ACIT, New Delhi V. Shri Madhukar Arenja, New Delhi

ITA 578/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9273 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Deemed dividend; Tax effect; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.578/DEL./2016 (ASSESSMENT YEAR : 2011-12) ACIT, CIRCLE 47 (1), VS. SHRI MADHUKAR ARENJA, NEW DELHI. C/O SHRI PREM SHARMA, 2, TILAK MARG, NEW DELHI 110 001. (PAN : AAEPA9093R) ITA NO.6825/DEL./2015 (ASSESSMENT YEAR : 2011-12) SHRI MADHUKAR ARENJA, VS. ACIT, CIRCLE 47 (1), C/O SHRI PREM SHARMA, NEW DELHI. 2, TILAK MARG, NEW DELHI 110 001. (PAN : AAEPA9093R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE REVENUE BY : SHRI J.K. MISHRA, CIT DR SMT. NAINA SOIN KAPIL, SENIOR DR DATE OF HEARING : 03.09.2019 DATE OF ORDER : 04.10.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : PRESENT CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE ARE BEING DISPOSED OFF BY WAY OF COMPOSITE ORDER TO AVOID REPETITION OF DISCUSSION. ITA NO.6875/DEL./2015 ITA NO.578/DEL./2016 2 2. APPELLANT, ACIT, CIRCLE 47 (1), NEW DELHI (HEREI NAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL B EING ITA NO.578/DEL/2016, SOUGHT TO SET ASIDE THE IMPUGNED O RDER DATED 03.11.2015 PASSED BY THE COMMISSIONER OF INCOME - T AX (APPEALS)-16, NEW DELHI ON THE GROUNDS INTER ALIA THAT :- 1. WHETHER THE LOSS FROM BUSINESS & PROFESSION CA N BE CARRIED FORWARD WHEN THE BUSINESS & PROFESSION OF T HE ASSESSEE IS DISCONTINUED? 2. WHETHER THE LD. CIT(A) WAS CORRECT IN DELETING T HE DISALLOWANCE OF CARRIED FORWARD LOSSES OF RS.1,55,4 9,577/- WHEN THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS , HIMSELF ADMITTED THE FACT THAT FROM THE AY. 2003-04 , THE ASSESSEE HAS NOT DONE ANY BUSINESS? 2. APPELLANT, SHRI MADHUKAR ARENJA (HEREINAFTER REF ERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL BEING ITA NO.6825/DEL/2015, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 03.11. 2015 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-16, NEW DEL HI ON THE GROUNDS INTER ALIA THAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN: 1. NOT DECIDING THE FOLLOWING ISSUES RAISED IN APP EAL: A) WHETHER PROVISO TO SECTION 72( 1) OF THE ACT WIT H REGARD TO SET OFF OF LOSS IN RELATION TO DISCONTINU ED BUSINESS IS REFERABLE TO SECTION 336 CASES ONLY AND NOT TO O THER ASSESSES; B) WHETHER THE INCOME FROM BUSINESS DECLARED IN THE RETURN HAS ACTUALLY ACCRUED TO THE ASSESSEE OR WAS ONLY A NOTIONAL INCOME AND THUS NOT TAXABLE. ITA NO.6875/DEL./2015 ITA NO.578/DEL./2016 3 2. IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSIN G OFFICER BY INVOKING PROVISIONS OF SECTION 2(22) (E) OF THE ACT TO THE EXTENT OF RS.20,57,050/-. ALL THE ABOVE ACTIONS BEING ARBITRARY, ERRONEOUS, UNWARRANTED AND UNJUST MUST BE QUASHED WITH DIRECTI ONS FOR RELIEF. ITA NO.6825/DEL./2015 (ASSESSEES APPEAL) 3. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ASSESSEE BEING DIRECTOR OF VARIOUS COMPA NIES HAD SHOWN INCOME UNDER HEAD SALARY FROM THREE COMPANIES, NA MELY, M/S.ARENJA IND. LTD., EMEM BUILDERS & DEV. PVT. LTD. AND M/S. MEHAK DEVELOPERS PVT. LTD. AND HAS SHOWN INCOME FROM RENTALS AND OTH ER SOURCES. ASSESSING OFFICER NOTICED FROM THE ACCOUNTS OF THE ASSESSEE THAT THE ASSESSEE BEING SHAREHOLDER IN A COMPANY CONTAINED D EBITS TO THE TUNE OF RS.43,57,050/- AND IT IS ALSO NOTICED THAT THE ASSE SSEE WAS A MAJOR SHAREHOLDER IN THE COMPANY AND THEREBY MADE THE ADD ITION OF RS.43,57,050/-. 4. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS RESTRICTED THE ADDITION TO RS.20,57 ,050/- MADE BY THE AO ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22 )(E) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) BY PARTL Y ALLOWING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED ITA NO.6875/DEL./2015 ITA NO.578/DEL./2016 4 BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 6. LD. AR FOR THE ASSESSEE CONTENDED THAT SHRI ANKU SH ARENJA, SON OF THE ASSESSEE PURCHASED A PROPERTY FROM THE COMPA NY WHICH HAS DEFERRED LEFT OVER ACCOUNT BALANCES TO ANKUSH ARENJ A AS PART OF THE UNDERSTANDING WHICH ARE AS UNDER :- (I) RS.5,39,500/- AMOUNT PAID FOR POSSESSION CHARGE S; (II) RS.50,000/- AMOUNT PAID FOR A.H. UNIT CHARGES ; (III) RS.1,20,000/- AMOUNT PAID FOR ADVANCE MAINTEN ANCE CHARGES; (IV) RS.6,17,550/- AMOUNT PAID FOR STAMP DUTY; (V) RS.30,000/- AMOUNT PAID FOR REGISTRATION CHARG ED. AND THE AMOUNT SO DEBITED TO ANKUSH ARENJA WAS LATE R AT CLOSING TRANSFERRED TO THE ASSESSEE WHO HAD A RUNNING ACCOU NT THEREIN. IT IS FURTHER CONTENDED THAT IT WAS NOT A TRANSACTION BY WAY OF EITHER LOAN OR ADVANCE OR BOTH RATHER WHICH WAS TRACEABLE TO THE S ALE OF AN IMMOVABLE PROPERTY AND SUCH ENTRIES ARE HAVING AN INTIMATE RE LATIONSHIP WITH THE TRANSACTION IN QUESTION. 7. PERUSAL OF PARA 12 OF THE IMPUGNED ORDER SHOWS T HAT THE ASSESSEE HAS BROUGHT ON RECORD ADDITIONAL EVIDENCE BEFORE TH E LD. CIT (A) AS TO THE SALE OF IMMOVABLE PROPERTY BY THE COMPANY IN TH E NAME OF ANKUSH ARNEJA, SON OF THE ASSESSEE WHICH HAS NOT BEEN CONS IDERED BY THE LD. CIT (A). SINCE THE ADDITIONAL EVIDENCE HAS NOT BEEN CO NSIDERED AND AS SUCH ISSUE IN CONTROVERSY REMAINED UNSETTLED IN ENTIRETY , THE CASE IS REQUIRED TO BE REMANDED TO THE AO TO DECIDE AFRESH AFTER PRO VIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO DECID E THE ISSUE IN ITA NO.6875/DEL./2015 ITA NO.578/DEL./2016 5 CONTROVERSY. BOTH THE PARTIES TO THE APPEAL AGREED IN THE INTEREST OF JUSTICE TO REMAND THE MATTER BACK TO THE AO. CONSE QUENTLY, THE CASE IS REMANDED BACK TO THE AO TO DECIDE AFRESH BY PROVIDI NG ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY CONSI DERING ADDITIONAL EVIDENCE SOUGHT TO BE LED BEFORE LD. CIT (A). ITA NO.578/DEL./2016 (REVENUES APPEAL) 8. SINCE THE TAX EFFECT IN THE APPEAL FILED BY THE REVENUE IS LOW I.E. LESS THAN RS.50,00,000/-, IN VIEW OF THE CBDT CIRCU LAR NO.17/2019 DATED 8 TH AUGUST, 2019 WHICH IS APPLICABLE RETROSPECTIVELY I N VIEW OF THE DECISION RENDERED BY COORDINATE BENCH OF THE TRIBUN AL IN CASE OF DINESH MADHAVLAL PATEL [TS-469-ITAT-2019(AHD)] 2019-TIOL-1 556-ITAT- AHM DATED 14 TH AUGUST, 2019, THE APPEAL OF THE REVENUE BEING ITA NO.3910/DEL/2011 IS DISMISSED ON ACCOUNT OF LOW TAX EFFECT. 8. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL FILED BY THE RE VENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF OCTOBER, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 4 TH DAY OF OCTOBER , 2019 TS ITA NO.6875/DEL./2015 ITA NO.578/DEL./2016 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-16, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.