DCIT, NEW DELHI vs. M/S. GOLD PLUS GLASS INDUSTRY LTD., DELHI

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ITA 1521/DEL/2015Status: DisposedITAT Delhi19 June 2018AY 2010-114 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 CIT(A) investigated the matter by summoning the other party and verifying documents, concluding that the receipt was a genuine forfeited advance. The Tribunal found no reason to interfere with the CIT(A)'s findings.

What were the facts?

The Assessing Officer treated an advance forfeited of Rs. 8,40,83,000/- as income, as the assessee could not adequately explain the receipt. The assessee argued that the assessment was initiated late, hindering proper explanation.

What were the issues?

Whether the CIT(A) erred in deleting the addition on account of forfeited advance, and whether the CIT(A) complied with procedural rules during the appeal.

Which sections of the Income-tax Act were involved?

Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: SH. N. K. BILLAIYA & SH. SUDHANSHU SRIVASTAVA

Hearing: 18/06/2018Pronounced: 19/06/2018

This appeal filed by the revenue is preferred against the order of the CIT (A)-IV, New Delhi dated 29.12.2014 pertaining A. Y. 2010-11.

2.

The grievance of the revenue read as under :-

1. 1. Whether on the facts and circumstances of case & in law, the Ld. CIT(A) has erred on deleting the addition of Rs. 8,40,83,000/- made on account of disallowance of advance forfeited.

2. Whether on the facts and circumstances of the case the Ld. CIT (A) is right is not complying with the mandate of the rule 46A(1), 46A(2) and 46A93) of the It Rules, 1962. 3. Whether on the facts and circumstances of case the Ld. CIT(A) is right is deleting the addition of Rs. 8,40,83,000/- made by the A.O. on account of disallowance of advance forfeited.

3.

While scrutinizing the return of income and on perusal of depreciation chart the Assessing Officer noted that the assessee had deleted / sold land amounting to Rs. 8.40 crores. The Assessing Officer found that the assessee has not actually sold the land but has forfeited some advances and reduced the same from the value of the land reflected in the balance sheet. The assessee was asked to explain the nature of the receipt. On receiving no plausible reply, the Assessing Officer came to the conclusion that the assessee has not been able explain the receipts and accordingly treated Rs.8.40 crores as income of the assessee.

4.

Assessee carried the matter before the CIT (A) and vehemently stated that the Assessing Officer started the assessment proceedings from late in the fag end of the year when the assessment was getting barred by limitation, therefore, the assessee could not explain the receipts properly. The details were furnished before the CIT (A) and in order to ascertain the correct nature of the aforesaid receipt. The CIT (A) issued summons u/s. 131 of the Act to M/s. Prayag Buildtech Pvt. Ltd. M/s. Prayag Buildtech representative explained the nature of transaction alongwith supporting bank statements, P & L account and balance-sheet which were verified by the CIT (A) and after verifying all the documents. The CIT (A) was convinced that the receipt of Rs. 8.40 crores is the amount forfeited and has been properly explained. The CIT (A) accordingly directed the Assessing Officer to delete the addition of Rs. 83,00,000/-.

5.

Before us the DR could not point out any factual error in the findings of the CIT (A). We find that the first appellate authority after summoning the person has himself verify all relevant supporting documents and came to the conclusion that the receipt of Rs. 8.40 crores is genuine and is the forfeited by the assessee during the year under consideration we therefore do not find any reason to interfere with the finding with the CIT (A).

6.

In the result, the appeal filed by the revenue is dismissed.

Order pronounced in the open court on 19.06.2018.

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