FR. SAUTER AG,NEW DELHI vs. ITO WARD INTERNATIONAL TAX 1(3)(2), NEW DELHI

PER KUL BHARAT, JM :

The present appeal filed by the assessee is directed against the

order passed by Ld. Commissioner of Income Tax (Appeal) (‘CIT(A)’

for short)-42, Delhi dated 31.01.2023 pertaining for the assessment

year 2012-13.

2 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO 2. The assessee has raised following grounds of appeal:-

“On the facts and in the circumstances of the case and in law, the Learned Assessing Officer (Ld. AO) and Learned Commissioner of Income Tax (Appeals), Delhi - 42 ["Ld. CIT(A)') erred both on facts and in law while making or confirming the additions made to the Appellant's income. The present appeal is being preferred on the following grounds. 1. Ground No. 1: Reassessment proceedings are bad-in- law 1.1. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating the re-assessment proceedings under the Act in respect of AY 2012-13, in the absence of any income escaping assessment. 1.2. On the facts and circumstances of the case & in law, the order passed by the Ld. AO is bad in law and void ab initio and therefore liable to be quashed. The following grounds are without prejudice to Ground No. 1. Ground No. 2: Non-admission of additional evidence 2.1. On the facts and circumstances of the case & in law, the Ld. CIT(A) erred in rejecting the additional evidence filed by the Appellant and holding that there were no exceptional circumstances which prevented the Appellant from filing the evidence during course of assessment proceedings. 2.2. The Appellant prays that the additional evidence filed by the Appellant be admitted. Page | 2

3 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO 3. Ground No. 3: Non-consideration of cost of acquisition for computation of long- term capital gains 3.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in computing the capital gains of the Appellant without considering the cost of acquisition of Rs. 4.45.01,750 as per the provisions of section 48 of the Act. 3.2. The Appellant prays that the cost of acquisition of Rs. 4.45.01,750 be reduced from the sale consideration for computation of capital gains. 4. Ground No. 4: Classification of capital gains 4.1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not characterizing the nature of capital gains arising on the impugned transaction of sale of shares as long-term capital gain' in his order despite the specific submissions and evidence filed by the Appellant. 4.2. Further, the Ld. CIT(A) erred in not directing the Ld. AO to compute the capital gains as per first proviso of section 48 and section 112 of the Income Tax Act, 1961 (the Act) read with Rule 115A of the Income Tax Rules, 1962 ("Rules'). 4.3. The Appellant prays that the capital gains ought to be assessed as income from long-term capital gains and the Ld. AO be directed to compute capital gains at Rs. 4,16,27,166 as per first proviso of section 48 and section 112 of the Act read with Rule 115A.

4 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO 5- Ground No. 5: Credit of taxes deducted at source and self-assessment tax 5.1. On the facts and in the circumstances of the ease and in law, the Ld. AO erred in not giving credit for the taxes deducted at source amounting to Rs. 85,58,982 and self-assessment tax amounting to Rs. 3,49,141 while determining the tax liability under the Act. 5.2. The Appellant prays the credit for taxes deducted at source and self-assessment tax paid be granted while determining the tax liability for the year. 6. Ground No. 6: Levy of interest under sections 234A and 234B of the Act 6.1. On the facts and in the circumstances of the case and in law, the Ld. AO erred in levying interest under sections 234A and section 234B of the Act. 6.2. The Appellant prays that interest levied under section 234A and section 234B of the Act be deleted. 7. Ground No. 7: Computation of interest under sections 234A and 234B of the Act 7.1. Without prejudice to Ground No. 6, on the facts and in the circumstances of the case and in law, the Ld. AO erred in computing interest under sections 234A and 234B of the Act on the total tax liability without giving credit of the prepaid taxes paid by the Appellant.

5 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO 7.2. The Appellant prays that the interest under sections 234A and 234B of the Act, if at all leviable, ought to be computed on the net tax liability calculated after giving credit of the prepaid taxes paid by the Appellant. 8. Ground No. 8: Initiating penalty proceedings under section 271(1)(b) of the Act On the facts and in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 274 r.w. s. 271(1)(b) of the Act. Ground No. 9: Initiating penalty proceedings under section 271(1)(c) of the Act On the facts and in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 274 r.w. s. 271(1)(c) of the Act. 10. Ground No. 10: Initiating penalty proceedings under section 271F of the Act On the facts and in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 271F of the Act. The Appellant craves leave to add to, omit or alter all or any of the above Grounds of Appeal before or during the hearing of aforesaid matter.”

