TMI Blog2017 (9) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... unning day to day business of the company and the loan is repayable alongwith interest and as such are revenue expenses for all intents and purposes so we hereby delete the addition on account of interest - Decided in favour of assessee. Revision u/s 263 - Addition on account of capital gain - Held that:- In the instant case the revenue has neither invoked provisions contained u/s 147/148 nor provisions contained u/s 263 to tax the new source of income and as such the order passed by Ld. CIT(A) to the extent of making addition on account of long term capital gain is beyond jurisdiction and as such is not sustainable.So without entering into the merits of this issue we are of the considered view that the addition made by Ld. CIT(A) to the tune of ₹ 92,52,933/- on account of long term capital gain is not sustainable. - ITA.No.4965/Del/2013 - - - Dated:- 22-9-2017 - SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri Ankit Saini, CA For The Revenue : Shri Naveen Chandra, CIT (DR) ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, Hindustan Vegetables Oils Corp. Ltd. hereinafter referred to as Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not capable of determination during the relevant year under appeal and accordingly no capital gain would be brought to tax in the hands of the appellant. 10.The learned CIT (Appeal) has wrongly interpreted and applied the provisions 'of Section 53A of Transfer of Property Act 1882 to state that there was a transfer within the meaning of Section 2(47) thereby taxing long term capital gains. 11.The learned CIT (Appeal) has ignored the fact that legally the land had not been handed over to DMRC and furthermore Sale consideration figure was also not arrived at during the relevant year under appeal. 12.The learned CIT (Appeal) has wrongly held sale consideration to be definite whereas the same was never defined. An ad hoc payment of ₹ 1 Crore was given by DMRC to the appellant; the same was shown as current liabilities in the books. Therefore learned CIT's attempt to take the same as Sale consideration is highly prejudicial and wrong in law. 13.The appellant claims that the huge unabsorbed business loss should be quantified and carry forward for setting it off against the future income in accordance with the provisions of the Act. 14 It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny may be wound up. However, the issue of winding up is still pending before Delhi High Court. During the year under assessment only one unit of the assessee company namely Bread and Breakfast unit (BFF) is operational. 3. During the assessment proceedings, AO noticed that the assessee has claimed expenditure on account of interest payable to the Govt. of India on working capital funds borrowed from time to time in the earlier years. AO observed that since majority of the loan pertains to units which have been closed the expenditure is related to discontinued business and is not allowable expenditure against the business of BFF Unit and consequently made an addition of ₹ 19,40,28,714/- to the total income of the assessee company and thereby assessed the total income at ₹ 3,36,20,560/-. 4. Assessee carried the matter before Ld.CIT(A) by way of filing of the appeal. Ld.CIT(A) allowed proportionate relief to the assessee by reducing the total disallowance to ₹ 16,61,03,405/- as against ₹ 19,40,28,714/- made by the A.O. but further made an addition on account of long term capital gain to the tune of ₹ 92,52,933/-.Subsequently Ld.CIT(A) u/s154 / 143 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est on the loan from Govt. of India by following the decision rendered by coordinate bench of the Tribunal in assessee s own case bearing ITA No. 212/15-16 for asstt. year 2005-06. When the interest on the same component of loan taken by the assessee company from Govt. of India for day to day running of the company and the loan repayable on interest has been allowed in asstt. year 2005-06 and 2012-13, there is no ground to disallow the interest claimed by the assessee during the year under assessment. Moreover, the revenue itself has not challenged the order passed by the Ld.CIT(A) in assessee s own case for asstt. Year 2012-13 by following order of the coordinate bench of the Tribunal passed in assessee s own case for asstt. Year 2005-06 (Supra), disallowance of interest for the year under assessment is not sustainable. 12. Hon ble Bombay High Court in case cited as Bhor Industries 264 ITR 180 (Bom) held that VRS expenditure was incurred to save the expenses and it was to be allowed in its entirety in the year in which it was incurred and expenditure could not be spread over the number of years and as such the allowable expenditure in the instant case as the major components of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available to the first appellate authority. That being the position, the decision in Union Tyres case (1999)240 ITR 556 of the court expresses the correct view and does not need reconsideration. This reference is accordingly disposed of. 17. When undisputedly the issue as to the taxability of assessee company on account of long term capital gain has not been considered by the A.O. by making any such addition while completing assessment u/s 143(3) which is entirely from a new source of income, Ld. CIT(A) has no jurisdiction to make addition on account of long term capital gain except by invoking provisions contained u/s 263 of the Act. 18. In the instant case the revenue has neither invoked provisions contained u/s 147/148 nor provisions contained u/s 263 to tax the new source of income and as such the order passed by Ld. CIT(A) to the extent of making addition on account of long term capital gain is beyond jurisdiction and as such is not sustainable. 19. So without entering into the merits of this issue we are of the considered view that the addition made by Ld. CIT(A) to the tune of ₹ 92,52,933/- on account of long term capital gain is not sustainable. Hence he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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