M/s Archi Medes India Consultants Pvt Ltd, New Delhi V. ITO, New Delhi

ITA 632/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8405 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D.AGRAWAL, HONBLE VICE PRES IDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-632/DEL/2015 ( ASSESSMENT YEAR: 2011-12) ARCHI MEDES INDIA CONSULTANTS PVT. LTD. L-7, GREEN PARK EXT. NEW DELHI PAN : AABCA0775 VS . ITO WARD 2(1) NEW DELHI APPELLANT RESPONDENT ASSESSEE BY: SH. RAHUL KHARE, ADV., SH. YOUDISHTER SETH, CA REVENUE BY: SHRI G. JOHNSON, SR. DR ORDER PER SUDHANSHU SRIVASTAVA, J.M.: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST O RDER DATED 27.10.2014 PASSED BY THE LD. CIT (APPEALS)- V, NEW DELHI FOR ASSESSMENT YEAR 2011-12. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED ITS RETURN OF INCOME DECLARING A LOSS OF RS. 24,23,278/ -. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT TH E ASSESSEE HAD SOLD HOUSE PROPERTY FOR AN AMOUNT OF RS. 2,65,00,00 0/-. THE DATE OF HEARING 08.10.2018 DATE OF PRONOUNCEMENT 04.01.2019 2 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) ASSESSING OFFICER (AO) NOTICED THAT THE ASSESSEE HA D CAPITALIZED THIS PROPERTY AS A BUSINESS ASSET AND HAD CLAIMED D EPRECIATION EVERY YEAR FROM THE YEAR OF PURCHASE TILL THE DATE OF SALE. THE AO NOTED THAT THE WRITTEN DOWN VALUE AS ON 31 ST MARCH, 2011 FOR THE BUILDING WAS ZERO AS THE COMPLETE BLOCK OF ASSETS H AD BEEN SOLD OFF. ACCORDINGLY, THE AO MADE AN ADDITION OF RS. 40,61,3 80/- BEING THE SHORT TERM CAPITAL GAIN. FURTHER, IT WAS ALSO NOTIC ED BY THE AO THAT THE ASSESSEE HAD CAPITALIZED INTEREST PAID TO ICICI BANK AMOUNTING TO RS. 45,86,336/- AND HAD ADDED THE SAME TO THE CO ST OF THE BUILDING. THE AO DID NOT AGREE WITH THE CAPITALIZAT ION OF THE INTEREST AND HE ADDED THIS AMOUNT ALSO TO THE INCOM E OF THE ASSESSEE. FURTHER DISALLOWANCE OF RS. 3,00,000/- WA S MADE OUT OF VARIOUS EXPENSES AND THE ASSESSMENT WAS COMPLETED A T AN INCOME OF RS. 65,24,440/-. ON APPEAL, THE LD. CIT (APPEALS ) PARTLY ALLOWED THE ASSESSEES APPEAL BY DELETING THE AD HOC ADDITION OF RS. 3,00,000/- OUT OF THE VARIOUS EXPENSES BUT UPHELD T HE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAINS AS WELL AS DISA LLOWANCE OF INTEREST PAID TO ICICI BANK. NOW, THE ASSESSEE HAS APPROACHED THE ITAT AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE ASSESSEE DENIES HIS LIABILITY TO BE ASSESSEE AT AN INCOME OF RS. 62,24,440/- 3 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT GIVING BENEFIT OF RS. 80,98,103 WHILE WORKING O UT THE SHORT TERM CAPITAL GAINS ON SALE OF PROPERTY AS DON E BY LD. AO AND THAT TOO BY RECORDING INCORRECT FACTS. 3. THAT THE ASSESSEE CRAVES THE LEAVE TO ADD, ALTE R OR AMEND THE GROUNDS OF APPEAL AT ANY STAGE AND ALL TH E GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTA TIVE SUBMITTED THAT THERE WAS A DELAY OF APPROXIMATELY SEVEN AND H ALF MONTHS IN FILING OF THE APPEAL. OUR ATTENTION WAS DRAWN TO TH E DELAY CONDONATION APPLICATION SUBMITTED BY THE ASSESSEE A ND IT WAS SUBMITTED THAT DUE TO SOME FAMILY DISPUTES, THE MAN AGING DIRECTOR OF THE ASSESSEE COMPANY WAS JAILED FOR 50 DAYS AND THE APPEAL COULD BE FILED ONLY AFTER A FAMILY SETTLEMENT HAD B EEN REACHED. THIS RESULTED IN DELAY IN FILING OF APPEAL. IT WAS SUBMI TTED THAT THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FILING THE APPEAL BUT THE APPEAL COULD NOT BE FILED DUE TO MATTERS BEYOND THE CONTROL OF THE ASSESSEE COMPANY. IT WAS PRAYED THAT THE DELAY BE CONDONED. 4 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) 4. THE LD. DEPARTMENTAL REPRESENTATIVE OPPOSED THE APPLICATION FOR CONDONATION OF DELAY AND SUBMITTED THAT THE AVE RMENTS OF THE ASSESSEE WERE NOT VERIFIABLE. 5. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO GON E THROUGH THE CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE IN THIS REGARD AND LOOKING INTO FACTS AND CIRCUMSTANCES OF THE CASE, W E ARE OF THE OPINION THAT THE DELAY IN FILING OF THE APPEAL WAS INDEED BEYOND THE CONTROL OF THE ASSESSEE COMPANY AND, THEREFORE, WE DEEM IT FIT TO CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 6. THE LD. AUTHORISED REPRESENTATIVE, APPEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE INTEREST PORTION WAS N OT CAPITALIZED BY THE ASSESSEE AS HAS BEEN AVERRED BY THE AO IN THE A SSESSMENT ORDER AND HE DREW OUR ATTENTION TO THE COPY OF THE AUDITED BALANCE SHEET FOR THE ASSESSMENT YEARS 2009-10, 2010-11 AND 2011-12 PLACED IN THE PAPER BOOK TO SUBSTANTIATE HIS ARGUME NT. OUR ATTENTION WAS ALSO DRAWN TO THE INTEREST CERTIFICAT E ISSUED BY THE ICICI BANK LTD. TO SUBSTANTIATE THE AMOUNT OF INTER EST. IT WAS ALSO SUBMITTED THAT THE INTEREST PORTION WAS NOT TREATED AS PART OF THE COST FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN S AND, THEREFORE, THE LOWER AUTHORITIES HAD ERRED IN DISALLOWING THE ASSESSEES CLAIM AND NOT GIVING BENEFIT OF RS. 80,98,103/- WHILE WOR KING OUT THE 5 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) SHORT TERM CAPITAL GAINS. IT WAS ALSO SUBMITTED THA T BOTH THE LOWER AUTHORITIES HAD RECORDED INCORRECT FACTS WHILE ADJU DICATING THE ISSUE. 7. IN RESPONSE THE LD. SR. DEPARTMENTAL REPRESENTAT IVE PLACED HEAVY RELIANCE ON THE ORDERS OF THE LOWER AUTHORITI ES AND SUBMITTED THAT THE DISALLOWANCE HAD RIGHTLY BEEN MADE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE ORDERS OF BOTH THE LOWER AUTHORITIES SHOWS THAT THE AVERMENT OF THE LD . AUTHORISED REPRESENTATIVE THAT THE FACTS HAVE NOT BEEN CORRECT LY RECORDED BY THE LOWER AUTHORITIES IS CORRECT IN SO FAR AS BOTH THE LOWER AUTHORITIES HAVE NOT RECORDED FACTS IN A PROPER MAN NER WHILE ADJUDICATING THE ISSUE. UNFORTUNATELY, THE ASSESSEE HAS ALSO NOT CARED TO FILE A PAPER BOOK IN THIS REGARD TO ENABLE US TO VERIFY THE VERACITY OF THE VARIOUS FIGURES AND THE FACTS, AS S UBMITTED BEFORE THE LOWER AUTHORITIES, BY THE ASSESSEE COULD BE VER IFIED. WE FEEL THAT IT WAS INCUMBENT UPON THE ASSESSEE TO HAVE FILED RE LEVANT DOCUMENTS BEFORE US TO ENABLE US TO EXAMINE THE MAT TER IN PROPER PERSPECTIVE. HOWEVER, THE ASSESSEE HAS FAILED IN TH IS REGARD. ALL THE SAME, IN INTEREST OF JUSTICE WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT (APPEALS) WITH THE DIRECTION TO RE- 6 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) EXAMINE THE ISSUE AFTER CORRECT APPRECIATION AND R ECORDING OF FACTS AND THEREAFTER PASS A SPEAKING ORDER AFTER PROVIDIN G DUE OPPORTUNITY TO THE ASSESSEE. WE ALSO DIRECT THE ASS ESSEE TO PRODUCE ALL RELEVANT DOCUMENTS BEFORE THE LD. CIT (APPEALS) IN SUPPORT OF ITS CLAIM WHEN IT IS CALLED UPON TO DO SO BY THE LD. CI T (APPEALS) FAILING WHICH THE LD. CIT (APPEALS) WILL BE AT LIBE RTY TO PROCEED EX PARTE AGAINST THE ASSESSEE AND ADJUDICATE THE ISSUE IN A CCORDANCE WITH LAW. 9. IN THE RESULT, APPEAL OF THE ASSESSEE STAND ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04.01.2019. SD/- SD/- (G.D.AGRAWAL) (SUDHANSHU SR IVASTAVA) VICE PRESIDENT JUDICIA L MEMBER DATED: 04.01.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA N O. 632/DEL/2015 (ARCHI MEDES INDIA CONSULTANTS PVT. LTD.) DATE OF DICTATION 4.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 4.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 4.01.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 4.01.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 4.01.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 4.01.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 4.01.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.01 .2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER