TMI Blog2020 (7) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of foreign exchange loss - addition as assessee failed to place requisite documents in support of its claim - HELD THAT:- On a perusal of the orders of the lower authorities, we find that the assessee despite specific directions had failed to place on record the requisite documents in support of its claim of having suffered the foreign exchange fluctuation loss viz. copies of bank statements, ledger accounts and the rate of foreign exchange payments made or received.Though there is no infirmity in the declining of the unsubstantiated claim of the assessee by the lower authorities, but then, a perusal of the Foreign exchange fluctuation gain/loss ledger accounts filed by the assessee does inspire some confidence as regards the veracity of such claim. Restore the matter to the file of the A.O for fresh adjudication. In case the assessee is able to substantiate its claim for foreign exchange fluctuation loss to the satisfaction of the A.O, then the latter shall allow the deduction of the same. Assessee's Ground is allowed for statistical purposes. Disallowance of bad debts/advances w/off and sundry balances w/off - HELD THAT:- Additional evidence filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as an allowable business loss. High Court while answering the said issue, had observed that non-satisfaction of the conditions for claim of bad debts, would not prevent the assessee from claiming deduction of the same as a business loss incurred in the course of carrying on of business as that of a share broker. assessee s claim that the amount of advances written off during the year was in the nature of a business loss requires to be adjudicated upon by the A.O. On a similar footing, the claim of the assessee that the sundry balances written off during the year were also a loss incidental to its business, on the same terms requires to be visited by the A.O. As principally in agreement with the contention of the ld. A.R, that the assessee s claim for deduction of the advances paid to customers, which were written off by it during the year under consideration were supposed to be looked into u/s 37 Accordingly, we herein direct the A.O to adjudicate upon the claim of the assessee as regards allowability of its claim for deduction of, viz. (i) the amounts advanced to suppliers written off during the year AND the sundry balances written off as a business loss within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y when the agreement under Sec. 53A of the Transfer of Property Act is registered under the Indian Registration Act. In the case before us, as the assessee by way of an unregistered MOU, dated 19.12.2012 had though sought to transfer the land under consideration to the purported buyer viz. M/s Golden Star Promoters Pvt. Ltd., but then, the very fact that the possession of the land was never parted with/delivered to by the assessee to the other party, on the said count itself would render the provisions of Sec. 2(47)(v) of the Act r.w.s 53A of the Transfer of Property Act, 1882, as inapplicable. As the instrument of transfer was an unregistered MOU, dated 19.12.2012, the same in the backdrop of the aforesaid judicial pronouncements would exclude the applicability of Sec. 2(47)(v) of the Act r.w Sec. 53A of the Transfer of Property Act. In so far the provisions of sec. 2(47)(vi) are concerned, we find that the assessee who had not even parted with the possession of the land in favour of the purported buyer, had not entered into any arrangement or acted in any other manner, which had the effect of transferring, or enabling the enjoyment of the property under consideration to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebts/Advances written off and Sundry Balances written off AND disallowance of Short Term Capital Loss on sale of depreciable assets. - HELD THAT:- Application for rectification under Sec. 154 are not free from doubts and debate, and would involve a long drawn process of reasoning, the same would thus not fall within the realm of rectification within the meaning of Sec. 154 of the Act. As such, finding no infirmity in the view taken by the lower authorities, who in our considered view had rightly rejected the application filed by the assessee under Sec. 154, we uphold the same. - ITA Nos.1459-1460/Mum/2018 - - - Dated:- 16-7-2020 - Shri Pramod Kumar, Vice President And Shri Ravish Sood, Judicial Member For the Appellant : Shri Vijay Mehta And Shri Anuj K isnadwala, A.R s For the Respondent : Shri Debashis Chanda, D.R ORDER PER RAVISH SOOD, JM The present appeals filed by the assessee are directed against the respective orders passed by the CIT(A)-10, Mumbai, dated 29.12.2013, which in turn arises from the respective orders passed by the A.O under Sec. 143(3) of the Income Tax 1961 (for short Act ), dated 31.03.2016 AND under Sec. 154 of the Act, dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said MOU was cancelled subsequently. 