2016 (5) TMI 1230 - AT - Income Tax

Intimation u/s.143(1) being time barred - Held that - The copy of order dated 16.02.2012 is on the file which speaks about the finalization of the assessment. There is no iota evidence on the file to which it can be assumed that the assessee received the intimation after the expiry of one year in view of the proviso u/s.143(1) of the Act. Therefore, in the said circumstances the contention raised by the assessee which is not supported by any documents on record, is not liable to be tenable in accordance with law. Hence these grounds are decided in favour of the revenue and against the assessee. Computation of income under section 115JB - non acceptance of loss to the tune of ₹ 1,49,819/- declared by the appellant and in connection with the acceptance to the tune of ₹ 20,57,890/- as capital gain which is infact the capital receipt - Held that - The receipt which is not in nature of income is not required to be taxed u/s.115JA of the Act and income which is also exempted u/s. 50 of the Act would also remain exempted as per provision of subsection 4 of section 115 JA of the Act. The capital gain arising to an assessee u/s.50 of the Act on a depreciable asset is liable to be excluded from calculation on deemed profit u/s. 115JA of the Act. In view of the said circumstances it is apparent that the capital receipt to the tune of ₹ 20,57,890/- is not liable to be included while determining the profit and loss account and accordingly the income of the assessee is liable to be assessed in accordance with law. Since there is no other ground challenging the figure of amount in the said assessment therefore, we are of the view that the learned CIT(A) has wrongly upheld the finding of the Assessing Officer on this ground, hence the finding of the learned CIT(A) on the point is hereby ordered to be set aside. Concluding this facts that the capital gain exempted under the provision of the law is not liable to be added to the income of the assessee. Accordingly this issue is decided in favour of the Assessee

Summary

Issues Involved:
1. Challenge to the intimation u/s.143(1) as time-barred.
2. Non-acceptance of declared loss and treatment of capital gain as capital receipt.
3. Computation of tax and levy of interest under sections 234A, 234B, and 234C.

Issue No.1 & 2:
The assessee contested the intimation u/s.143(1) as time-barred due to receiving it after one year, contrary to the proviso of the Act. However, the revenue argued that the intimation date was within the timeframe. The Tribunal found no evidence supporting the assessee's claim, ruling in favor of the revenue.

Issue No.3:
Regarding the non-acceptance of declared loss and treatment of capital gain as a capital receipt, the assessee declared a loss but had a capital gain. The Tribunal analyzed the nature of the gain, its accounting treatment, and relevant legal provisions. Citing a precedent, it concluded that the capital gain, exempt under the law, should not be included in the income assessment. The Tribunal set aside the CIT(A)'s decision, ruling in favor of the assessee.

Issue No.4:
The computation of tax and interest levied under sections 234A, 234B, and 234C were intertwined with the previous issue. The Tribunal directed a fresh assessment by the Assessing Officer based on the decision on Issue No.3. Consequently, this issue was decided in favor of the assessee, leading to a partial allowance of the appeal.

In summary, the Tribunal ruled in favor of the revenue on Issue No.1 & 2, while deciding in favor of the assessee on Issue No.3 and Issue No.4. The judgment provided detailed analysis on each issue, considering legal provisions and accounting principles to reach a balanced decision.