DCIT CIRCLE 10(2)(1), MUMBAI V. LYKA LABS P.LTD, MUMBAI

MA 70/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8620 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 31-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A, MU MBAI BEFORE SHRI G.S. PANNU, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER M.A. NO. 70/M/2019 IN ITA NO.67/MUM/2015 (A Y 2010- 11 ) DCIT-10(2)(1), ROOM NO. 509, 5 TH FLOOR, AAY AKAR BHAVAN, M.K. ROAD, MUMBAI-400020. VS. LYKA LABS LTD., 101, SHAKTI INDUSTRIAL ROAD, ANDHERI (EAST), MUMBAI-400059 . PAN: AAACL0820G APPELLANT RESPONDENT APPELLANT BY : SHRI MANOJ KUMAR (DR) RESPONDENT BY : SHRI JAYESH DADIA (AR) DATE OF HEARING : 30.08.2019 DATE OF PRONOUNCEMENT : 04.09.2019 ORDER UNDER SECTION 254(2)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS MISCELLANEOUS APPLICATION (M.A.) IS FILED BY R EVENUE FOR SEEKING RECTIFICATION OF CERTAIN MISTAKE IN THE ORDER DATED 31.07.2018 PASSED IN ITA NO. 67/MUM/2015. THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) FOR THE REVENUE SUBMITS THAT THERE ARE CERTAIN TYPOGRAP HICAL MISTAKES IN PARAGRAPH-10 OF THE ORDER WHICH REQUIRE RECTIFICATI ON. THE LD. DR SUBMITS THAT IN THE LINE NO.4 OF PARAGRAPH-10, THE DATE OF PURCHASE OF PLOT IS INCORRECTLY MENTIONED AS 15.06.2005, HOWEVER, THE D ATE OF SALE OF PLOT IS ALSO INCORRECTLY MENTIONED AS 18.05.2005, THE CORRE CT DATE IS 15.06.2005. SIMILARLY, THE SALE CONSIDERATION IS ALSO MENTIONED AT RS. 1.60 CRORE WHICH IS INFACT RS. 1.67 CRORE (APPROXIMATELY). SIMILARLY , ON PAGE NO. 9, THE DATE OF CONVEYANCE DEED IS NOT CORRECTLY MENTIONED, THE CORRECT DATE IS M.A. 70 MUM 2019-LYKA LABS LTD. 2 18.05.2005, SIMILARLY, THE DATE OF AGREEMENT TO SAL E IS WRONGLY MENTIONED AT 15.06.2000, HOWEVER, THE CORRECT DATE OF PURCHAS E IS 31.03.1996. 2. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIV E (AR) OF THE ASSESSEE AFTER GOING THROUGH THE PARAGRAPH-10 OF THE ORDER A GREED THAT THE SUITABLE/CORRECT CORRIGENDUM MAY BE PASSED. 3. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AN D PERUSED THE ORDER DATED 31.07.2018. CONSIDERING THE FACT, THERE ARE C ERTAIN TYPOGRAPHICAL MISTAKES. THEREFORE, WE DIRECT THAT PARAGRAPH-10 OF THE ORDER DATED 31.07.2018 BE READ IN THE FOLLOWING MANNER: 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE MAT ERIAL PLACED BEFORE US. DURING THE ASSESSMENT PROCEEDING THE ASSESSING OFFI CER NOTED THAT ASSESSEE PURCHASED THE PLOT ON 31 ST MARCH 1996 FOR RS. 1.66,94,446/-. THE SAID PLOT WA S SOLD BY ASSESSEE ON 18.05.2005 FOR A CONSIDERATION OF RS. 1,60,000,000/-. THE ASSESSEE HAS SHOWN THE LONG-TERM CAPITAL LOSS OF RS . 