Gateway International School Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4920/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91384 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 10-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard
• Section: 50C; 142(1)

Judgement Text

ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4 920 /DEL/201 4 A.Y. : 200 9 - 10 GATEWAY INTERNATIONAL SCHOOL PVT. LTD., VS. ITO, WARD - 12 ( 1 ), A - 1/59 - 60, 1 ST FLOOR, SECTOR - 11, NEW DELHI ROHINI, NEW DELHI 110 085 ( PAN : AACCM2029E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V ED JAIN, ADV. DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 10 - 7 - 2015 DATE OF ORDER : 10 - 7 - 2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , MEERUT DATED 31 . 7 .201 4 PERTAINING TO ASSESSMENT YEAR 200 9 - 10 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER EXPART E. ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 2 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING ASSESSEE A PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD. 4 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEAR NED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ENHANCING THE INCOME OF THE APPELLANT WITHOUT GIVING IT A PROPER NOTICE FOR THE SAME. 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING TH E ACTION OF THE AO IN DISALLOWING A SUM OF RS.60,097/ - BEING 50% OF THE SALARY EXPENSES INCURRED BY THE ASSESSEE. (II) THAT THE ADDITION HAS BEEN CONFIRMED IGNORING THE FACT THAT THE EXPENSES ON ACCOUNT OF SALARY HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS. (III) THAT THE ADHOC DISALLOWANCE THE RATE OF 50% HAS BEEN MADE WITHOUT THERE BEING ANY BASIS FOR THE SAME. 6(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIR MING THE ACTION OF THE AO, IN ASSESSING THE INCOME ON ACCOUNT OF RENT RECEIVED BY ASSESSEE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AS AGAINST 'INCOME FROM HOUSE PROPERTY'. ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 3 (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED B OTH ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING AN AMOUNT OF RS.64,400 / - CLAIMED BY ASSESSEE BEING 30% OF THE RENT RECEIVED WHILE COMPUTING INCOME FROM HOUSE PROPERTY AND ALLOWABLE UNDER SECTION 24(1 )(A) OF THE ACT. 7(I) ON TH E FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN ENHANCING THE INCOME ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND TO RS.53,97,751/ - AS AGAINST RS.1,47,942/ - DECLARED BY THE ASSESSEE AND D ULY ACCEPTED BY THE A O . (II) THAT THE ABOVE - SAID INCOME HAS BEEN ENHANCED ARBITRARILY IGNORING THE MATERIAL AND EVIDENCES SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT. (III) THAT THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HA S NOT SUBMITTED DETAILS AND EXPLANATION. (IV) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT DEDUCTING AN AMOUNT OF RS.10,29,809/ - BEING INDEXED COST OF IMPROVEMENT INCURRED BY THE ASSESSEE DURING THE FINANCIAL YEAR 2007 - 08. ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 4 (V) THAT THE ABOVE SAID COST HAS BEEN DISALLOWED ARBITRARILY IN UTTER DISREGARD TO THE EXPLANATION AND EVIDENCES ON RECORD. (VI) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN DISALLOWING AN AMOUNT OF RS.42,20,000/ - ON ACCOUNT OF COST OF IMPROVEMENT INCURRED BY ASSESSEE DURING THE FINANCIAL YEAR 2008 - 09. (VII) THAT THE ABOVE DISALLOWANCE HAS BEEN MADE DESPITE ALL THE MATERIAL AND EVIDENCES BEING ON RECORD. 8. ON THE FA CTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN HOLDING THAT A SUM OF RS.1,63,31,250/ - BEING THE CIRCLE RATE OF THE LAND TRANSFERRED TO GATEWAY EDUCATION CHARITABLE SOCIETY BE MADE THE BASIS FOR COMPUTATION OF CA PITAL GAIN. 9(I) THAT THE ABOVESAID ACTION OF THE CIT(A) IS IN TOTAL DISREGARD TO THE ORDER OF THE SUBORDINATE COURT, SONEPAT DECREED IN FAVOUR OF GECS IN RESPECT - OF THE SAID LAND. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HA S ERRED BOTH ON FACTS AND IN LAW IN HOLDING THAT DECREE PASSED BY A COMPETENT COURT BE IGNORED DESPITE THE FACT THAT SUCH DECREE IS A VALID DECREE AND HAS NOT BEEN DECLARED NULL OR VOID BY ANY COMPETENT COURT/AUTHORITY. ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 5 10(I) THAT THIS ACTION OF THE LEARNED CIT(A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS AS THE TRANSFER TO GECS HAS BEEN MADE WITHOUT CONSIDERATION, AS SUCH THAT THE SAID AMOUNT DOES NOT COME UNDER THE AMBIT OF INCOME UNDER THE HEAD 'CAPITAL GAINS'. (II) THAT THE ADDITION HAS BEEN MADE REJECTING THE CONTENTION OF THE ASSESSEE THAT THIS IS A CASE OF RELINQUISHMENT OF ASSET AS SUCH PROVISION OF SECTION 50C CANNOT BE INVOKED. 11. WITHOUT PREJUDICE TO THE ABOVE AND IN THE ALTERNATIVE THE LEARNED CIT(A) HAS ERRED I N IGNORING THE PROVISIONS OF SECTION 50C(2), WHEREBY IN CASE OF - DISPUTE IN VALUATION THE SAME IS TO BE REFERRED TO THE VALUATION OFFICER. 12. THE ORDER PASSED BY THE CIT(A) SETTING ASIDE THE ISSUE OF COMPUTATION OF CAPITAL GAIN IS AGAIN S T THE PROVISIONS O F SECTION 251'(1)(A) OF THE ACT AND AS SUCH BAD IN LAW. 1 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME A RE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. LD. COUNSEL OF THE ASSESSEE AT THE THRESHOLD, STATED THAT LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING ASSESSEE A PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD. LD. COUNSEL REITERATED THE CONTENTIONS RAISED THE GROUNDS OF APPEAL ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 6 AND PRAYED THAT THE ADDITIONS MADE BY THE AO AND UPHELD AND / OR ENHANCED BY THE LD. CIT(A) MAY BE DELETED. 5. LD. DR RELIED UPON THE ORDERS OF THE LD. CIT(A). 6 . I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH RELEVANT RECORDS AVAILABLE WITH ME, ESPECIALLY THE IMPUGNED ORDER. I AM OF THE VIEW THAT THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT AFFORDING SUFF ICIENT OPPORTUNITY TO THE ASSESSEE AND WITHOUT CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE BEFORE HIM. LD. COUNSEL OF THE ASSESSEE HAS ALSO FILED THE PAPER BOOK CONTAINING PAGES 1 TO 200 HAVING THE COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME ALONGWI TH COMPUTATION OF INCOME; COPY OF AUDITED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT ALONG WITH AUDITOR S REPORT; COPY OF CONFIRMED LEDGER ACCOUNT OF DEED NO. 5997 29K - 13M IN THE BOOKS OF ASSESSEE; COPY OF REPLY, DATED 18.7.2011 FILED BEFORE AO ALONGWITH C ONFIRMATION OF THE SITUATION OF LAND OUTSIDE MUNICIPAL CORPORATION AREA; COPY OF NOTICE U/S. 143(2) AND 142(1) DATED 27.7.2011; COPY OF REPLIES FILED BEFORE AO; COPY OF REPLY DATED 8.8.2011; COPY OF REPLY DATED 25.8.2011 COPY OF REPLY DATED 8.9.2011 ALON GWITH COPY OF SALE DEEDS; COPY OF FORM 66; COPY OF SECRETARIAL COMPLIANCE CERTIFICATE ISSUED TO THE ASSESSEE; COPY OF LETTER ISSUED TO THE ASSESSEE FROM THE OFFICE OF SH. VIKAS SHARMA, ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 7 ADVOCATE, SONEPAT IN RESPONSE TO THE LEGAL NOTICE DATED 2.10.2007; CO PY OF LEGAL NOTICE DATED 2.10.2007; COPY OF PETITION FILED BEFORE THE ARBITRATOR; DETAILS OF SALARY PAID ALONG WITH PAYMENT VOUCHERS; COPY OF ATTENDANCE REGISTER; COPY OF SHARE APPLICATION FORM, BANK STATEMENT, COPY OF AGREEMENT TO SELL, COPY OF BANK STATE MENT OF STATE BANK OF PATIALA AND COPY OF PAN IN RESPECT OF RAM MEHAR RAHTU; COPY OF SHARE APPLICATION FORM, COPY OF BANK STATEMENT, COPY OF AGREEMENT TO SELL, COPY OF FULL AND FINAL RECEIPT, COPY OF POSSESSION CERTIFICATE IN RESPECT OF VIJAY; COPY OF SHAR E APPLICATION FORM IN RESPECT OF KRISHAN KUMAR; COPY OF SHARE APPLICATION FORM IN RESPECT OF ANIL KUMAR HUF AND COPY OF SHARE APPLICATION FORM, COPY OF AGREEMENT TO SELL, COPY OF BANK STATEMENT OF STATE BANK OF PATIALA; COPY OF MUTATION REGISTER; COPY OF L EDGER ACCOUNT THE ASSESSEE AND ITS SOCIETY; COPY OF AGREEMENT TO SELL; COPY OF SUIT OF DECLARATION DATED 10.12.2008; COPY OF SUIT OF DECLARATION DATED 24.12.2008 AND COPY OF WRITTEN SUBMISSIONS FILED BEFORE CIT(A) , WHICH WERE NOT CONSIDERED BY THE AUTH ORITIES BELOW. 6 .1 KEEPING IN VIEW OF THE AFORESAID EVIDENCES PRODUCED BY THE ASSESSEE, I AM OF THE VIEW THAT INTEREST OF JUSTICE WOULD BE SERVED, IF THE ISSUES IN DISPUTE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, UNDER THE LAW. ACC ORDINGLY, I SET ASIDE THE ISSUES TO THE FILE OF THE AO WITH THE DIRECTIONS TO DECIDE THE SAME AFRESH UNDER THE ITA NO. 4920/DEL/2014 (GATEWAY INTERNATIONAL SCHOOL PVT. LTD VS. ITO ) 8 LAW , AFTER CONSIDERING THE EVIDENCES FILED BEFORE ME. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE PROVIDED FULL OPPORTUNITY OF BEING HEARD. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 /7/201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 10 /7/201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES