Chandan Buildwell Pvt Ltd, New Delhi V. ITO WARD 6(1), New Delhi

ITA 3394/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2839 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RADHA KRISHNA MITTAL
• Keywords: Capital asset converted into stock in trade; Opportunity of being heard; Principle of natural justice; Date of conversion; Fair market value; Set aside
• Section: 45(2); 250

Judgement Text

1 ITA NO.3394/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER A N D MS. SUCHITRA KAMBLE, JUD ICIAL MEMBER I.T.A. NO. 3394/DEL/20 19 (A.Y. 2015-16) (THROUGH VIDEO CON FERENCING) CHANDAN BUILDWELL PVT. LTD., KHASRA NO. 562, MAIN GADAIPUR ROAD, GADAIPUR VILLAGE, NEW DELHI 110 074. PAN: AADCC0718K (APPELLANT) VS ITO , WARD : 6 (1) NEW DELHI. (RESPONDENT) O R D E R PER SUCHITRA KAMBLE, JM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 28.02.2019 PASSED BY CIT (APPEALS)-2, NEW DELHI, FOR ASSESSMEN T YEAR 2015-16. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN DISMISS ING THE APPEAL IN LIMINE WITH IN VIEW THAT THE APPELLANT IS NOT INTERESTED IN PURSUI NG THE APPEAL WHICH IS FACTUALLY INCORRECT, AS SUCH THE IMPUGNED ORDER OF LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND PASSED IN GROSS DISREGA RD TO THE PRINCIPLE OF NATURAL JUSTICE. APPELLANT BY SHRI RADHA KRISHNA MITTAL, C. A.; RESPONDENT BY SHRI UMESH TAKYAR, SR. D. R.; DATE OF HEARING 19.11.2020 DATE OF PRONOUNCEMENT 25.11.2020 2 ITA NO.3394/DEL/2019 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DESERVE TO BE SET ASIDE AS THE APPELLANT WAS NOT ALLOWED ADEQUATE OPPORTUNITY OF BEING HEARD, AN D FURTHER NOT PASSING AN ORDER ON MERITS OF DISPUTED ADDITION THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) HAS FAILED TO COMPLY WITH REQUIREMENTS OF SECTION 2 50(6) OF THE INCOME TAX ACT. 3) THAT THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) UNDER SECTION 250 OF THE INCOME TAX ACT, 1961 IS BA D IN LAW AND NOT JUSTIFIED AS THE APPEAL IS DISMISSED SIMPLY ON ACCOUNT OF NON-PR OSECUTION THOUGH THE LAW DOES NOT EMPOWER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO DISMISS THE APPEAL FOR NON-PROSECUTION. 4) THAT THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AS THE SAME HAS BEEN PASSED WITHOUT CONS IDERING THE MERITS OF THE CASE, WHICH IS AGAINST THE PROVISIONS OF THE INCOME TAX ACT, 1961 5) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW IN ASSESSING THE BUSINESS LOSS OF RS. 16300100/- SUFFERED DURING THE YEAR BY THE APPELLANT AS CAPITAL LOSS, O N CONJECTURES AND SURMISES, IGNORING THE FAIR MARKET VALUATION OF THE LAND DETE RMINED BY AN APPROVED VALUER AS ON THE DATE OF CONVERSION OF INVESTMENT TO STOCK IN TRADE. 6) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW IN NOT ACCEPTING THE VALUA TION OF LAND DETERMINED BY AN APPROVED VALUER AS ON THE DATE OF CONVERSION OF LAN D FROM INVESTMENT TO STOCK IN TRADE, AND ERRED IN CONSIDERING THE SALES CONSIDERA TION OF RS. 48500000/- AS FAIR MARKET VALUE OF LAND THOUGH THE SALES HAPPENED MUCH AFTER THE DATE OF VALUATION/ CONVERSION FROM INVESTMENT TO STOCK IN TRADE. 7) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW IN LAW NOT ALLOWING THE SE T OFF OF BUSINESS LOSS OF RS. 16300100/- SUFFERED BY IT AGAINST INCOME FROM BUSIN ESS AND OTHER INCOME. 8) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED ASSESSING OFFICER HAS ERRED IN LAW IN ASSESSING THE CAPITAL LOSS AS PER T HE PROVISIONS OF SECTION 45(2) WHICH IS NOT IN CONSONANCE WITH THE PROVISIONS OF S AID SECTION IGNORING THE VALUATION OF AN APPROVED VALUER AS ON THE DATE OF C ONVERSION OF LAND FROM INVESTMENT TO STOCK IN TRADE. 9) THAT THE APPELLANT LEAVES TO CRAVES TO ADD, ALTER AND/ OR DELETE ANY GROUNDS OF APPEAL AT LATER STAGE IF NECESSARY. IT IS THEREFORE PRAYED THAT THE APPEAL BE ACCEPTED AND SUITABLE RELIEF BE ALLOWED. 3. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE AND DEVELOPERS. PE 3 ITA NO.3394/DEL/2019 THE ASSESSEE FILED RETURN OF INCOME ON 30.12.2015 D ECLARING A LOSS OF RS. 10,88,387/-. THE ASSESSING OFFICER PASSED ASSESSMEN T ORDER DATED 28.12.2017 THEREBY ASSESSING THE INCOME AT RS.1,52,14,630/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT (APPEALS). THE CIT (A) DISMISSED THE APPEA L OF THE ASSESSEE. 5. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE CIT (APPEALS) HAS NOT GIVEN AN APPROPRIATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO REPRESENT HIS CASE. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT (APPEALS). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT (APPE ALS) HAS NOT GIVEN ANY CATEGORICAL FINDING ON MERITS OF THE CASE AND ALSO DID NOT GIVE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE, THE CIT (APPEALS) WAS NOT RIGHT IN DISMISSING THE APPEAL OF THE ASSESSEE WITH OUT GIVING PROPER OPPORTUNITY OF HEARING. HENCE, WE ARE REMANDING BACK THE ENTIR E ISSUE TO THE FILE OF THE CIT (APPEALS) TO BE DECIDED ON MERITS. NEEDLESS TO SAY , THE ASSESSEE BE GIVEN AN OPPORTUNITY OF HEARING BY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, FOR STATI STICAL PURPOSE. 8. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2020 SD/- SD/- ( R. K. PANDA ) ( SUCHITRA KAMBLE ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25/11/2020 *MEHTA/R.N* 4 ITA NO.3394/DEL/2019 COPY FORWARDED TO :- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI