M/s. Angelic Construction (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 5535/DEL/2015

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9762 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 17-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH K GUPTA
• Section: 147; 148; 139; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.5535 /DEL/2015 Assessment Year 2010-11 M/s. Angelic Construction (P) Ltd., H. No.-119, G/F Gali No.-1, KH No. Khajuri Khas, Near Shiv Mandir, New Delhi. DCIT, Central Circle-17, New Delhi. TAN/PAN: AAFCC1080F (Appellant) (Respondent) Appellant by: Shri Suresh K Gupta, CA Respondent by: Smt. Sunita Singh, CIT-DR Date of hearing: 30 05 2022 Date of pronouncement: 07 06 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een fil ed b y th e Assessee ag ain st th e o rd er o f th e Co mmiss io n er o f In co me Tax (Ap p eals)-XXVII, New Delh i (‘CIT( A)’ in sh o rt) d ate d 0 2 .0 3 .2 01 5 arisi n g fro m th e assess men t o rd er d ated 0 9 .0 5 .20 13 p assed by th e Assessin g Officer (AO) u n d er Sect io n 1 4 3(3 ) of th e In co me Tax Act, 1 9 6 1 (th e Act) co n cern in g AY 20 1 0-1 1 . 2 . Th e g ro u nd s o f ap p eal ra ised b y th e assesse e read s as u n d er: 1 . “ O n t h e f a c t s o f t h e c a se a n d a s p e r l a w , t h e L d . CI T (A ) e r r e d i n u p h o l d i n g t h e i n i t i a t i o n o f p ro c e e d i n g s u /s 1 4 7 o f t h e A c t wi t h o u t j u d i c i a l l y a p p re c i a t i n g t h e f a c t s o f t h e c ase a n d t h e l a w. 1 . 1 T h a t t h e L d . CI T (A ) e r re d i n h o l d i n g t h a t t h e a p p e l l a n t I.T.A. No.5535 /Del/2015 2 d i d n o t m a k e f u l l a n d t ru e d i s c l o s u r e o f f a c t s o n th e p l e a t h a t t h e i n c o m e t a x r e t u r n wa s n o t t a k e n u p f o r sc r u t i n y a nd n o O r d e r wa s p a ss e d u / s 1 4 3 (3 ) o f t h e A c t . T h e L d . C I T (A ) d id n o t a p p r e c i a t e t h a t t h e f a c t t h a t t h e a p p e l l a n t f i l e d In c o m e T a x R e t u r n u / s 1 3 9 (1 ) a n d t h e r e t u r n wa s p ro c e s se d u / s 1 4 3 (1 ) o f t h e A c t . T h e se l e c t i o n o f t h e c a se u n d e r sc ru t i n y i s t h e p r e ro g at i v e o f t h e I n c o m e T a x D e p a rt m e n t . T h e re a so n f o r n o t p u t t i n g th e c a se u n d e r sc ru t i n y c a n n o t b e t h e g r o u n d f o r a l l e g i n g t ha t t h e a p p e l l a n t d i d n o t m a k e f u l l a n d t ru e d i s c l o s u r e o f f a c t s wh i c h e n t i t l e d t h e R e v e n u e O f f i c e r f o r i n i t i a t i n g t h e p r oc e e d i n g u / s 1 4 7 o f t h e A c t . 2 . T h e L d . CI T (A ) e r re d o n f a c t s a n d l a w i n u p h o l d in g t h e O r d e r d a t e d 2 8 . 0 3 . 2 0 1 3 p a s s e d b y t h e A s se s si n g O f f i c e r whe re i n t h e o b j e c t i o n s f i l e d b y t h e a p p e l l a n t , c h a l l e n g i n g t h e i n i t i a t i o n o f p r o c e e d i n g s u / s1 4 7 o f t h e A c t we r e r e j e c t e d a rb i t r ari l y . 3 . O n t h e f a c t s o f t h e c a se a n d a s p e r l a w , t h e L d . CI T (A ) e r r e d i n u p h o l d i n g t h e a r b i t r a ry O r d e r o f t h e L d . As se s si n g O f f i c e r i n d i s a l l o w i n g S h o r t T e r m C a p i t a l L o s s o f Rs . 1 1 , 6 5 , 0 0 , 0 0 0 / - , i n c u r r e d o n sa l e o f c o m m e rc i a l F S I i n A g ra P ro j e c t , m e r e l y o n h i s w h i m s a n d f a n c y . T h e L d . CI T(A ) e r re d i n u p h o l d i n g t h e O rd e r o f t h e A s s e ss i n g O f f i c e r wh o c ha l l e n g e d t h e b u si n e s s p ru d e n c e o f t h e a p p e l l a n t wi t h o u t a n y c o g en t m a t e ri a l a n d d i s a l l o w e d S h o r t T e r m C a p i t a l L o s s m e r e l y o n sus p i c i o n . 