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TMI Blog2020 (7) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance made by the A.O u/s 43B - Decided in favour of assessee. Disallowance of foreign exchange loss - addition as assessee failed to place requisite documents in support of its claim - HELD THAT:- On a perusal of the orders of the lower authorities, we find that the assessee despite specific directions had failed to place on record the requisite documents in support of its claim of having suffered the foreign exchange fluctuation loss viz. copies of bank statements, ledger accounts and the rate of foreign exchange payments made or received.Though there is no infirmity in the declining of the unsubstantiated claim of the assessee by the lower authorities, but then, a perusal of the Foreign exchange fluctuation gain/loss ledger accounts filed by the assessee does inspire some confidence as regards the veracity of such claim. Restore the matter to the file of the A.O for fresh adjudication. In case the assessee is able to substantiate its claim for foreign exchange fluctuation loss to the satisfaction of the A.O, then the latter shall allow the deduction of the same. Assessee s Ground is allowed for statistical purposes. Disallowance of bad debts/advances w/off and sundry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions precedent as provided u/s 36(2), then could the same be considered as an allowable business loss. High Court while answering the said issue, had observed that non-satisfaction of the conditions for claim of bad debts, would not prevent the assessee from claiming deduction of the same as a business loss incurred in the course of carrying on of business as that of a share broker. assessee s claim that the amount of advances written off during the year was in the nature of a business loss requires to be adjudicated upon by the A.O. On a similar footing, the claim of the assessee that the sundry balances written off during the year were also a loss incidental to its business, on the same terms requires to be visited by the A.O. As principally in agreement with the contention of the ld. A.R, that the assessee s claim for deduction of the advances paid to customers, which were written off by it during the year under consideration were supposed to be looked into u/s 37 Accordingly, we herein direct the A.O to adjudicate upon the claim of the assessee as regards allowability of its claim for deduction of, viz. (i) the amounts advanced to suppliers written off during the year AND the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1882, will be completed only when the agreement under Sec. 53A of the Transfer of Property Act is registered under the Indian Registration Act. In the case before us, as the assessee by way of an unregistered MOU, dated 19.12.2012 had though sought to transfer the land under consideration to the purported buyer viz. M/s Golden Star Promoters Pvt. Ltd., but then, the very fact that the possession of the land was never parted with/delivered to by the assessee to the other party, on the said count itself would render the provisions of Sec. 2(47)(v) of the Act r.w.s 53A of the Transfer of Property Act, 1882, as inapplicable. As the instrument of transfer was an unregistered MOU, dated 19.12.2012, the same in the backdrop of the aforesaid judicial pronouncements would exclude the applicability of Sec. 2(47)(v) of the Act r.w Sec. 53A of the Transfer of Property Act. In so far the provisions of sec. 2(47)(vi) are concerned, we find that the assessee who had not even parted with the possession of the land in favour of the purported buyer, had not entered into any arrangement or acted in any other manner, which had the effect of transferring, or enabling the enjoyment of the property u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bad Debts/Advances written off and Sundry Balances written off AND disallowance of Short Term Capital Loss on sale of depreciable assets. - HELD THAT:- Application for rectification under Sec. 154 are not free from doubts and debate, and would involve a long drawn process of reasoning, the same would thus not fall within the realm of rectification within the meaning of Sec. 154 of the Act. As such, finding no infirmity in the view taken by the lower authorities, who in our considered view had rightly rejected the application filed by the assessee under Sec. 154, we uphold the same. X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the A.O. to consider short term capital loss of Rs, 69,72,79,948/- for the purpose of set off against the income of the assessee/ carry forward to subsequent years." Also, the assessee has moved a letter dated January 15, 2020 seeking liberty for admission of certain documents as additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963, for the reason that they shall have a strong bearing on the adjudication of certain grounds of appeal, as under: Gr. No. Pg Nos of P.B. 3 Nature of documents Remarks 1. 