2. The learned CIT (A) ought to have directed the A.O. to consider short term capital loss of Rs, 69,72,79,948/- for the purpose of set off against the income of the assessee/ carry forward to subsequent years. Also, the assessee has moved a letter dated January 15, 2020 seeking liberty for admission of certain documents as additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963, for the reason that they shall have a strong bearing on the adjudication of certain grounds of appeal, as under: Gr. No. Pg Nos of P.B. 3 Nature of documents Remarks 1. 110-113 Details of VAT/Sales tax payable, journal voucher and ledger account The assessee has filed these documents to demonstrate that excise duty payable account has not effected profit and loss account and hence no disallowance is required to be made u/s 43B of the Act. 4. 114-127 Details of bad debts and relevant ledger accounts The disallowance was confirmed on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of viz. (i) National Thermal Power Corporation Vs. CIT (1998) 229 ITR 383 (SC); and (ii) Jute Corporation of India Ltd. Vs. CIT (1991) 187 ITR 688 (SC). Also support was drawn by him from the judgment of the full bench of the Hon ble High Court of Bombay in the case of Ahmedabad Electricity Company Ltd. Vs. CIT (1993) 199 ITR 351 (Bom) (FB). Per contra, the ld. Departmental Representative (for short D.R ) objected to the admission of the additional grounds of appeal. 3. We have heard the authorized representatives for both the parties in context of the issue pertaining to the admission of the additional grounds of appeal. In our considered view there is substantial force in the claim of the ld. A.R that as no new facts are required to be looked into for adjudicating the aforesaid additional grounds of appeal, therefore, the same in all fairness requires to be admitted. Apart from that, as observed by us hereinabove, as the additional ground of appeal no. 1 is merely in the nature of an extension of the Ground of appeal No. 7 raised by the assessee in the memorandum of appeal, therefore, there appears to be no justification in declining the admission of the same. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant ledger accounts The disallowance was confirmed on the ground that S. 36(2) condition has not been satisfied. The details filed shows the year in which amount has been shown as income and thus satisfaction of S. 36(2) 7. 128-145 Acknowledgment of return of income along with computation of income for A.Y. 2018-19 and 2019-20 The assessee has filed these copies to demonstrate that capital gain arising on transfer of land has been offered to tax 8. 146-158 Acknowledgement of return of income along with computation of income for A.Y. 2013-14 along with affidavit of Mr. Shyam Ghia and Mr. Mukund Dalal. The assessee has filed these documents to contest the addition made u/s 68 of the Act. 9. 159-160 Order giving effect to CIT(A) s order. It is the claim of the assessee that as the aforesaid documents filed as additional evidence before us would go to the roots of some of the issues involved in the present appeal, therefore, the same may be admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng additions /disallowances: Sr. No. Particulars Amount (Rs.) 1. Disallowance u/s. 43B 36,66,290/- 2. Disallowance of commission expenses 10,60,512/- 3. Disallowance of foreign exchange loss 2,20,50,511/- 4. Disallowance out of sundry balances written off, bad debt and advances to suppliers written off : 13,83,56,806/- (i). Sundry balance written off : ₹ 11,99,829/- (ii). Bad debts : ₹ 12,42,69,569/- (iii). Advance to suppliers W/off : ₹ 1,28,87,408/- 5. Cessation of liability under Sec.41(1) : 5,13,69,419/- (i). Sundry Creditors : ₹ 4,95,23,539/- (ii). Other liabilities : ₹ 18,45,880/- 6. Unexplained cash credit under Sec. 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us the sustaining of the disallowance of ₹ 36,66,490/- u/s 43B by the CIT(A). At the very outset, it was submitted by the ld. A.R that the lower authorities while making/sustaining the aforesaid disallowance u/s 43B had misconceived the factual position. It was submitted by the ld. A.R, that the VAT Tax payable of ₹ 1,47,08,432/- comprised of the closing balances of the earlier years as well. In order to fortify his aforesaid claim the ld. A.R took us through Note 4 of the balance sheet of the assessee company on 31.03.2013. Further, the ld. A.R took us through Schedule 3 i.e. details of disallowance of unpaid expenditure u/s 43B for the year under consideration. Referring to the Schedule 3 , it was submitted by the ld. A.R that the sum total of the current year expenditure of ₹ 5,52,74,054/- that was not paid up to the due date within the meaning of Sec. 43B was voluntarily disallowed by the assessee in its computation of income for the year under consideration. In order to drive home his aforesaid claim, the ld. A.R took us through the computation of income of the assessee company which revealed the said factual position. The ld. A.R further took us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him. Explanation 2 . - For the purposes of clause (a), as in force at all material times, any sum payable means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. . Accordingly, as per Sec. 43B(a), deduction for VAT and Excise duty shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him), only in computing the income referred to in section 28 of that previous year in which sum is actually paid by him. As is discernible from Schedule 3 i.e. details of disallowance of unpaid expenditure u/s 43B for the year under consideration, therein forming part of the revised statement of income , the current year expenditure towards VAT and Excise duty of ₹ 1,79,305/- and ₹ 1,08,62,837/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city of the aforesaid claim of the assessee, rejected the same. Observing, that the assessee had failed to substantiate its claim of foreign exchange fluctuation loss by placing on record the requisite documents, the CIT(A) concurred with the view taken by the A.O as regards the inadmissibility of such claim of deduction raised by the assessee. 13. The assessee has assailed the confirming of the disallowance of foreign exchange fluctuation loss in appeal before us. Ld. A.R for the assessee took us through the consolidated details of the foreign exchange fluctuation gain/loss which had culminated into a loss of ₹ 2,20,50,511.65 during the year under consideration. Our attention was drawn to the copy of the ledger accounts of foreign exchange fluctuation gain/loss as appearing in the books of accounts of the assessee. It was averred by the ld. A.R, that though the requisite details in support of the foreign exchange fluctuation loss suffered by the assesee during the year was there before the lower authorities, however, they had most arbitrarily rejected the assessee s claim for deduction. On being confronted with the observations of the lower authorities that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered view, though there is no infirmity in the declining of the unsubstantiated claim of the assessee by the lower authorities, but then, a perusal of the Foreign exchange fluctuation gain/loss ledger accounts filed by the assessee (Page 22-32 of APB ), does inspire some confidence as regards the veracity of such claim. Accordingly, in all fairness, we herein restore the matter to the file of the A.O for fresh adjudication. In case the assessee is able to substantiate its claim for foreign exchange fluctuation loss to the satisfaction of the A.O, then the latter shall allow the deduction of the same. Needless to say, the A.O in the course of the set aside proceedings shall afford a reasonable opportunity of being heard to the assessee, who shall remain at a liberty to substantiate its aforesaid claim of loss on the basis of fresh documentary evidence. Ground of appeal No. 3 is allowed for statistical purposes. 15. We shall now take up the claim of the assessee, that the CIT(A) had erred in confirming the disallowance of bad debts/advances w/off and sundry balances w/off, therein aggregating to ₹ 13,83,56,806/-. As can be gathered from the records, we find, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fulfilment of the conditions stipulated in sub-section (2) of Sec. 36. In the backdrop of the aforesaid facts, the CIT(A) not finding any infirmity in the declining of the assessee s claim for deduction u/s 36(1)(vii) by the A.O, therein upheld his order to the said extent. 16. The assessee has assailed before us the upholding by the CIT(A) of the aforesaid disallowance of ₹ 13,83,56,806/- u/s 36(1)(vii) of the Act. The ld. A.R took us through the bad debt account of the assessee company (Page 115 of APB ), wherein the respective bad debts of its various divisions were transferred vide respective journal entries on 31.12.2012, as under: Particulars Amount Fibre Division ₹ 2,55,41,586.53 Polymer division ₹ 1,04,59,346.76 Preform division ₹ 19,40,469.86 Chemicals sundry debtors ₹ 96,32,210.00 Innovasynth Technologies Private Limited ₹ 53,76,799.00 Innovasynth Technologies Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantiate its claim on the basis of fresh documentary evidence. 18 We shall now advert to the claim of the ld. A.R that the CIT(A) had erred in upholding the disallowances made by the A.O, viz. (i). sundry balances w/off : ₹ 11,99,829/-; and (ii). advances to suppliers w/off : ₹ 1,28,87,408/-. It was submitted by the ld. A.R, that as giving of the aforesaid amounts of advances/sundry balances was incidental to carrying of the business of the assessee, therefore, the irrecoverability of the same in its ordinary commercial meaning was to be construed as an allowable business loss incurred in the normal course of its business. The ld. A.R took us through the complete bifurcated party vise details, alongwith the respective dates on which the amounts aggregating to ₹ 1,28,87,407/- were advanced in the preceding years by its divisions viz. (i) Futura Fibre Division: ₹ 1,17,41,598/-; (ii). Futura Polymer Division: ₹ 6,75,180/-; (iii). Futura Performs Division: ₹ 3,96,475/-; and (iv). Chemtax Division :₹ 74,154/- (Page 121 -126 of APB ). Also, the ld. A.R drew our attention to the bifurcated party vise/date vise details of the Sundry balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee from claiming deduction of the same as a business loss incurred in the course of carrying on of business as that of a share broker. The Hon ble High Court, while concluding as hereinabove, had observed as under: 10. Section 28 of the Act imposes a charge onthe profits or gains of business or profession. The expression Profits and gains of business or profession is to be understood in its ordinary commercial meaning and the same does not mean total receipts. What has to brought to tax is the net amount earned by carrying on a profession or a business which necessarily requires deducting expenses and losses incurred in carrying on business or profession. The Supreme Court in the matter of Badridas Daga v. Commissioner of Income Tax, reported in 34 ITR page 10, has held that in assessing the amount of profits and gains liable to tax, one must necessarily have regard to the accepted commercial practice that deduction of such expenses and losses is to be allowed, if it arises in carrying on business and is incidental to it. 11. On the basis of the aforesaid decisions, it can be concluded that even if the deduction is not allowable as bad debts, the Tribunal ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of a business loss within the meaning of Sec. 37 of the Act. In fact, the bifurcated details of the advances written off by the various divisions of the assessee had been furnished before us as additional evidence. In the backdrop of the aforesaid facts, we are of the considered view, that the assessee s claim that the amount of advances written off during the year was in the nature of a business loss requires to be adjudicated upon by the A.O. On a similar footing, the claim of the assessee that the sundry balances written off during the year were also a loss incidental to its business, on the same terms requires to be visited by the A.O. Accordingly, we herein direct the A.O to adjudicate upon the claim of the assessee as regards allowability of its claim for deduction of, viz. (i) the amounts advanced to suppliers written off during the year: ₹ 1,28,87,408/-; and (ii). the sundry balances written off during the year: ₹ 11,99,829/-, as a business loss within the meaning of Sec. 37 of the Act. Needles to say, the A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at a li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record in context of the aforesaid issue under consideration. Before us, the assessee has filed by way of additional evidence, the copies of the incometax returns alongwith the computation of income for A.Y 2013-14 of the aforesaid directors, and also the affidavits of the aforesaid directors viz. S/shri. Shyam Ghia and Mukund Dalal, wherein they had admitted of having advanced loans to the assessee company during the year under consideration. In the course of hearing of the appeal the ld. A.R took us through the aforesaid additional evidence viz. copies of the returns of income and affidavits of the respective directors, at Page 146-158 of the APB . On a perusal of the respective returns of income, we find that during the year under consideration viz. A.Y 2013-14, the directors viz. S/sh. Shyam Ghia and Mukund Dalal had returned an income of ₹ 21,38,448/- and ₹ 26,77,008/-, respectively. As regards the source of advancing of the respective loans, both of them had deposed in their respective affidavits that the same was out of their past savings. To sum up, the aforesaid directors viz. S/sh. Shyam Ghia and Mukund Dalal, after providing their respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the hands of the assessee. On appeal, the assessee submitted before the CIT(A) as additional evidence the copy of the purchase agreement and the valuation report as on 01.04.1981, alongwith the copy of the MOU dated 19.12.2012, which was forwarded by the appellate authority to the A.O for his comments. In reply, it was stated by the A.O that as the assessee had filed the copy of the MOU for sale of land, dated 19.12.2012, copy of the purchase agreement and the valuation report as on 01.04.1981, therefore, the LTCG on the sale of the land, as claimed by the assessee in its return of income could be admitted on the basis of the aforesaid documents. In the backdrop of the aforesaid facts, the CIT(A) directed the A.O to compute LTCG on sale of land as per the extant law. But then, the assessee in the course of the appellate proceedings, vide its letter dated 26.09.2017, raised a new issue, that as pursuant to a deed of cancellation dated 28.09.2017 the MOU dated 19.12.2012 had been cancelled, therefore, the sale transaction under consideration stood nullified. In order to buttress its said claim, the assessee vide its letter dated 06.10.2017 placed on record the deed of cancellati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Star Promoters Pvt. Ltd. However, it was stated by the A.O, that as no reply as regards cancellation/termination of the MOU was received by him from M/s Golden Star Promoters Pvt. Ltd., therefore, in the absence of the confirmation of the other party it remained unproved that the MOU was terminated. After perusing the report filed by the A.O, it was observed by the CIT(A) that the assessee in the course of the remand proceedings had despite specific directions of the A.O failed to place on record the requisite details/documents in support of its claim that the sale transaction was terminated viz (i). details of amount transacted; (ii). copies of the bank statements from F.Y 2011-12 onwards; (iii). original deed of cancellation of the agreement; and (iv). details as regards the legal fees paid by the assessee for the agreement and its cancellation, both. Observing, that the assessee had failed to substantiate its claim that the sale transaction had been terminated, the CIT(A) concurred with the view taken by the A.O and rejected the claim of the assessee that the sale transaction had not materialized. On the basis of his aforesaid deliberations, the CIT(A) directed the A.O to asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies of the returns of income alongwith respective computations of income of the assessee company for A.Y 2018-19 and A.Y 2019-20, Page 128 -145 of APB. Relevance of the copies of the returns of income of the assessee company for the succeeding years viz. A.Y 2018-19 and A.Y 2019- 20, is to draw our attention to the fact that part of the land under consideration was thereafter sold by the assessee in the succeeding years. To sum up, the assessee by referring to the sale transactions of the land under consideration, had tried to fortify its claim that the impugned sale transaction of the land during the year under consideration had not materialized, and stood cancelled. The ld. A.R took us through the facts pertaining to the issue under consideration. The ld. A.R took us through the definition of the term transfer as envisaged in Sec. 2(47) of the Act. It was averred by the ld. A.R that as the assessee had only entered into an unregistered MOU, dated 19.12.2012, with the other party, which too stood repudiated vide a deed of cancellation, dated 28.09.2017, therefore de hors transfer of the land under consideration no capital gain was liable to be assessed in respect of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it. It is necessary for us to refer to some of these decisions only to deal with two submissions on behalf of the department. The first is with respect to an observation of the Supreme Court in Jute Corporation of India Limited v. Commissioner of Income Tax, 1991 Supp (2) SCC 744 = (1991) 187 ITR 688. The second submission is based on a judgment of the Supreme Court in Goetze (India) Limited v. Commissioner of Income Tax. 11(A). In Jute Corporation of India Limited v. CIT, for the assessment year 1974-75 the appellant did not claim any deduction of its liability towards purchase tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as it entertained a belief that it was not liable to pay purchase tax under that Act. Subsequently, the appellant was assessed to purchase tax and the order of assessment was received by it on 23rd November, 1973. The appellant challenged the same and obtained a stay order. The appellant also filed an appeal from the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer. [emphasis supplied] (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 12. At page 694, after referring to certain observations of the Supreme Court in Additional Commissioner of Income-tax v. Gurjargravures P. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the return was filed and the assessment order was made but could not have been raised at that stage. The words are could not have been raised and not were not in existence . Grounds which were not in existence when the return was filed or when the assessment order was made fall within the second category viz. where the ground became available on account of change of circumstances or law. 14. The facts in Jute Corporation of India Ltd., various judgments referred to therein as well as in subsequent cases, which we will refer to, establishes this beyond doubt. In many of the cases, the grounds were, in fact, available when the return was filed and/or the assessment order was made. In Jute Corporation of India Ltd., the ground was available when the return was filed. The assessee did not claim any deduction of its liability to pay purchase tax as it entertained a belief that it was not liable to pay purchase tax under the