9911796707
TMI Blog2020 (11) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... elected for scrutiny under CASS and notice under section 143(2) and 142(1) were issued and served on the assessee. In response, AR of the assessee filed the relevant information as called for. 4 During the assessment proceedings, assessing officer observed in the tax audit report in form No. 3 CD in clause No. 20, the auditor has disclosed the details of amount of profit chargeable to tax under section 41, as below:- Other deduction Rs. 56,77,411/- Rebate and settlement Rs. 40,29,086/- 5. Further, the assessing officer observed that the assessee has disclosed the total income in its profit and loss account, but assessee has not disclose the above said income in its statement. On enquiry, assessee has explained the details of miscellaneous income which is already disclosed in its profit and loss account, the net income of Rs. 1,648,325/-. They explained that assessee has withheld certain portion of contract money awarded to M/s Talin Modular Office Furniture System and M/s Kevin Electricals Private Limited. Subsequently, in an settlement reached with the above said companies, assessee has settled Rs. 4,029,086/- out of total outstanding of Rs. 5,677,411/-. The difference of ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss income therefore by relying on judicial pronouncement assessee submitted that it is a business income. After considering the submissions of the assessee and other judicial pronouncements relied on by the assessee, Assessing Officer rejected the contention of the assessee by relying on the Hon'ble Supreme Court decision in the case of Shambhu Investment Pvt. Ltd. 263 ITR 143(SC) and brought the income declared by the assessee as income from house property and assessed the same under the head Income from House Property. 8. Since, the above said rental income was assessed as income from house property, the claim of the assessee on the depreciation of building was disallowed to the extent of Rs. 1,63,58,960/-. Apart from that, assessing officer has disallowed expenditure under section 43B, disallowance of interest, 14A and disallowance of expenses due to non deduction of TDS. 9. Aggrieved with the above order, assessee preferred an appeal before Ld. CIT(A) and has submitted an elaborate submission before him. After considering the submissions of the assessee Ld CIT(A) dismissed all the grounds raised by the assessee except giving relief for disallowance made under section 14A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the auditor would have appropriately disclosed if he is convinced with the submissions of the assessee, since the auditor has not convinced, he has disclosed the details. Therefore, he rejected the contention of the assessee. And he submitted that the auditor has not qualified the report rather he gave the details of the miscellaneous income declared by the assessee. Further he brought to our notice page 9 of the paper book in which assessee has submitted before Ld. CIT(A) that the assessing officer has misunderstood the comments of the auditor and if required the matter may be remanded to assessing officer to make the enquiry and seek clarification from the auditor so that the intension of the auditors remark in-Clause 20 of tax audit report would be clear. He submitted that the Ld CIT(A) has not sought any clarification from the auditor. He prayed that the ground No. 1 may be allowed in favour of the assessee. 12. With regard to ground No. 2, he brought to our notice page 24 of paper book which is rental agreement as per which assessee entered rental agreement with Lanxes India Private Limited and further he brought to our notice page 42 of the paper book as per which assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x authorities they did not believe and also not verified the same by calling for explanation from the tax auditors. In our considered view that tax authorities should have called for clarification from the tax auditor and completed assessment based on the clarification. In our view, the information matches with the submissions of the assessee therefore we are inclined to accept the submissions of the assessee therefore the addition made by the assessing officer is accordingly deleted. Hence, the ground No. 1 raised by the assessee is allowed. 18. With regard to ground No. 2, when we consider the facts on this issue by combined reading of facts in both AY 2012-13 and 2013-14, we notice that assessee has acquired absolute assignment right from M/s Ravi Fisheries Ltd. on the basis of deed of assignment dated 25th Jan 2007 on the plot of land bearing Plot No.-'A', 162, 163 & 164 total admeasuring 2915 Sq. Mtrs together with the structures standing thereon in Thane Industrial Area, which comes within the limit of Thane Municipal Corporation. Subsequently, in order to construct an I.T. Park in that industrial area, assessee has taken a loan from Thane Janta Sahakari Bank Ltd and by tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion period, since assessee was holding lease rights, assessee with the prior consent of NRPL, entered into leave and license agreement with M/s Lanxes India Pvt. Ltd, accordingly gave the constructed building to them on 9th Sept. 2011. It is important to note that the deed of entering an MOU with NRLP dated 5th Aug 2010 and entering into leave and license agreement with LIPL dated 6th Aug 2010, it clearly indicates that assessee has prior approval from NRPL to allow LIPL to occupy the building based on license agreement. Later, the leave and license agreement can be transferred to NRPL once the total project is completed. Based on the above MOU, assessee has completed the construction of building and transferred the complete right based on deed of assignment dated 11.04.12 to NRPL. 18.3 From the above facts, it is clear that assessee has only indulged in construction of IT Park and during the construction period, the vacant area was allowed to use the same for commercial activities with the prior approval of the NRPL and therefore, it is not the actual intent of the assessee to give the above property for lease. It is only an arrangement with NRPL and assessee to explore the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vrs. Ansal Land Mark Township (P) Ltd, 377 ITR 635 and various case law in this respect and also as per the confirmation received from the company that bank has already declared the income in the return of income, we are of the considered view that section 40(a)(ia) of the Act cannot be invoked in this regard. Accordingly, ground no. 4 raised by the assessee is allowed. 