Loading judgment…
Facts
The assessee filed an appeal against the order of the Deputy Commissioner of Income-tax. The assessee raised multiple grounds of appeal, including issues with the notice issued under Section 143(2), recomputation of long-term capital loss, rejection of revised computation of total income, and incorrect computation of additions. The assessee had opted for the Vivad-Se-Vishwas Scheme.
Held
The Assessing Officer (AO) and Dispute Resolution Panel (DRP) made an adjustment of INR 5,26,54,886 to the total income of the assessee. The assessee contested various aspects of the assessment, including the validity of the notice and the calculation of capital gains. The assessee's appeal was ultimately dismissed as withdrawn due to opting for the Vivad-Se-Vishwas Scheme.
Key Issues
The primary issues revolved around the validity of the notice issued under Section 143(2) for a non-resident assessee, the correctness of recomputing long-term capital loss, and the rejection of a revised computation of total income.
Sections Cited
143(3), 144C(13), 143(2), 120, 144B, 48, 112(1)(c), 234A, 234B, 234C, 270A
AI-generated summary — verify with the full judgment below
Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
Assessee by : Ms. Riddhi Maru Revenue by : Shri Krishna Kumar Date of Hearing 17.02.2025 Date of Pronouncement 20.02.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Deputy Commissioner of Income-tax, International Tax Circle-4(1)(1), Mumbai dated 28.07.2023 passed u/s 143(3) r.w.s. 144c(13) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 202-21.
The assessee has raised the following grounds of appeal: Ground no. 1- General ground On the facts and in the circumstances of the case and in law, the Ld. AO based on the directions of the Hon'ble Dispute Resolution Panel (DRP), erred in making adjustment of INR 5,26,54,886 to the total income of the Appellant.
A.Y. 2020-21 Rhodianyl. SAS 2 Ground No. 2: Notice issued under section 143(2) of the Act by NaFAC is bad in law On the facts and in circumstances of the case and in law, the Ld. DRP/AO erred in rejecting the contention of the Appellant that the notice issued under section 143(2) by the NaFAC is without any jurisdictions under section 120 of the Act, and thus the notice issued is invalid in terms of the provisions of the Act. The Ld. AO/DRP erred in not considering the fact that since the Assessee being a non-resident, falls under the International tax charge which is specifically excluded from the Faceless. Assessment Scheme under section 144B of the Act. The Ld. AO/DRP erred in not considering that since the NaFAC does not have any jurisdiction under section 120 of the Act for initiating the proceedings for the Assessee (which is under international tax charge), the assessment proceedings are void-ab-initio and are to be considered "invalid" and "without jurisdiction". The Appellant wishes to raise that the final assessment order passed by the Ld. AO and all proceedings consequent to the final assessment order are also illegal and bad in law and liable to be quashed.
Ground No. 3: Recomputation of long-term capital loss Without prejudice to Ground no. 2, on the facts and in the circumstances of the case and in law, the Ld. DRP / the Ld.AO erred in re-computing the long-term capital loss to INR 80,92,455 as against INR 6,07,47,342 claimed by the Assessee in revised computation of total income and thereby making an addition of INR 5,26,54,886 to the total income The Ld. DRP/ the Ld.AO erred in disregarding the computation of the long-term capital loss provided by the Assessee based on the contention that in case of unlisted shares of an Indian Company, the provisions of section 112(1)(c) of the Act are applicable and not the provisions of first proviso to section 48. The Ld. DRP/the Ld.AO erred in not considering the fact that section 48 of the Act is a computation mechanism whereas section 112 provides the tax rates for the amount of Capital gains as computed in accordance with section 48. In case the computation under section 48 results in a loss (after giving effect to the first or the second proviso), there is no need to recompute the gains and apply the rates under section 112(1)(c)(iii). The Ld. DRP/Ld. AO erred in considering the whole transaction of the Appellant as a single sale contract-based transfer and considering the whole taxable transaction in the case as a "net" gain scenario. The Appellant therefore submits and prays that the computation provided by the Appellant with respect to long-term capital loss be accepted.
