ITO 11(3)(2), MUMBAI vs. VALECHA L M TOLL P.LTD, MUMBAI

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ITA 3081/MUM/2017Status: DisposedITAT Mumbai17 July 2023AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the assessee company is undergoing liquidation proceedings. Consequently, the appeal filed by the revenue was dismissed with liberty to restore it after the moratorium period ends.

What were the facts?

The assessee company, engaged in road construction on a BOT basis, filed a return declaring Nil income. The Assessing Officer (AO) made substantial additions and disallowances, increasing the total income significantly. The Commissioner of Income Tax (Appeals) deleted these additions.

What were the issues?

The primary issue was the deletion of additions/disallowances made by the AO. The appeal was dismissed due to the assessee company being under liquidation proceedings.

Which sections of the Income-tax Act were involved?

Section 40A(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

For Appellant: Shri Ankush Kapoor
For Respondent: Shri Ankush Kapoor
Hearing: 13.07.2023Pronounced: 17.07.2023

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM (Assessment Year: 2011-12) ITO-11 (3)(2) M/s. Valecha L. M. Toll P. Ltd. Room No. 428, Aayakar Bhavan, 4th 4th Floor, Plot No. B-6, Valecha Floor, M. K. Marg, Chambers, New Link Road, Vs. Mumbai-400020 Andheri West, Mumbai-400020 PAN/GIR No. AADCV2787M (Appellant) : (Respondent) : Simoni Dohsi/ Shri Krunal Gandhi. Assessee by Revenue by : Shri Ankush Kapoor Date of Hearing : 13.07.2023 Date of Pronouncement : 17.07.2023 O R D E R PER KAVITHA RAJAGOPAL, J M:

1.

This appeal has been filed by the revenue challenging the order of the Learned Commissioner of Income Tax (Appeals)-18 [hereinafter ‘the CIT(A)’] passed u/s 250 the Income Tax Act [hereinafter ‘the Act’], relevant to the assessment year 2012-13.

2.

The revenue has challenged the order of the Ld. CIT(A) deleting the additions/disallowances made by the Ld. AO.

(A.Y.2011-12) Valecha L M Toll P. Ltd.

3.

Briefly stated that the assessee company is a private limited company incorporated on 22-04-2010 and a subsidiary company of Valecha Infrastructure Limited which holds 100% of equity share capital of the assessee company. The assessee company is engaged in the business of design, engineering, construction, development, finance, operation and maintenance, construction of Four Lane Roads of Lebad (SH 31) to Manpur (NH3) Madhyapradesh on build-operate-transfer (BOT) basis. The assessee company is set up for this limited purpose of the said project which project has been contracted by the assessee company to its sister concern namely Valecha Engineering Ltd. The assessee filed its return of income dated 31.08.2011 for the impugned year declaring total income at Nil. The assessee’s case was selected for scrutiny and the assessment order dated 21.03.2014 was passed by the Ld. AO by determining the total income at Rs 35,60,47,685/- by making various disallowances/additions tabulated as below:

Sr. Nature of additions/disallowance Amount (₹) No. i. Excess expenditure on account of cost of project 35,00,00,000/- under section 40A(2)(b) ii. Amount of interest expenses disallowed 46,72,654/- iii. Amount of business promotion expenses disallowed 5,07,377/- iv. Amount of travelling expenses disallowance 8,67,654/- Total 35,60,47,685/-

4.

The assessee was in appeal before the Ld. CIT(A) who deleted the additions/disallowances made by the Ld. AO.

5.

The revenue is in appeal before us challenging the impugned order of the Ld. CIT(A).

(A.Y.2011-12) Valecha L M Toll P. Ltd.

6.

We have heard the rival submissions and perused the materials available on record. It is observed that the assessee company is undergoing liquidation proceedings before the Hon'ble National Company Law Tribunal (NCLT). This fact has not been controverted by the Ld. Representatives. We deem it fit to dismiss this appeal with the liberty given to the revenue to restore the appeal after the completion of moratorium period in accordance with the provisions of section 14 of the Bankruptcy and Insolvency Code of 2016.

7.

In the result the appeal filed by the revenue is dismissed

Order pronounced in the open court on 17 .07.2023

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