Mahashya Ispat (P) Ltd., Delhi V. ITO, Ward- 16(1), New Delhi

ITA 896/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9999 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Capital asset; Application of stay
• Section: 143(3); 54

Judgement Text

1 STAY APPL. NO. 896/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: FRIDAY NEW DELHI BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SMT. BEENA A PILLAI, JUDICIAL MEMBER STAY APPL. NO. 896/DE L/2018 (IN ITA NO. 7165/DEL/2018) (ASSESSMENT YEAR-2014- 15) SURESH SINGHAL 811-812, AGGARWAL SYBER PLAZA-1 NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI. PAN NO. AAAPS7729L VS ACIT CIRCLE 61(1) NEW DELHI. APPELLANT BY SH. K. SAMPATH, ADV. RESPONDENT BY SH. S.L. ANURAGI, SR. DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER : PRESENT STAY APPLICATION HAS BEEN FILED BY APPLICA NT SEEKING STAY OF OUTSTANDING DEMAND OF RS.57,81,580./-. 2. BRIEF FACTS ARE AS UNDER : IT HAS BEEN SUBMITTED THAT ASSESSEE, AN INDIVIDUAL , IS A PROFESSIONAL, AND HAS FILED HIS RETURN OF INCOME FO R RS.46,67,470/- ON 26.11.2014. ASSESSMENT U/S 143(3) OF THE ACT, 1 961 WAS COMPLETED AT TOTAL INCOME OF RS.2,60,31,500/- ON 29 .12.2016, WHEREIN FOLLOWING ADDITIONS WERE MADE: DATE OF HEARING 07/12/2018 DATE OF PRONOUNCEMENT 11/12/2018 2 STAY APPL. NO. 896/DEL/2018 I. RS.1,74,96,164/- BY DENYING EXEMPTION CLAIMED U/S 5 4 OF THE ACT AGAINST LONG TERM CAPITAL GAIN EARNED ON SALE O F HOUSE PROPERTY; II. RS.38,67,868/- BEING THE AMOUNT OF INTEREST EXPENSE S CLAIMED AGAINST INCOME FROM OTHER SOURCES. 2.1 ASSESSEE AGGRIEVED BY THE ORDER OF LD.AO, PREFE RRED APPEAL BEFORE THE LD.CIT(A)-20, WHICH WAS PARTLY ALLOWED I N VIDE ORDER DATED 28 TH SEPTEMBER, 2018. THE LD.CIT(A) CONFIRMED DISALLOW ANCE OF EXEMPTION CLAIMED U/S 54 ON ACCOUNT OF SALE OF L ONG TERM CAPITAL ASSET AND ALSO CONFIRMED THE FINDING OF LD.AO THAT SALE WAS NOT EFFECTED DURING THE YEAR UNDER CONSIDERATION. IN RE GARDS SECOND ADDITION MADE ON ACCOUNT OF INTEREST, LD.CIT(A) ALL OWED PARTIAL RELIEF TO THE EXTENT OF RS. 6,04,835/-. 2.3 AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE P REFERRED APPEAL BEFORE THIS TRIBUNAL ON FOLLOWING GROUNDS: 1. THE LD. AO HAS MADE A DISALLOWANCE OF DEDUCTION U/ S 54 OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 1,46,2 8,050/-, WHICH HAS NOT BEEN JUSTIFIED AND AGAINST THE LAW. THEREFORE, THE ASSESSEE PRAYS IN YOUR COURT OF LAW THAT THE SA ME MAY PLEASE BE DELETED ON THE FOLLOWING GROUNDS: 1.1 EXTINGUISHMENT OF RIGHTS AMOUNTS TO TRANSFER IN T ERMS OF SECTION 2(47) OF THE INCOME TAX ACT, 1961. THE TRA NSFER OF POSSESSION OF PROPERTY BY THE ASSESSEE AFTER RECEIP T OF FULL CONSIDERATION AMOUNTS TO EXTINGUISHMENT OF RIGHTS . 3 STAY APPL. NO. 896/DEL/2018 1.2 ALLOWING POSSESSION OF PROPERTY TO BE TAKEN OR RETA INED IN PART PERFORMANCE OF CONTRACT IN TERMS OF SECTION 53 A OF THE TRANSFER OF PROPERTY ACT, 1882 AMOUNTS TO TRANSFER . THERE IS NO CONDITION OF EXECUTION OF SALE DEED FOR THE SAME. 1.3 THE STAMP DUTY HAD BEEN PAID BY THE BUYER COMPANY MUCH BEFORE THE EXECUTION OF SALE DEED, INDICATING THE FACT THAT PROPERTY HAD BEEN TRANSFERRED FOR ALL PRACTICA L PURPOSES AND ALSO THE INTENTION TO EXECUTE SALE DEE D. 1.4 THE EXECUTION OF SALE DEED WAS BEYOND THE CONTROL O F THE ASSESSEE AS THE MANAGEMENT OF BUYER COMPANY WAS ORISSA-BASED, WHO COULD NOT FIND IT FEASIBLE TO TRA VEL TO DELHI AT THAT TIME FOR THE PURPOSE. 