Ground No. 4: Rejection of revised computation of total income Without prejudice to Ground no. 2, on the facts and in the circumstances of the case and in law, the Ld. DRP/AO erred in rejecting the revised computation of total income filed by the Assessee during the course of scrutiny assessment and thereby rejecting claim of the Assessee to reduce capital gains as per the revised computation of income.
A.Y. 2020-21 Rhodianyl. SAS The Ld. DRP/ the LD.AO erred in rejecting claim of the Assessee to reduce capital gains as per the revised computation of total income by placing reliance on the decision of the Apex Court in the case of Goetze (India) Ltd. v. CIT (2006) 284 ITR 323. The Appellant therefore submits and prays that the Ld. AO be directed to consider the revised computation of total income filed during the course of scrutiny assessment.
Ground No. 5: Incorrect computation of addition to the total income Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. AO has erred in having rejected the revised computation of total income, considering the sales consideration and long-term capital loss as per the revised computation of total income while computing the amount of addition to the total income of the Appellant Without prejudice to the above, the Ld. DRP/Ld.AO, having rejected the revised computation of total income filed during the course of scrutiny assessments, ought to have considered the sales consideration and long- term capital loss as per the revised ROI while computing the addition to total income. Without prejudice to the above, the Appellant prays that the Ld. AO be direeted to recompute the amount of addition to the Total Income of the Assessee by considering the correct amount of sales consideration and long-term capital loss.
Ground No. 6: Income from capital gains On the facts and circumstances of the case and in law, the Ld. AO has erred in overstating the total income of the Appellant to Rs. 93,21,05,260 in the computation sheet to the order. The Appellant prays that the AO be directed to compute the total taxable income as Rs. 92,43,78,331 instead of Rs. 93,21,05,260.
Ground No. 7: Interest under section 234A On the facts and in the circumstances of the case and in law, the Ld.AO has erred in levying interest of INR 1,77.927 under section 234A of the Act. The Ld.AO erred in not considering the fact that the Appellant had filed the original return of income for the assessment year 2020-21 on 15.02.2021 which was within the due date. The Appellant prays that the Ld. AO be directed to delete the interest levied under section 234A after considering all the facts available on record.
Ground No. 8: Interest under section 234B On the facts and in the circumstances of the case and in law, the LAO erred in levying interest of INR 23,72,360 under section 234B of the Act. The Appellant prays that the LD.AO be directed to delete the interest levied under section 234B of the Act after considering all the facts and circumstances of the case.
Ground No. 9: Interest under section 234C A.Y. 2020-21 Rhodianyl. SAS On the facts and in the circumstances of the case and in law, the Ld.AO erred in levying interest of INR 59,309 under section 234C of the Act however interest under section 234C as per returned income is Nil. The Appellant prays that the Ld.AO be directed to delete the interest levied under section 234C of the Act as per law.
Ground No. 10: Non-receipt of Refund On the facts and in the circumstances of the case and in law, the Ld.AO erred in considering the amount of refund already issued as INR 59,80,526 whereas the Appellant has not yet received any refund. The Appellant prays that the Ld.AO be directed to be directed to revise the computation of tax liability issued along with the order under section 143(3) of the Act.
Ground No. 11: Penalty proceedings On the facts and in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceeding under section 270A of the Act. The Appellant prays that the LL. AO be directed that to drop the penalty proceedings. All of the above Grounds of Appeal
are independent of and without prejudice to each other.
3. At the outset, Ld. AR has submitted that the assessee has opted for the Vivad-Se-Vishwas Scheme, 2024 (VSVS, 2024). Form No. 3 has been filed and Form No. 4 is awaited.
4. In view of the above facts, the appeal of the assessee is dismissed as withdrawn with liberty to the assessee to request for the revival in case his application under VSVS, 2024 does not become final.
5. In the result, the appeal of the assessee is dismissed as withdrawn. Order pronounced in the open court on 20.02.2025.