UNITECH HOLDINGS LTD.,NEW DELHI vs. DCIT, CIRCLE- 27(1), NEW DELHI

Before us, the ld. Sr. DR vehemently supported the order of the lower authorities and argued that even after admission of the additional evidences filed before the ld. CIT(A), the assessee has failed to justify the claim of loss on the transfer of shares as business loss. Ld. Sr. DR further submitted that the ld. CIT(A) has duly considered the fact that assessee is a NBFC and after appreciating the submission of the assessee has rightly held the business loss as capital loss which order deserves to be confirmed. He prayed accordingly.

After considering the arguments of the ld. Sr. DR and further after perusing the orders of both the lower authorities, we find that neither before the AO nor before the ld. CIT(A), the assessee could be able to substantiate the claim that the shares sold at a lower price were under commercial expediency. The assessee is a NBFC and claim of the assessee was that the investment was made in the group company M/s Gurgaon Recreation Park Ltd. (GRPL) as strategic investment in terms of the Assisted Sector agreement. The assessee in order to save the project undertaken by the company GRPL, had transferred its equity to Haryana State Industrial & Infrastructure Development Corporation Limited (HSIIDC) who threatened to cancel the allotment if it was not allotted 15% of the paid up capital of GRPL in the shape of sweat equity shares and thus incurred loss of Rs. 1,49,75,269/-. Since the assessee is regularly engaged in making strategic investment in group companies, the loss incurred due to transfer of shares under compelling circumstances to save the company and was a business loss. However, no evidences to establish that the shares were transfer under commercial exigencies were filed before the AO or before the CIT(A) therefore, both the authorities were of the view that the this was a capital loss.

In view of the above discussions, we are of the view that the matter needs to be considered afresh from the aspect of commercial exigency. Therefore, we set aside the orders of the lower authorities and remand back this issue to the file of the AO to examine the commercial exigencies of the assessee in transfer of shares to HSIIDC at loss and decide the same in accordance with the provisions of the Act. Needless to say, assessee be provided reasonable and sufficient opportunity of being heard.

In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in open court on 17.04.2025. /- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22.04.2025