JAIPRAKASH ASSOCIATES LTD.,NOIDA V. PR.CIT, NOIDA

ITA 819/DEL/2021

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 30370 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: PARVEEN KUMAR
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report; Revision of order
• Section: 143(3); 263; 43CA; 50C; 2(A); 115JB

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘C’, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA NO. 819/DEL/2021 A.YR. : 2016-17 JAIPRAKASH ASSOCIATES LTD., SECTOR-128, NOIDA, UTTAR PRADESH-201304 (PAN: AABCB1562A) Vs. PR. CIT, NOIDA AAYAKAR BHAWAN, A-2D, SE-24, NOIDA, UTTAR PRADESH-201301 (Appellant) (Respondent) Date of Hearing 19.12.2024 Date of Pronouncement 31.12.2024 ORDER PER SHAMIM YAHYA, AM : This appeal by the Assessee is directed against the order of the Ld. PCIT, NOIDA dated 24.03.2021passed u/s. 263 of the Act which is pertaining to assessment year 2016-17 on the following grounds:- “1. That on the facts and in law the impugned order u/s 263 passed by the Learned Principal Commissioner of Income Tax, Noida (Ld. PCIT) is unlawful and beyond permissible jurisdiction under section 263 of the Income Tax Act, 1961 (Act). The order of Learned Assessing Officer (Ld. AO) is not an erroneous order which is also prejudicial to the interest of the revenue within the meaning of section 263 of the Act. As such, the order of Ld. PCIT is unlawful and deserves to be quashed. 2. That the very basis of notice u/s 263 issued by the Ld. PCIT being the report of ADIT (I&CI) and not the record of assessment proceedings called for Assessee by CA, PARVEEN KUMAR Department by Shri DAYAINDER SINGH SIDHU, CIT(DR) 2 examination was without sanction of law and as such the subsequent proceedings thereunder being unlawful the impugned revision order passed u/s 263 is a legal nullity and deserves to be quashed. 3. That the Ld. PCIT has erred on facts and in law in remanding the matter back to the Ld.AO for re-computing the income on transfer of commercial plot of land bearing No. C3-E1, Sector 129, Noida in this year without appreciating the fact that as per the accepted method of revenue recognition being POCM, the sale in respect of subject commercial plot was accounted for and assessed in AY 2013-14 and not in this year. 4. That the Ld. PCIT has erred on facts and in law in remanding the matter back to the Ld.AO on the issue of application of Section 43CA of the Act on transfer of subject commercial plot of land at a price lower than the circle rate adopted for stamp duty without appreciating the fact that the sale in respect of subject commercial plot was accounted for and assessed in AY 2013-14 wherein section 43CA was not applicable. 5. That the assessment under section 143(3) has been processed by the Ld. AO after duly considering the audited accounts, material, explanations and submissions on record including in context of method of accounting and applicable law. The directions of the Ld. PCIT in setting aside the assessment back to the Ld. AO, being vague and not final, the order of the Ld. PCIT passed under section 263 is not sustainable and deserves to be quashed. 6. That Explanation 2(a) to subsection 263(1) of the Act is not applicable on the facts and law involved. The findings of the Ld. PCIT that the Assessing Officer has failed to make enquiries and verification which he should have made are without any basis. Ld. PCIT has not mentioned as to what enquiry the Ld. AO was supposed to make in this year which he failed to make. As such too the impugned revision order passes by Ld. PCIT being perverse deserves to be quashed. 7. That in relation to the sublease of subject commercial plot accounted for as sale in AY 2013-14, no income was computable and was in fact computed by the Ld. AO in this year and as such there is no question of any recompilation thereof in this year. As such too the impugned revision order passes by Ld. PCIT being perverse deserves to be quashed. 8. That on the facts and in law the Ld. PCIT has erred in invoking provisions of section 43CA of the Act in respect of transfer of leasehold rights in subject commercial plot of land as Section 50C (and accordingly Section 43CA) is not applicable while computing capital gain on transfer of leasehold rights in land and building; 9. That the order of the Ld. PCIT is based on erroneous views, self- contradictions, suspicion and conjectures and non-appreciation of the facts and 3 law involved including binding case law supporting the appellant. As such too, the order of the Ld. PCIT is erroneous and deserves to be quashed. 10. That the order of the Ld. PCIT in remanding the matter back to the Ld.AO for re-computing the income on transfer of subject commercial plot of land without giving a final finding and computation mechanism is erroneous and as such deserves to be quashed. 