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ACIT, Circle 47 (1), New Delhi.Vs. Shri Madhukar Arenja, C/o Shri Prem Sharma, 2, Tilak Marg, New Delhi 110 001.
October, 07th 2019

Referred Sections:
Section 72( 1) of the Act
Section 336
Section 2(22) (e) of the Act

            (DELHI BENCH `D' : NEW DELHI)


                        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



       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.
                                     2                   ITA No.6875/Del./2015
                                                          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

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

        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.
                                    3                   ITA No.6875/Del./2015
                                                         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


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
                                      4                 ITA No.6875/Del./2015
                                                         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
       (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
                                    5                    ITA No.6875/Del./2015
                                                          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
                               6   ITA No.6875/Del./2015
                                    ITA No.578/Del./2016

Copy forwarded to:
     4.CIT(A)-16, New Delhi.
     5.CIT(ITAT), New Delhi.         AR, ITAT
                                    NEW DELHI.
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