ITO, WARD - 6(2), KOLKATA, KOLKATA vs. JUBILEE INVESTMENTS & INDUSTRIES LTD., KOLKATA

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ITA 1470/KOL/2010Status: DisposedITAT Kolkata07 January 2021AY 2005-065 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme, rendering the appeal infructuous. Consequently, the appeal was treated as withdrawn by the Revenue.

What were the facts?

The Revenue filed an appeal against an order of the CIT(A) concerning various disallowances and additions made by the AO. The assessee had filed a declaration under the Vivad Se Vishwas Scheme, 2020, for settlement of the disputes.

What were the issues?

Whether the appeal has become infructuous due to the assessee opting for the Vivad Se Vishwas Scheme. The grounds of appeal raised by the Revenue pertained to various disallowances and additions related to business expenses, interest, and capital gains/losses.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 36(i)(iii)

AI-generated summary — verify with the full judgment below

(A) This appeal by Revenue is filed against the order of Learned Commissioner of Income Tax (Appeals)-VII, New Delhi, [“Ld. CIT(A)”, for short], dated 26.04.2010 for Assessment Year 2005-06. Grounds taken in this appeal of Revenue are as under:

“1.The Ld. CIT(A)-VII, New Delhi, had erred in law as well as on facts, in deleting the addition of Rs.25,00,000/- made u/s.40(a)(ia) without considering the nature of business of the assessee company vis-a-vis services rendered by the group of companies.

2.

The Ld. CIT(A)-VII, New Delhi, had erred in law as well as on facts, in directing the assessing officer to recalculate the disallowances of interest expenses of ITA No.-1470/K/2010. Jubilee Investments & Industries Ltd.

Rs.2,24,62,414/- u/s.36(i)(iii), as interest attributable to interest-free loans advanced to group companies, without considering the records available and failure on the part of the assessee company to file the requisitions called for by the AO and accepting the explanation of the assessee, without asking for a remand report as per provisions of Rule 46A of the I. T. Rules

3.

The Ld. CTT(A)-VII, New Delhi, had erred in law as well as on facts, in directing the assessing officer to allow loss- of Rs.3,54,66,463/- as long term capital loss for sale & purchase and sale of shares & securities of ZenSar Technologies Ltd., without considering the failure on the part of the assessee company during the course of assessment proceedings and restriction of SEBI Rule in respect of off-market trading.

4.

The Ld. CIT(A)-VII New Delhi, had erred in law as well as on facts, in directing the assessing officer to accept long term capital gain of Rs.2,33,34,157/- and net short term capital loss of Rs.1,62,19,020/- in respect of purchase and sale of shares of KEC International, accepting the fresh plea of the assessee company without remanding the matter to AO and violating Rule 46A of the I. T. Rules.

5.

The Ld. CIT(A)-VII, New Delhi, had erred in law as well as on facts, in directing the assessing officer to allow long term capital loss of Rs.74.40 lakhs in respect of shares of RPG Life Science Ltd., which were held as stock-in-trade and sold @ Rs.41/-; whereas the said shares held as investment and sold @ Rs,.56.75, without considering the modus operandi of the assessee company to reduce the tax effect.

6.

The Ld. CIT(A)-VII, New Delhi, had erred in law as well as on facts, in directing the assessing officer to allow capital loss of Rs.33.11 crores in respect of sale of unquoted shares of Hilltop Holdings, which were held as opening stock, preferred to sale the same out of investment portfolio thereby resulting unwarranted long term capital loss of Rs.33.11 crores, without considering the failure on the part of the assessee company to substantiate the sale value of unquoted share, to whom it was sold and as to why shares in stock were remained unsold as well as scheme of the assessee company to avoid tax effect.

7.

The Ld. CIT(A)-VII, New Delhi, had erred in law as well as on facts, in directing the assessing officer to allow the capital gain/loss as claimed by the assessee company

ITA No.-1470/K/2010. Jubilee Investments & Industries Ltd. without considering the effort and intention of the assessee company to minimize the tax effect.

8.

That the appellant craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing.”

(B) At the time of hearing, at the outset, the Ld. Authorized Representative (“Ld. AR”, for short) for the Assessee informed us that the assessee filed a declaration under the Vivad Se Vishwas Scheme, 2020 (“VSVS”, for short) electronically in Form 1, on November 21,2020 vide acknowledgement no. 736288081211120 for the settlement of subject matter of the disputes in this appeal. He drew our attention to letter dated January 04, 2021 filed from assessee’s side in Income Tax Appellate Tribunal (“ITAT”, for short) giving intimation of the same. A Copy of declaration filed by assessee in respect of the aforesaid VSVS was also enclosed with aforesaid letter dated 04/01/2021. At the time of hearing before us, the Ld. AR for assessee submitted before us that this appeal has become infructuous on account of VSVS, and may be treated as withdrawn. The learned Commissioner of Income Tax (Departmental Representative) [“Ld. CIT(DR)”, for short] did not express any objection to this. After due consideration, and in view of the foregoing; we are of the opinion that this appeal has become infructuous on account of aforesaid VSVS, and that this appeal may be treated as withdrawn by Revenue on account of the aforesaid VSVS. Accordingly, the appeal having become infructuous, is treated as withdrawn and, is hereby dismissed.

ITA No.-1470/K/2010. Jubilee Investments & Industries Ltd. (B.1) Before we part, we hereby clarify, by way of abundant caution, that if for some reason it is found by Revenue that the disputes under this appeal before us are not fully settled under the aforesaid VSVS, then Revenue will be at liberty to approach ITAT for restoration of this appeal, in accordance with law.

(B.2) With these directions, the aforesaid appeal of Revenue is dismissed, being treated as withdrawn.

(C) For statistical purposes, this appeal is dismissed.

This order was already pronounced on 06th January, 2021 in Open Court, in the presence of Representatives of both sides; after conclusion of the hearing.

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