ITO 11(3)(2), MUMBAI V. VALECHA L M TOLL P.LTD, MUMBAI

ITA 3081/MUM/2017

AI Insights

The case involves the Income Tax Department (revenue) appealing against the order of the Learned Commissioner of Income Tax (Appeals)-18, which had deleted various additions and disallowances made by the Assessing Officer (AO) in the assessment of Valecha L. M. Toll P. Ltd. for the assessment year 2011-12. The additions and disallowances pertained to excessive project costs, interest expenses, business promotion expenses, and traveling expenses totaling approximately INR 35.6 crore. The tribunal noted that the assessee company was undergoing liquidation proceedings before the NCLT, a fact not disputed by the representatives, and thus decided to dismiss the appeal with a provision to restore it post-moratorium period.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299262 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 12-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SIMONI DOHSI KRUNAL GANDHI
• Keywords: Liquidation
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA N o. 3081/M U M /20 17 (A s s ess me nt Y ea r: 20 11-12) ITO-11 (3)(2) Room No. 428, Aayakar Bhavan, 4 th Floor, M. K. Marg, Mumbai-400020 V s. M/s. Valecha L. M. Toll P. Ltd. 4 th Floor, Plot No. B-6, Valecha Chambers, New Link Road, Andheri West, Mumbai-400020 PA N /GI R N o. AAD C V278 7M (Appellant) : (Respondent) Assessee by : Simoni Dohsi/ Shri Krunal Gandhi. Revenue by : Shri Ankush Kapoor D ate of H ea rin g : 13.07.2023 D ate of P ron ou n ce me n t : 17.07.2023 O R D E R PER KAVITHA RAJAGOPAL, J M: 1. This appeal has been filed by the revenue challenging the order of the Learned Commissioner of Income Tax (Appeals)-18 [hereinafter ‘the CIT(A)’] passed u/s 250 the Income Tax Act [hereinafter ‘the Act’], relevant to the assessment year 2012-13. 2. The revenue has challenged the order of the Ld. CIT(A) deleting the additions/disallowances made by the Ld. AO. 2 ITA No.3081/Mum/2017 ( A . Y .2011-12) Valecha L M Toll P. Ltd. 3. Briefly stated that the assessee company is a private limited company incorporated on 22-04-2010 and a subsidiary company of Valecha Infrastructure Limited which holds 100% of equity share capital of the assessee company. The assessee company is engaged in the business of design, engineering, construction, development, finance, operation and maintenance, construction of Four Lane Roads of Lebad (SH 31) to Manpur (NH3) Madhyapradesh on build-operate-transfer (BOT) basis. The assessee company is set up for this limited purpose of the said project which project has been contracted by the assessee company to its sister concern namely Valecha Engineering Ltd. The assessee filed its return of income dated 31.08.2011 for the impugned year declaring total income at Nil. The assessee’s case was selected for scrutiny and the assessment order dated 21.03.2014 was passed by the Ld. AO by determining the total income at Rs 35,60,47,685/- by making various disallowances/additions tabulated as below: Sr. No. Nature of additions/disallowance Amount (₹) i. Excess expenditure on account of cost of project under section 40A(2)(b) 35,00,00,000/- ii. Amount of interest expenses disallowed 46,72,654/- iii. Amount of business promotion expenses disallowed 5,07,377/- iv. Amount of travelling expenses disallowance 8,67,654/- Total 35,60,47,685/- 4. The assessee was in appeal before the Ld. CIT(A) who deleted the additions/disallowances made by the Ld. AO. 5. The revenue is in appeal before us challenging the impugned order of the Ld. CIT(A). 3 ITA No.3081/Mum/2017 ( A . Y .2011-12) Valecha L M Toll P. Ltd. 6. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee company is undergoing liquidation proceedings before the Hon'ble National Company Law Tribunal (NCLT). This fact has not been controverted by the Ld. Representatives. We deem it fit to dismiss this appeal with the liberty given to the revenue to restore the appeal after the completion of moratorium period in accordance with the provisions of section 14 of the Bankruptcy and Insolvency Code of 2016. 7. In the result the appeal filed by the revenue is dismissed Order pronounced in the open court on 17 .07.2023 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 17.07.2023 Aniket Singh Rajput, Stenographer Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai