Sir Shadilal Enterprises Limited Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition towards long term capital gain sustained as assessee failed to furnish confirmation from the purchaser company as lower sale consideration was claimed by assessee.
Facts- Vide the present appeal, assessee contested that CIT (A) erred in law and on facts in dismissing the appeal against the order of assessing officer as adequate opportunity of being heard was not provided to the appellant. The Order passed by CIT(A) is arbitrary, bad in law and in violation of rudimentary principles of contemporary jurisprudence. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed.
Assessee also contested that CIT (A) erred in law and on facts in dismissing the appeal against the order of AO and confirming the addition of Rs. 27,09,95,865/- in long term capital gain of slump sale of unit of Sugar Mill on highly presumption basis.
Conclusion- Held that the appellate has failed to furnish confirmation from the purchaser company and the documentary evidence particularly conveyance deed dated 08.09.2014 clearly revealed that the assessee received sale consideration of Rs. 75.50 crores in four installments through banking channels from the purchaser company and therefore there was no reason to interfere with the findings of Assessing Officer making impugned addition of Rs. 27,09,95,865/- to the capital gain income of assessee. In view of above, we are inclined to hold that the Assessing Officer was right in making addition in the hands of assessee and the ld. CIT(A) was also quite correct and justified in upholding the same.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal has been filed against the order of CIT(A)-8 New Delhi dated 22.04.2019 for AY 2015-16.
2. The grounds raised by the assessee are as under:-
1. The learned CIT (A) erred in law and on facts in dismissing the appeal against the order of assessing officer as adequate opportunity of being heard was not provided to the appellant. The Order passed by the learned CIT(A) is arbitrary, bad in law and in violation of rudimentary principles of contemporary jurisprudence. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed.
2. The learned CIT (A) erred in law and on facts in dismissing the appeal against the order of assessing officer and confirming the addition of Rs. 27,09,95,865/- in long term capital gain of slump sale of unit of Sugar Mill on highly presumption basis. From the ledger account of the other party filed on record by the appellant, the authorities below could not appreciate the transactions mentioned in ledger account and simply on the basis of credit entries appeared therein, addition of long term capital gain on slump sale was made. Even authorities below could not appreciate that the short term capital gain of Rs. 12,73,798/- on mutual funds, were not belongs to unit under consideration for slump sale purpose and included in above additions. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed.
3. The ld. counsel of assessee submitted that The learned CIT (A) erred in law and on facts in dismissing the appeal against the order of assessing officer as adequate opportunity of being heard was not provided to the appellant. The Order passed by the learned CIT(A) is arbitrary, bad in law and in violation of rudimentary principles of contemporary jurisprudence. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed. He vehemently submitted that The learned CIT (A) erred in law and on facts in dismissing the appeal against the order of assessing officer and confirming the addition of Rs. 27,09,95,865/- in long term capital gain of slump sale of unit of Sugar Mill on highly presumption basis. From the ledger account of the other party filed on record by the appellant, the authorities below could not appreciate the transactions mentioned in ledger account and simply on the basis of credit entries appeared therein, addition of long term capital gain on slump sale was made. Even authorities below could not appreciate that the short term capital gain of Rs. 12,73,798/- on mutual funds, were not belongs to unit under consideration for slump sale purpose and included in above additions. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed. The ld. counsel submitted that since the Assessing Officer himself noted that the assessee has already declared capital gain of Rs. 22,09,26,536/- in its return of income and no further addition as made by the Assessing Officer was required hence the impugned addition may kindly be deleted.
4. Replying to the above, the ld. CIT(DR) drew our attention towards relevant paras at pages 7 to 19 of assessment order and submitted that the Assessing Officer issued notice u/s. 133(6) of the Act to the purchaser company namely M/s. Superior Foots Pvt. Ltd. but the said notice never complied by the purchaser company. The ld. CIT(DR) further contended that the assessee responded the notices issued by the Assessing Officer and the Assessing Officer found that in the conveyance deed executed by the assessee in favour of assessee company, as reproduced by the Assessing Officer in the assessment order clearly reveals that the assessee itself has shown sale consideration of Rs. 75.50 crores and not Rs. 70 crores has claimed by the assessee. The ld. CIT(DR) also drawing out attention towards pages 80 to 170 of assessee paper book submitted that the sale consideration of Rs. 70.50 crores was the value of net current assets on the transfer date as was determined in accordance with clause 6.3 of the said agreement dated 14.01.2014 which is also gets support with the amount mentioned in clause 4 at page 14 as purchase price and payment terms. The ld. CIT(DR) vehemently pointed out that the Assessing Officer also found that page 66 & 67 of submission dated 11.09.2017. ledger entry dated 30.09.20214 with number 90243 of Rs. 49,19,22,400.94 reads as ‘ By amount of profit on sale of UNN Sugar Unit.’ Therefore the Assessing Officer was right in making addition to the capital gain declared by the assessee and ld. CIT(A) was also correct in upholding that same.
5. On careful consideration of above submissions, first of all, from the relevant part of assessment order we note that the Assessing Officer made impugned addition in the hands of assessee with following observations and findings:-
Page No. 7 of annual report published by the assessee scanned above clearly reinforces the fact that the sale consideration received by the assessee was Rs. 75.5 Crore. Various documents like sale deed, ledger of party, conveyance deed etc., submitted by the assessee and scanned above clearly point together at an irrefutable conclusion that the sale consideration received was 75.5 Crore and not Rs. 70.0 Crore as claimed by the assessee. The facts emerging out of study of all the documents 41-23 submitted by the assessed during assessment proceedings can be summarized as under:
