Referred Sections: Section 72( 1) of the Act Section 336 Section 2(22) (e) of the Act
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `D' : NEW DELHI)
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.578/Del./2016
(Assessment Year : 2011-12)
ACIT, Circle 47 (1), vs. Shri Madhukar Arenja,
New Delhi. C/o Shri Prem Sharma,
2, Tilak Marg,
New Delhi 110 001.
(PAN : AAEPA9093R)
ITA No.6825/Del./2015
(Assessment Year : 2011-12)
Shri Madhukar Arenja, vs. ACIT, Circle 47 (1),
C/o Shri Prem Sharma, New Delhi.
2, Tilak Marg,
New Delhi 110 001.
(PAN : AAEPA9093R)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri K. Sampath, Advocate
REVENUE BY : Shri J.K. Mishra, CIT DR
Smt. Naina Soin Kapil, Senior DR
Date of Hearing : 03.09.2019
Date of Order : 04.10.2019
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
Present cross appeals filed by the assessee as well as by the
revenue are being disposed off by way of composite order to avoid
repetition of discussion.
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ITA No.578/Del./2016
2. Appellant, ACIT, Circle 47 (1), New Delhi (hereinafter referred
to as the `Revenue') by filing the present appeal being ITA
No.578/Del/2016, sought to set aside the impugned order dated
03.11.2015 passed by the Commissioner of Income - tax (Appeals)-16,
New Delhi on the grounds inter alia that :-
"1. Whether the loss from business & profession can be
carried forward when the business & profession of the
assessee is discontinued?
2. Whether the Ld. CIT(A) was correct in deleting the
disallowance of carried forward losses of Rs.1,55,49,577/-
when the assessee during the assessment proceedings,
himself admitted the fact that from the AY. 2003-04, the
assessee has not done any
business?"
2. Appellant, Shri Madhukar Arenja (hereinafter referred to as the
`assessee') by filing the present appeal being ITA No.6825/Del/2015,
sought to set aside the impugned order dated 03.11.2015 passed by the
Commissioner of Income - tax (Appeals)-16, New Delhi on the grounds
inter alia that :-
"On the facts and in the circumstances of the case and in
law the Ld. CIT(A) erred in:
1. not deciding the following issues raised in appeal:
a) whether proviso to section 72( 1) of the Act with
regard to set off of loss in relation to discontinued business
is referable to Section 336 cases only and not to other
assesses;
b) whether the income from business declared in the
return has actually accrued to the assessee or was only a
notional income and thus not taxable.
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ITA No.578/Del./2016
2. in confirming the additions made by the Assessing
Officer by invoking provisions of section 2(22) (e) of the Act
to the extent of Rs.20,57,050/-.
All the above actions being arbitrary, erroneous,
unwarranted and unjust must be quashed with directions
for relief."
ITA No.6825/Del./2015 (ASSESSEE'S APPEAL)
3. Briefly stated the facts necessary for adjudication of the issue at
hand are : Assessee being Director of various companies had shown
income under head `Salary' from three companies, namely, M/s.Arenja
Ind. Ltd., Emem Builders & Dev. Pvt. Ltd. and M/s. Mehak Developers
Pvt. Ltd. and has shown income from rentals and other sources.
Assessing Officer noticed from the accounts of the assessee that the
assessee being shareholder in a company contained debits to the tune of
Rs.43,57,050/- and it is also noticed that the assessee was a major
shareholder in the company and thereby made the addition of
Rs.43,57,050/-.
4. Assessee carried the matter by way of an appeal before the ld.
CIT (A) who has restricted the addition to Rs.20,57,050/- made by the
AO on account of deemed dividend under section 2(22)(e) of the
Income-tax Act, 1961 (for short `the Act') by partly allowing the appeal.
Feeling aggrieved, the assessee has come up before the Tribunal by way
of filing the present appeal.
5. We have heard the ld. Authorized Representatives of the parties
to the appeal, gone through the documents relied upon and orders passed
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ITA No.578/Del./2016
by the revenue authorities below in the light of the facts and
circumstances of the case.
6. Ld. AR for the assessee contended that Shri Ankush Arenja, son
of the assessee purchased a property from the company which has
deferred left over account balances to Ankush Arenja as part of the
understanding which are as under :-
(i) Rs.5,39,500/- amount paid for possession charges;
(ii) Rs.50,000/- amount paid for A.H. unit charges;
(iii) Rs.1,20,000/- amount paid for advance maintenance
charges;
(iv) Rs.6,17,550/- amount paid for stamp duty;
(v) Rs.30,000/- amount paid for registration charged.
and the amount so debited to Ankush Arenja was later at closing
transferred to the assessee who had a running account therein. It is
further contended that it was not a transaction by way of either loan or
advance or both rather which was traceable to the sale of an immovable
property and such entries are having an intimate relationship with the
transaction in question.
7. Perusal of para 12 of the impugned order shows that the assessee
has brought on record additional evidence before the ld. CIT (A) as to
the sale of immovable property by the company in the name of Ankush
Arneja, son of the assessee which has not been considered by the ld. CIT
(A). Since the additional evidence has not been considered and as such
issue in controversy remained unsettled in entirety, the case is required
to be remanded to the AO to decide afresh after providing an
opportunity of being heard to the assessee to decide the issue in
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ITA No.578/Del./2016
controversy. Both the parties to the appeal agreed in the interest of
justice to remand the matter back to the AO. Consequently, the case is
remanded back to the AO to decide afresh by providing adequate
opportunity of being heard to the assessee by considering additional
evidence sought to be led before ld. CIT (A).
ITA No.578/Del./2016 (REVENUE'S APPEAL)
8. Since the tax effect in the appeal filed by the Revenue is low i.e.
less than Rs.50,00,000/-, in view of the CBDT Circular No.17/2019
dated 8th August, 2019 which is applicable retrospectively in view of the
decision rendered by coordinate Bench of the Tribunal in case of Dinesh
Madhavlal Patel [TS-469-ITAT-2019(Ahd)] 2019-TIOL-1556-ITAT-
AHM dated 14th August, 2019, the appeal of the Revenue being ITA
No.3910/Del/2011 is dismissed on account of low tax effect.
8. Resultantly, the appeal filed by the assessee is allowed for
statistical purposes and the appeal filed by the Revenue is dismissed.
Order pronounced in open court on this 4th day of October, 2019.
Sd/- sd/-
(R.K. PANDA) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 4th day of October, 2019
TS
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ITA No.578/Del./2016
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-16, New Delhi.
5.CIT(ITAT), New Delhi. AR, ITAT
NEW DELHI.
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