Medravathi Agro Farms Private Limited(Now merged with Hill County Properties Limited), Hyderabad V. Asst. Commissioner of Income Tax, Central Circle-3(2), Hyderabad

ITA 997/Hyd/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4309 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 21-01-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 993/HYD/18 2013-14 UTTARASHADA BIO TECH PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 994/HYD/18 2013-14 VAMSADHARA AGRO FARMS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 995/HYD/18 2013-14 SINDHU GREENLANDS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD), HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 996/HYD/18 2013-14 KONAR GREENLANDS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 997/HYD/18 2013-14 MEDRAVATHI AGRO FARMS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 998/HYD/18 2013-14 GOMAN AGRO FARMS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 999/HYD/18 2013-14 HIMAGIRI BIO TECH PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD), HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD ITA NOS. 993, 994, 995, 996, 997 998, 999, 1000 & 1001/HYD/2018 :- 2 -: 1000/HYD/18 2013-14 HIMAGIRI GREEN FIELDS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD) HYDERABAD, [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD 1001/HYD/18 2013-14 NAGAVALI GREENLANDS PRIVATE LIMITED, (NOW MERGED WITH HILL COUNTY PROPERTIES LTD), HYDERABAD [PAN: AAECM2732Q] ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(2), HYDERABAD FOR ASSESSEE : SHRI S.RAMA RAO, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 21-01-2021 DATE OF PRONOUNCEMENT : 08-02-2021 O R D E R PER BENCH : THESE ASSESSEES APPEALS FOR AY.2013-14 ARISE FROM THE CIT(A)-11, HYDERABADS ORDER ALL DATED 31-01-2018 IN VOLVING PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [I N SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. IT TRANSPIRES DURING THE COURSE OF HEARING THAT ALL TH ESE ASSESSEES; NOW STAND MERGED WITH M/S.HILL COUNTY PRO PERTIES LIMITED, HAVE RAISED AN IDENTICAL SOLITARY SUBSTANTIV E GRIEVANCE CHALLENGING LOWER AUTHORITIES ACTION TREATING LOSS ON ACCOUNT OF WRITE OFF REPRESENTING ADVANCES MADE FOR PURCHASE OF LANDS TO THE TUNE OF RS.33,34,977/-, RS.1.25 CRORES, RS.2 CR ORES, RS.1 CRORE, RS.70 LAKHS, RS.2.40 CRORES, RS.1.50 CR ORES, 2.50 CRORES AND RS.1,89,80,000/-; APPEAL-WISE RESPECTIVEL Y, UNDER THE HEAD BUSINESS THAN CAPITAL LOSS(ES) CLAIMED AT THE IR ITA NOS. 993, 994, 995, 996, 997 998, 999, 1000 & 1001/HYD/2018 :- 3 -: BEHEST. IT IS NOT IN DISPUTE THAT ALL THESE ASSESSEES AR E CORPORATE ENTITIES STATED TO BE ENGAGED IN SALE OF LAND AND ALLIED ACTIVITIES ONLY. 3. COMING TO THE ABOVE SOLE ISSUE OF IMPUGNED WRITE-OF F, THE FIRST ASSESSEES APPEAL ITA NO.993/HYD/2018 RAISED TH E FOLLOWING SUBSTANTIVE GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE AP PELLANT. 2. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN DISALLOWING THE LOSS ON ACCOUNT OF WRITE OFF OF RS.33,34,977/- REPRESENTING THE ADVANCES FOR PURCHASE OF LANDS. 3. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) OUGHT TO HAVE CONSIDERED THE DETAILED EXPLANATION S UBMITTED AND OUGHT TO HAVE ALLOWED THE AMOUNT OF RS.33,34,977/- AS THE BUSINESS LOSS OF THE APPELLANT. 4. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 4. WE NOTICE DURING THE COURSE OF HEARING THAT BOTH THE LEARNED LOWER AUTHORITIES HAVE TREATED THE ASSESSEES AS MERE INVESTOR(S) THEN ENGAGED IN ADVENTURE IN REAL ESTATE BU SINESS. THEIR CLAIM OF BUSINESS LOSS THROUGHOUT HAS BEEN THAT THE CORRESPONDING AGREEMENT(S) OF JOINT DEVELOPMENT HAD C ONVERTED THE LAND IN ISSUE AS STOCK-IN-TRADE AND THEREFORE, THE A DVANCES WRITE OFF HEREIN ARE NOTHING BUT LIABLE TO BE TREATED AS BUSINESS LOSS(ES) ONLY. FACED WITH THIS PECULIAR POSITION, WE D EEM IT APPROPRIATE TO RESTORE THE FOREGOING SOLE ISSUE IN ALL THESE APPEALS BACK TO THE ASSESSING OFFICER(S) FOR HIS AFRE SH APPROPRIATE ADJUDICATION AS PER LAW KEEPING IN MIND TH E ASSESSEES MEMORANDUM OF ASSOCIATION/ OBJECT CLAUSES , BOOK ITA NOS. 993, 994, 995, 996, 997 998, 999, 1000 & 1001/HYD/2018 :- 4 -: TREATMENT GIVEN TO THE CORRESPONDING PARCELS OF LAND RIG HT FROM THE DATE OF ACQUISITION TO JOINT DEVELOPMENT AND WRITE OFF ALONG WITH ALL BUSINESS ACTIVITIES CARRIED OUT IN THE INTERV ENING PERIOD RESPECTIVELY. IT SHALL BE VERY MUCH OPEN FOR THE ASSESSEES TO RAISE ALL FACTUAL AND LEGAL ARGUMENTS BE FORE THE ASSESSING OFFICER IN CONSEQUENTIAL PROCEEDINGS WITH IN THREE EFFECTIVE OPPORTUNITIES. 5. ALL THESE ASSESSEES APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES IN FOREGOING TERMS. A COPY OF THIS COMMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEBRUARY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 08-02-2021 TNMM ITA NOS. 993, 994, 995, 996, 997 998, 999, 1000 & 1001/HYD/2018 :- 5 -: COPY TO : 1.UTTARASHADA BIO TECH PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHU PALLY, HYDERABAD. 2.VAMSADHARA AGRO FARMS PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY, HYDERABAD. 3.SINDHU GREENLANDS PRIVATE LIMITED (NOW MERGED WIT H HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY , HYDERABAD. 4.KONAR GREENLANDS PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY , HYDERABAD. 5.MEDRAVATHI AGRO FARMS PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY, HYDERABAD. 6.GOMAN AGRO FARMS PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY , HYDERABAD. 7.HIMAGIRI BIO TECH PRIVATE LIMITED (NOW MERGED WIT H HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHUPALLY , HYDERABAD. 8.HIMAGIRI GREEN FIELDS PRIVATE LIMITED (NOW MERGED WITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHU PALLY, HYDERABAD. 9.NAGAVALI GREENLANDS PRIVATE LIMITED (NOW MERGED W ITH HILL COUNTY PROPERTIES LIMITED), HILL COUNTY, BACHU PALLY, HYDERABAD. 10.THE ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIR CLE- 3(2), HYDERABAD. 11.CIT(APPEALS)-11, HYDERABAD. 12.PR.CIT(CENTRAL), HYDERABAD. 13.D.R. ITAT, HYDERABAD. 14.GUARD FILE.