Soma Punjab Warehousingh Private Limited, New Delhi V. ACIT, Circle-24(1), New Delhi

ITA 4809/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2829 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Capital receipt; Capital expenditure

Judgement Text

1 ITA NO.4809/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. 4809/DEL/20 19 (A.Y. 2015-16) (THROUGH VIDEO CON FERENCING) M/S SOMA PUNJAB WAREHOUSING PVT. LTD. B4/45, SUFDURJUNG ENCLAVE, NEW DELHI 110 029. PAN: AAPCS7312H (APPELLANT) VS ACIT , CIRCLE : 24 (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 28.03.2019 PASSED BY CIT (APPEALS)-XXV, NEW DELHI, FOR ASSESSM ENT YEAR 2015-16. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AND IN L AW IN SUMMARILY DISMISSING THE APPEAL OF THE APPELLANT SOLELY ON THE BASIS THAT TH E APPELLANT FAILED TO APPEAR BEFORE HIM AND ON THE ASSUMPTION THAT THE APPELLANT CHOSE NOT TO PRESS THE APPEAL, EVEN THOUGH THE NOTICES FOR ATTENDANCE WERE NOT RECEIVED BY THE APPELLANT. APPELLANT BY N O N E; RESPONDENT BY SHRI UMESH TAKYAR, SR. D. R.; DATE OF HEARING 19.11.2020 DATE OF PRONOUNCEMENT 25.11.2020 2 ITA NO.4809/DEL/2019 2. WITHOUT PREJUDICE, THE LD. C1T(A) HAS GROSSLY ERRED ON FACTS AND IN LAW IN NOT ADJUDICATING THE MATTER BASED ON MERITS, WHICH IS U NJUSTIFIED, ILLEGAL AND AGAINST THE PROVISIONS OF THE SECTION 250(6) OF THE ACT. 3. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AND IN LA W IN CONFIRMING THE ACTION OF THE LEARNED ASSISTANT COMMISSIONER OF INCOME-TAX, C IRCLE 24, NEW DELHI (LD. AO') AND CONSIDERING THE AMOUNT RECEIVED FROM PUNGRAIN F OR USING OF STORAGE FACILITIES OF UNDER-CONSTRUCTION GODOWNS AS REVENUE IN NATURE. 4. THE LD. CIT(A) HAS GROSSLY ERRED ON FACTS AND IN LA W IN CONFIRMING THE ADDITION OF RS. 18,09,96,432/- WITHOUT APPRECIATING THE FACT TH AT RECEIPTS ARISING FROM USING OF STORAGE FACILITIES OF AN UNDER-CONSTRUCTION GODO WNS SHOULD HAVE BEEN CONSIDERED AS CAPITAL RECEIPTS WHICH ARE TO BE DEDU CTED FROM THE COST OF CONSTRUCTION OF THE WAREHOUSES IN TERMS OF THE APPL ICABLE ACCOUNTING STANDARDS AND, THEREFORE, SHOULD NOT CONSTITUTE AS INCOME OF THE APPELLANT. 5. WITHOUT PREJUDICE, THE LD. CIT(A) AND LD. AO HAVE G ROSSLY ERRED ON FACTS AND IN LAW IN NOT CONSIDERING THAT EVEN OTHERWISE IF RECEI PTS OF RS. 18,09,96,432/- ARE CONSIDERED TO BE REVENUE IN NATURE AND NOT A REDUCT ION FROM CAPITAL EXPENDITURE, THE APPELLANT OUGHT TO HAVE BEEN ALLOWED A CORRESPO NDING DEDUCTION OF ONE AND ONE-HALF TIMES OF THE CAPITAL EXPENDITURE OF RS. 18 ,09,96,432/- INCURRED BY THE APPELLANT, UNDER SECTION 35AD OF THE ACT AND CONSEQ UENTLY, THE ASSESSED INCOME SHOULD HAVE BEEN COMPUTED AT AN ENHANCED LOSS OF RS .1,02,40,60,920/- AS AGAINST THE RETURNED LOSS OF RS.93,35,62,704/-. 3. THE ASSESSEE FILED RETURN OF INCOME ON 30.09.20 15 DECLARING A LOSS OF RS.93,35,62,704/-. THE ASSESSING OFFICER PASSED ASS ESSMENT ORDER DATED 30.12.2017 THEREBY ASSESSING THE LOSS AT RS.75,25,6 6,270/-. 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. NONE APPEARED FOR THE ASSESSEE DESPITE GIVING NO TICE, HENCE WE ARE PROCEEDING ON THE BASIS OF THE ORDER OF THE CIT(A) AND THE ASSESSMENT ORDER. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT (APPEALS). 7. WE HAVE HEARD LD. DR AND PERUSED ALL THE MATERIA L AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT (APPEALS) HAS NOT GIVEN ANY CATEGORICAL FINDING ON MERITS OF THE CASE AND ALSO DID NOT GIVE SUFFICIENT OPPORTUNITY OF 3 ITA NO.4809/DEL/2019 HEARING TO THE ASSESSEE. THEREFORE, THE CIT (APPEA LS) WAS NOT RIGHT IN DISMISSING THE APPEAL OF THE ASSESSEE WITHOUT GIVIN G PROPER OPPORTUNITY OF HEARING. HENCE, WE ARE REMANDING BACK THE ENTIRE I SSUE 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 COPY FORWARDED TO :- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NO.4809/DEL/2019