What did the Tribunal hold?

The Tribunal noted that the assessee had offered the amount for taxation in AY 2013-14. Since the issue was kept open by the AO pending the ITAT's decision for AY 2010-11, the matter was set aside to the AO for fresh adjudication.

The Revenue appealed the deletion of an addition of Rs. 99,10,000 made by the AO on a protective basis. The assessee had offered this amount as remission/cessation of liability in the current assessment year (2013-14).

What were the issues?

Whether the deletion of a protective addition made in a prior assessment year is sustainable when the amount was offered for taxation in the current assessment year.

DCIT vs M/S. Balaji Krupa Estates Pvt… | ITAT Ahmedabad 2019

Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘C’

Before: SHRI RAJPAL YADAV & SHRI RIFAUR RAHMAN

Hearing: 27/06/2019Pronounced: 15/07/2019

PER RAJPAL YADAV, JUDICIAL MEMBER:

Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-1, Vadodara dated 3.1.2017 passed for the Asstt.Year 2013-14. 2. Sole grievance of the Revenue is that the ld.CIT(A) has erred in deleting the addition of Rs.99,10,000/- which was added by the AO on protective basis.

Brief facts of the case are that the assessee-company at the relevant time was engaged in the business of investment in real- 2

estate and renting of properties. It has filed its return of income electronically on 25.9.2013 declaring total income at Rs.1,18,66,20/-. On scrutiny of the accounts, it revealed to the AO that the assessee had sold a property during the accounting period for the Asstt.Year 2010-11 for a consideration of rs.4.11 crores. It has claimed cost of improvement of Rs.1.95 crores in F.Y.2009-10. The assessee has made various payments amounting to Rs.50 lakhs. The balance of Rs.1.45 crores has been shown as liability towards Rama reality i.e. contractor. This claim of the assessee was not allowed in the Asstt.Year 2010-11. Dispute travelled upto the Tribunal in ITA No.969 and 1071/Ahd/2014. Tribunal held that since the assessee has already offered this amount for taxation in the Asstt.Year 2013-14 on account of remission/cessation of liability, therefore, this addition of Rs.99.10 lakhs is not sustainable. The finding of the Tribunal in para 18 reads as under:

“18. So far as the balance of Rs. 99.10 lacs is concerned, a perusal of the paper book shows that the assessee has offered the same as remission/cessation of liability in A.Y. 2013-14 and has paid the taxes accordingly. Since, the assessee has offered this amount as its income in subsequent year if the disallowance is sustained during the year under consideration, it would amount to double taxation of the same amount. Therefore, in our understanding of the fact, this disallowance cannot be sustained. We, accordingly, modify the findings of the Id. CIT(A) and direct the A.O. to confirm the addition of Rs. 45.90 lacs and delete the addition of Rs. 99.10 lacs.”

The ld.counsel for the assessee at the very outset admitted that addition from Asstt.Year 2010-11 of Rs.99.10 lakhs was deleted on account of the stand of the assessee that it offered in 3

2013-14. Now this amount is taxable in this assessment year, and therefore, order of the CIT(A) deserves to be set aside. Thus, order of the ld.CIT(A) is set aside. At this stage, we deem it appropriate to note the finding of the AO on this issue which is available in sub-para 4 of the assessment order. It reads as under: “A.Y. 2013-14: As the matter is pending with the Hon’ble ITAT-Ahmedabad for adjudication, no change is being made in the capital gain shown by the assessee for the assessment year under consideration (i.e. A.Y.2013-14). However, as and when the matter is decided by the Hon’ble ITAT and is accepted by the department as well as the assessee, the issue in question will be disposed accordingly.”

A perusal of the above would indicate that the ld.AO kept this issue open in order to await the decision of ITAT for the Asstt.Year 2010-11. Thus, the issue is required to be adjudicated now. We set aside it to the file of AO for fresh adjudication.

In the result, appeal of the Revenue is allowed for statistical purpose.

Order pronounced in the Court on 15th July, 2019. (RIFAUR RAHMAN) JUDICIAL MEMBER

Ahmedabad; Dated 15/07/2019

आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to :

THE DY. CIT., CIRCLE-1(1)(1), VADODARA vs. M/S. BALAJI KRUPA ESTATES PVT. LTD., VADODARA

What did the Tribunal hold?

What were the facts?

What were the issues?

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