TMI Blog2020 (11) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Income received from letting out of property - Income from house property and not under the head Income from business - HELD THAT:- Even though one of the object of the assessee to give the property developed by them as on lease. But as per the above facts, it is clear that it is only an arrangement between NRPL and assessee to explore the option of finding a large multinational company and construct the commercial property and then transfer the same to NRPL as per the MOU entered with them. By the time, assessee completed the total project and received a considerable sale consideration from NRPL, which clearly indicates that assessee has carried on its main object of construction and giving the IT Park on lease, is only an arrangement and not the main objective of the assessee company. Therefore, relying on the decision of Hon ble Supreme Court in the case of Chennai Properties and Investment Ltd Vrs. CIT [ 2015 (5) TMI 46 - SUPREME COURT] is farfetched and as per this, the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed the same by following the provisions of capital gains. Accordingly, ground no. 1 raised by the assessee is dismissed. Applicability of section 50C to the transfer of leasehold rights in a plot of land with structure constructed thereon - 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. - assessee was asked as to why the stamp duty valuation cannot be assessed - HELD THAT:- Coordinate Bench of ITAT in the case of ACIT vs. Greenfield Hotels and Estates Pvt. Ltd [ 2013 (10) TMI 1544 - ITAT MUMBAI] 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. - Decided in favour of assessee. Non-deduction of TDS on interest paid to Kotak Mahindra Prime - addition u/s 36(1)(va) r.w.s. 2(24)(x) of the I.T Act 1961 towards delayed deposit of ESIC contribution of employees - HELD THAT:- Coordinate Bench of ITAT in the case of CIT vs. Rajinder Kumar [ 2013 (7) TMI 454 - DELHI HIGH COURT] and CIT vs. Ghatge Patil Transport Ltd. [ 2014 (10) TMI 402 - BOMBAY HIGH COURT] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 4,029,086/- out of total outstanding of ₹ 5,677,411/-. The difference of above settlement is already recognized as miscellaneous income in its financial statement. However, assessing officer not convinced with the submissions of the assessee, completed the assessment by making addition of ₹ 97,06,497/- that is total of other deduction and rebate/settlement. 6. Further, the assessing officer observed that assessee has given Sankalpan building at Wagle Estate, Thane on rent to M/s Lanxess India P Ltd. and has received an amount of ₹ 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 the Act. 10. Aggrieved with the above order, assessee preferred an appeal before us raising following grounds of appeal:- 1. The Hon. CIT (A) erred in upholding addition of ₹ 97,06,497/-, made on account of erroneous reading of the comments of the auditor at clause no. 20 of form no.3CD, being tax audit report, with regards to computation of miscellaneous income offered to tax u/s 41 of the I.T Act 1961. 2. The Hon. CIT (A) erred in upho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per 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 has provided other utility services to the licensee which includes providing power, power backup, air condition, elevators et cetera, further he brought to our notice object Clause in its Memorandum of Association, particularly Clause C , as per which assessee can develop IT parks and give and let out the properties. Therefore he submitted that the facts in this case are similar to the case of Chennai Properties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 taking due permission from Maharashtra Industrial Development Corporation to construct an IT Park in the above said plots. Assessee has acquired sanction of plan in respect of consumption of 100% additional floor space index on the said plots vide commencement certificates dated 3rd Aug 2010. 18.1 We further notice that assessee has acquired absolute lease of the above said plots in the Thane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 commercial opportunity to find out large business opportunities and find multinational company to occupy such commercial venture. Accordingly, they found a multinational company M/s Lanxes India Pvt. Ltd. and accordingly to set their requirement and IT Park was developed and handed over to them. 18.4 In our considered view, even though one of the object of the assessee to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 in a plot of land with structure constructed thereon to one M/s Nisarg Realtors Pvt. Ltd., inspite of agreeing at Para 3.3.2.3/Page 23 of the appeal order that section 50C was not attracted to lease hold rights and therefore the addition of ₹ 2,72,66,500/- should have been deleted by the Hon. CIT(A). 3. The Hon. CIT (A) erred hi confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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) af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospective buyer from time to time. d) Since construction of the building was in progress, no sale agreement was entered into. e) The sale agreement was entered on 11.04.2012. f) Since our sale consideration was fixed as per rate stated in above Moils referred in point no.2, we took sale consideration of ₹ 37,62,42,000/-. g) Under these circumstances the sales consideration of ₹ 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 ₹ 2,72,66,5007- (erroneously taken as ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rib.) (vi) Kancast Pvt. Ltd. -Vs- ITO, 68 SOT 110 (Pune Trib.) 33. On the other hand, Ld. DR relied on the orders passed by the revenue authorities. 34 Considered the rival submissions and material placed on record, we notice that the Coordinate Bench of ITAT in the case of ACIT vs. Greenfield 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manners :- (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. (c ) In a case where no date of pronouncement is given by the Bench, every 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 Shivsag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation has expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown . Hon ble Bombay High Court, in an order dated 15th April 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 defin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters for clarifications because of considerable time lag between the point of time when the hearing is concluded and the point of time when the order thereon is being finalized, but then, in our considered view, no such exercise was required to be carried out on the facts of this case. 11. To sum up, the appeal of the assessee is allowed, and appeal of the Assessing Officer is dismissed. Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962, by placing the details on the notice board. 41. Respectfully following the aforesaid judicial precedent, we proceed to pronounce this order beyond a period of 90 days from the date of conclusion of hearing. 42 Order pronounced as per Rule 34(5) of ITAT Rules and by placing the pronouncement list in the notice board on 15.06.2020. Order pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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