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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI M. BALAGANESH & SHRI KULDIP SINGH
composite order.
Appellant Shri Ram Urban Infrastructure Ltd., Mumbai (hereinafter referred to as the assessee) and appellant DCIT, 8(2)(1), Mumbai (hereinafter referred to as the Revenue) by filing aforesaid cross appeals sought to set aside the impugned order 12.03.2018 passed by Commissioner of Income Tax (Appeals)
[hereinafter referred to as the Ld. CIT(A)], on the grounds inter alia that:
Assessee’s appeal: ITA No:4460/M/2017 (A.Y. 2012-13) “1. The Hon'ble Commissioner of Income Tax (Appeal) has erred in confirming the Order of Assessing Officer in reducing WIP on account of proportionate disallowance of interest expense of Rs.1,69,83,512/- capitalised to WIP mainly incurred on account of Secured Loans on the pretext that interest free Loans and Advances has been extended from Secured Loans by the appellant. It is submitted that such proportionate interest disallowance worked out by Assessing Officer and confirmed by the Hon'ble Commissioner of Income Tax (Appeal) should be deleted and necessary direction should be given in this regard.
2. The Hon'ble Commissioner of Income Tax (Appeal) has erred in confirming the Order of Assessing Officer for calculating Capital gains on sale of Land at Rs. 1,41,03,89,6407- as against calculated by the Appellant at Rs. 63,73,08,316/- on the proportion to percentage of revenue
3 & ors. M/s. Shree Ram Urban Infrastructure Ltd. booked by the appellant during the year under consideration. It is submitted that such calculation of capital gains of sale of land by the Learned Assessing officer and as confirmed by the Hon'able Commissioner of Income Tax (Appeal) is without considering the facts and circumstance of the case. It is submitted that the calculation of capital gains offered by the Appellant shall be accepted and the addition made by the learned Assessing officer is unjustifiable therefore the same should be deleted.
3. Without Prejudice to above grounds the Hon'ble Commissioner of Income Tax (Appeals) has erred in not considering the Additional Grounds raised
by the Appellant during the Appeal Proceeding merely staring the reason that this additional ground does not arise from the assessment order neither was raised during the course of assessment proceedings. Further Additional Grounds filed by the Appellant states if the Total capital gain on Land is calculated after reducing percentage of Area Sold to Total Area then the same treatment shall be given for the claiming land cost as business expense i.e. by applying only first layer. It is further submitted that your appellant has consistently followed this stand of offering the capital gain on land and claiming land cost expense by applying percentage of Area Sold to Total Area i.e. by applying only first layer. It is submitted that your appellant has accepted this concept of first layer and has calculated Capital gain and Land Cost for A.Y. 2013-14 during assessment proceedings and has filed revised return of income for A.Y. 2014-15 and A.Y. 2015-
16. Further return for A.Y. 2016-17 has also been filed applying the first layer while calculating Capital gain on Land and Land Cost expense. It is therefore prayed to give necessary directions in this regard.
4. Without Prejudice to above grounds, it is prayed to your honour to allow your appellant to offered complete capital gain of Rs.474,62 crores and claims Land cost as expense of Rs. 519.86 crores. It is therefore prayed to give necessary directions in this regard.”
Revenue’s appeals:
ITA Nos.3033/M/2018 (A.Y. 2013-14) & (A.Y. 2014-15)
“1. Whether on the facts and circumstances of the case the Ld. CIT(A) is justified in deleting the addition of Rs.351.26 Cr and 35.48 Cr being 61.89% and 68.12% for 4 & ors. M/s. Shree Ram Urban Infrastructure Ltd. A.Y.2013-14 & 2014-15 respectively of alleged unaccounted income of Rs.567.57 Cr and Rs.567.57 Cr for A.Y.2013-14 & 2014-15 respectively on account of under valuation of sales as clearly brought out by the AO in the assessment order without properly appreciating the factual and legal matrix of the case.
2. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) is justified in deleting the addition of Rs.92,08,96,851/- and Rs.9,45,46,957/- for A.Y.2013-14 & 2014-15 respectively made on account of additional business income as clearly brought out by the AO in the assessment order without properly appreciating the factual and legal matrix of the case. 3. "Whether on the facts and circumstances of the case the Ld. CIT(A) is justified in deleting the addition of Rs.91,30,57,261/- and Rs.6,38,06,624/- for A.Y.2013-14 & 2014-15 respectively made on account of capital gain computed on the basis of total area sold upto the year at 7,12,899 sqft and 7,32,617 sqft for A.Y.2013-14 & 2014- 15 respectively computed and taken by the Assessing Officer as against the total area sold shown by the assessee at 5,26,366, as clearly brought out by the AO in the assessment order without properly appreciating the factual and legal matrix of the case.
2. The appellant craves leave to amend or alter any ground or add a new ground that may be necessary.
3. The appellant prays that the order of CIT (A) on the above grounds be set aside and that of the AO restored.”
Briefly stated facts necessary for adjudication of the controversy at hand are : in Assessment Year (A.Y.) 2012-13 the Assessing Officer (AO) made a proportionate disallowance of interest expenses of Rs.1,69,83,512/- capitalized to the WIP primarily incurred on account of secured loans on the ground that interest free loans and advances have been extended in a standard format of secured loans by the assessee. The AO also made Rs.63,73,08,316/-) on account of additional long term capital gain (LTCG) not offered by the assessee during the year under consideration and thereby framed the assessment at total income of Rs.70,93,51,350/- under section 143(3) of the Income Tax Act (the Act).
In A.Y. 2013-14 & A.Y. 2014-15 the AO made addition of Rs.351.26 crores and Rs.35.48 crores being Rs.61.89 crores and Rs.68.14 crores respectively. The AO also made addition of Rs.92,08,96,851/- and Rs.9,45,46,957/- on account of additional business income for A.Y. 2013-14 and 2014-15 respectively and thereby framed the assessment under section 143(3) of the Act.
Assessee carried the matter before the Ld. CIT(A) by way of filing appeal. The Ld. CIT(A) confirmed the addition by dismissing the appeal for A.Y. 2012-13.
However, the Ld. CIT(A) deleted the addition in question for A.Y. 2013-14 & 2014-15 by partly allowing the appeal. Feeling aggrieved with the impugned orders passed by the Ld. CIT(A) for A.Y. 2012-13, the assessee has come up before the Tribunal by way of filing the present appeal. For A.Y. 2013-14 & 2014-15 aggrieved with the impugned orders passed by the Ld. CIT(A) present appeals.
Despite issuance of the notice to the assessee none appeared on behalf of it, so the Bench decided to decide these appeals on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
At the very outset, it is brought to the notice of the Bench by the Ld. D.R. for the Revenue that winding up proceedings against the assessee has already been initiated by the Hon’ble Bombay High Court and placed on record order passed by National Company Law Appellate Tribunal (NCALT) containing all these facts.
In view of the matter, we are of the considered view that under section 94A of the Act “Winding up” means winding up under Insolvency & Bankruptcy (I & B) Code, 2016. Legislator by way of amendment in the I&B Code, 2016 made it clear that the word “winding up” mentioned in the Companies Act, 2013 is Code, 2016.
So we are of the considered view that once the winding up proceedings have already been initiated against the assessee present appeal by the assessee as well as Revenue are not maintainable in the present format as the liquidator has not come up before the Tribunal despite numerous notices to file the amended form 36A in the assessee as well as Revenue’s appeal. So in these circumstances present appeals are not maintainable in the present format.
Resultantly, aforesaid cross appeals are dismissed being not maintainable at this stage, with liberty to file fresh appeals in proper format duly verified by the person authorized to file the return of income or to get the present appeals restored by moving an application.
Order pronounced in the open court on 22.03.2022.