110-113 Details of VAT/Sales tax payable, journal voucher and ledger account The assessee has filed these documents to demonstrate that excise duty payable account has not effected profit and loss account and hence no disallowance is required to be made u/s 43B of the Act. 4. 114-127 Details of bad debts and relevant ledger accounts The disallowance was confirmed on the ground that S. 36(2) condition has not been satisfied. The details filed shows the year in which amount has been shown as income and thus satisfaction of S. 36(2) 7. 128-145 Acknowledgment of return of income along with computation of income for A.Y. 2018-19 and 2019-20 The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard the authorized representatives for both the parties in context of the issue pertaining to the admission of the additional grounds of appeal. In our considered view there is substantial force in the claim of the ld. A.R that as no new facts are required to be looked into for adjudicating the aforesaid additional grounds of appeal, therefore, the same in all fairness requires to be admitted. Apart from that, as observed by us hereinabove, as the additional ground of appeal no. 1 is merely in the nature of an extension of the 'Ground of appeal No. 7' raised by the assessee in the memorandum of appeal, therefore, there appears to be no justification in declining the admission of the same. Accordingly, on the basis of our aforesaid deliberations, we herein admit the additional grounds of appeal raised by the assessee before us. 4. We shall now deal with the letter filed by the assessee seeking admission of certain documents as additional evidence under Rule 29 of the Appellate Tribunal Rules 1963. On a perusal of the aforesaid letter dated 15.01.2020, we find, that it is the claim of the assessee that during the course of the assessment proceedings its operations were stopp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the addition made u/s 68 of the Act. 9. 159-160 Order giving effect to CIT(A)'s order. It is the claim of the assessee that as the aforesaid documents filed as additional evidence before us would go to the roots of some of the issues involved in the present appeal, therefore, the same may be admitted under Rule 29 of the Appellate Tribunal Rules 1963. Per contra, the ld. D.R. objected to the admission of the additional evidence. 5. On a perusal of the documents filed by the assessee as additional evidence, we find that the same would have a strong bearing on the adjudication of the issues raised by the assessee before us. In our considered view, the circumstances prevailing at the end of the assessee, i.e at the time of framing of the assessment in itself explains the reason for non-filing of the requisite documents in the course of the assessment proceedings. In fact, the factual position canvassed before us by the ld. A.R cannot be held to be an eye wash, as the same is supported by an 'affidavit' of Shri Shyam Ghia, managing director of the assessee company. Apart from that, no fact to the contrary has been brought to our notice by the ld. D.R which would prove otherwise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of audit fees 26,27,940/- 9. Unexplained cash credits 3,66,692/- 10. Short term capital gain 315,00,00,000/- On the basis of the aforesaid additions/disallowance the income of the assessee was assessed at ₹ 286,02,72,980/-, as against its returned income of Rs. nil. 7. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee partly allowed the appeal. 8. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. A.R at the very outset of the hearing of the appeal submitted, that as instructed, he is not pressing the grounds of appeal Nos. 2,5,6 and 9. Accordingly, as per the concession of the ld. A.R the grounds of appeal No. 2, 5, 6 and 9 are dismissed as not pressed. 9. We shall now advert to the merits of the case. The assessee has assailed before us the confirming of the disallowance of ₹ 36,66,290/- under Sec. 43B by the CIT(A). Facts in brief, are that the assesse in its 'balance sheet' for the year ending 31.03.2013 had shown VAT & Tax payable at ₹ 1,47,08,432/-. As per 'Schedule 3' forming part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, therefore, the same could not have been disallowed u/s 43B of the Act. Per contra, the ld. D.R relied on the orders of the lower authorities. 11. We have heard the authorized representatives for both the parties in context of the issue under consideration. Before proceeding any further, it would be relevant to cull out Sec. 43B (relevant extract), which reads as under: "Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or] (b) to (g) …….……………………………………………………………………………………………………………… shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ₹ 1,08,62,837/-, respectively, formed part of the suo motto disallowance of ₹ 5,52,74,054/- made by the assessee under Sec. 43B of the Act. In the totality of the aforesaid facts, we are in agreement with the claim of the ld. A.R that as the balance amount of ₹ 36,66,290/-(forming part of VAT & taxes payable of ₹ 1,47,08,432/-) was the 'closing balance' of the earlier years that was brought forward to the year under consideration, the same could not have been disallowed u/s 43B. Accordingly, we 'set aside' the order of the CIT(A) in context of the issue under consideration and vacate the disallowance of ₹ 36,66,290/- made by the A.O u/s 43B of the Act. Ground of appeal No. 1 is allowed. 12. We shall now deal with the claim of the assessee that the CIT(A) had erred in sustaining the disallowance of foreign exchange loss of ₹ 2,20,50,511/-. As is discernible from the orders of the lower authorities, the assessee had debited an amount of ₹ 2,20,50,511/- in its profit & loss account on account of loss on fluctuation of foreign exchange. As the assessee failed to substantiate its claim of loss, the A.O disallowed the same. On appeal, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not controvert the same. Per contra, the ld. D.R supported the orders of the lower authorities. It was submitted by the ld. D.R, that as the assessee had failed to substantiate its claim of foreign exchange fluctuation loss, both in the course of the assessment and remand proceedings, therefore, the CIT(A) had rightly upheld the said disallowance. 14. We have heard the authorised representatives for both the parties, and also perused the orders of the lower authorities in context of the issue under consideration. Admittedly, the assessee in the course of the proceedings before the lower authorities had failed to substantiate its claim of foreign exchange fluctuation loss, to their satisfaction. In fact, we would not hesitate to observe, that the assessee except for furnishing the copy of the ledger account of foreign exchange fluctuation loss, had despite specific directions of the A.O failed to place on record any other supporting material viz. copies of bank statements, ledger accounts and the rate of foreign exchange payments made or received. Admittedly, in case of revenue items falling under s. 37(1), para 9 of AS-11 which deals with recognition of exchange differences, needs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 12,42,69,569/- (iii). Advance to suppliers W/off : ₹ 1,28,87,408/- 13,83,56,806/- Observing, that involving identical facts in the preceding year i.e A.Y 2012-13 the claim of deduction raised by the assessee was disallowed, coupled with the fact that the assessee could not demonstrate as to how the conditions laid down in Sec. 36(2) of the Act were satisfied, the A.O disallowed the aforesaid amount of ₹ 13,83,56,806/-. On appeal, the assessee by way of additional evidence submitted with the CIT(A) the details of the balances w/off, bad debts, and the advances to suppliers w/off. Also, support was drawn by the assessee from the judgment of te Hon'ble Supreme Court in the case of TRF Ltd. Vs. CIT, (2010) 323 ITR 397 (SC). The additional evidence filed by the assessee was forwarded by the CIT(A) to the A.O for his comments. In reply, it was submitted by the A.O, that in the course of the remand proceedings the assessee on being called upon to justify its claim for deduction of bad debts/write off of the aforesaid amounts, had only submitted the list of the parties and claimed that the copies of bills, invoices and other documents were not available with it, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary evidence in respect of the remaining three parties viz. (i).Chemical sundry debtors; (ii). Innovasynth Technlogies Pvt. Ltd.; and (iii). Innovasynth Technologies Private Limited, was brought to our notice. 17. We have given a thoughtful consideration to the issue as regards W/off of the 'bad debts' by the assessee. As observed by us hereinabove, the A.O/CIT(A) had declined the assessee's claim for deduction u/s 36(i)(vii), as the assessee could not demonstrate satisfaction of the conditions contemplated in Sec. 36(2) of the Act. On a perusal of the details filed by the assessee by way of additional evidence before us, we find that it had prima facie demonstrated that as the amount of bad debts in so far relatable to its three divisions viz. (i). Futura Fibre Division; (ii). Futura Polymer Division; and (iii).Futura Preform Division, had their genesis in the respective sales for the preceding years, therefore, the condition required in Sec. 36(2) stood satisfied. However, as the said details had been filed by the assessee before us by way of additional evidence, and were never there before the lower authorities, therefore, we refrain from adjudicating the issue at this stage. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney lending. On a perusal of the observations of the A.O, we find, that the entitlement of the assessee for claim of deduction of the advances written off during the year was addressed by the A.O only in the backdrop of the second limb of Sec. 36(2)(i), which takes within its sweep writing off of money lent in the ordinary course of the business of banking or money-lending carried on by the assessee. As such, the A.O observing that neither the advances written off by the assessee during the year were ever taken into account by the assessee in computing of its income, nor the same represented money lent by the assessee in the ordinary course of business of banking or money lending, thus, it did not satisfy either of the conditions contemplated in Sec. 36(2) of the Act. Although, we concur with the view taken by the lower authorities that the advances written off by the assessee would not qualify for deduction u/s 36(1)(vii) r.w Sec. 36(2), but then, the same on the said standalone basis cannot jeopardise its entitlement towards claim for deduction of the same as a business loss u/s 37 of the Act. In fact, we find that the Hon'ble High Court of Bombay in the case of Harshad J. Choks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged that the assessee having claimed deduction as a bad debt the benefit of the general principle of law that all expenditure incurred in carrying on the business must be deducted to arrive at a profit cannot be extended. This submission was negatived by this court and it was held that even where the debt is not held to be allowable as bad debts yet the same would be allowable as a deduction as a revenue loss in computing profits of the business under Section 10(1) of the Indian Income Tax Act, 1922. 13. In view of the above, the question as referred to us is answered in the affirmative i.e. in favour of the assessee and against the respondent. No order as to costs." In the backdrop of the aforesaid observations of the Hon'ble High Court, we find ourselves to be principally in agreement with the contention of the ld. A.R, that the assessee's claim for deduction of the advances paid to customers, which were written off by it during the year under consideration were supposed to be looked into u/s 37 of the Act. In our considered view, as observed by the Hon'ble High Court in its aforesaid order, even if the deduction of the advances written off by the assessee during the year w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, nor placed on record their respective PAN nos. and addresses, the A.O inter alia treated the same as an unexplained cash credit within the meaning of Sec. 68 of the Act. Before the CIT(A), the assessee by way of an additional evidence filed the confirmations of the aforesaid persons, which were forwarded by the appellate authority to the A.O for his report. As per the remand report filed by the A.O, though the assessee had in support of the loans received from the aforesaid directors filed their confirmations alongwith the respective bank statements, but it had failed to substantiate their creditworthiness on the basis of supporting documentary evidence. In the backdrop of the aforesaid report of the A.O, the CIT(A) directed the assessee to substantiate/explain with documentary evidence, and bring on record the source of income of the directors especially when the operations of the company had been discontinued w.e.f July, 2012 on account of financial problems and difficulties and there was total shut down of the business for non-payment of the workers dues. However, as the assessee failed to come forth with any explanation, the CIT(A) holding a conviction that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngwith the 'Ground of appeal No. 7', wherein the assessee has assailed the observation of the CIT(A), that as the assessee had failed to substantiate its claim that ass the MOU, dated 19.12.2012 for sale of land was subsequently cancelled, vide deed of cancellation dated 28.09.2017, therefore, the sale transaction having not materialized, no capital gain could have been brought to tax. Facts in brief, are that the assessee company vide a "Memorandum of Understanding" (MOU), dated 19.12.2012, had agreed to sell its factory at Manali, Chennai i.e land, building, plant & machinery, furniture & fixtures, vehicles, office equipments and inventory, to M/s Golden Star Promoters Pvt. Ltd., Regd. Office at No. 1, 4th Avenue, Harrington Road, Chet pet, Chennai - 600 031, for a total consideration of ₹ 355 crores. On a perusal of the records, the aforesaid sale consideration was comprised of viz. (i). Land (210 acres) : ₹ 315 crores; and (ii). Building, plant & machinery, office equipments, furniture & fixture, inventory etc. : ₹ 40 crores. In its return of income, the assessee adopting the Fair Market Value (F.M.V) of the land as on 01.04.1981 at ₹ 6.33 crores, had w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to the assessee and M/s Golden Stars Promoters Pvt. Ltd., wherein they were called upon to furnish/produce certain information/details viz. (i). communication details for cancellation of MOU, dated 19.12.2012 between the assessee and M/s Golden Star Promoter; (ii). details of amount transacted; (iii). copies of the bank statements from F.Y 2011-12 to till date of all bank accounts; (iv). original deed of cancellation for verification; and (v). details of legal fees paid both for the execution of the MOU, dated 19.12.2012 and the deed of cancellation. It was stated by the A.O in his report, that the assessee vide his letter dated 13.12.2017 (filed in tapal) had filed part reply, and had stated viz. (i). that the cancellation of MOU was based on several discussions and deliberations and there was no written communication in this regard; (ii). that part amount of sale consideration of ₹ 25.47 crores was received from M/s Golden Star Promoters Pvt. Ltd., out of which an amount of ₹ 91 lac was repaid; and (iii). that till date no legal fees was paid wither for the MOU or the cancellation deed. Further, it was stated by the A.O, that an e-mail was received at his office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, the aforesaid sale consideration was comprised of viz.