RADIUS DESERVE LAND DEVELOPERS, MUMBAI V. PR CIT-CITY-6, MUMBAI

ITA 889/MUM/2021

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9743 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-10-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 20-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Assessment record; Set aside
• Section: 263; 143(3); 142(1); 143(2)

Judgement Text

ITA No. 889/Mum/2021 A.Y: 2016-17 Radius Deserve Land Developers Pvt. Ltd. Vs. Pr.CIT 1 IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.889 /Mum/2021 (A.Y. 2016-17) Radius Deserve Land Developers Pvt. Ltd. Deserve House, CST Road Jn, Next To Kotak Mahindra Bank, Opp Mumbai University, Kalina Santacruz, East, Mumbai – 400098 Vs. Pr. Commissioner of Income Tax, City-6, Room No. 501, 5 th Floor, Aayakar Bhavan, M.K.Road, Mumbai – 400 020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAGCA7060F Appellant .. Respondent Appellant by : Ajay Singh Respondent by : Riddhi Mishra Date of Hearing 20.10.2022 Date of Pronouncement 26.10.2022 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal filed by the assessee is directed against the order passed by the ld. Pr.CIT-6, Mumbai which in turn arises from the order passed by the A.O u/s 143(3) of the Act. The assessee has raised the following grounds before us: “1. The Hon’ble Pr. CIT-6 (herein after referred as CIT) has erred in invoking Provisions of Section 263 of the Income Tax Act, 1961 by issuing the Notice in-spite of the fact that Scrutiny assessment has been completed by the ITO - 14(3)(1), Mumbai U/s 143 (3) of the Income Tax Act, 1961 after duly examined and considering facts while framing the assessment order U/s ITA No. 889/Mum/2021 A.Y: 2016-17 Radius Deserve Land Developers Pvt. Ltd. Vs. Pr.CIT 2 143 (3) of Income Tax Act, 1961. The Hon’ble CIT has erred in raising the issues and making rowing enquiries in the Proceedings U/s 263 of the Income Tax Act, 1961. Further Order U/S 263 is also passed without any conclusion merely setting aside the assessment to the file of the learned assessing officer which is unjustified. It is therefore submitted that the order passed U/s 263 should be cancelled. 2. Without prejudice to ground No. 1. The CIT has erred in directing the Assessing officer to verify the following: i. Details of interest paid of Rs. 16,35,74,582/ ii. Purpose of issue of Non-Convertible Debentures. iii. Whether Debenture Redemption premium is paid or not Rs. 24,65,66,129/-. The Pr. CIT failed to appreciate that the Assessment order u/s 143(3) of the Income Tax Act, 1961 dated 17.12.2018 was passed by the A.O. after considering the entire material on record and applied his mind during the course of Assessment proceeding u/s 143(3). All the issues raised by CIT was duly examined and the same cannot be considered in the Order U/s 263 of the Income Tax Act, 1961. In conclusion, CIT has set aside the order without examining the documents and explanation filed during the 263 proceedings and mere set of the order to such extent is unjustified. Accordingly, the necessary direction should be given in this regard.” 2. The fact in brief is that return of income declaring total income of Rs.nil was filed on 31.12.2018. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 14.08.2018. The assessment order u/s 143(3) of the Act was passed on 17.12.2018 assessing total income at Rs. nil as shown in the computation of income by the assessee. Subsequently, the ld. Pr. CIT(A)-6, Mumbai, after verification of the assessment record noticed that assessee company had advanced Rs.200.35 crore to its subsidiary namely, Radius & Deserves Builders LLP, out of which an amount of Rs.70.50 crores was interest free. The ld. Pr.CIT was of the view the assessee had advanced borrowed funds to its sister concern without any commercial exigency, therefore, proposed interest of Rs.16,35,74,582/- should have been disallowed u/s 36(1)(iii) of the Act. Ld. Pr.CIT also observed that assessee company had executed option deposit agreement with Radius & Deserves Builders LLP to exercise option to purchase option FSI admeasuring 4,00,000 sq. ft. in ITA No. 889/Mum/2021 A.Y: 2016-17 Radius Deserve Land Developers Pvt. Ltd. Vs. Pr.CIT 3 Chembur project. The ld. Pr.CIT was of the view that no documents have been called to ascertain the real purpose of such option and the A.O had also ascertained whether the said subsidiary had utilized the funds for their business purposes or not. The ld. Pr.CIT also observed that the assessee company had also issued non-controvertible debenture for an amount of Rs.302 crores to IIFL reality limited from 18.09.2015 to 19.02.2016 and claimed an amount of Rs.24,65,66,129/- as debenture redemption premium without creating any debenture redemption reserves. Therefore, the ld. Pr.CIT was of the view assessee had made provisions only without making actual payment. Considering the aforesaid lacuna in the assessment order interalia it is discerned to the ld. Pr.CIT that impugned order is erroneous and so far as prejudicial to the interest of revenue. Therefore, the impugned assessment order u/s 143(3) dated 17.12.2018 was set aside to the file of A.O to pass the same de novo after affording adequate opportunity to the assessee. 3. During the course of appellate proceedings before us the ld. Counsel has filed a paper book comprising copies of document mostly filed before the A.O during the course of assessment proceedings. After referring the copies of document the ld. Counsel contended that during the course of original assessment proceedings u/s 143(3), the assessee had submitted all the details and issues were explained and discussed with the A.O. The ld. Counsel has also referred notices u/s 142(1) issued by the A.O during the course of assessment and the corresponding replies furnished by the assessee as placed in the paper book. however, the ld. D.R at the outset contended that the various details and copies of document furnished in the paper book were not ITA No. 889/Mum/2021 A.Y: 2016-17 Radius Deserve Land Developers Pvt. Ltd. Vs. Pr.CIT 4 brought to the knowledge of the Pr.CIT, since the assessee had not made any compliance before the ld. Pr.CIT during the course of proceedings u/s 263 of the Act. She has also supported the order of ld. Pr.CIT. 4. Heard both the sides and perused the material on record. Without reiterating the facts as elaborated above, it is undisputed fact as evident from para 4 of the order u/s 263 of the Act that during the course of proceedings u/s 263 of the Act neither the assessee has attended the proceedings nor furnished any written submission before the ld. Pr.CIT to controvert his observations related to the impugned unverified issues as discussed supra in this order. Therefore, it is our considered view that the material placed in the paper book is required to be brought to the consideration of the ld. Pr.CIT for adjudicating the issue on merit. Accordingly, we restore the case to the file of the ld. Pr.CIT for deciding de novo after affording opportunities to the assessee to controvert the facts on the basis of which the ld. Pr.CIT had exercised revisional jurisdiction. The assessee is also directed to make due compliance during the course of proceedings u/s 263 of the Act before the ld. Pr.CIT without any further failure. Therefore, the grounds of appeal of the assessee are allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 26.10.2022 Sd/- Sd/- (Aby T Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 26.10.2022 Rohit: PS ITA No. 889/Mum/2021 A.Y: 2016-17 Radius Deserve Land Developers Pvt. Ltd. Vs. Pr.CIT 5 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. विभागीय प्रविवनवध, आयकर अपीलीय अवधकरण DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.