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Income Tax Appellate Tribunal, BANGALORE BENCHES “C” BENCH: BANGALORE
Before: SHRI A.K. GARODIA & SHRI PAVAN KUMAR GADALE
O R D E R PER SHRI PAVAN KUMAR GADALE, JM : These are the appeals filed by the assessee against different orders of Commissioner of Income Tax (Appeals)-6 Bangalore passed u/s 143(3) and 250 of
We shall take up the and the grounds of appeal raised by the assessee are as under:
3. The Brief facts of the case are that the assessee is an individual and owns a stud farm and maintains race horses. There was a survey operations under Section 133A of the Act conducted on 14.12.2011 and the income tax survey team found the 3 & 137/Bang/2018 documents relating to sale of 22 acres of land to M/s. Unival Willows Pvt. Ltd. Subsequently notice under section 143(2) of the Act was issued. In compliance, the learned Authorized Representative appeared from time to time and furnished the details. The A.O. found the sale consideration adopted for computation of capital gains on sale of land by the assessee is not correct and has adopted Rs27,72,06,608/- and further the assessee had set off loss of Rs.67,77,881/- incurred in stud farm and certain clarifications were called. During the said financial year, 11 horses were transferred to the racing division and 5 were sold outside and accounted in the sales accounts. But the Assessing Officer found the sale proceeds of 11 horses are only Rs.13,19,329/- and whereas expenses claimed in respect of maintenance is much higher, which resulted in loss of Rs67,77,881/- The Assessing Officer dealt on the provisions of Section 74A of the Act and the facts of claim and high expenses incurred on horses accounted in the profit and loss account. The A.O. is of the opinion that the expenses incurred on horses in Stud Farm, transferred to the racing division is not an allowable claim, and disallowed the same and assessed the total income of Rs.27,91,74,212/- and passed order under Section 143(3) of the Act dt.22.07.2014.Aggrieved by the order, the assessee has filed an appeal before the CIT (Appeals). Whereas, The CIT (Appeals) has concurred with the action of the Assessing Officer in respect of the 4 & 137/Bang/2018 claim of set off of loss and confirmed the addition and partly allowed the appeal of the assessee. Aggrieved by the order of CIT (Appeals), the assessee has filed an appeal with the Tribunal.
4. At the time of hearing, the learned Authorized Representative submitted that the CIT (Appeals) has not considered the facts and details submitted in the course of hearing in respect of disputed claim, and substantiated his arguments with financial statements, computation of income, judicial decision and the Paper Book. Further the ld. AR submitted that the CIT (Appeals) has not provided adequate opportunity to submit clarifications on material filed and prayed for allowing the appeal. Contra, the ld. DR supported the orders of CIT (Appeals).
We heard the rival submissions and perused the material on record. Prima facie, the whole crux of the disputed issue is in respect of disallowance of set off of expenses.The assessee has two business divisions being Stud Farm and race horses. During the year the assessee has transferred 11 horses to racing division and 5 horses were sold outside and expenses claimed in respect of maintenance is much higher and resulting in loss of Rs67,77,881/-.The ld.AR demonstrated the financial statements depicting the facts and consideration in respect of transfer of horses and expenses. The ld. AR emphasized that the assessee has filed the information in appellate proceedings and no opportunity was provided by the CIT (Appeals) and 5 & 137/Bang/2018 has confirmed the addition. We, on perusal of the CIT (Appeals) order, found that the assessee has submitted the information, which cannot be disputed and there are no findings on the submissions. Further the CIT (Appeals) has not given the clarity on set off of loss and overlooked the nature of the business. Considering the facts and circumstances,we are of the opinion that the order passed by the LdCIT (Appeals) is cryptic. Accordingly, in the interest of justice, we set aside the order of the CIT (Appeals) and restore the entire disputed issue to the file of CIT (Appeals) to adjudicate afresh and pass a speaking and reasoned order. It is nevertheless to mention that, the assessee shall be provide adequate opportunity of hearing to substantiate the case with evidences and shall co-operate in submitting the information for early disposal of the appeal and the grounds of appeal of the assessee are allowed for statistical purposes.
Similarly, the assessee has filed appeal in for the A.Y. 2013-14, where the issues are similar and identical, and the decision in shall equally apply. Accordingly, we set aside the order of CIT (Appeals) with similar directions and allow the grounds of appeal of the assessee for statistical purpose .
6 & 137/Bang/2018 7. In the result, appeals of the assessee for the Asst Year 2012-13. &2013-14 are treated as allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page.