21. Consequently, the appeal filed by the assessee is partly allowed. ITA No. 2400/Mum/2018 (AY 2013-14) 22. Now we take up the other appeal filed by the assessee in ITA No. 2400/Mum/2018 for AY 2013-14 on the grounds mentioned herein below:- 1. The Hon. CIT (A) erred in confirming the addition of Rs. 2,86,31,608/-, as short term capital gain arising on transfer of premises to M/s Nisarg Realtors Pvt. Ltd., not appreciating that the appellant having transferred the building premises used for business, the consideration for sale would have to be reduced from the block of assets, as provided u/s 43(6) of the I. T. Act 1961 and computation of short term capital gams separately was not correct by law. 2. The Hon. CIT (A) erred in upholding the applicability of section 50C to the transfer of leasehold rights i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, gave the building on lease to M/s Lanxes India Pvt. Ltd. and claimed depreciation in the previous year. Therefore, the building which is transferred is depreciable and business assets, accordingly, it is to be treated as short term capital gain and further disclosed the profit. AO rejected the contention of the assessee and completed the assessment treating the above transaction under the head 'Income from capital gain' and assessed as below:- Particular Amounts in Rupees A. Sale consideration (as per sale deed) 37,62,42,000 B. Cost of Acquisition Cost of Building as on 10/04/2012 (without considering Depreciation) 32,71,79,217 Add: Addition during of CWIP till 10/04/2012 2,04,31,175 34,76,10,392 C. Short term Capital Gain (A-B) 2,86,31,608 24 From the above, AO rejected the claim of depreciation claimed by the assessee. 25 Aggrieved with the above order, assessee preferred the appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of assessee, sustained the addition made by AO. 26. Aggrieved with the above, assessee is in appeal before us. 27. Considered the rival submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as fixed as per rate stated in above Moils referred in point no.2, we took sale consideration of Rs. 37,62,42,000/-. g) Under these circumstances the sales consideration of Rs. 37,62,42,000/- is considered as appropriate." 29. After considering the submission of assessee, AO rejected the contention of the assessee by invoking the provision of section 50C and brought to tax the difference between stamp duty valuation and sale consideration. 30. Aggrieved with the above order, assessee is in appeal before Ld CIT(A) and Ld. CIT(A) sustained the addition made by the AO. 31. Aggrieved with the above order, assessee is in appeal before us. 32. Before us, Ld. AR submitted as under 3.1 Ld. AO has made addition of Rs. 2,72,66,5007- (erroneously taken as Rs. 2,77,66,500/- in the asst. order while computing income) on assignment of lease hold rights of premises to M/s. Nisarg Realtors Pvt. Ltd. by relying on the provisions of section 50C of the I.T. Act 1961. As stated above, the appellant has in the year under appeal, vide deed of assignment dt. 11.04.2012, transferred and assigned all leasehold rights in premises being plot at Wagle Industrial area, Thane alongwith constructed IT pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reenfield Hotels and Estates Pvt. Ltd in ITA No. 5053/Mum/2012 has passed its order in favour of the assessee by determining that the provision of section 50C are not attracted to transfer of leasehold rights. 35 Therefore, respectfully following the decision of Coordinate Bench of ITAT, which is applicable mutatis mutandis to the present case, we are inclined to accept the submission of Ld. AR. Accordingly, we allow the ground no. 1 raised by the assessee. 36 With regard to ground no. 3 & 4, we notice that the Coordinate Bench of ITAT in the case of CIT vs. Rajinder Kumar 362 ITR 241 (Delhi) and CIT vs. Ghatge Patil Transport Ltd. 368 ITR 749(Bom) respectively, has passed its order in favour of the assessee. Therefore, respectfully following the decision of Coordinate Bench of ITAT, which is applicable mutatis mutandis to the present case, we are inclined to accept the submission of Ld. AR. Accordingly, we allow these ground grounds raised by the assessee. 37 With regard to Ground no. 5, we notice from the submission of Ld. AR that assessee has filed his return of income during this assessment year without claiming expenditure incurred by the assessee and made this expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily (emphasis supplied by us now) be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. 8. Quite clearly, "ordinarily" the order on an appeal should be pronounced by the bench within 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 jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that "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 admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il 2020, has, besides extending the validity of all interim orders, has also observed that, "It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020". It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification 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 disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
