SUKHWANI ASSOCIATIES,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX , PUNE
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “B”, PUNE
BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER
आयकर अपील सं. / ITA No.449/PUN/2025
Assessment Year : 2020-21
Sukhwani Associates,
208/2A, Sukhwani House,
Near Swaminathan Clinic,
Station Road, Pimpri,
Pune 411 018
Maharashtra
PAN : AAEFS7987E
Vs.
DCIT,
Central Circle-2(3),
Pune
Appellant
Respondent
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated
03.01.2025 of National Faceless Appeal Centre (NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Intimation Order dated
25.12.2021 passed u/s.143(1) of the Act.
Assessee has raised following grounds of appeal :
“1. The Commissioner of Income Tax(Appeals) 12, Pune ['CIT(A)']
erred in confirming the action of Assistant Director of Income Tax
(CPC), Banglore [hereinafter 'AO'] in passing the order u/s.143(1) of the Act without providing sufficient opportunity of being heard, as provided under second proviso to section 143(1) of the Act; hence the order passed by the AO is bad in law, ultravires the provisions of the Act, against the principal of natural justice and same shall be quashed.
Appellant by :
Shri Vardhaman L. Jain
Respondent by :
Shri Akhilesh Srivastva
Date of hearing
:
16.07.2025
Date of pronouncement
:
01.08.2025
Sukhwani Associates
The Appellant submits that the AO passed the order u/s.143(1) on 25.12.2021 i.e. within 3 days of notice issued on 22.12.2021 u/s 143(1)(a) of the Act, as against the statutory time limit of 30 days provided under second proviso to section 143(1) of the Act; hence the order passed by the AO is bad in law and same shall be quashed.
(a) The CIT(A) erred in confirming the action of AO in considering Total exempt income at 'Sr. No.5(d) of Schedule BP Computation of income from business or profession at Rs.NIL as against 'Total exempt income of Rs.2.90.30,325/- declared by the Appellant in its return of income at the said schedule. The AO thereby erred in considering the exempt income as taxable in the order passed u/s.143(1) of the Act.
The Appellant submits that the AO shall be directed to consider the Total Exempt income at Sr.No.5(d) of Schedule BP at Rs.2,90,30,325/- as declared by the Appellant in its return of income and reduce the same from total income under the head
"Income from Business or profession".
(b)
Without Prejudice to above, the CIT(A) failed to appreciate that even if the compulsory acquisition of land is treated as exempt in F.Y.2016-17 then also no gain would have arisen in the year under consideration on sale of TDR; if we consider the value of TDR in F.Y.2016-17 as cost of acquisition of TDR same would have resulted in a loss during the year under consideration and hence on the facts and circumstances of the case of the Appellant and in law the CIT(A) ought to have directed the AO to compute the correct/revised capital gain on sale of TDR and tax accordingly.”
Brief facts of the case are that the assessee is a Partnership firm engaged in the business of Promotor and Builder for commercial and residential complexes. Income of Rs.650/- declared in the e-return for A.Y. 2020-21 filed on 01.01.2021. In the return, assessee has claimed exempt income of Rs.2,90,30,325/-. CPC processed the return u/s.143(1)(a) of the Act vide order dated 25.12.2021 declined the exemption claimed by the assessee and assessed the income at Rs. Rs.2,90,30,970/-. Assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal. Sukhwani Associates
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4. Before us, Ld. Counsel for the assessee made detailed submissions and the crux of the same are as under :
(a)
That the order u/s.143(1)(a) of the Act deserves to be quashed as the assessee was not granted opportunity of hearing prior to making the alleged adjustment.
(b)
In the order u/s.143(1)(a) of the Act at page 5 in column 9(5) on one hand CPC has accepted the claim of exemption but in next column it has denied, which is prima-facie an apparent mistake and therefore order u/s.143(1)(a) of the Act deserves to be quashed.
(c)
On merits, it is contended that the assessee has received Transferable Development Rights (TDR) for the compulsory acquisition of land and value of compulsory acquisition of land is exempt but the assessee has not claimed the exemption in the year of receiving the TDR and finally when the TDRs have been sold assessee has claimed the exemption. However, complete details could not be placed properly before ld.CIT(A) and therefore prayer is made to restore the matter to the file of ld.
Juri ictional Officer for necessary verification.
On the other hand, ld. Departmental Representative supported the order of ld.CIT(A) but did not object if the matter is restored to the file of ld. JAO.
We have heard the rival contentions and perused the record placed before us. As far as the grounds raised by the assessee that order u/s.143(1)(a) deserves to be quashed as no opportunity was granted, we fail to find any merit because the assessee did not fill the columns in the return of income Sukhwani Associates
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properly which resulted into the alleged adjustment. Further, assessee was having sufficient opportunity to file an application u/s.154 and to upload the return with correct figures and CPC could have processed it and corrected the mistake. Instead of filing rectification application u/s.154 of the Act, assessee decided to file the appeal before ld.CIT(A).
Even otherwise, opportunity has been granted to the assessee and assessee has made detailed submission but still ld.CIT(A) was not satisfied about the claim of exempt income mentioned in the income-tax return and therefore the grounds challenging the validity of processing the return u/s.143(1)(a) of the Act are hereby dismissed.
So far as merits of the case are concerned, assessee on one hand claiming the exempt income from sale of TDR in the open market but in the audited profit and loss account the assessee has mixed both the transactions regarding the purchase and sale of TDR as well as purchase made at Kiwale and Lonawala. Before us, assessee filed the detailed paper book running into 141 pages giving the details of sale value of TDR received, TDR purchases and other incidental expenses at Rs.13.85 crore but then has debited indirect expenses of Lonawala and Mundhwa at Rs.9.68 crore approximately and finally the net profit has been arrived at Rs.2,90,30,324.72 which is the same profit as has been mentioned at page 130 from sale of TDRs. It is also claimed by the assessee that cost of the asset which was acquired during F.Y. 2016-17 has also not been deducted. Overall situation before us is that there is a mixed accounting of the regular business as well as the sale of TDR. Ld.CIT(A) has observed that eventhough the assessee was entitled to exemption in the A.Y. 2016-17 but then Sukhwani Associates
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assessee has sold the TDR in the open market and has earned profit which is not eligible for exemption. All these aspects need to be examined in depth by the ld. JAO before whom assessee shall furnish all the requisite details. Based on the submissions by the assessee and after providing reasonable opportunity of hearing, ld. JAO shall carry out the denovo assessment proceedings taking into consideration the exemption claimed by the assessee. Impugned order is set aside and grounds of appeal raised before us are remitted to the file of Ld. JAO for necessary verification.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Order pronounced on this 01st day of August, 2025. (VINAY BHAMORE)
ACCOUNTANT MEMBER
पुणे / Pune; दनांक / Dated : 01st August, 2025. Satish
आदेश क ितिलिप अ ेिषत / Copy of the Order forwarded to :
अपीलाथ / The Appellant. 2. यथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” बच, पुणे / DR, ITAT, “B” Bench, Pune.
गाड फ़ाइल / Guard File. आदेशानुसार / BY ORDER,
//// Senior Private Secretary
आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.