Case Number: ITA 5512/DEL/2019
Appellant: Sir Shadi Lal Enterprises Ltd., New Delhi
Respondent: DCIT Circle-23(2), New Delhi
Assessment Year: 2015-16
Case Filed On: 2019-06-24
Order Type: Final Tribunal Order
Date of Order: 2023-09-12
Pronounced On: 2023-09-12
Before: Shri Chandra Mohan Garg, Judicial Member and M. Balaganesh, Accountant Member
For Assessee: Shri I.P. Bansal, Adv. and Shri Vivek Bansal, Adv.
For Revenue: Shri T. James Singson, CIT(DR)
Date of Hearing: 19.07.2023
Date of Pronouncement: 12.09.2023
This appeal was filed by Sir Shadi Lal Enterprises Ltd. against the order of CIT(A)-8, New Delhi, dated 22.04.2019, for the assessment year 2015-16. The appellant challenged the additions made by the Assessing Officer (AO) regarding the long-term capital gain from the slump sale of a unit of their Sugar Mill.
1. The learned CIT (A) erred in law and on facts by dismissing the appeal against the AO’s order without providing adequate opportunity of being heard, resulting in a decision based on surmises and conjecture.
2. The CIT (A) incorrectly confirmed the addition of Rs. 27,09,95,865/- to the long-term capital gain from the slump sale of the Sugar Mill unit, based on the ledger account of the other party without appreciating the actual transactions.
3. The appellant contended that the short-term capital gain of Rs. 12,73,798/- on mutual funds was wrongly included in the additions, as it did not pertain to the unit under consideration.
The appellant argued that the CIT (A) dismissed the appeal without proper hearing and that the additions were based on presumptions rather than factual transactions. They pointed out that the AO himself noted the capital gain declared in the return of income, suggesting no further addition was required.
The respondent, represented by Shri T. James Singson, CIT(DR), highlighted the AO’s efforts to verify the transactions, including issuing a notice under section 133(6) to the purchaser, which went uncomplied. The AO found discrepancies in the sale consideration as declared by the appellant and the actual amounts shown in various documents.
The Tribunal carefully reviewed the submissions, assessment order, and the CIT(A)’s findings. Key observations include:
1. The sale consideration received by the appellant was Rs. 75.5 crore, not Rs. 70 crore as claimed. This was evident from the annual report, sale deed, and other documents.
2. The AO’s calculation of the capital gain at Rs. 49,19,22,401/- was based on accurate assessments, including a detailed review of the sub-ledger and payment transactions.
3. The appellant failed to furnish confirmation from the purchaser during both assessment and appellate proceedings, undermining their claims.
The Tribunal upheld the AO’s addition of Rs. 27,09,95,865/- to the capital gain, noting that the appellant’s arguments lacked substantiation. The AO’s findings were based on a thorough review of available evidence and proper calculation of the actual sale consideration and resulting capital gain.
In conclusion, the appeal of Sir Shadi Lal Enterprises Ltd. was dismissed, affirming the AO’s order. The detailed review of transactions and adherence to factual evidence were key to the decision.
Order pronounced in the open court on 12.09.2023.
Members:
(M. Balaganesh) Accountant Member
(Chandra Mohan Garg) Judicial Member
Copy forwarded to:
By Order
Assistant Registrar, ITAT, New Delhi
Capital Gain Dispute: Sir Shadi Lal Enterprises Ltd. vs. DCIT for Assessment Year 2015-16
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