ACIT Vs DSL Properties Pvt Ltd (ITAT Delhi)
Deletion of understated sale consideration by CIT(A) without dealing in fundamental aspects cannot be countenanced in law
ITAT Delhi held that deletion of additions on account of understated sale consideration based on loose papers, dairy, documents, etc. seized in search action without dealing with the fundamental aspects of the matter by CIT(A) order cannot be countenanced in law. Accordingly, matter restored back to CIT(A) for fresh determination.
Facts- In course of the scrutiny assessment, AO observed that the assessee company has earned Long Term Capital Gains on sale of property. The property was sold to M/s. UTC Softech Pvt. Ltd. (UTC) for a stated consideration of Rs.36,00,76,400/-.
A search and seizure under section 132 of the Act was conducted on 10.10.2013 on Urbtech Group including the purchaser of the property M/s. UTC Softech Pvt. Ltd. Certain loose papers, diary, documents were inter alia seized in the search.
On perusal of seized documents seized, AO observed that real sale consideration agreed stands at Rs.40,00,00,000/- towards the sale of aforesaid property. Consequently, in course of assessment proceedings, the assessee was confronted with such incriminating evidences so gathered.
Accordingly, a show-cause notice was issued by the AO proposing to assess the difference of Rs.3,99,23,600/- in the hands of the assessee as undisclosed income attributable to understatement of such sale consideration. AO thus alleged suppression of sale consideration to the extent of Rs.3,99,23,600/- and consequent lower reporting of LTCG. The Assessing Officer accordingly enhanced the Long Term Capital Gain declared to this extent while framing the assessment order.
CIT(A) allowed the appeal preferred by the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- The controversy in the present case relates to additions on account of understated sale consideration on sale of property by the assessee in the factual matrix. The issue is essentially factual in nature and is thus wholly dependent upon the examination of facts threadbare.
AO, to our mind, has discharged his quasi judicial duties in a just and proper manner, the CIT(A), on the other hand, has failed to adhere to legitimate expectation and has passed a nondescript and cryptic order without dealing with the fundamental aspects of the matter.
Held that the order of CIT(A) lacks comprehension. The CIT(A) has omitted to expound the facts in perspective while displacing the order of AO. The fallacy in action of the CIT(A) is quite visible and hence the impugned first appellate order cannot be countenanced in law. The appellate order of the CIT(A) is thus set aside and matter is restored back to the file of the CIT(A) for fresh determination of the issue in accordance with law after making enquiries or causing enquiry through the AO in this regard.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeal has been filed by the Revenue against the First Appellate Order of the Learned Commissioner of Income Tax (Appeals) – 3, Delhi (‘CIT(A)’ in short) dated 31.07.2017 arising from the assessment order dated 30.12.2016 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning Assessment Year 2014-15.
2. The grounds of appeal raised by the revenue read as under:
