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Facts
The appeals are cross-appeals for A.Y. 2015-16 filed by Ansal Properties and Infrastructure Pvt. Ltd. (assessee) and the ACIT (revenue). The core disputes involve additions related to notional Annual Lettable Value (ALV) for properties held as stock-in-trade, under litigation, self-occupied, and basement areas, as well as the taxability of income from the sale of windmills and the disallowance of employee contributions to PF/ESI.
Held
The Tribunal allowed the assessee's grounds on notional ALV for properties held as stock-in-trade and self-occupied, based on previous ITAT orders. Issues regarding ALV for properties under litigation and employee contributions to PF/ESI were remanded to the AO for re-adjudication and factual verification. The revenue's challenge to the 50% ALV for basement areas was dismissed, upholding the CIT(A)'s estimation. The CIT(A)'s order on windmill income was modified to allow a deduction for expenses incurred during the initial three-month period, and the revenue's appeal regarding the deletion of section 43CA addition was allowed.
Key Issues
1. Whether notional Annual Lettable Value (ALV) can be applied to properties held as stock-in-trade, properties under litigation, self-occupied properties, and basement areas. 2. The taxability of revenue from windmill operations between the agreement to sell and final slump sale, and the allowance of corresponding expenses. 3. The admissibility of employee contributions to PF and ESI deposited beyond statutory due dates but before the income tax return filing due date. 4. The application of Section 43CA concerning lesser sale consideration for property transfers.
Sections Cited
Section 22 of Income Tax Act, 1961, Section 36(1)(va) of Income Tax Act, 1961, Section 43CA of Income Tax Act, 1961, Section 139(1) of Income Tax Act, 1961, Section 143(3) of Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
O R D E R PER M. BALAGANESH, A. M.: 1. This appeal in filed by the revenue for A.Y. 2015-16 arises out of the order by ld CIT(A)-I, New Delhi in appeal No. 425/17-18 dated 10.01.2019 (hereinafter referred to as ld CIT(A) in short) against the order of assessment passed u/s Page | 1 & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27.01.2018 by the ACIT, Circle-2(2), New Delhi (hereinafter referred to as ld. AO).
As these are cross appeals, they are taken up together and disposed of by this common order for the sake of convenience.
The assessee has raised the following grounds of appeal:-
―1. That on facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals)-1, New Delhi [briefly "the CIT(A)"] did not appreciate the ratio of Chennai Properties & Investments Ltd. v. CIT (2015) 373 ITR 673 (SC) in upholding the addition on account of notional annual letting value made under section 22 of Income tax Act, 1961 ('the Act'). 1.1 That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that closing stock of business of real estate is outside the ambit of section 22 of the Act. 2 That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that out of total inventory of constructed area of 4,95,300.70 sqft in 35 projects, area of 23,744.56 sqft was actually let out and rental income derived there-from was duly declared in P&L A/c and was assessed to tax. 2.1 That on facts and circumstances of the case and in law, the CIT(A) has erred in sustaining addition of Rs.82,78,816/-being notional ALV of 23744.56 sq.ft. area of inventory of closing stock actually let out allegedly for the reason that the issue was not separately raised in the grounds of appeal
3. That on facts and circumstances of the case and in law, the CIT(A) has erred in assessing notional ALV of closing stock in respect of areas under legal dispute or otherwise, for such areas could neither be sold nor let out. 3.1 That on facts and circumstances of the case and in law, the CIT(A) has erred in sustaining addition of Rs.55,26,298/- being notional ALV of 15,085.28 sq.ft. area of closing stock inventory under litigation allegedly for the reason that the issue was not separately raised in the grounds of appeal.
4. That on facts and circumstances of the case and in law, the CIT(A) has erred in upholding addition of notional ALV in respect of inventory under self occupation of the Appellant.
5. That on facts and circumstances of the case and in law, the CIT(A) has erred in holding that transfer of land or building made during financial year 2013- 14 and registered after 1.4.2014 would be governed by section 43CA of the Act & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd
5.1 That on facts and circumstances of the case and in law, the CIT(A) has erred in not appreciating that since procedure laid down in section 43CA of reference to Valuation Officer was not followed, therefore, addition of Rs.6,38,41,629/- was not sustainable. 5.2 That on facts and circumstances of the case and in law, the CIT(A) has erred in not following the binding decision of ITAT Delhi Bench in ITO v. Aditya Narain Verma (HUF) (2017) 187 TTJ 476. 6.1 That on facts and circumstances of the case and in law, the CIT(A) has erred in sustaining the addition of Rs.1,89,54,323/- in respect of revenue from windmill. 6.2 Without prejudice, on facts and circumstances of the case and in law, the CIT(A) has erred in taking gross revenue from windmill and not considering expenses incurred against it. Therefore, addition should have been restricted to Rs.1,43,67,779/-.‖ 4. The revenue has raised the following grounds of appeal:-
―1. On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in directing the AO to take the ALV value of the basement area at 50% of the ALV of the properties located at ground floor and above.
2. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs.2,13,52,716/- made by the AO on account of payment of Employees' Contribution to PF and ESI deposited beyond the due date u/s 36(1)(va) of the I.T. Act.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.6,38,41,629/- u/s 43CA made by the AO on account of lesser sale consideration on transfer of properties than the value adopted by the stamp duty valuation authority.
On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in restricting the addition of Rs.5,74,71,115/- to Rs.1,89,54,323/- (being the revenue for the period 01.04.2014 to 30.06.2014) made by the AO on account of Revenue from Wind Mill sold to M/s Rugby Renergy Pvt. Ltd. For the following reasons: a) The assessee has itself admitted that the sale of Wind Mill to M/s Rugby Renergy Pvt. Ltd. had not been completed during the financial year. b) The agreement did not come into force during the current financial year and clause XI of the said agreement cannot be said to have been executed.
& 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd c) The assessee was the owner of the assets during the financial year and therefore the revenue from the Wind Mills is attributable to the assessee company for the entire financial year.‖ 5. The Ground No.1 raised by the assessee was stated to be not pressed by the ld. AR. The same is reckoned as a statement made from the Bar and accordingly Ground No.1 raised by the assessee is hereby dismissed as not pressed.
6. The Ground Nos.1.1., 2 & 2.1. raised by the assessee are challenging the addition made on Annual Lettable Value (ALV) of properties where rent has been considered as business income.
6.1. We have heard the rival submissions and perused the materials available on record. The assessee is a company engaged in the business of development / construction and sale of flats, plot etc. During the year under consideration, the assessee had filed its return of income on 30.11.2015 declaring taxable income of Rs 27,17,72,820/-. It is not in dispute that the assessee had held properties as stock in trade and the same are classified into following categories :- a) Flats open for sale – notional rental income to be added in the hands of the assessee ; b) Flats that were actually let out by the assessee – rental income already offered to tax by the assessee in the return ; c) Flats that were used for the purpose of business by the assessee – no notional rental income could be added ; and d) Flats under litigation for which approval was not granted by Municipal Corporation of Delhi (MCD) – no rental income could be added.
6.2. At the outset, both the parties before us fairly submitted that the issue raised in Ground Nos. 1.1., 2 and 2.1. by the assessee are already covered in favour of the assessee by the order of this Tribunal in assessee‘s own case in & 5011 /Del/ 2017 and ITA Nos. 5679 & 5680/Del/2017 for Asst & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd Years 2013-14 and 2014-15 (cross appeals) respectively dated 23.2.2022. The relevant operative portion of the said order is reproduced hereunder:-
―22. Facts on record show that the assessee has shown certain spaces/units which are given on rent and has been declared under the Schedule Sales and other income of the accounts. Copy of such account was filed before the Assessing Officer. Since no findings have been given in the assessment order by the Assessing Officer, the issue was raised by the assessee before the Id. CIT(A).
Before the ld. CIT(A), the assessee furnished assessment orders for Assessment Year 2011-12 and 2012-13 wherein the Assessing Officer has excluded the properties which have been given on rent for calculation of notional rental value. Following the findings given in Assessment Years 2011-12 and 2012-13, the Id. CIT(A) directed to exclude such properties.
Since the ld. CIT(A) has followed the findings of the Assessing Officer himself given in Assessment Years 2011-12 and 2012-13, we do not find any merit in this grievance of the Revenue. Ground No. 1(b) is dismissed.‖ 6.3. Respectfully following the aforesaid decision, the Ground Nos. 1.1, 2 & 2.1. raised by the assessee are allowed.
7. The Ground Nos. 3 & 3.1. raised by the assessee are determination of ALV in respect of property under litigation.
7.1. We have heard the rival submissions and perused the materials available on record. Both the parties before us fairly submitted that the issue raised in Ground Nos. 3 & 3.1. by the assessee are already covered in favour of the assessee by the order of this Tribunal in assessee‘s own case in & 5011 /Del/ 2017 and ITA Nos. 5679 & 5680/Del/2017 for Asst Years 2013-14 and 2014-15 (cross appeals) respectively dated 23.2.2022. The relevant operative portion of the said order is reproduced hereunder:- ―5. Ground No. 2 of assessee's appeal relates to the non-exclusion of ALV of spaces/flats under litigation/disputes admeasuring 7511 sq. ft in Jyoti Shikar Building.
Briefly stated, the facts of the case are that the Assessing Officer has included ALV in respect of 23 spaces/flats measuring 7511 sq ft in Jyot Shikar Building, Janakpuri which was completed 20 years back but was & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd not approved by the Municipal Corporation of Delhi for occupation on the ground that the same were not as per the actual plan.
The assessee strongly contended that notional ALV in respect of such spaces needs to be excluded, as the same has not been approved by the MCD for occupation.
8. The ld. CIT(A) dismissed this ground of the assessee following the findings given in earlier assessment years.
9. Before us, the Id. counsel for the assessee prayed for restoration of this grievance to the Assessing Officer as the assessee is now in a position to furnish necessary documentary evidences in support of its claim.
We find that since the evidences have not been submitted before the lower authorities, this grievance has been decided against the assessee. In the interest of justice and fair play, we restore this issue to the file of the Assessing Officer. The assessee is directed to furnish necessary documentary evidences to justify its claim of non inclusion of ALV of storage of 7511 sq. ft in Jyoti Shikar, Janakpuri. The Assessing Officer is directed to examine the evidences and decide the issue afresh. Ground No. 2 is allowed for statistical purposes.‖ 7.2. Respectfully following the aforesaid decision, the Ground Nos. 3 & 3.1. raised by the assessee are allowed for statistical purposes by restoring to the file of ld. AO.
The Ground No. 4 raised by the assessee is determination of ALV in respect of property under self-occupation.
8.1. We have heard the rival submissions and perused the materials available on record. Both the parties before us fairly submitted that the issue raised in Ground No. 4 by the assessee is already covered in favour of the assessee by the order of this Tribunal in assessee‘s own case in & 5011 /Del/ 2017 and ITA Nos. 5679 & 5680/Del/2017 for Asst Years 2013-14 and 2014-15 (cross appeals) respectively dated 23.2.2022. The relevant operative portion of the said order is reproduced hereunder:- ―15. Facts on record show that the Assessing Officer has included ALV of certain properties which have been claimed by the assessee to be occupied for its own business purposes. These properties have been claimed to have been used for storage purposes or for office purposes. The Assessing Officer has not accepted & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd the claim of the assessee and made addition in respect of notional value of the ALV.
Before the Id. CIT(A), the assessee contended that it has filed evidences in support of usage of spaces by the assessee alongwith copies of property tax, bills issued by the NDMC, New Delhi.
After considering the evidences and after perusing the decision given in Assessment Year 2010-11, 2011-12 and 2012-13, the ld. CIT(A) directed the Assessing Officer to exclude the ALV of the said 12 properties.
Before us, the ld. DR strongly supported the findings of the Assessing Officer.
Per contra, the ld. counsel for the assessee relied upon the decision of the Id. CIT(A).
In our considered opinion, section 22 of the Act itself excludes ALV of such properties of which the assessee is owner and has occupied for the purpose of any business or profession carried on by him. Since the assessee has furnished necessary evidences which have been duly verified by the Id. CIT(A), we to interfere with the findings of the CIT(A). Ground No. 1(a) is dismissed.‖ 8.2. Respectfully following the aforesaid decision, the Ground No. 4 raised by the assessee is allowed.
The Ground Nos. 5 to 5.2. raised by the assessee were stated to be not pressed by the ld. AR. The same is reckoned as a statement made from the Bar and accordingly Ground Nos. 5 to 5.2. raised by the assessee are hereby dismissed as not pressed.
10. The Ground Nos. 6.1. &6.2. raised by the assessee are challenging the action of the ld CIT(A) in sustaining the addition of business income in respect of sales for the period of first three months (1.4.14 to 30.6.14) on a proportionate basis. The inter connected issue involved therein is Ground No. 4 raised by the revenue challenging the action of the ld. CIT(A) in deleting the addition made by the ld. AO on account of sales for the whole year and sustaining it only for first 3 months.
10.1. We have heard the rival submissions and perused the materials available on record. The assessee company was the owner of 8 windmills in Gujarat. The assessee company decided to sell the windmills to M/s Rugby Renergy P Ltd and & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd for the said purpose entered into an agreement to sell dated 22.07.2014. As per the said agreement, the rights in the windmills were transferred in favour of M/s Rugby Renergy P Ltd and it was specifically agreed between the parties vide Clause 5(xi) of the agreement that the revenue from operation of windmills shall belong to the buyer i.e Rugby Renergy P Ltd from 1.7.2014 onwards. Subsequently the said agreement was revised on 29.12.2014 . We find that ultimately both the agreements stood culminated into final slump sale agreement dated 23.3.2015. We have perused the following agreements placed on record for the purpose of adjudication of this dispute:- a) Agreement to sell dated 22.7.2014 enclosed in Pages 160 to 170 of the Paper Book b) Agreement to sell dated 29.12.2014 enclosed in Pages 171 to 180 of the Paper Book c) Slump Sale Agreement dated 23.3.2015 enclosed in Pages 181 to 195 of the Paper Book 10.2. The ld. AO in para 7.7 of his order had held that since the sale of windmill was not completed in the year under consideration, the entire revenue from windmill net of its expenses amounting to Rs 5,74,71,115/- is taxable in the hands of the assessee company. The ld. CIT(A) in Para 11.4. of his order held that Clause 5(xi) of the Agreement to sell dated 22.7.2014 stipulates transfer of revenue from windmill to be effective from 1.7.2014 and accordingly the revenue from operation of windmills upto 30.6.2014 amounting to Rs 1,89,54,323/- would become taxable in the hands of the assessee company and remaining 9 months revenue would be taxable in the hands of the buyer i.e. Rugby Renergy P Ltd. Against this finding, both the assessee as well as the revenue are in appeals before us. 10.3. It is a fact that the assessee had not offered any revenue from windmills net of expenses during the year under consideration to tax on the ground that the buyer i.e Rugby Renergy P Ltd had offered the entire revenue from & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd operations of windmills and its related expenses for the whole year to tax in its income tax returns. We find that the ld. CIT(A) had gone by the specific clause 5(xi) of the Agreement dated 22.7.2014 and had held that the revenue from operation of windmills for the period 1.4.2014 to 30.6.2014 (first three months) would be taxable in the hands of the assessee company. We find that while holding so, the ld. CIT(A) did not give corresponding deduction for expenses incurred for the same period of 3 months under the head ‗income from business‘. In our considered opinion, the assessee would be duly entitled for deduction of expenses incurred qua the windmill unit for the period of 1.4.2014 to 30.6.2014 which had been worked out at Rs 45,86,544/-, subject to verification of the figures stated thereon by the ld. AO . Hence the ld. AO is directed to examine the veracity of the figure of Rs 45,86,544/- stated by the assessee and grant deduction accordingly. The assessee is hereby directed to furnish the break up of figures of Rs 45,86,544/- before the ld. AO and prove that the same were incurred for the purpose of windmill division and pertains to the period of first three months of the year under consideration. 10.4. Further we find that pursuant to the agreement dated 22.7.2014, both the buyer and seller had undertaken various acts which demonstrates that the beneficial ownership of the windmills got transferred in favour of the buyer by the seller i.e. the assessee herein. The legal ownership alone stood transferred by the assessee in favour of the buyer by way of Slump Sale Agreement dated 23.3.2015 but the beneficial ownership already stood transferred on 1.7.2014 which is evident from the following acts carried out by the parties :- a) Payments received through regular banking channels by the assessee from the buyer as under:- 23.07.2014 Rs 3,00,00,000/- Vide RTGS 04807630001562 17.10.2014 Rs 2,00,00,000/- Vide HDFC Bank Cheque No. 000044 31.12.2014 Rs 1,00,00,000/- Vide HDFC Bank Cheque No. 000154 31.12.2014 Rs18,00,00,000/- Vide IDBI Loan Disbursement 27.3.2015 Rs 4,50,00,000/- Vide RTGS 0127103000015464 23.3.2015 Rs 1,50,00,000/- Vide HDFC Bank Cheque No. 000181 20.5.2015 Rs 1,18,50,000/- Vide RTGS Page | 9 & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd
22.5.2015 Rs 39,50,000/- Vide HDFC Bank Cheque No. 000194 21.8.2015 Rs 1,36,11,653/- Vide HDFC Bank Cheque No. 000106 21.8.2015 Rs 73,88,347/- Vide HDFC Bank Cheque No. 000110 b) For enabling the buyer to avail loan from IDBI Bank, the assessee gave No Objection Certificate (NOC) to IDBI Bank on 18.9.2014 ; IDBI Bank issued Letter of Intent for sanction of loan to the buyer on 3.11.2014 and No Dues Certificate issued by IDBI Bank to the assessee on 5.1.2015. c) Lease deeds for purchase of land were entered into on 28.1.2015 and 12.2.2015. d) Certificate issued by Windmills Maintenance Agency M/s Suzlon Global Services Ltd substituting the name of the buyer in the place of the assessee company on 24.11.2014. e) Insurance Policy of Windmills taken in the name of the buyer on 12.1.2015. f) Particulars of communication by the assessee to various agencies for transferring power purchase agreements in the name of the buyer dated 16.2.2015 and 17.2.2015. g) The buyer of Windmills i.e Rugby Renergy P Ltd started making payment of interest on outstanding loan amounts taken by the assessee for purchase of the said windmills vide Clause 5(XI)(B) of the Agreement dated 22.7.2014. It is a fact that the interest cost stood credited in the books of the assessee company which has been accepted by the ld. AO. While this is so, the ld. AO would not be justified in holding that the agreement dated 22.7.2014 was not acted upon by the parties.
10.5. We find that the revenue clause as agreed in the Agreement dated 22.7.2014 is operative and forms integral part of the Slump Sale Agreement dated 23.3.2015. This goes to prove that the original agreement dated & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd 22.7.2014 was acted upon by the parties and it finally stood culminated into Slump Sale Agreement.
10.6. In view of the aforesaid observations, we hold that the order of the ld. CIT(A) requires to be modified only to the limited extent of granting deduction for expenses incurred during the period 1.4.2014 to 30.6.2014 in the windmill division and other findings given by the ld. CIT(A) does not require any interference. The Ground Nos. 6.1. & 6.2. raised by the assessee and Ground No. 4 raised by the revenue are disposed of in the abovementioned terms.
The Ground No.1 raised by the revenue is challenging the action of the ld. CIT(A) in determining the ALV of the property at 50% for basement area in respect of properties located at ground floor on the ground that it is arbitrary in nature.
11.1. We have heard the rival submissions and perused the materials available on record. We find that the ld. AO had sought to assess the rental income for the basement area of the property on notional basis by determining ALV of the property on the basis in the following manner:-
SI. Name of Building/Project Unsold Unit Rate per Sqft No Area per month . (In Sqft.) 1 Ansal Chamber-I 264 Sq. Ft. 44.10 1,39,709 2 Sushant Vyapar Kendra 912 Sq. Ft. 33.60 3,67,718 3 Sushant Vyapar Kendra- 2,569 Sq. Ft. 33.60 Basement 10,35,821 4 Sushant Shopping Arcade 6,046 Sq. Ft. 33.60 24,37,747 5 Palam Vyapar Kendra 7,202 Sq. Ft. 33.60 29,03,689 6 Palam Triangle 781 Sq. Ft. 33.60 3,14,899 7 Peach Tree 596 Sq. Ft. 16.80 1,20,154 8 Time Square 9,297 Sq. Ft. 38.85 43,34,448 9 Sushant Estate EWS 205 Sq. Ft. 11.55 28,413 10 Ansal Plaza-Gurgaon 13,104 Sq. Ft. 33.60 52,83,533 11 Roman Court Sonepat 6,943 Sq. Ft. 16.80 13,90,709 12 Sunshine County 8,525 Sq. Ft. 11.55 11,81,365 13 Sunshine County EWS 9,974 Sq. Ft. 5.25 6,28,362 14 Neel Padam II 3,292 Sq. Ft. 16 80 6,63,667 15 Rajni Gandha 1 6,396 Sq. Ft. 16 80 12,89,434 16 Rajni Gandha 11 521 Sq. FI. 16.80 1.05,034 17 Ansal Plaza Greater Noida 34,618 Sq. Ft. 33.60 1,19,57,978 18 Highway Plaza- Jalandhar 16,109 Sq. R. 33.60 64,95,149 & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd
19 Ludhiana Boulevard 2,573 Sq. Ft. 27.30 8,42,915 20 Jodhpur ARP 28,277 Sq. ft 16.80 57,00,643 21 Jodhpur- Sushant Haat 757 Sq. Ft. 11.55 1,04,920 22 Jaipur- Orchid 18,954 Sq. Ft. 9.45 21,49,384 23 Jaipur- Tulip 13,227 Sq. Ft 9.45 14.99,942 24 Palam Corporate Plaza 88,021 Sq. Ft. 26.25 2,77,26,615 Ansal Highway Plaza Sonepat 1,57,599 Sq. Ft. ••• — 25 1.4.2 26 Corporate Park Noida 10,201 Sq. Ft. 26.25 32,13,315 27 Ajmer- Ansal Courtyard 22,944 Sq. Ft. 10.50 28,90,896 28 Ajmer- Abhilasha Home, Phase-I 2,120 Sq. Ft. 5.25 1,33,560 Ajmer- Abhilasha Home-I, 3,500 Sq. Ft. 5.25 2,20,500 29 Phase-II 30 Mohali GL-I Courtyard 9,071 Sq.Ft. 10.50 11,42,996 31 Mohali GL-I Happy Homes 1,222 Sq. Ft. 5.25 76,986 32 Jaipur-Happy Home 850 Sq. Ft. 9.45 96,390 33 Jaipur- Abhilasha Home 8,480 Sq. Ft. 9.45 9,61,632 34 Jaipur Sweet Home, Anand Lok 1,488 Sq. Ft. 9.45 1,68.739 Total Rs.8,96,16,461/- 11.2. We find that the ld. CIT(A) observed that the basement area of the property could at best be used only for storage facilities and ALV of such storage space could be estimated to be roughly 50% of the property. The ld. CIT(A) also appreciated the fact that there are lot of restrictions in use of basement area when compared to ground floor and above. The revenue has challenged the relief of 50% granted by the ld. CIT(A). We find that the MCD guidelines do not permit the usage of basement for residential purposes. It could be let out only for storage purposes or car parking purposes. Hence we find that the ld. CIT(A) had fairly estimated the usage of basement area to be 50%. We further find that the assessee had not challenged the action of the ld. CIT(A) before us in this regard. It is a fact that the basement area could not be utilized for residential purposes. We duly appreciate the fact that the basement area could have only restrictive usage and cannot command the same rental value as the ground floor commands. Hence the relief granted by the ld. CIT(A) at the rate of 50% is correct and would meet the ends of justice in the peculiar facts and circumstances of the instant case. Accordingly, the Ground No.1 raised by the revenue is dismissed. & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd
The Ground No.2 raised by the revenue is challenging the deletion of disallowance by the ld. CIT(A) on account of Employees contribution to PF and ESI.
12.1. We have heard the rival submissions and perused the materials available on record. The ld. AR fairly stated that the issue in dispute is decided against the assessee by the recent decision of the Hon‘ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT reported in 143 taxmann.com 178 (SC) wherein it was held that the employees contribution to PF / ESI remitted after the due dates prescribed under the respective Acts but deposited before the due date of filing the return of income u/s 139(1) of the Act would not be allowed as deduction. The ld. AR drew our attention to the tabulation mentioned by the Tax Auditor in the Annexure to Form 3CD mentioning the month wise details of PF / ESI payments, due date of payments and actual date of remittance thereon. The ld.AR submitted that in the said tabulation, the Tax Auditor had mentioned the actual date on which the cheques issued by the assessee were cleared in the bank account. He further argued that the cheques in favour of PF / ESI Authorities were duly issued by the assessee on or before the due dates prescribed under the respective PF / ESI Acts i.e. the Cheques were tendered to the bank on or before the due date, but the cheques were cleared after the due dates. The ld.AO had also taken cognizance of the said table in his assessment order. The ld. AR argued that once the date on which cheques were tendered to the bank by the assessee, the assessee loses control over it. He prayed for setting aside of this issue to the file of ld. AO. The ld. DR vehemently relied on the order of the ld. AO. We find that the claim made by the assessee requires factual verification by the ld. AO. Hence we deem it fit and appropriate to restore this issue to the file of ld. AO for denovo adjudication in accordance with law. Accordingly, the Ground No. 2 raised by the revenue is allowed for statistical purpose.
The Ground No. 3 raised by the revenue is challenging the deletion of addition made u/s 43CA of the Act by the ld. CIT(A). The ld. AR before us stated & 3170/Del/2019 Ansal Properties and Infrastructure Pvt. Ltd that the issue in dispute is to be decided in favour of the revenue and the ld. CIT(A) erred in granting relief to the assessee. Since no arguments were advanced by the ld. AR responding to the arguments of the ld. DR on this issue, the Ground No. 3 raised by the revenue is allowed.
In the result, both the appeals of the assessee as well as the revenue are partly allowed for statistical purposes.
Order pronounced in the open court on 19/01/2024.