TMI Blog2017 (9) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 32,64,08,970/- It is amply clear from the two tables hereinabove tha the whole exercise as proposed by the Commissioner under proceedings u/s 263 is tax neutral as no tax evasion is caused by the assessee resulting into any prejudicial to the interest of the revenue. In one case, the assessee has not considered the payment towards loan and taken net consideration and capital gain was worked out by taking the net asset after reduction of loan. Whereas in the second case as proposed by the CIT if the gross amount of consideration is taken the corresponding reduction is not made of the loan from the fixed assets and therefore, the net result is same as calculated by the assessee. In view of this facts, we are of the considered opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , The CIT has mentioned that while considering the capital work in progress as net worth the pending liabilities i.e. loans relatable to the WIP standing in the books at ₹ 25.75 crores had not been considered and resultantly, the net worth was over estimated by ₹ 25.75 crores, therefore there is under assessment of income and the learned assessing officer does not appear to looked into the said matter. The issue raised with regard to such amount was duly examined and the same cannot be considered in the Order D/s 263 of the Income Tax Act, 1961. Further the details with regards net worth of the assets as on the date of slump sale were submitted to the CIT and further also submitted that the loan was squared up and had been reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 3,62,86,952/- has been claimed as carried forward loss in subsequent year. According to the PCIT while considering the capital work in progress as net wealth, the outstanding liabilities i.e. loan related to WIP of ₹ 25.75 crores has not been considered thereby resulting into overstatement of net worth by Rs. crores which in turn resulted in the overstatement of Short Term Capital Loss by ₹ 25.75 Cr which was allowed to be carried forward and partly set off in subsequent year. Accordingly, the PCIT came to the conclusion that the assessment framed by the AO vide order dated 27.2.2014 was erroneous and prejudicial to the interest of revenue and hence proposed to invoke the provisions of section 263 of the Act by issuing issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gress for calculating the capital loss and second as proposed by the PCIT wherein Work in progress is taken at gross cost and the loan is taken separately. The ld AR submitted before the bench the in both the calculation the capital loss was worked out to be same and thus there was no prejudice or loss to the revenue. Under these circumstances, the ld.AR finally prayed that the proceedings under section 263 of the Act should be quashed as one of the conditions precedent for issue of notice was not satisfied. 5. The ld. DR on the other hand, opposed the arguments of the ld.AR by submitting that while calculating the capital gains/loss loan liability relating to work in progress as shown by the assessee to be relating to WIP was not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advance of earlier deal forfeited ₹ 51,00,000 2 Less:Cost being net asset Rs.37,15,08,970 3 Short term capital loss Rs.32,64,08,970 Working of capital gains by the PCIT:. Table-2 S.No. Particulars amount 1 Sale consideration Rs.36,51,00,000 Payment towards loan ₹ 32,00,00,000 Sale consideration(balance) ₹ 4,00,00,000 36,00,00,000 Advance of earlier deal forfeited ₹ 51,00,000 2 Less:Cost being net asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee resulting into any prejudicial to the interest of the revenue. In one case, the assessee has not considered the payment towards loan and taken net consideration and capital gain was worked out by taking the net asset after reduction of loan. Whereas in the second case as proposed by the CIT if the gross amount of consideration is taken the corresponding reduction is not made of the loan from the fixed assets and therefore, the net result is same as calculated by the assessee. In view of this facts, we are of the considered opinion that the one of the condition that prejudicial to the interest of revenue is missing in the present case, and therefore proceedings under section 263 is quashed. 7. In the result, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