(i). Land (210 acres): ₹ 315 crores; and (ii). Building, plant & machinery, office equipments, furniture & fixture, inventory etc.: ₹ 40 crores. In its return of income, the assessee adopting the Fair Market Value (F.M.V) of the land as on 01.04.1981 at ₹ 6.33 crores had worked out the LTCG on the sale of the same at ₹ 261 crores. For the reasons discussed at length hereinabove, the A.O assessed the entire sale consideration of ₹ 315 crores as STCG in the hands of the assessee. On appeal, the CIT(A) accepted the claim raised by the assessee in its return of income, and directed the A.O to assess the gain arising from sale of land as LTCG in the hands of the assessee. But then, the controversy herein involved finds its genesis in the claim raised by the assessee in the course of the proceedings before the CIT(A), that as the MOU, dated 19.12.2012 was subsequently cancelled as per the terms of the deed of cancellation, dated 28.09.2017, and the sale transaction was nullified, therefore, no capital gain was liable to be assessed in respect of the impugned sale transaction which did not see the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Bom). It was submitted by the ld. A.R, that both of the lower authorities had erred in law and the facts of the case by saddling the assessee with capital gain income in respect of a transaction which had never fructified. Per contra, the ld. D.R relied on the orders of the lower authorities. 25. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record in context of the issue under consideration. Admittedly, the assessee had on its own reflected the LTCG on transfer of the land under consideration in its return of income. As such, before proceeding any further, we shall first deal with the issue as to whether an assessee in the course of the assessment proceedings could be permitted to raise a claim, which would lead to exclusion of an income offered by him in his return of income. We find that the said issue had been deliberated upon at length by the Hon'ble High Court of Bombay in the case of CIT Vs. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom). In its said judgment, it was held by the Hon'ble High Court that an assessee is entitled to raise additional grounds not me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 229) "If an appeal lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is co-terminus with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do." (emphasis supplied) 6. The above observations are squarely applicable to the interpretation of Section 251(1)(a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is co-terminus with that of the Income Tax Officer, if that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose." [emphasis supplied] 13. The underlined observations in the above passage do not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may be taken by the assessee before the appellate authorities to those that were not available when the return was filed or even when the assessment order was made. The sentence read as a whole entitles an assessee to raise new grounds/make additional claims :- "if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made..." "or" if "the ground became available on account of change of circumstances or law" The appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow an assessee to raise a claim which was not raised when the return was filed or the assessment order was made. As held by the Supreme Court there may be several factors justifying the raising of a new plea in appeal and each case must be considered on its own facts. However, such cases include those, where the ground though available when the return was filed or the assessment order was made, was not taken or raised for reasons which the appellate authorities may consider valid. In other words, the jurisdiction of the appellate authorities to consider a fresh or new ground or claim is not restricted to cases where such a ground did not exist when the return was filed and the assessment order was made. 16(A). A Full Bench of this Court in Ahmedabad Electricity Limited v. Commissioner of Income-tax, (1993) 199 ITR 351 considered a similar situation. In that case, the appellant/assessee did not claim a deduction in respect of the amounts it was required to transfer to contingencies reserve and dividend and tariff reserve either before the Income Tax Officer or before the Appellate Assistant Commissioner in appeal. Subsequently, this Court had, in Amalgamated Electricity Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed when the return was filed. The mere fact that a decision of a court is rendered subsequently does not indicate that the ground did not exist when the law was enacted. Judgments are only a declaration of the law. The assessee could have raised the ground in its return itself. It did not have to await a decision of a court in that regard. Indeed, even if a judgment is against an assessee, it is always open to the assessee to claim the deduction and carry the matter higher. The words "could not have been raised", therefore, cannot be read strictly. Neither the Supreme Court nor the Full Bench of this Court meant them to be read strictly. They include cases where the assessee did not raise the claim for a reason found to be reasonable or valid by the appellate authorities in the facts and circumstances of a case. 17. The next judgment to which our attention was invited by Mr. Mistri is the judgment of a Bench of three learned Judges of the Supreme Court in National Thermal Power Company Limited v. Commissioner of Income-tax, (1997) 7 SCC 489 = (1998) 229 ITR 383. In that case, the assessee had deposited its funds not immediately required by it on short term deposits with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income Tax (Appeals). Both the assessee as well as the Department have a right to file an appea1/cross- objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier." 18. In the case before us, the CIT(A) and the Tribunal have held the omission to claim the deduction of ₹ 40,00,000/- to be inadvertent. Both the appellate authorities held, after considering all the facts, that the assessee had inadvertent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make a claim for deduction, other than by filing a revised return. After the return was filed, the appellant sought to claim a deduction by way of a letter before the Assessing Officer. The claim, therefore, was not before the appellate authorities. The deduction was disallowed by the Assessing Officer on the ground that there was no provision under the Act to make an amendment in the return of income by modifying an application at the assessment stage without revising the return. The Commissioner of Income-tax (Appeals) allowed the assessee's appeal. The Tribunal, however, allowed the department's appeal. In the Supreme Court, the assessee relied upon the judgment in National Thermal Power Company Limited contending that it was open to the assessee to raise the points of law even before the Tribunal. The Supreme Court held :- "4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the CIT(A). 26. We shall now advert to the maintainability of the claim of the assessee that in the absence of transfer of the land under consideration, no LTCG could have been assessed in its hands. The issue herein involved lies in a narrow compass i.e as to whether or not the land under consideration was transferred by the assessee during the year under consideration. At this stage, we may herein observe, that the assessee by way of an unregistered MOU, dated 19.12.2012, had sought to transfer the property to the purported buyer viz. M/s Golden Star Promoters Pvt. Ltd. Before adverting any further, as regards the fate of the said MOU, which as observed by us hereinabove was cancelled vide a deed of cancellation, dated 28.09.2017, it would be relevant to deliberate upon the validity of the MOU, dated 19.12.2012 as an instrument for transfer of the land under consideration. As observed by us hereinabove, the Hon'ble Supreme Court in the case of CIT Vs. Balbir Singh Maini (2017) 398 ITR 531 (SC), had observed, that pursuant to the Registration and Other Related Laws (Amendment) Act, 2001, amendments were made simultaneously in Section 53A of the Transfer of Property Act and Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e very fact that the possession of the land was never parted with/delivered to by the assessee to the other party, on the said count itself would render the provisions of Sec. 2(47)(v) of the Act r.w.s 53A of the Transfer of Property Act, 1882, as inapplicable. Apart from that, even otherwise as the instrument of transfer was an unregistered MOU, dated 19.12.2012, the same in the backdrop of the aforesaid judicial pronouncements would exclude the applicability of Sec. 2(47)(v) of the Act r.w Sec. 53A of the Transfer of Property Act. In so far the provisions of sec. 2(47)(vi) are concerned, we find that the assessee who had not even parted with the possession of the land in favour of the purported buyer, had not entered into any arrangement or acted in any other manner, which had the effect of transferring, or enabling the enjoyment of the property under consideration to the purported buyer. Rather, the fact that the MOU, dated 19.12.2012 was subsequently cancelled vide a deed of cancellation, dated 28.09.2017, therein proves to the hilt that the impugned sale transaction had never crystallized. As a matter of fact, the lower authorities had failed to place on record any material wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the STCL of (-)₹ 69,72,79,948/- for the purpose of 'set off' against the income of the assessee/carry forward to the subsequent years, therefore, the latter in his order giving effect to the order of the CIT(A), dated 18.12.2018, had not considered the STCL of (-) ₹ 69,72,79,948/-. 