1,87,67,577/-. THE ASSESSING OFFICER DISALLOWED THE LONG TERM CAPITAL LOSS ON HIS OBSERVATION THAT THE ASSESSEE HAS NOT PLACED ON RECORD THE COPY OF P URCHASE DOCUMENT TO SUBSTANTIATE THE PURCHASE PRICE. HOWEVER, THE LEARN ED CIT(A) APPEAL WHILE CONSIDERING THE CONTENTION OF THE ASSESSEE OBSERVED THAT THE DISALLOWANCE OF LONG-TERM CAPITAL LOSS ON THE SALE OF PLOT NOT JUS TIFIED. THE ASSESSEE SOLD PLOT OF LAND FOR RS. 1,60,00,000/- CRORE AND CLAIMED LON G-TERM CAPITAL LOSS OF RS. 1,87,76,577/- THE LD CIT(A) FURTHER OBSERVED THAT T HIS LOSS WAS ALLOWED TO THE ASSESSEE WHILE PASSING THE ASSESSMENT ORDER UND ER SECTION 143(3). THE LD CIT(A) FURTHER NOTED THAT THE OBSERVATION OF THE A SSESSING OFFICER THAT PRICE OF THE PLOT IS NOT VERIFIABLE IS FAR FROM THE TRUTH . THE SALE DEED EXECUTED BY ASSESSEE CLEARLY INDICATES THE PURCHASE PRICE ON WH ICH THE ASSESSEE ACQUIRED THE PROPERTY. THE ASSESSING OFFICER HAS NOT DOUBTED THE SALE PRICE OF THE PROPERTY/PLOT. THE ONLY OBJECTION OF THE ASSESSING OFFICER IS THAT THE PRICE IS NOT VERIFIABLE, WHICH CANNOT BE THE GROUND TO DISAL LOW THE CAPITAL LOSS, THE M.A. 70 MUM 2019-LYKA LABS LTD. 3 ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY BEFORE A RRIVING AT THE CONCLUSION FOR DISALLOWING THE LOSS. THE LEARNED CIT(A) AFTER VERIFYING THE FACTS ALLOWED THE CLAIM OF LONG TERM CAPITAL LOSS TO THE ASSESSEE . BEFORE US THE ASSESSEE HAS PLACED ON RECORD THE COPY OF CONVEYANCE DEED EXECUT ED BY THE ASSESSEE ON 18 TH MAY 2005 IN FAVOUR OF TRANSFEREE. THE CLAUSE O O F THE CONVEYANCE DEED APPEARING AT PAGE NO. 6 HAS CLEARLY MENTIONS THAT T HE PLOT WAS PURCHASED BY ASSESSEE BY WAY OF AGREEMENT TO SELL DATED 31 ST MARCH 1996 ON A CONSIDERATION OF RS.1.60CRORE.THE CONVEYANCE DEED OF THE PLOT WAS EXECUTED BY THE ORIGINAL OWNERS OF THE PLOT AND THE MANAGING DIRECTOR OF THE ASSESSEE SIGNED IT AS A CONFIRMING PART. THE CONSIDERATION RECEIVED BY ASSE SSEE IS ALSO SHOWN IN THE CONVEYANCE DEED. IN OUR VIEW IN ABSENCE OF ANY CONT RARY MATERIAL, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DENYING THE LONG-TERM CAPITAL LOSS TO THE ASSESSEE. THEREFORE, WE ARE IN AGREEMENT WITH THE F INDING OF LD CIT(A) IN ALLOWING LONG-TERM CAPITAL LOSS TO THE ASSESSEE ON THE SALE OF SAID PLOT. NO CONTRARY EVIDENCE OR LAW IS BROUGHT TO OUR NOTICE T O TAKE THE CONTRARY VIEW. IN THE RESULT THE GROUND OF APPEAL RAISED BY REVENU E IS DISMISSED. 4. WITH THE AFORESAID DIRECTION THE M.A. FILED BY REVE NUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.09.2019. SD/- SD/ - G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUDICIAL M EMBER MUMBAI, DATE: 04.09.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY OR DER, DY./ASST. REGISTRAR ITAT, MUMBAI