What did the Tribunal hold?

The tribunal held that the CIT(A) rightly deleted the impugned capital gains addition as it would have resulted in double taxation. The Revenue's arguments were found to be without merit.

The assessee's appeal was filed with a 3-day delay, which was condoned by the tribunal due to the COVID-19 pandemic. The Revenue appealed the CIT(A)'s order deleting an addition of long-term capital gains.

What were the issues?

Whether the deletion of long-term capital gains addition by the CIT(A) was justified, and whether the addition would lead to double taxation.

ACIT vs Golconda Extrusion Private Limited | ITAT Hyderabad 2021

Income Tax Appellate Tribunal, HYDERABAD ‘A’ BENCH, HYDERABAD.

For Appellant: Shri Ravi Kiran

O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2010-11 arises from the Commissioner of Income Tax (Appeals)-11, Hyderabad’s order dt.27.07.2020 passed in case No.10048/2019-20 in proceedings under Section 144 of Income Tax Act, 1961 (‘the Act’).

We notice at the outset that assessee's instant appeal suffers form 3 days delay in filing. Learned counsel submitted that due to the outbreak of pandemic covid 19 unable to get the documents form the department which caused the impugned delay in filing of the instant appeal. Case law Collector Land Acquisition Vs. Mst. Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No.9488 & 9489/2019 dated 17th Dec., 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that assessee's impugned delay of 3 days is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits therefore.

Heard both the parties. Case file perused.

3. The Revenue raises the following substantive grounds in the instant appeal : “ 2. The learned CIT (Appeals) failed to appreciate the fact that the assessee company 5.07 acres of land in the undivided land of 98.10 acres situated in Sy. No.172, Hydernagar.

The learned CIT (Appeals) failed to appreciate the fact that nowhere in the assessment record, it is mentioned that the income offered by M/s. Trinity Infraventures Ltd. includes the amount received by the assessee company from M/s. MBS Impex Pvt. Ltd. on account of sale transaction.

4. The learned CIT (Appeals) erred in allowing the appeal without appreciating the fact that nowhere in the assessment record, it is mentioned that the income offered by M/s. Trinity Infraventures Ltd., includes the amount derived by the assessee from sale of 2.06 acres out of the undivided land of 98.10 acres in Sy. No.172, Hydernagar.

The learned CIT (Appeals) failed to appreciate the fact that the Assessing Officer determined the income derived from sale of land under capital gain, whereas the income has been offered in the hands of M/s. Trinity Infraventures Ltd., under business income.”

Both the learned representatives invited our attention to the CIT(A)’s detailed discussion reading as under :

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5. Learned CIT-DR vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in deleting the impugned long term capital gains (LTCG) addition of Rs.8,84,51,000 despite the fact that the same has been never assessed in the hands of M/s. Trinity Infra Divisions Limited. His first argument is that the Assessing Officer had never made any protective assessment in this taxpayer’s hand as well. We find no merit in either of the Revenue foregoing arguments in light of the assessee's detailed paper book running into 92 pages including the said other entity income tax returns, computation, sale ledger, etc in pages 86, 91 & 92; as the case may be, respectively. Coupled with this, there is hardly any dispute that the CIT(A) has referred to the Assessing Officer’s discussion in the said third party assessment treating the addition with remaining assignee’s hands (supra) as protective one only. We conclude in this facts and circumstances that the CIT(A) has rightly deleted the impugned capital gains addition as an instance of double taxation both in assessee as well as M/s. Trinity Infra Divisions Limited’s hands. The Revenue’s sole substantive grievance fails. No other ground has been pressed before us.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 16th Nov., 2021.

ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(1), HYDERABAD vs. GOLCONDA EXTRUSION PRIVATE LIMITED, HYDERABAD

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