INCOME TAX OFFICER, C.R. I P ESTATE, NEW DELHI vs. MILLENIUM MERITECH PRIVATE LIMITED, NEW DELHI

Date of hearing 03.07.2025 Date of 18.07.2025 pronouncement ORDER

PER SUDHIR KUMAR JM:

Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 2 2. The revenue has raised following grounds of appeal :- 1) "Whether, on the facts and circumstances of the case and in law, the Ld.JCIT(Appeal) has rightly allowed the deduction of cost of improvement under the head Capital Gain amounting to Rs. 9,80,19,310/- claimed in its return of income, thereby ignoring the addition made by the AO CPC in the intimation order passed u/s 143(1) of the Act? 2) Whether, on the facts and circumstances of the case and in law, the Ld..JCIT(Appeal) has rightly allowed the deduction of cost of improvement under the head Capital Gain amounting to Rs. 9,80,19,310/- claimed in its return of income after considering it to be clerical error made on the part of the AO CPC without even verifying the claims of indexed cost of improvement claim by the assessee? 3) That the department craves to add or amend the grounds of appeal before Hon'ble ITAT is finally heard or disposed of."

3. The brief facts of the case are that the assessee filed its return of income declaring total income of Rs.18,29,35,390/- on 28-10-2023 for A.Y. 2023-24. In the intimation u/s. 143 (1), of the Act the income of the assessee has been computed at Rs.28,09,54,700/- after making addition / adjustments of Rs.9,80,19,310/- by not allowing the Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 3 deduction of cost of improvement under the head capital gain. The AO CPC has disallowed the total cost of improvement amounting to Rs.9,80,19,317/- as claimed by the assessee without giving any opportunity of hearing. Aggrieved by the order of the AO, the assessee filed the appeal before the Ld. CIT(A), who vide order dated 07-05- 2024 allowed the appeal of the assessee by observing as under :- Ground of appeal 2: From the facts on record, it is evident that the AO CPC in the intimation order passed u/s 143(1) has disallowed the cost of improvement along with the cost of indexation amounting to Rs. 9.80.19.317/- as claimed by the appellant in the return of income under the head of Capital Gains. The AO CPC has not given any reason for the disallowance made. Therefore, the disallowance made seems to be a clerical error and the whole cost of improvement amounting to Rs. 9.80.19.317/- cannot be disallowed in the intimation u/s 143(1), as this is not prima facie adjustment. Hence the AO is directed to pass the correct speaking order i. e order u/s 143(3)/147, if any discrepancy is found in the cost of improvement claimed by the appellant after dual verification. Therefore, the disallowance made by the AO CPC appears to be a clerical error, Hence the contention of Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 4 the appellant is accepted in the benefit of doubt. The disallowance of Rs. 9,80,19,317/- made in the intimation order u/s 143(1) is hereby deleted. The appellant gets relief of Rs. Rs. 9,80,19,317/-. The appeal filed on the ground of appeal

2 is allowed. Ground of appeal 3 & 4 : The AO is directed to calculate the correct tax payable along with accurate interest u/s. 234B and 234C as per provisions of the IT Act. The appeal filed on the grounds of appeal 3 & 4 is allowed. The appeal filed on ground of appeal 1 is general in nature does not require any specific adjudication.

6. In the result, the appeal is Allowed.

4. The Ld. Sr. DR submitted that the order was passed without any reasons. He prayed that order be set aside. Ld. AR of the assessee submitted that LD. CIT(A) has directed the AO to pass the correct and speaking order, now order has been passed by the AO. During the course of hearing the assessee has filed the copy of the order which as under:

Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 5 Income Tax Officer v. Millenium Meritech Private Limited New Delhi A.Y. 2023-24 6 5.We have heard the rival contentions and perused the material available on record.