4 . T h a t t h e O r d e r s o f t h e A s s e s si n g O f f i c e r &C I T (A) i s h i g h l y a rb i t ra ri l y , c a p ri c i o u s, u n wa r ra n t e d a n d a r e n o t b a se d o n t h e f a c t s o f t h e c a s e & a s p e r l a w a n d c o n se q u e n t l y t h e r e f o r e n o t su st a i n a b l e a s p e r l a w . 5 . O n t h e f a c t s o f t h e c a se a n d a s p e r l a w , t h e O rd e r p a s se d b y t h e L d . CI T (A ) i n u p h o l d i n g t h e O rd e r p a s se d b y t h e A s se s si n g I.T.A. No.5535 /Del/2015 3 O f f i c e r wh o d i s a l l o we d t h e a c t u a l c a p i t a l l o s s o f Rs . 1 1 , 6 5 , 0 0 , 0 0 0 / - m e r e l y o n wh i m si c a l g ro u n d s wi t h o u t p u r s u i n g t h e b o n a f i d e e x p l a n a t i o n a n d e v i d e n c e s p r o d u c e d b y t h e a p p e l l a n t . T h e O r d e r o f t h e L d . CI T (A ) a n d t h e A s se s si n g o f f i ce r i s t o t a l l y p e rv e r se a n d a rb i t r a r i l y a n d h e n c e n o t su st a i n a b l e i n t h e l a w. 6 . T h a t l e v y i n g t h e i n t e r e st u / s 2 3 4 B & 2 3 4 C i s n o t i n a c c o rd a n c e w i t h t h e l a w . ” 3 . Wh en th e mat ter was cal led fo r h ea rin g , ld . co u nsel fo r th e assesse e, a t th e o u tse t, ad v erted to t h e ad d itio n al g ro u n d s with a p ray er fo r its ad missio n an d th e ad j u d icatio n in terms o f Ru le 1 1 o f th e ITAT Ru les, 1 9 6 3 . Th e ad d itio n al g ro u nd s so raised read as u n d er: “A d d i t i o n a l G ro u n d N o . 1 T h e L d . CI T (A ) h a s e rr e d b o t h i n l a w a n d c i r c u m s t a nc e s o f t h e c a se i n u p h o l d i n g t h e re a s se s sm e n t p r o c e e d i n g s- i n i ti a t e d u / s 1 4 7 o f t h e I T A c t i g n o r i n g t h e c o n t e n t i o n o f a p p e l l a n t t h a t t h e p r o c e e d i n g s h a v e b e e n i n i t i a t e d b y t h e A O wi t h o u t co r re c t a p p r e c i a t i o n o f f a c t s. I n v i e w o f t h e a b o v e d e f e c t s i n t h e c o m p l i a n c e s t h e r e s u l t a n t re a ss e s sm e n t p ro c e e d i n g s a re re q u i r e d t o b e s e t a si d e . ” Ad d i t i o n a l G ro u n d N o . 2 “ T h a t o n t h e f a c t s a n d i n c i rc u m st a n c e s o f t h e c a se, t h e re a s se s s m e n t p ro c e e d i n g s a n d i m p u g n e d re a s s e s sm e n t o r d e r i s b a d i n l a w a s t h e a s se s si n g o f f i c e r h a s p r o c e e d e d wi t h t h e a s s e ss m e n t i m m e d i a t e l y d i sp o si n g o f f i n i t i a l o b j e c ti o n wi t h o u t p r o v i d i n g r e a so n a b l e t i m e o f f o u r w e e k s t o t h e a p p el l a n t t o s e e k re m e d y a g a i n st r e j e c t i o n o f o b j e c t i o n . I.T.A. No.5535 /Del/2015 4 Ad d i t i o n a l G ro u n d N o . 2 “ T h a t o n t h e f a c t s a n d i n c i rc u m st a n c e s o f t h e c a se, t h e re a s se s s m e n t p ro c e e d i n g s a n d i m p ~ l e d re a s se s s m e n t o rd e r i s b a d i n l a w a s t h e a s s e s s i n g o f f i c e r h a s p ro c e e d e d w i t h t h e a s s e s sm e n t i m m e d i a t e l y d i sp o s i n g o f f i n i t i a l o b j e c t i o n wi t h o u t p r o v i d i n g re a so n a b l e t i m e o f f o u r we e k s t o t h e a p p e l l a n t t o se e k re m e d y a g a i n st r e j e c t i o n o f o b j e c t i o n a n d t h e j u ri sd i c t i o na l n o t i c e s a re n o t a s p e r t h e r e q u i re m e n t o f l a w . ” Ad d i t i o n a l G ro u n d N o . 