THE PR COMMISSIONER OF INCOME TAX-4 NEW DELHI vs. M/S HESPERA REALTY PVT. LTD.

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ITA - 468 / 2024HC Delhi29 August 20242 pages
For Petitioner: SHLOK CHANDRA
AI SummaryPartly Allowed

What did the High Court hold?

The Tribunal affirmed the CIT(A)'s view that the proviso to Section 10(38) mandates inclusion of LTCG in book profit computation under Section 115JB, but this does not make the LTCG ineligible for exemption under Section 10(38). The High Court is hearing further submissions.

What were the facts?

The Assessing Officer (AO) argued that long-term capital gains (LTCG) exempt under Section 10(38) should be included in book profits under Section 115JB, thus disallowing the exemption. The CIT(A) and Tribunal disagreed with the AO's interpretation.

What were the issues?

Whether LTCG exempt under Section 10(38) becomes ineligible for exemption if it is included in the computation of book profit under Section 115JB.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 115JB

AI-generated summary — verify with the full judgment below

$~85 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 468/2024

THE PR COMMISSIONER OF INCOME TAX-4 NEW DELHI

.....Appellant Through: Mr. Shlok Chandra, SSC With Ms. Priya Sarkar, Ms. Madhavi Shukla, JSCs, Mr. Madhav Gawri & Mr. Sushant Pandey, Advs.

versus

M/S HESPERA REALTY PVT. LTD. .....Respondent

Through: Mr. Aniket D. Agrawal, Adv.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE RAVINDER DUDEJA

O R D E R %

29.08.2024

CM APPL. 49577/2024 (Ex.)

Allowed subject to all just exceptions.

Application stands disposed of. CM APPL. 49575/2024 (6 Days Delay in filing) & 49576/2024 (213 Days Delay in Refiling)

Bearing in mind the disclosures made the delay of 6 days in filing and 213 days in refilling the appeal is condoned.

Applications stand disposed of. ITA 468/2024 1. Having heard Mr. Chandra, learned counsel appearing for the appellant, we take note of the following conclusions which have been rendered by the Commissioner of Income Tax (Appeals) [“CIT(A)”]: “8.6 The argument taken by the AO, in view of first proviso to section 10(38), that the income by way of long term capital gain of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:49:43

a company shall be taken into account in computing the book profit u/s 115JB and therefore exemption u/s 10(38) cannot be allowed to the appellant, in my view is not correct. The proviso only makes it mandatory that irrespective of any LTCG being exempt u/s 10(38), the same shall be included while computing the book profit u/s 115JB. It is not the other way round that once such income is included in computing book profit u/s 115JB, the same becomes ineligible for exempt u/s 10(38).”

2.

It is in the aforesaid context that the Income Tax Appellate Tribunal [“Tribunal”] has proceeded to affirm the view as expressed, bearing in mind the plain language in which the Proviso to Section 10(38) of the Income Tax Act, 1961 [“Act”] stands couched. 3. We are presently also not apprised of whether Long Term Capital Gains [“LTCG”] would be liable to be excluded while computing book profits under Section 115JB of the Act. 4. In order to enable Mr. Chandra, learned counsel, to address further submissions, let this matter be called again on 01.10.2024.

YASHWANT VARMA, J

RAVINDER DUDEJA, J AUGUST 29, 2024/kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 12:49:43

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