Bengal Raw Jute Taxation Act, 1941 . Thus, the ground existed when the return was filed. The assessment order was even made and received by the assessee. It is only after the appeal was filed that the assessee claimed a deduction in respect of the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional grounds and in the departmental appeals cross objections regarding the deductibility of the sums transferred to contingency reserve and tariff and dividend control reserve? (B) The Division Bench which heard the reference, finding that there was a conflict of decisions, placed the papers before the Hon'ble Chief Justice for constituting a larger bench to resolve the controversy. The Full Bench answered the reference in the affirmative and in favour of the assessee. The Full Bench held :- Thus, the Appellate Assistant Commissioner has very wide powers while considering an appeal which may be filed by the assessee. He may confirm, reduce, enhance or annul the assessment or remand the case to the Assessing Officer. This is because, unlike an ordinary appeal, the basic purpose of a tax appeal is to ascertain the correct tax liability of an assessee in accordance with law. Hence an Appellate Assistant Commissioner also has the power to enhance the tax liability of the assessee although the Department does not have a right of appeal before the Appellate Assistant Commissioner. The Explanation to subsection (2), however, makes it clear that for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal grounds to the effect that the said sum could not be included in the total income. The assessee contended that on a erroneous admission, no income can be included in the total income. It was further contended that the ITO and the Commissioner of Income-tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it had raised these additional grounds on learning about the legal position subsequently. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under :- 4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised their jurisdiction to consider the additional claim as they were entitled to in view of the various judgments on the issue, including the judgment of the Supreme Court in National Thermal Power Corporation Limited. This is clear from the fact that these judgments have been expressly referred to in detail by the CIT(A) and by the Tribunal. 20. We wish to clarify that both the appellate authorities have themselves considered the additional claim and allowed it. They have not remanded the matter to the Assessing Officer to consider the same. Both the orders expressly direct the Assessing Officer to allow the deduction of ₹ 40,00,000/- under section 43B of the Act. The Assessing Officer is, therefore, now only to compute the respondent's tax liability which he must do in accordance with the orders allowing the respondent a deduction of ₹ 40,00,000/- under section 43B of the Act. 21. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if a claim is not made before the assessing officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. 24. A Division Bench of the Delhi High Court dealt with a similar submission in Commissioner of Income-tax v. Jai Parabolic Springs Limited, (2008) 306 ITR 42. The Division Bench, in paragraph 17 of the judgment held that the Supreme Court dismissed the appeal making it clear that the decision was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the Tribunal. In paragraph 19, the Division Bench held that there was no prohibition on the powers of the Tribunal to entertain an additional ground which, according to the Tribunal, arises in the matter and for the just decision of the case. Now, in the case before us, we find that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. It was observed by the Hon ble Apex Court, that after the commencement of the Amendment Act of 2001, if an agreement, was not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there would be no agreement in the eyes of law which could be enforced under Section 53A of the Transfer of Property Act. In the backdrop of its aforesaid observations, the Hon ble Apex Court had concluded that in order to qualify as a transfer of a capital asset under Section 2(47)(v) of the Act, there must be a contract which can be enforced in law under Section 53A of the Transfer of Property Act. In sum and substance, the Hon ble Apex Court had observed, that in terms of Sec. 2(47)(v) of the Act, transfer of any immovable property in part performance of a contract of the nature referred in Sec. 53A of the Transfer of Property Act, 1882, will be completed only when the agreement under Sec. 53A of the Transfer of Property Act is registered under the Indian Registration Act. Also, we find that the Hon ble High Court of Bombay in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in a transaction which had never fructified into a sale transaction. As observed by the Hon ble Apex Court in the case of CIT Vs. Shoorji Vallabhdas and