3 T h a t o n t h e f a c t s a n d i n c i r c u m st a n c e s o f t h e c a se , t h e i m p u g n e d re a s se s s m e n t o r d e r c o m p u t i n g t h e sh o r t t e r m c a p i t a l g a i n a t R s. 1 1 , 6 1 , 0 4 , 3 7 0 / - n e e d s b e se t a si d e a s t h e sa m e h a s be e n c o m p u t e d wi t h o u t a l l o w i n g t h e se t o f f t h e b r o u g h t f o r wa r d l os se s u n d e r t h e h e a d c a p i t a l g a i n a g g re g a t i n g R s. 1 4 , 3 5 , 2 3 , 7 7 9 / - wh ic h i s p a r t o f t h e st a t e m e n t o f c o m p u t a t i o n o f i n c o m e a n d t h e r e t ur n o f i n c o m e f o r t h e a s se s s m e n t y e a r u n d e r c o n s i d e ra t i o n f i l e d in r e sp o n se t o n o t i c e u / s 1 4 8 . ” 4 . Hav in g reg ard to th e co n ten tio n th at su ch g rou nds are p u re leg al g ro u n d s an d th eir ad ju d ic at io n d o es no t req u ire an y fresh in v estig a tio n in to fac ts , th e ad d itio n al g ro u nd s are admi t ted fo r ad ju d icat io n in v ie w o f th e d e cis io n o f Ho n ’b le Ap ex Co u rt in th e case o f Na t io n a l Th erma l Po wer Co . Ltd . vs. Co mmissio n er o f In co me Ta x 2 29 ITR 3 8 3 (S C), an d Ju te Co rp o ra te o f In d ia Ltd . vs. CIT, 1 8 7 ITR 6 8 8 (S C). 5 . At th e ti me o f h earin g , th e ld . co u n sel su b mi tted th at alth o u g h sev eral ma in g ro u nd s an d ad d itio n al g ro u nds h av e b een raised , h o wev er t o cu t th e ma t ter sh o rt, th e g ri ev an ce o f th e assesse e wo u ld b e, b y and larg e, satis fied wh ere the Sh o rt Term I.T.A. No.5535 /Del/2015 5 Cap it al Ga in s in d isp u te a mo u n tin g t o Rs.1 1 ,6 1 ,0 4 ,370 /- assessed b y th e Assessin g Officer is a l lo wed to b e set o ff ag ain st th e b ro ug h t fo rward lo sses u n d er th e h ea d ‘Cap it al Gains’ s tat ed to b e av ail ab le to th e tu n e o f Rs.1 4 ,3 5 ,2 3 ,7 7 9 /- at th e disp o sal o f th e assesse e. Th e ld . co u n sel fo r th e as sessee th u s so ug h t remed y o n th e asp ects o f se t o ff at th e t i me o f h earin g as p er ad d itio n al Gro un d No .3 o f its ap p eal to b rin g an en d to th e p ro tracted li tig a tio n . 6 . Th e ld . CIT-DR s u b mit ted th a t wh il e sh e seek s to su p p o rt o rd ers o f th e lo wer au th o rities b u t h o wev er h as n o real o b ject io n to su ch set o ff, i f av ail ab le in ac co rd an ce with law. It was fu rth er su g g ested th at th e ma tt er sh o u ld b e resto red to th e file o f th e Assessin g Offi cer fo r ex amin a tio n an d v erifica t io n o f av ailab i l ity o f carry fo rward lo sses an d its se t o ff in acco rd ance wi th law. 7 . Hav in g h eard th e riv als su b mi ssio n s, we set aside th e o rd ers o f th e lo wer au th o rit ies an d res to re t h e issu e ar isin g fro m Gro u nd No .3 o f ad d itio n al g ro un d s reg ard in g set o ff o f Sh ort Te rm C ap it al Gain s asse ssed ag ain st av ai lab l e c a p ita l lo sses as e l i g ib le an d en ti tled in ac co rd an ce with law. I t sh all b e o p en to Assessin g Officer to su i tab ly v erify th e cla i m o f set o ff an d carry fo rward of lo sses ag ain st imp u gn ed cap ital Gain s as p ro p ag ated by th e assesse e. Need les s to say , th e ass essee sh a l l b e g iv en p rop er o p po rtu n ity fo r deter min a tio n o f set o ff an d carry fo rward o f cap it al g ain s/ lo sse s in a cco rd an ce wi th l aw. 8 . Ad d itio n al Gro u n d No .3 is al lo wed fo r sta ti st ical p u rp o ses. 9 . All o th er g ro u n d s an d ad d it io n al g ro u nd s d o no t ca l l fo r ad ju d icat io n in v i e w o f ass ert io n s ma d e o n b eh alf of ass essee . I.T.A. No.5535 /Del/2015 6 1 1 . In th e resu l t, ap p eal o f th e as sesse e i s al lo wed fo r s ta ti sti cal p u rpo ses. Order pronounced in the open Court on 07/05/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /05/2022 Prabhat