2. THE LD. AO HAS MADE A DISALLOWANCE OF 50% OF THE CO ST OF IMPROVEMENT AMOUNTING TO RS.28,68,114/-. THE ASSES SEE DOES NOT AGREE TO THE ADDITION AND PRAYS THE SAME B E DELETED ON THE FOLLOWING GROUNDS: 2.1 DESPITE THE FACT THAT MAINTENANCE OF BOOKS OF ACCOU NTS AND OTHER DOCUMENTS ARE NOT REQUIRED POST SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN TERMS OF RULE 6F(5) OF THE INCOME TAX RULES, 1962, THE ASSESSEE H AD SUBMITTED RELEVANT DOCUMENTS AND RECORDS SUPPORTING HIS CLAIM OF COST OF IMPROVEMENT. 2.2 DISALLOWANCE OF 50% EXPENSES IS ARBITRARY AND LACKS BASIS. 4 STAY APPL. NO. 896/DEL/2018 3. THE LD.AO HAS MADE A DISALLOWANCE OF INTEREST EXPEN SES UNDER THE HEAD INCOME FROM OTHER SOURCES AMOUNTIN G TO ADDITION OF RS. 38,67,868/-, TO WHICH THE ASSESSEE DOES NOT AGREE AND PRAYS THAT THE SAME BE DELETED ON THE FOL LOWING GROUNDS: 3.1 REPLACEMENT OF LOAN HAS BEEN CONSIDERED AS THE REPAYMENT OF LOAN BY THE LD. AO. 3.2 LONG TERM LOANS HAVE BEEN ADVANCED AS SHORT TERM DEMAND LOANS, RESULTING IN MISMATCH IN THE RATES OF INTEREST. 3.3 THE AMOUNT OF INTEREST WHICH HAS BEEN CAPITALIZED B Y THE ASSESSEE HIMSELF IN HIS BOOKS OF ACCOUNTS (WHICH WA S NOT CLAIMED AS EXPENSE), HAS BEEN ADDED TO THE TOTAL IN COME OF THE ASSESSEE BY THE LD. AO. 3. LD.COUNSEL SUBMITTED THAT ASSESSEE HAS DULY DEPO SITED 15% OF GROSS DEMAND AMOUNTING TO RS.8,67,240/-, AND ASSESS EE DOES NOT HAVE WHEREWITHALS TO PAY BALANCE DEMAND. UNDER THES E CIRCUMSTANCES, IT IS PRAYED THAT DISPUTED DEMAND MA Y BE STAYED TILL DISPOSAL OF APPEAL. 4. ON THE OTHER HAND, LD.DR RELYING UPON ORDERS PAS SED BY AUTHORITIES BELOW OBJECTED FOR A BLANKET STAY TO BE GRANTED TO ASSESSEE. HE SUBMITTED THAT IN THE EVENT STAYS GRAN TED CERTAIN AMOUNT MAY BE DIRECTED TO BE DEPOSITED AGAINST THE BALANCE OUTSTANDING DEMAND AS ON DATE. 5 STAY APPL. NO. 896/DEL/2018 5. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES AND THE LIGHT OF THE RECORDS PLACED BEFORE US. 6. WE ARE OF CONSIDERED OPINION THAT ASSESSEE HAS M ADE OUT PRIMA FACIE CASE ON MERITS, AND BALANCE OF CONVENIENCE SHIFTS IN FAVOUR OF ASSESSEE. WE ARE THEREFORE INCLINED TO GR ANT STAY TO ASSESSEE FOR YEAR UNDER CONSIDERATION, FOR A PERIOD OF SIX MONTHS(180 DAYS) OR TILL PASSEG OF ORDER, WHICHEVER IS EARLIER, SUBJECT TO MAKING PAYMENT OF RS.10 LACS IN TWO EQUA L INSTALLMENTS OF RS.5 LACS EACH ON OR BEFORE 31/12/18 AND 15/01/1 9. ON MAKING AFORE STATED PAYMENT WITHIN STIPULATED TIME, REGIST RY IS DIRECTED TO FIX APPEAL IN ITA NO. 7165/DEL/2018 FOR HEARING ON 05/03/2018. NEEDLESS TO SAY THAT ASSESSEE SHALL NOT SEEK ANY AD JOURNMENT UNLESS THERE BEING A COGENT REASON, OTHERWISE THIS STAY SHALL STAND AUTOMATICALLY VACATED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/12/2018 SD/- SD/- (N.K. SAINI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/12/2018 *KAVITA ARORA 6 STAY APPL. NO. 896/DEL/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 07/12/2018 2. DRAFT PLACED BEFORE AUTHOR 11/12/2018 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 12/12 6. KEPT FOR PRONOUNCEMENT ON 11/12 7. FILE SENT TO THE BENCH CLERK & ORDER UPLOADED ON 12/12 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.