NUTRELA MARKETING P. LTD, MUMBAI V. ITO 7(1)(1), MUMBAI

ITA 3910/MUM/2010

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0949 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 13-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Sale consideration of property below Jantri Value; Bad and doubtful debts
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 3910/MUM/2010 (ASSESSMENT YEAR-2006-07) NUTRELA MARKETING PVT. LTD. OFFICE NO.15, GIRIRAJ BUILDING, IRON MARKET, SANT TUKARAM ROAD, MASJID BUNDER, MUMBAI- 400009. PAN: AACCN0459P VS. ITO-7(1)(1), AAYAKAR BHAVAN, M.K. MARG, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SUMAN KUMAR (DR) DATE OF HEARING : 09.11.2017 DATE OF PRONOUNCEMENT : 10.01.2018 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER LD. CIT(A)-13, MUMBAI DATED 06.01.2010 FOR ASSESSMENT YEAR (AY) 2006-07 WHICH I N TURN ARISES FROM THE ASSESSMENT ORDER UNDER SECTION 143(3) DATED 31 .12.2008 PASSED BY THE ASSESSING OFFICER (AO) . THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS OF APPEAL: 1.1] ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT APPEAL HAS ERRED IN CONFIRMING THE VIEW OF THE ASSE SSING OFFICER THAT SECTION 50C IS APPLICABLE TO TRANSFER OF LEASE HOLD LAND AN D THEREBY ERRED IN DIRECTING THE A.O TO SUBSTITUTE THE VALUE OF SALE CONSIDERATI ON AT RS.1,43,53,100/- BEING THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY, FOR ASCERTAINING THE CAPITAL GAIN. ITA NO. 3910/M/2010 - NUTRELA MARKETING PVT. LTD. 2 1.2] ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT APPEAL HAS ERRED IN HOLDING THAT THE APPELLANT IS T HE OWNER OF THE LEASE HOLD LAND BY VIRTUE OF 95 YEARS OF LEASE PERIOD. 2.1] ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT APPEAL HAS ERRED IN UPHOLDING THE ACTION OF THE A.O . OF DISALLOWING THE CLAIM FOR BAD DEBTS OF RS.18,99,714/- INTER ALIA ON THE G ROUND THAT NO MATERIAL HAS BEEN PRODUCED TO PROVE THAT THE DEBT HAD BECOME BAD . 2.2] THE DISALLOWANCE SO UPHELD IS IN TOTAL DISREGA RD TO THE PROVISION OF SECTION 36(1)(VII) READ WITH PROVISION OF SECTION. 2.3] THE APPELLANT PRAYS THAT THE DISALLOWANCE OF R S.18,99,714 BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY, FILED ITS RETURN OF INCOME FOR RELEVANT AY ON 30.03 .2007 DECLARING TAXABLE INCOME OF RS. 24,02,102/-. THE ASSESSMENT WAS COMPL ETED ON 31.12.2008 UNDER SECTION 143(3) OF THE ACT. THE AO WHILE FRAMI NG THE ASSESSMENT ORDER BESIDES THE OTHER ADDITION DISALLOWED BED DEB T OF RS. 18,99,714/- AND FURTHER ADDITION OF RS. 5 CRORE ON ACCOUNT OF E NHANCEMENT IN SALE VALUE OF LAND AND FACTORY BUILDING AT TALOJA. ON AP PEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE OF BAD-DEBT WAS UPHELD, HO WEVER, THE ADDITION ON ACCOUNT OF ENHANCEMENT IN SALE VALUE OF LAND AND BUILDING, THE AO WAS DIRECTED TO VERIFY THE FACT ABOUT THE LEASED PE RIOD OF THE LAND AND TO ADOPT THE VALUE ADOPTED BY STAMP VALUATION AUTHORIT Y AT RS. 1,43,53,100/-. FURTHER, AGGRIEVED BY THE ORDER OF L D. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ITA NO. 3910/M/2010 - NUTRELA MARKETING PVT. LTD. 3 3. NONE, APPEARED ON BEHALF OF THE ASSESSEE. THE PERUS AL OF ORDER-SHEET REVEALS THAT NONE APPEARED ON BEHALF OF ASSESSEE ON 01.03.2007. ON 01.03.2007, IT WAS DIRECTED TO SERVE THE ASSESSEE B Y NOTICE OF HEARING THROUGH RPAD. DESPITE SERVICE OF NOTICE, NONE APPEA RED ON BEHALF OF ASSESSEE. 4. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE L D. DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. CIT(A). IT WAS ARGUED TH AT THE LD. CIT(A) HAS ALREADY GRANTED SUFFICIENT RELIEF TO THE ASSESSEE B Y DIRECTING THE AO TO ADOPT THE VALUE ADOPTED BY STAMP VALUATION AUTHORIT Y. FOR DISALLOWANCE OF BAD-DEBT, IT WAS ARGUED THAT ASSESSEE HAS NOT PL ACED ANY MATERIAL ON RECORD ABOUT THE BAD-DEBT. THE LD. DR FOR THE REVEN UE PRAYED FOR DISMISSAL OF THE APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR AND PER USED THE ORDERS OF AUTHORITIES BELOW INCLUDING THE SUBMISSION FILED BE FORE THE LD. CIT(A). GROUND NO.1 RELATES TO SUBSTITUTING THE VALUE OF SA LE CONSIDERATION BY THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY. THE AO WHILE FRAMING THE ASSESSMENT ORDER NOTICED THAT ASSESSEE HAS SOLD THE LAND AND BUILDING DURING THE RELEVANT PERIOD AND CLAIMED BUSINESS INC OME. THE ASSESSEE WAS ASKED TO PRODUCE THE SALE-DEED FOR LAND SHOWN I N FIXED ASSET FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. THE ASSESSEE NO T PROVIDED COPY OF SALE-DEED FOR SALE OF LAND AND FACTORY BUILDING AT TALOJA OR ANY OTHER ITA NO. 3910/M/2010 - NUTRELA MARKETING PVT. LTD. 4 EVIDENCE, THE AO MADE THE ADDITION OF RS. 5 CRORE I N THE INCOME OF ASSESSEE ON ESTIMATE BASIS. THE LD. CIT(A) AFTER CO NSIDERING THE CONTENTION OF ASSESSEE OBSERVED THAT THE PROFIT OF SALE OF LAND SHALL BE TAKEN AS LTCG AND THE ASSESSEE SHALL BE ENTITLED FO R INDEXATION COST AND DIRECTED THE AO TO ADOPT THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY AND VERIFIED THE FACT REGARDING THE PERIOD OF LEASE . BEFORE US, THE ASSESSEE HAS NEITHER FILED ANY DOCUMENTARY EVIDENCE NOR EXPL AINED THE FACT. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE O RDER PASSED BY LD. CIT(A). HENCE, GROUND NO.1 OF THE APPEAL IS DISMISS ED. 6. GROUND NO.2 RELATES TO THE DISALLOWANCE OF BAD-DEBU T. THE AO WHILE PASSING THE ASSESSMENT ORDER NOTICED THAT THE ASSES SEE CLAIMED BAD-DEBT OF RS. 18,99,714/-. THE SAID AMOUNT HAS COME FROM M /S RUCHI PVT. LTD. WHICH WAS AMALGAMATED WITH THE ASSESSEE-COMPANY BY THE ORDER OF HONBLE BOMBAY HIGH COURT DATED 30.06.2008 WITH RET ROSPECTIVE DATE OF 01.04.2005. NO DETAILS OF DEBTS WERE PROVIDED BY TH E ASSESSEE, THUS CLAIMED WAS DISALLOWED. THE LD. CIT(A) ALSO OBSERVE D WHILE CONFIRMING THE ACTION OF THE AO, THAT NO DETAILS OF BAD-DEBT W AS MADE AVAILABLE NOR ANY PRIMA FACIE JUSTIFICATION WAS GIVEN. EVEN BEFOR E US, THE ASSESSEE HAS NEITHER GIVEN ANY EXPLANATION NOR FILED ANY DETAILE D ABOUT THE BAD-DEBTS. NONE COME FORWARD ON BEHALF OF ASSESSEE TO EXPLAIN THE FACT ABOUT THE BAD-DEBT AND THE TREATMENT GIVEN IN THE BOOKS OF AC COUNT. THUS, WE DO ITA NO. 3910/M/2010 - NUTRELA MARKETING PVT. LTD. 5 NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER P ASSED BY LD. CIT(A). THUS, GROUND NO.2 OF THE APPEAL IS ALSO DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DAY OF JANUARY 2018. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 10/01/2018 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/