28. We have given a thoughtful consideration to the contentions advanced by the authorized representatives for both the parties in context of the aforesaid issue under consideration. Before proceeding any further, we may herein observe that the A.O while framing the assessment had in the absence of the details of the assets sold declined the assesse's claim of Short Term Capital Loss of ₹ 69,72,79,948/-. In sum and substance, in the absence of the requisite details as regards the loss claimed by the assessee on account of sale of depreciable assets along with working and other relevant documents, the aforesaid claim of STCL was rejected by the A.O while framing the assessment. Elaborating on the said issue, we find that the A.O had in the course of hearing of the appeal by the CIT(A), against the order passed by him u/s. 154 of the Act, had stated the reasons for rejecting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,898 -19,21,08,128 30% 1,06,92,601 41,500 -1,06,51,101 60% 3,16,473 3,16,473 0 Furniture & Fittings 10% 66,57,131 4,04,833 -62,52,298 Intangible Assets 25% 49,35,99,792 - -49,35,99,792 Total 96,97,66,191 27,24,86,243 -69,72,79,948 Although, as per the MOU, dated 19.12.2012, a sale consideration of ₹ 40 crores was assigned to building, plant and machinery, furniture and fixture, inventory etc., without values being assigned to the individual assets, but then, the assessee had assigned an amount of ₹ 27,24,86,243/- to the assets sold and remaining amount to the inventory sold. However, the basis of such allocation is not apparent from record. Apart from that, we find that though the assessee had further assigned the sale consideration to individual assets while working out the Short Term Capital Loss on sale of the depreciable assets, however, no justification or basis for assigning such respective costs to the individual assets can be gathered from the records. In fact, the sale consideration of the depreciable assets has neither been justified by the assessee on the basis of any valuation report nor with the cost allocated by the purchaser in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order on the following effective grounds of appeal: "1. The Commissioner of Income Tax (Appeals) erred in confirming the action of A.O in not setting off Unabsorbed Depreciation brought forward from earlier years amounting to ₹ 66,45,52,265/- against Capital Gain. 2. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Bad Debts/Advances written off and Sundry Balances written off aggregating to ₹ 13,83,56,806/-. 3. The Commissioner of Income Tax (Appeals) erred in confirming disallowance of Short Term Capital Loss of ₹ 69,72,79,948/- on sale of depreciable assets." 29. Briefly stated, the assessment in the case of the assessee company for A.Y. 2013-14 was framed by the A.O vide his order passed under Sec. 143(3), dated 31.03.2016 at an income of ₹ 286,02,72,984/-. After the culmination of the assessment, the assessee filed a letter dated 03.06.2016, therein seeking rectification of certain mistakes in the body of the assessment order under Sec. 154 of the Act. However, the A.O observing that the impugned mistakes pointed out by the assessee in its rectification application were not in the nature of mistake apparent from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the procedure for pronouncement of orders, provides as follows: (5) The pronouncement may be in any of the following manners:- (a) The Bench may pronounce the order immediately upon the conclusion of the hearing. (b) In case where the order is not pronounced immediately on the conclusion of the hearing, the Bench shall give a date for pronouncement. In a case where no date of pronouncement is given by the Bench, every endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. As such, "ordinarily" the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression "ordinarily" has been used in the said rule itself. This rule was inserted as a result of directions of Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn by observing that "In case the limitation expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown". Hon'ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, "It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020". It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus "should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure…". Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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