THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 02.05.2013
+ ITA 596/2012
CIT ... Appellant
AKME PROJECTS LTD ... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Karan Khanna, Adv. with Ms Ashmita Kumar, Adv.
For the Respondent : Mr Piyush Kaushik, Adv.
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE VIBHU BAKHRU
BADAR DURREZ AHMED, J (ORAL)
1. This is an appeal by the revenue against the order dated 28.12.2011
passed by the Income Tax Appellate Tribunal, New Delhi, in ITA No.
3276/Del/11 relating to the assessment year 2008-09. The appeal was
admitted for hearing on 15.10.2012. The order indicates that the
following question of law arises for consideration:-
"Whether the Tribunal fell into error in directing that
the sum of `. 39,52,293/-, added by the Assessing
Officer, was covered by the disclosure made by the
assessee after the survey conducted, which led to his
filing a return?"
ITA 596/2012 Page 1 of 5
2. At the outset, the learned counsel for the respondent/assessee urged
that the above question was not a question of law at all and much less a
substantial question of law and that the same involved only issues of fact
which had been finally determined by the Tribunal. However, the learned
counsel for the appellant contended that a Bench of this court had already
framed the above question and therefore the same needs to be answered.
3. The facts of the case are aptly set out in paragraph 2 of the
impugned order and the same are reproduced herein below:-
"2. A search operation was carried out at the premises
of the assessee including the group concerns. A
survey was also conducted on 19.20th February, 2008
on various premises and group concerns of the
assessee. During the course of survey, on the basis of
various documents/papers/soft copies of the data, the
assessee declared a sum of `. 15 crore as additional
business income in the hands of various business
concerns of the assessee group vide letter dated 10th
March, 2008 the copy of which has been placed at
page 59 of the paper book. On the basis of the
declaration, it is the case of the assessee that the entire
`. 15 crore was declared in its hands and accordingly
the return of income was filed at `. 18,37,88,691/-.
However, while assessing the income of the assessee,
the Assessing Officer found that the assessee had
claimed set off of loss from trading in commodities
amounting to `. 39,52,293/- against business income.
The Assessing Officer treated that such loss is of
speculative nature, hence could not be set off against
ITA 596/2012 Page 2 of 5
business income. He, therefore, added the said sum to
the income of the assessee and has assessed the
income of the assessee at `. 18,77,40,980/-. The
addition was challenged by the assessee before the
CIT(A). It was contended that the assessee had
transferred 58 flats having mutually agreed value at `.
18,08,31,794/- in favour of M/s BLK Reality Pvt. Ltd.
Against which claim of having incurred `. 17 crore on
various projects of the assessee company. The
assessee company recognized total value of sales of
such flats in its profits and loss account at `.
18,08,31,794/- as against the earlier sale value shown
at `. 4,50,00,000/- thereby offering an additional
income to the extent of `. 13,58,31,794/-. The said
accretion formed part of the overall agreed income of
`. 15 crore as offered voluntarily by the assessee after
the survey. The balance amount of `. 1,41,68,206/-
was offered directly in the computation of income to
cover any deficiency or discrepancies or other
investments/expenditure, etc. Thus, it was pleaded by
the assessee that further disallowance of `. 39,52,293/-
being less than the amount additionally offered for tax
of `. 1,41,68,206/- on account of there being no other
discrepancy, should have been considered to be
covered by the said additional addition and therefore,
the addition of `. 39,52,293/- was not called for. Such
submissions of the assessee were forwarded by the
CIT (A) to the Assessing Officer vide letter dated 20th
January, 2011 for his comments within ten days, but,
no comments were received from the Assessing
Officer. It is observed by CIT (A) that the written
submission of the assessee do not contain any
additional evidence. Therefore, he proceeded to
ITA 596/2012 Page 3 of 5
decide the appeal filed by the assessee on the basis of
the material available on record. Learned CIT (A)
after reproducing the submissions of the assessee in
letter dated 10th March, 2008 vide which the assessee
had offered additional income of `. 15 crore has come
to the conclusion that in view of the additional amount
taken by the assessee of `. 1,41,68,206/- which did not
exceed the disallowance made by the Assessing
Officer of `. 39,52,293/-, the addition made by the
Assessing Officer was not called for. It is against
these findings recorded by the CIT (A), the
department has filed the aforementioned grounds of
4. The argument of the revenue is that the sum of `. 39,52,293/- was
by way of speculation loss and therefore the said amount had to be added
back to the business income of the assessee. On the other hand the
learned counsel for the respondent/assessee contended that the said sum
of `. 39,52,293/- was already embedded in the additional business income
which was offered by the respondent/ assessee which was to the extent of
`.1,41,68,206/-. The Tribunal has examined this aspect of the matter in
detail and observed that the assessee, in order to make its offer an honest
attempt, apart from declaring the discrepancy pointed out, offered an
additional sum of `. 1,41,68,206/- so as to complete the figure of `.15
crores which was the offer made at the time of survey. The Tribunal
noted that the said amount of `. 1,41,68,206/- exceeded the amount of `.
39,52,293 added by the assessing officer. Consequently the Tribunal held
ITA 596/2012 Page 4 of 5
"Therefore, in our opinion, learned CIT (A) has taken
a right view that the aforementioned amount should
have been considered to be embedded in the additional
income offered by the assessee. We find no infirmity
in the view taken by the CIT (A) and, therefore, we
decline to interfere in the order of CIT (A)."
5. Consequently, we are of the opinion that, first of all, the question is
one which entirely rests on facts and is not a substantial question of law.
Secondly, even if we consider the question on merits the Tribunal has
arrived at the correct decision in concluding that the said sum of `.
39,52,293/ which was added by the assessing officer was embedded in
the additional offer of `.1,41,68,206 made by the assessee at the time of
the survey proceedings.
6. Consequently, even on merits the question is answered in favour of
the respondent/assessee and against the revenue.
7. The appeal is dismissed. There shall be no orders as to costs.
BADAR DURREZ AHMED, J
VIBHU BAKHRU, J
MAY 02, 2013
ITA 596/2012 Page 5 of 5