PUNE KONDHWA REALTY PVT. LTD., MUMBAI V. DCIT - 14 (2)(2), MUMBAI

ITA 2481/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1748 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 22-04-2019

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI M. BALAGANESH , AM & SHRI AMARJIT SINGH , JM SA NO.224/MUM/2019 ARISING OUT OF ITA NO. 2481 / MUM/20 1 9 ( ASSESSMENT YEAR : 2008 - 09 ) & ITA NO. 2481 /MUM/201 9 ( ASSESSMENT YEAR : 2008 - 09 ) SA NO.225/MUM/2019 ARISING OUT OF ITA NO. 2482 /MUM/201 9 ( ASSESSMENT YEAR : 2009 - 10 ) & ITA NO. 2482 /MUM/201 9 ( ASSESSMENT YEAR : 2009 - 10 ) M/S. PUNE KONDHWA REALTY PRIVATE LIMITED UNIT NO.215, THE CAPITAL, G - BLOCK, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 VS. DY. COMMISSIONER OF INCOME TAX - 14(2)(2) ROOM NO.461, AAYAKAR BHAVAN, MAHARSHI KARVE ROAD, MARINE LINES, MUMBAI 400 020 PAN/GIR NO. AAACW6665N ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI SANJAY SANGHVI & SHRI RAGHAV KUMAR BAJAJ REVENUE BY SHRI S.H. USMANI DATE OF HEARING 03 / 05 /201 9 DATE OF PRONOUNCEMENT 12 / 06 /201 9 SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 2 / O R D E R PER M. BALAGANESH (A.M) : TH E S E APPEAL S IN ITA NO S . 2481/MUM/2019 & 2482/MUM/2019 FOR A.Y RS . 2008 - 09 & 2009 - 10 ARISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 22, MUMBAI IN APPEAL NO. CIT(A) - 22/DCIT - 14(2)/IT/10252/201 6 - 17 DATED 14/02/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 28/03/2016 BY THE LD. DY. COMMISSIONER OF INCOME TAX 14(2)(2) (HEREINAFTER REFERRE D TO AS LD. AO). 2. AT THE TIME OF HEARING OF STAY APPLICATIONS IN SA NOS. 224 & 225/MUM/2019 ON 03/05/2019 , WITH THE CONSENT OF BOTH THE PARTIES THE MAIN APPEALS FOR A.YRS 2008 - 09 AND 2009 - 10 WERE ALSO TAKEN UP FOR HEARING. THE ONLY COMMON ISSUE RAISED BY THE ASSESSEE IN BOTH THE APPEALS IS A PART FROM CHALLENGING THE VALIDITY OF REOPENING THE ASSESSMENT , IS AN ADDITION MADE U/S.68 OF THE ACT IN RESPECT OF SHARE CAPITAL RECEIVED UNDER FOREIGN DIRECT INVESTMENT (FDI) GROUP. THE FACTS IN APPEAL NO.2481/MUM/20 19 ARE TAKEN UP FOR ADJUDICATION FOR A.Y.2008 - 09 AND THE DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR A.Y.2009 - 10 ALSO. 3. THE BRIEF FACTS OF THIS APPEAL IS THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF ACQUISITION , DEVELOPMENT, SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 3 CONSTRUCTION, MARKETING AND SALE OF RESIDENTIAL TOWNSHIP PROJECT OF APPROXIMATELY 110 ACRES IN PUNE, MAHARASHTRA. THE ASSESSEE HAS TWO SHAREHOLDERS, ONE IS AN INDIAN COMPANY, PRA REALTY (INDIA) PVT. LTD. [DOMESTIC SHAREHOLDER] AND THE OTHER IS A MA URITIUS COMPANY (WSI/WSQI V (XXIII) MA URITIUS INVESTORS LTD., [MA URITIUS SHAREHOLDER]. THE MA URITIUS SHAREHOLDER IS ULTIMATELY OWNED BY A BROAD BASED REAL ESTATE FOCUS S ED PROFIT EQUITY FUND MANAGED BY AFFILIATES OF WALTON STREET CAPITAL, LLC WITH EQ UITY COMMITMENTS IN EXCESS OF USD 1.5 BILLION FROM INVESTORS WHICH PRIMARILY COMPRISES US BASED PENSION FUNDS, GOVERNMENT FUNDS, INSURANCE COMPANIES ETC., DURING THE A.Y.2008 - 09, THE ASSESSEE RAISED SHARE CAPITAL FROM ITS SHARE HOLDERS. THE ASSESSMENT FOR THE A.Y.2008 - 09 WAS REOPENED AND RE - ASSESSMENT WAS COMPLETED WHEREIN ADDITION WAS MADE U/S.68 OF THE ACT IN RESPECT OF SHARE CAPITAL RECEIVED BY THE ASSESSEE. LATER THE ADDITION AMOUNT WAS SOUGHT TO BE RECTIFIED BY THE ORDER PASSED U/S.154 OF THE ACT BY TH E LD. AO ON 22/04/2016, WHEREIN THE ADDITION WAS RESTRICTED TO RS.19,58,34,718/ - FOR A.Y.2008 - 09. 3.1. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) PARTLY HEARD THE MATTER AND ADJOURNED THE APPEAL TO A SPECIFIC DATE, BUT TO THE SURPRISE OF THE ASSESSEE , THE LD. CIT(A) PROCEEDED TO DISPOSE OFF THE APPEAL VIDE ITS ORDER DATED 14/02/2019 IGNORING (I) THE DETAILED LEGAL SUBMISSIONS FILED BEFORE HIM ON 23/01/2019 (II) COPY OF BANK STATEMENTS OF THE MA URITIUS SHAREHOLDER THAT ASSESSEE SUBMITTED SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 4 BEFORE THE LD. CIT(A) ON HIS REQUEST ON 30/01/2019 AND (III) MATERIALS AVAILABLE ON RECORD AND THE VARIOUS SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LD. AO WHICH INCLUDED THE A UDITED FINANCIAL STATEMENTS OF MA URITIUS SHAREHOLDER. THE ASSESSEE CAME TO KNOW OF THE DISPOSAL OF THE APPEAL BY THE LD. CIT(A) ONLY BASED ON THE RECOVERY NOTICE SENT BY THE LD. AO ON 29/03/2019 FOR RECOVERY OF TAX ARREARS. THE ORDER OF THE LD. CIT(A) WAS SERVED ON THE ASSESSEE ON 01/04/2019. 4. LATER THE ASSESSEE PREFE RRED AN APPEAL BEFORE THIS TRIBUNAL FOR A.Y.2008 - 09. THE ASSESSEE ALSO PREFERRED A RECTIFICATION PETITION U/S.154 OF THE ACT BEFORE THE LD. CIT(A) POINTING OUT VARIOUS ERRORS COMMITTED BY THE LD. CIT(A), WHICH IS STATED TO BE PENDING DISPOSAL TILL THE DATE OF HEARING OF THIS APPEAL. 5. WE HAVE HEARD RIVAL SUBMISSIONS. AT THE OUTSET, WE FIND THAT LD. CIT(A) HAD IGNORED VARIOUS SUBMISSIONS AND DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE BEFORE THE LD. AO AS WELL AS BEFORE HIM AND HAD NOT GIVEN ANY FINDING WIT H REGARD TO THOSE EVIDENCES ON MERITS. THE LD. CIT(A) HAD PRIMARILY PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF PCIT VS. NRA IRON AND STEEL LTD., REPORTED IN 412 ITR 161 (SC). BUT WE FIND THAT THE ASSESSEE HAS FILED FOLLOWING DO CUMENTS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHAREHOLDERS AND GENUINENESS OF THE TRANSACTION AS UNDER: - SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 5 (I) NAMES OF PERMANENT ACCOUNT MEMBERS ALONGWITH COPY OF PAN CARD, ADDRESSES OF DOMESTIC SHAREHOLDER AS WELL AS MA URITIUS SHAREHOLDER FILED BEFORE THE LD. AO VIDE WRITTEN SUBMISSIONS DATED 27/11/2015 AND 18/03/2016. (II) FORM FCGPRS FILED WITH RBI FOR INVESTMENT BY MA URITIUS SHAREHOLDER IN THE ASSESSEE COMPANY TOGETHER WITH THE FOLLOWING DETAILS IN RELATION TO MA URITIUS SHAREHOLDER I.E. CERTI FICATE OF INCORPORATION, TAX RESIDENCE CERTIFICATES, AUDITED FINANCIAL STATEMENTS FILED BEFORE THE LD. AO VIDE WRITTEN SUBMISSIONS DATED 27/11/2015 AND 18/03/2016. (III) COPY OF RETURN OF ALLOTMENT FILED BY THE ASSESSEE WITH REGISTRAR OF COMPANIES WHICH WE RE FILED BEFORE THE LD. AO VIDE WRITTEN SUBMISSION DATED 18/03/2016. (IV) COPY OF BANK STATEMENTS OF MAURITIUS SHAREHOLDER AS WELL AS THE ASSESSEE COMPANY WHICH WERE FILED BEFORE THE LD. CIT(A) ON HIS REQUEST VIDE LETTER DATED 30/01/2019. 5.1. WE FIND THA T T HESE DOCUMENTS WERE NOT CONSIDERED BY THE LD. CIT(A) WHILE DISPOSING OFF THE APPEAL FOR THE A.Y.2008 - 09. HENCE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE DEEM IT FIT AND APPROPRIATE TO REMAND THIS APPEAL TO THE FILE OF THE LD. CIT(A) FOR DENOVO ADJUD ICATION OF THE ENTIRE ISSUES RAISED BEFORE HIM AND DISPOSE OFF THE SAME IN ACCORDANCE WITH LAW. THE ASSESSEE IS GIVEN LIBERTY TO RAISE ADDITIONAL GROUNDS AND FILE FRESH EVIDENCES IN SUPPORT OF ITS CONTENTIONS. NEEDLESS TO MENTION THAT THE SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 6 ASSESSEE BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD . A CCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR A.Y.2008 - 09 IN ITA NO.2481/MUM/2019 ARE ALLOWED FOR STATISTICAL PURPOSES. 5.2. THE SAME DECISION RENDERED ABOVE FOR A.Y.2008 - 09 WOULD APPLY WITH EQUAL FORCE FOR A. Y.2009 - 10 IN ITA NO.2482/MUM/2019 ALSO. SA NO.224/MUM/2019 AND SA NO.225/MUM/2019: - THESE STAY APPLICATIONS ARISE OUT OF ITA NO.2481/MUM/2019 AND 2482/MUM/2019. 6. AS WE HAVE ALREADY DISPOSED ASSESSEES APPEALS, T HESE STAY PETITIONS OF THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES AND STAY PETITIONS ARE DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 06 /201 9 SD/ - ( AMARJIT SINGH ) SD/ - ( M.BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 12 / 06 /201 9 KARUNA SR. PS SA NO.224/MUM/2019 AND OTHER APPEALS M/S. PUNE KONDHWA REALTY PVT. LTD. 7 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBA I. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//