11. That without prejudice to the claim that the subject revision order deserves to be quashed being a legal nullity, the transaction being at fair market value duly supported by the valuation report from the independent unrelated registered valuer, the impugned revision order of the Ld. Ld. PCIT is unlawful and deserves to be quashed. 12. That the Grounds of Appeal as herein are without prejudice to each other. 13. That the appellant craves leave to add, amend, modify and/or forgo any of the grounds of appeal before or at the time of hearing.” 2. The brief facts of the case are that assessee company filed its e-return declaring income of Rs. NIL on 30.11.2016. the assessee company also declared book loss u/s. 115JB of Rs. (-) 38,76,19,22,854/- as per income tax return. The case was selected for scrutiny through CASS. The assessment u/s. 143(3) of the Act was completed on 21.5.2018 at assessed income (loos) of (-) Rs. 25,71,74,14,170/- after making additions / disallowances of Rs. 28,87,91,807/- under different heads. 3. In exercise of power vested under him under section 263 of the Act the Ld. PCIT perused and examined the records. He referred to the notice u/s. 263 of the Act issued to assessee and assessee’s response thereto. He concluded as under:- “…11. In view of the judicial pronouncements discussed above and also in terms of Explanation 2(a) to sub-section (1) of section 263 of the Act, an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner the order is passed without making inquiries or verification which should have been made by the assessing officer. After carefully, examining the facts of this case and reply submitted by the assessee, I am of the view that the AO failed to examine the case on account of computing correct income from the transfer of commercial plot of land of the assessee company. 4 12. In view of the facts stated above and from the perusal of the documents / submissions made by the assessee during the assessment proceedings before the ACIT, Circle -1, Noida as well as in the course of proceedings under section 263 of the Act. I, the Pr. Commissioner of Income Tax, Noida, therefore, remand the matter back to the Assessing Officer for re-computing the income from transfer of commercial plot of land as per provisions of law in the hands of the assessee company.” 4. Against the aforesaid order of the Ld. PCIT, assessee is in appeal before us. 5. At the time of hearing, Ld. AR has submitted that Corporate Insolvency Resolution Process (CIPR) has been initiated against the assessee, under the Insolvency and Bankruptcy Code, 2016 (IBC) and a moratorium has been imposed by an order dated 03.06.2024 issued by the Hon’ble National Company Law Tribunal (NCLT), Allahabad, under the IBC. He also placed the copy of the aforesaid order of the NCLT. He further submitted that assessee has also filed an appeal before the Hon’bel National Company Law Appellate Tribunal (NCLAT) against the order dated 03.06.2024 passed by NCLT. 6. Ld. DR did not controvert the aforesaid proposition. 7. We have heard both the parties and perused the records. The record of proceedings show that since 08.08.2022, the matter is adjourning from time to time mostly on the written request of the Ld. AR. On 19.12.2024, when the matter was called out on Board, the Ld. AR again sought adjournment for a month’s time, in view of his contentions raised as above. 8. We find that provisions contained under section 238 of “the Code” are having an overriding effect over all other Central and State statutes including Income Tax Act as held by Hon’ble Supreme Court in case of PCIT vs. Monnet Ispat and Energy Ltd. SLP (C) No. 6483 of 2018 order dated 10.8.2018 by returning following findings:- 5 “Given section 238 of the Insolvency and Bankruptcy Code, 2016, it is obvious that the Code will override anything inconsistent contained in any other enactment, including the Income Tax Act.” 9. In this view of the matter, section 238 of the Code will have overriding effect over all other Central and State statutes including the Income Tax Act and all the claims including claim of the Income Tax Department under the Income Tax Act, 1961 shall be entertained by the Official Liquidator u/s. 53(1) of the Code. In the background of the aforesaid factual matrix, the Appeal filed by the assessee has become infructuous and dismissed as such. However, the assessee is at liberty to approach the Tribunal for reinstitution of the appeal and the Tribunal shall consider such application appropriately, as per law. 10. In the result, for statistical purposes, the appeal stands dismissed in the aforesaid manner. The above decision was pronounced on 31-12-2024. Sd/- Sd/- (YOGESH KUMAR US) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER “SRBHATNAGAR Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "