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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD
Before: SHRI RAMA KANTA PANDA & SHRI K.NARASIMHA CHARY
आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated 31/10/2022 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Taurus Value Steel & Pipes Private Limited (“the assessee”) for the assessment year 2020-21, assessee preferred this appeal. 2. When the matter is called, neither the assessee nor any authorised representative entered appearance. It could be seen from the record that the notices were issued to the address given in form No. 36 and also notice of date of hearing was served through e-mail, furnished by the assessee. Notice sent by registered mail with postage prepaid is also returned un- served. If the assessee is to be found in such address given in form-36, there is no reason as to why it is not served even for any reason the assessee is absent from such address. If for any reason, the assessee is not available there, it is for the assessee to make arrangements for service of such notice by furnishing the address where the assessee would be available, or to deliver it to some authorised person, or by making request to the postal department to detain the mail till the assessee claims the same. However, there is no appearance for the assessee. In these circumstances, we find no option, but to proceed to hear the counsel for Revenue and decide the matter on merits basing on the material available on record.
Brief facts of the case are that the assessee is a company. It bought a factory land shed and building, plant and machinery from Shankara Infrastructure Material Limited (which was renamed as Shankara Building Products Ltd) by virtue of business transfer agreement dated 01/10/2013 between the assessee and vendor company as slump sales. The assessee company bought factory land, factory shed and building and plant and machinery, embedded or fastened to the earth together with movable machinery and all other assets and liabilities. The assessee also acquired other pieces of land for a consideration of Rs. 80,73,875/- on 13/05/2019 vide registered document Nos. 1450/2018 and 1886/2018. The assessee also bought other lands and acquired movable machineries from other vendors from time to time. During the year under appeal, the assessee sold factory land, shed and building together with embedded and fastened machineries.
Assessee filed its return of income for the AY 2020-21 on 29/01/2021, declaring a total income of Rs. 15,04,48,110/-. Learned Assessing Officer, however, concluded the assessment and determined the income of assessee at Rs. 85,12,08,943/- by making certain additions in respect of income from Long Term Capital Gain, sale of land, income from Short Term Capital Gain on the sale of machinery and income from other sources apart from denying the set-off of losses to the tune of Rs. 18.37 crores.
Aggrieved, assessee challenged the same before the learned CIT(A) on the following grounds: i.The order of the Assessment Unit, Income Department is erroneous both on facts and in law insofar as it is prejudicial to the interest of assessee. ii.The Assessment Unit, Income Tax Department has erred in not making assessment in accordance with the procedure laid down under section 143(3) as such it shall be declared non-est as per section 144B which is infructuous and void-ab-initio as the appellant was not given further opportunity of being heard before passing an order and as such the order passed is against the principles of Natural Justice. iii.The Assessment Unit, Income Tax Department has erred in assessing Long Term Capital Gain from sale of Factory Land and Building at Rs.42,03,53,365/- in place of Rs. 6,64,18,718/-. iv.The Assessment Unit, Income Tax Department computed Long Term Capital Gain erroneously without indexing the Long Term Capital Assets which is pervers and bad-in-law. v.The action of the Assessment Unit, Income Tax Department in assessing the entire sale consideration of Machineries Rs. 29,70,98,691/- as unexplained cash credit u/s.68 of the Income of the Income tax Act, 1961 (“the Act”), 1961 is against the Computational provisions of Capital Gains when the actual Short Term Capital Gain derived by the appellant company was Rs. 5,20,90,802/- which is supported by proper documents in the form of sale deed and sale invoices of Machineries submitted during the course of assessment proceedings. vi.The Assessment Unit, Income Tax Department has erred in arriving at income of Rs. 29,70,98,691/- and treating the entire sale amount of Machineries as unexplained credit u/s.68 is bad-in-law. vii.The action of the Assessment Unit, Income Tax Department in assessing the total income at Rs.85,51,62,746/- is arbitrary, unjust as the appellant company has not earned that much of income and taxing the appellant company on the income not earned is unlawful and contrary to the taxing provisions. viii. The Assessment Unit, Income Tax Department has erred in disallowing set off of loss of Rs.18,36,95,537/- done rightly by the Appellant Company in the block of assets. ix.The Assessment Unit, Income Tax Department further erred in law by applying the provisions of section 115BBE when the sale consideration of Machineries is out of the explainable sources. x.The Assessment Unit, Income Tax Department erred in charging interest u/s.234B amounting to Rs.97,73,290/-. xi.The Appellant craves leave to add, amend or alter any of the above ground at the time of hearing of the above appeal.
Learned CIT(A), however, dismissed the appeal. Hence the assessee is before us on the following grounds: i.The order of the learned Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law. ii.The learned Commissioner of Income-Tax (Appeals) erred in determining the income from business/profession at Rs. 13,01,73,562/- as against Rs. 3,19,81,385/-. iii. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the profit of Rs. 13,01,73,562/- as per CPC mentioned in Intimation u/s.143(1), include profit on sale of asset of Rs. 9,81,71,443/- which is separately admitted as income under the head “Capital Gains”. iv. The learned Commissioner of Income-Tax (Appeals) should have considered the Long Term Capital Gain admitted of Rs. 6,64,18,718/- representing the net income from LTCG and the income from Short Term Capital Gain of Rs. 5,20,90,802/- without considering part of it as income from business. v. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing Officer in arriving at figure of Rs. 31,90,12,803/- as the gross total income after intra-head adjustments. The learned Commissioner of Income-Tax (Appeals) ought to have accepted the income admitted of Rs. 15,04,48,110/- which represents the actual income of the appellant and should not have adopted the total income at Rs. 31,50,59,000/-.
7. Learned DR submitted that the learned CIT(A) is justified in upholding the assessment order on the ground that the assessee itself stated in its return of income that there were inadvertent errors in filing the ITR and since the assessee never filed any revised return showing the amounts in correct heads/schedules, the genuineness of the contentions of the assessee cannot be verified. Learned DR also submits that as rightly held by the learned CIT(A), if the details in the return of income are filed, but incorrectly, then proper course for the assessee is to file the revised return of income and the assessee cannot claim the CPC. According to him, unless the revised return of income is filed, the authorities cannot verify anything and, therefore, no interference could be made with the orders of the learned CIT(A).
8. We have gone through the record in the light of the submissions made by the learned DR. As stated above, the assessee preferred appeal before the CIT(A) on the grounds stated above, but the impugned order reads that the learned CIT(A) considered the following grounds .
1. On the sale of land/building who have got Long Term Capital Gain (LTCG) of Rs.6,64,18,718/- which we have disclosed under column B of schedule- CG. But in the ITR form under schedule special income it got additionally added in column 3 of schedule special income.
2. Employee’s contribution of PF for the month of Feb-2020 was actually paid before the due date (i.e., on 14/3/2020) stop but while reporting in tax audit report it was erroneously reported after the due date (i.e., on 20/3/2020).
3. During the year we have sold assets for which we got capital gains of Rs. 11,85,09,520/- and paid taxes for the same as per Income Tax act, 1961. The above profit of Rs. 9,81,71,443/- is book profit which is not taxable.
9. The impugned order further reads the statement of facts which is different from the statement of facts given in form
35. We do not find any reference to the employee contribution of provident fund anywhere either in the assessment order or in the grounds preferred by the assessee as could be verified from form
35. Further, all the grounds of appeal preferred by the assessee in form 35 are not dealt with by the learned CIT(A).
10. In these circumstances, we set aside the impugned order and restore the appeal to the file of learned CIT(A) for considering all the grounds pleaded by the assessee, vide form 35 and to take a plausible view according to law, after hearing the assessee. We also make it clear that it is the last opportunity to the assessee to get the matter disposed of on merits.
In the result, appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on this the 21st day of June, 2023.