Co., (1962) 46 ITR 144 (SC) , income-tax is a levy on income. No doubt, the Income-tax act takes into account two points of time at which the liability to tax is attracted ,viz., the accrual of the income or its receipt, but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a hypothetical income , which does not materialize. As observed by the Hon ble High Court, where the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account . On the basis of our aforesaid observations, we are unable to persuade ourselves to concur with the view taken by the lower authorities, and therein vacate the addition towards LTCG made by them, on the basis of the MOU, dated 19.12.2012. Ground of appeal No. 7 r.w additional ground of appeal no. 1 , are allowed in terms of our aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration between various assets sold and ratio adopted for working of loss on account of depreciable assets. In response, the assessee vide letter dated 3-8-2017 has submitted that the total value of ₹ 27.19 Ors. in respect of sale of other depreciable assets has been taken on the basis of book value of these assets as on 31-12-2012 (52 Annual Report 2011-12 Pg. No. 34) A Copy of Annual Report 2011-12 submitted. Accordingly, from the opening WDV for depreciable assets as on 31-03-2012 has been deducted from the sale value and the total loss has been worked out at ₹ 69,72,79,948/-. The said loss has been disclosed in Schedule DPM and Schedule DOA forming part of return of income Pg. Nos.18 19. In this regard, on perusal of terms and conditions laid down in MOU dated 19-12-2012 entered between the assessee company and Golden Star Promoters Pvt. Ltd., it is seen that the parties have agreed to purchase and sell all building, plant machinery, office equipment, furniture and fixtures, etc., on an As Is Where Is basis at FPL's factory at Manali, Chennai - ₹ 40 Crs. It can be seen from the above condition mentioned in the MOU that the purchaser part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. In fact, the sale consideration of the depreciable assets has neither been justified by the assessee on the basis of any valuation report nor with the cost allocated by the purchaser in its books of accounts . Further, we find that the assessee while claiming the Short Term Capital Loss on sale of depreciable assets had not assigned any costs to the intangible asset in its return of income, and resultantly had claimed a loss of ₹ 49,35,99,792/- on transfer of intangible assets. On the contrary, no such loss is reported in the annual report of the assessee company for 2011-12. As regards the sale consideration taken by the assessee for the inventory sold, the same had neither been correlated with the market value of the inventory nor with the cost recorded in the books of account of the purchaser or its subsequent sale by the purchaser. In the backdrop of the aforesaid facts, it can safely be concluded that as the assessee had failed to substantiate the basis for allocation of the sale consideration to the individual assets, and also its inventory, the A.O had for the said reason disallowed its claim for Short Term Capital Loss of (-) ₹ 69,72,79,928/-. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... body of the assessment order under Sec. 154 of the Act. However, the A.O observing that the impugned mistakes pointed out by the assessee in its rectification application were not in the nature of mistake apparent from record, rejected the claim of the assessee. 30. Aggrieved, the assessee assailed the order passed by the A.O under Sec. 154, dated 20.06.2016 in appeal before the CIT(A). After necessary deliberations, it was observed by the CIT(A) that the issues raised by the assessee before him were beyond the scope of adjustments permissible under Sec.154 of the Act. Accordingly, the CIT(A) drawing support from the judgment of the Hon ble Supreme Court in the case of T.S. Balaram, Income Tax Officer Vs. Volkart Brothers Ors. (1971) 82 ITR 50 (SC) , rejected the claim of the assessee for the reason that the mistakes pointed out in the rectification application did not fall within the purview of rectification under Sec. 154 of the Act. Accordingly, the appeal of the assessee was dismissed. 31. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We have given a thoughtful consideration and concur with the view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression ordinarily has been used in the said rule itself. This rule was inserted as a result of directions of Hon ble High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein it was inter alia, observed as under: We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment . In the rule so framed, as a result of these directions, the expression ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dated 19th February 2020, taken the stand that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnip ..... 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