ACIT, Chandigarh V. M/S AISHANI DEVELOPERS PRIVAYTE LTD, Chandigarh

MA 109/CHANDI/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6150 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: YOGESH MONGA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER MA NO.109/CHD/2016 (IN ITA NO. 174/CHD/2014) ( ASSESSMENT YEAR 2008-09) THE D.C.I.T., VS M /S AISHANI DEVELOPERS P. LTD., CIRCLE 6 (1), SCF 79, 1 ST FLOOR, MOHALI. SECTOR 47-D, CHANDIGARH. PAN : AAGCA3229G (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI MANJIT SINGH, SR.DR RESPONDENT BY : S/SHRI AJAY JAIN & YOGESH MONGA, CA DATE OF HEARING : 23.02.2018 DATE OF PRONOUNCEMENT : 23.02.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN MOVED BY THE DEPARTMENT PLEADING THEREIN THAT A MIS TAKE APPARENT ON RECORD HAS OCCURRED IN THE ORDER OF THE TRIBUNAL DATED 5.1.2016, PASSED IN ITA NO.174/CHD/2 014 RELATING TO ASSESSMENT YEAR 2008-09. IT HAS BEEN P LEADED IN THE APPLICATION THAT THE TRIBUNAL HAS ERRED IN A LLOWING THE DEDUCTION OF RS.50 LACS CLAIMED BY THE ASSESSEE ON ACCOUNT OF FORFEITURE OF THE ADVANCE GIVEN IN RESPE CT OF SHORT TERM CAPITAL GAIN EARNED BY THE ASSESSEE ON S ALE OF LAND. THE ASSESSEE WHILE RETURNING THE SHORT TERM C APITAL GAIN DEDUCTED A SUM OF RS.50 LACS ON ACCOUNT OF FORFEITURE OF THE ADVANCE GIVEN BY THE ASSESSEE FOR THE PURCHASE OF LAND FOR INSCOL HEALTHCARE LIMITED. T HE LOWER 2 AUTHORITIES DISALLOWED THE CLAIM OBSERVING THAT THE FORFEITURE OF THE ADVANCE GIVEN OF RS.50 LACS WAS I N RESPECT OF ANOTHER LAND AND NOT PERTAINING TO THE L AND IN QUESTION, IN RESPECT OF WHICH, THE ASSESSEE EARNED INCOME UNDER THE HEAD SHORT TERM CAPITAL GAIN. THE TRIBU NAL, HOWEVER, ALLOWED THE AFORESAID CLAIM OF DEDUCTION OBSERVING THAT THE ASSESSEE HAD BEEN PURCHASING LAN DS ON BEHALF OF INSCOL HEALTHCARE LIMITED AND THAT THE ENTIRE RECEIPTS FROM INSCOL HEALTHCARE LIMITED WERE SHOW N AS INCOME IN THE HANDS OF THE ASSESSEE. THE TRIBUNAL APPLYING ANALOGY OF REASONABILITY OBSERVED THAT WHE N THE TOTAL SALE CONSIDERATION RECEIVED FROM INSCOL HEAL THCARE LIMITED WAS BEING TREATED AS INCOME IN THE HANDS O F THE ASSESSEE THEN THE LOWER AUTHORITIES WERE NOT JUSTIF IED IN NOT ALLOWING THE DEDUCTION OF FORFEITED AMOUNT OF R S.50 LACS IN THE HANDS OF THE ASSESSEE. 2. NOW, THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION HAS PLEADED THAT EXPENDITURE/FORFEITURE OF ADVANCE MONEY WAS RELATED TO A PROPERTY ENTIRELY DI FFERENT FROM THE PROPERTY IN RESPECT OF WHICH SHORT TERM CA PITAL GAIN HAD BEEN RETURNED. IT HAS, THEREFORE, BEEN RE QUESTED THAT THE DEDUCTION OF FORFEITED AMOUNT OF RS.50 LAC S IN RESPECT OF SHORT TERM CAPITAL GAIN EARNED BY THE AS SESSEE ON SALE OF LAND TO INSCOL HEALTHCARE LIMITED IS N OT ALLOWABLE. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. T HOUGH ON THE FACE OF IT, THE ARGUMENT/PLEADING OF THE REV ENUE 3 SEEMS TO HAVE FORCE, HOWEVER, IF WE GO THROUGH THE ORDER IN QUESTION OF THE TRIBUNAL DATED 5.1.2016, WE FIND THAT THE ASSESSEE IS IN THE ACTIVITY OF PURCHASING LAND FOR INSCOL HEALTHCARE LIMITED. THE PROFIT/COMMISSION E ARNED BY THE ASSESSEE FROM THE AFORESAID ACTIVITY IS RETU RNED AS SHORT TERM CAPITAL GAIN. THE ASSESSEE HAD ADVANCED MONEY TO THE LAND OWNERS BUT THE INSCOL HEALTHCARE LIMITED DID NOT PURCHASE THE LAND AND THE AMOUNT W AS FORFEITED BY THE LAND OWNERS. AS PER THE AGREEMENT OF THE ASSESSEE WITH INSCOL HEALTHCARE LIMITED, ANY ADVA NCE FORFEITED BY THE SELLER/OWNER OF THE PROPERTY WAS T HE LIABILITY OF THE ASSESSEE. THOUGH, THE ASSESSEE SUF FERED CAPITAL LOSS IN RESPECT OF THE AFORESAID TRANSACTIO N, HOWEVER, IN THE ANOTHER TRANSACTION, THE DEAL WAS M ATURED AND THE ASSESSEE RETURNED THE INCOME THEREFROM AS S HORT TERM CAPITAL GAINS. AS PER THE PROVISIONS OF SECTIO N 70 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) THE A SSESSEE IS LIABLE TO SET OFF OF SHORT TERM CAPITAL GAIN FRO M ONE ASSET AGAINST SHORT TERM CAPITAL LOSS FROM ANOTHER ASSET. SIMILARLY, U/S 74 OF THE ACT, THE ASSESSEE IS ENTIT LED TO CARRY FORWARD SHORT TERM CAPITAL LOSS, IF ANY. IN VIEW OF THIS, THE ASSESSEE WHILE COMPUTING TOTAL INCOME IS ENTITLED TO CLAIM SET OFF OF SHORT TERM CAPITAL LOSS AGAINST THE SHORT TERM CAPITAL GAIN FROM ANOTHER ASSET. HENCE E VEN IF THE PLEA OF THE REVENUE ON MERITS IS CONSIDERED, TH ERE WILL NOT ARISE ANY ADDITIONAL TAX LIABILITY UPON THE ASS ESSEE. THE NET TAXABLE INCOME WILL REMAIN SAME EITHER THE DEDUCTION OF EXPENDITURE ON ACCOUNT OF FORFEITED MO NEY IS 4 ALLOWED WHILE COMPUTING THE SHORT TERM CAPITAL GAIN S FROM THE TRANSACTION IN QUESTION OR THE SAME IS ALL OWED AS SET OFF WHILE COMPUTING THE TOTAL INCOME. EVEN OTHE RWISE, THE REVENUE THROUGH THIS MISCELLANEOUS APPLICATION WANTS TO RE-AGITATE THE MATTER/ISSUE. HOWEVER, NO MISTAK E APPARENT FROM RECORD HAS BEEN POINTED OUT. IN VIEW OF THIS, WE DO NOT FIND ANY REASON TO DISTURB THE ORDE R OF THE TRIBUNAL DATED 5.1.2016. 4. IN VIEW OF OUR ABOVE OBSERVATIONS AND THE LEGAL POSITION AS STATED ABOVE, WE DO NOT FIND ANY MERIT IN THIS APPLICATION AND THE SAME IS ACCORDINGLY HEREBY DISM ISSED. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23.02.2018. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 18/6/2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5