059 & 2060/MDS/2014 4 THEREOF, HE REJECTED THE ASSESSEES EXPLANATION AND COMPUTED IMPUGNED SHORT TERM CAPITAL GAINS OF ` 29,88,022/-. 5. THE ASSESSEE PREFERRED AN APPEAL. IT WOULD FILE WRITTEN SUBMISSION ON 28.05.2009 RELYING ON ITS ACCOUNT BOO KS / OTHER DOCUMENTS AND PLEADED THAT SALE CONSIDERATION IN QU ESTION INCLUDED COST OF BUILDING AS WELL (SUPRA). THE SAM E WERE NEVER FILED IN THE LOWER APPELLATE PROCEEDINGS TILL PASSI NG OF ORDER UNDER CHALLENGE DATED 24.1.1014. THE CIT(A) REJECTED THE ASSESSEES ARGUMENTS. THEREFORE, IT HAS FILED THE INSTANT APP EAL. 6. WE HAVE HEARD BOTH SIDES AND GONE THROUGH THE RE LEVANT FINDINGS. IT IS MADE CLEAR THAT THERE IS NO EVIDEN CE FILED BEFORE US TO REBUT THE CIT(A)S FINDINGS THAT THE SALE CONSID ERATION DID NOT INCLUDE VALUE OF THE BUILDING OR DISPUTING ITS ACKN OWLEDGEMENT IN THE SALE DEED (SUPRA) OF HAVING RECEIVED FULL SALE PRICE. EVEN THE SALE DEED IN QUESTION HAS NOT BEEN PLACED ON RECORD . THEREFORE, WE AFFIRM THE CIT(APPEALS)S FINDINGS AND REJECT TH E ASSESSEES GROUND. I.T.A. NO. 2059/MDS/2014 IS DISMISSED. 7. NOW WE COME TO I.T.A. NO. 2060/MDS/2014 (ASSESSM ENT YEAR 2000-2001) CHALLENGING ADDITION OF WRITTEN BAC K SUM OF - - I.T.A. NOS.2059 & 2060/MDS/2014 5 ` 22,80,832/- UNDER SECTION 41(1) OF THE ACT TREATED AS CESSATION OF LIABILITY. THE ASSESSEE HAD WRITTEN BACK THIS A MOUNT DUE TO M/S NEPC AS NO LONGER PAYABLE. IT WOULD NOT TREAT THIS SUM AS TAXABLE INCOME SINCE NO CORRESPONDING DEBIT HAD BEE N CLAIMED. THE RELEVANT NOTE IN COMPUTATION STATED THE SUM AS UNPAID PURCHASE CONSIDERATION OF CAPITAL ACCOUNT TREATED A S CAPITAL INCOME/RECEIPT. THE ASSESSEE HAD PURCHASED WINDMIL LS FROM M/S NEPC FOR A SUM OF ` 1.02 CRORES ON 26.09.1997. IT WOULD CAPITALIZE THE ENTIRE AMOUNT AND CLAIM DEPRECIATION THEREUPON. LATERON, IT CHOSE NOT TO PAY THE BALANCE AMOUNT OF ` 22,80,832/- THE ASSESSING OFFICER INVOKED SECTION 41(1) OF THE ACT AND TREATED THIS AMOUNT AS PROFITS ARISING FROM CESSATI ON OF LIABILITY. HE OBSERVED THAT THE ASSESSEE HAD ALREADY CLAIMED E NTIRE EXPENDITURE IN ITS PROFIT & LOSS ACCOUNT. THIS RES ULTED IN THE IMPUGNED ADDITION. THE CIT(A) HAS ALSO SUSTAINED T HE ASSESSING OFFICERS ACTION. 8. HEARD BOTH SIDES. RECORD PERUSED. IT HAS COME ON RECORD THAT THE ASSESSEE HAD ALREADY CLAIMED THE EN TIRE PURCHASE COST OF ` 1.02 CRORES (INCLUDING THE IMPUGNED SUM) IN ITS PROFIT & LOSS ACCOUNT AND CLAIMED DEPRECIATION. TH E CASE FILE - - I.T.A. NOS.2059 & 2060/MDS/2014 6 READS THAT THIS SUM WRITTEN BACK HAS ALREADY BEEN F ORMING PART OF THE ABOVE SAID CAPITALIZATION EXERCISE. IN THESE C IRCUMSTANCES, WE FIND NO GROUND TO INTERFERE WITH THE LOWER AUTHO RITIES ACTION IN INVOKING SECTION 41(1) OF THE ACT FOR TREATING IT A S PROFITS ARISING FROM CESSATION OF LIABILITY. THE ASSESSEE FAILS TO POINT OUT ANY FACTUAL OR LEGAL INFIRMITY IN THE FINDINGS UNDER CH ALLENGE. THE CIT(A)S ORDER IS UPHELD. I.T.A. NO. 2060/MDS/2014 IS DISMISSED. 9. TO SUM UP, ASSESSEES BOTH THE APPEALS I.T.A. NO . 2059/MDS/2014 AND I.T.A. NO. 2060/MDS/2014 ARE DISM ISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 11 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (S.S. GODARA) ( . ) ( . . ') / ACCOUNTANT MEMBER # /JUDICIAL MEMBER /CHENNAI, 3 /DATED, THE 11 TH MARCH, 2015. KRI. - - I.T.A. NOS.2059 & 2060/MDS/2014 7 4 - +#056 76&0 /COPY TO: 1. () /APPELLANT 2. +,() /RESPONDENT 3. / 80 () /CIT(A)-II, CHENNAI 4. / 80 /CIT, CHENNAI-I, CHENNAI 5. 6!9' +#0# /DR 6. ':% ; /GF.