6 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO 3. Facts giving rise to the present appeal are that, the case of the

assessee was re-opened u/s 147 of the Income Tax Act, 1961 (“the

Act” for short) after recording the reasons and seeking necessary

approval, the reasons stated for reopening are that despite having

taxable income during the concerned Assessment Year no return

has been filed by the assessee and no income has been declared by

the assessee, thereafter the Assessing Officer assessed income at

Rs. 18,30,22,368/-.

Ld.CIT(A), the assessee had also filed application for addition of

additional evidence under Rule 46A of the Income Tax Rules, 1962

(hereinafter referred to as the ‘Rules’). The application so filed by

the assessee was rejected and the additional evidences were not

admitted by the Ld. CIT(A).

preferred appeal before this Tribunal.

Ground No. 2 submitted that the assessee had filed additional

evidences and he also pointed out that there was no effective

7 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO representative before the Assessing Authority, he, therefore, prayed

that matter be remanded to Lower Authority for consideration of

additional evidence, he contended that the additional evidence as

filed by the assessee goes to the root of the matter. He further

submitted that to sub serve the interest of justice the additional

evidence as filed by the assessee may be admitted. On the other

hand, the Ld. Departmental Representative opposed these

submissions and supported the orders of the Authorities below, he

contended that the assessee was provided sufficient opportunity

which it failed to avail, therefore, the Ld. CIT(A) rightly did not

consider the additional evidences so filed. At this stage, additional

evidences should not be admitted.

available on records. We find that the Ld. CIT(A) has decided this

issue by observing as under:-

“11.4.1. The AO has raised objection to the admission of additional evidence on the ground that as per Rule 46A, additional evidence may only be accepted if there were any exceptional circumstances which prevented the assessee from filing the evidence during course of assessment proceedings. The AO has submitted that as Page | 7

8 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO per the facts and circumstances of the case, the appellant does not fulfill any of the conditions specified in Rule 46A as the assessee had been given enough opportunity of being heard and was not prevented by any sufficient cause to produce the evidence during the assessment proceeding. The AO has contended that the assessee was given ample opportunities to file its replies even then the assessee has failed to file the necessary document in support of its claim. The AO has therefore, requested that the additional evidence submitted by the assessee during appellate proceeding deserve to be rejected.

11.4.2. The appellant has not been able to controvert the observations of the AO in this regard. Therefore, I agree with the AO that the appellant was provided with ample opportunities during the assessment proceedings and therefore, there was no exceptional circumstances which prevented the assessee from filing the evidence during course of assessment proceedings. It is therefore, concluded that the appellant does not fulfill any of the conditions specified in Rule 46A and the additional evidences filed during appeal cannot be accepted. The assessment order and remand report in this regard are upheld. Accordingly, no deduction is to be allowed from the total consideration of Rs. Rs. 9,15,11,184/-.”

the contention of the assessee that the additional evidence as filed Page | 8

9 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO by the assessee goes to the root of the dispute, therefore, to serve

the interest of justice, we hereby admit the additional evidences

filed by the assessee and restore the additional evidence to the file

of the Ld. CIT(A) for deciding the Grounds of Appeal afresh after

giving due opportunity to the assessee and considering the

additional evidences so filed.

reopening of the assessment are also set aside to the file of the Ld.

CIT(A) to decide it afresh after providing adequate opportunity of

being heard to the assessee. The Grounds raised in this Appeal are

allowed for statistical purpose. Therefore, the impugned order is

hereby set aside.

assessee is allowed for statistical purpose.

Order pronounced in the open Court on 22nd November, 2023.

Sd/- Sd/- (SHAMIM YAHYA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER

* Amit Kumar/R.N, Sr. PS*

10 ITA No. 831/Del/2023 Fr. Sauter AG. Vs. ITO