ITO, WARD-58(6), NEW DELHI vs. AMBA CONSTRUCTION CO., DELHI

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ITA 872/DEL/2020Status: DisposedITAT Delhi26 July 2023AY 2011-124 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 upheld the CIT(A)'s decision to quash the reassessment proceedings. It agreed that the reopening was based on factual errors and therefore vitiated the assessment order.

What were the facts?

The Revenue appealed against the CIT(A)'s order which quashed reassessment proceedings initiated under Section 147 of the Income Tax Act. The CIT(A) found the reasons for reopening to be based on factual errors.

What were the issues?

Whether reassessment proceedings initiated under Section 147 are bad in law if based on factual errors. Whether further additions can be made if the primary basis for reopening ceases to exist.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI

For Appellant: Mr. Kanv Bali, Sr. DR
For Respondent: Mr. C.S. Anand, Advocate
Hearing: 26/07/2023Pronounced: 26/07/2023

ORDER PER M. BALAGANESH AM: This appeal of the Assessee arises out of the order of Learned

Commissioner of Income Tax (Appeals)-30, New Delhi, [hereinafter referred to as ‘Ld. CIT(A)’] in Appeal No.35/18-19/19-20/4329 dated 11/12/2019 against the order passed by Income Tax Officer,

Ward-55(1), New Delhi, (hereinafter referred to as the ‘Ld. AO’) u/s ITO vs. Amba Construction Co. 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 24/12/2018 for Assessment Year 2011-12.

2.

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 holding that reasons recorded u/s 147 of the Act are based on factual errors and thus treating the entire re-opening, re-assessment proceedings as bad in law, vitiated the assessment order. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that once the addition of the proposed income from the fundamental issues ceases to exist, no other addition can be made.”

3.

We have heard the rival submissions and perused the material available on record. From the above grounds raised by the Revenue, it could be seen that the Revenue had only challenged the action of the Ld. CIT(A) in quashing the re-assessment proceedings as bad in law. We find from the order of Ld. CIT(A), in para 6.10, had categorically held that the addition made by the Ld. AO in the sum of Rs.39,00,000/- is incorrect as assessee had not entered into any sale transaction on 21/07/2010, which fact is also confirmed by the Sub-Registrar on enquiry made by the AO. Against this finding on merit, the Revenue had not preferred any appeal before us.

Accordingly, what survives on merits is only the addition made on account of unverified loss in Futures and Options transactions of shares amounting to Rs.1,31,91,367/-. Though, the Ld. CIT(A) had Page 2 of 4 ITO vs. Amba Construction Co. not given any finding on this addition on merits as the re- assessment has been quashed by him, still any addition that could be contested on merits by the Revenue would only to be the sum of Rs.1,31,91,367/-. From the aforesaid reproduction of grounds raised by the Revenue, it is very clear that Revenue does not have any grievance on the non-adjudication of the ground raised by the assessee before the Ld. CIT(A) on the addition made on account of Futures and Options loss amounting to Rs.1,31,91,367/-. Hence, the grounds raised by the Revenue on legal issue is purely academic and in any case, the tax effect on the disputed addition of Rs.1,31,91,367/- would be less than the prescribed monetary limits for filing of the appeal by the Revenue before this Tribunal.

4.

In view of the aforesaid facts, various legal arguments advanced by both the parties on the quashing of re-assessment need not be gone into as this appeal is fit to be dismissed as not maintainable on the ground of low tax effect in view of CBDT vide Circular No.17/2019 dated 08.08.2019.

ITO vs. Amba Construction Co. 5. In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 26th July, 2023.

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