M/S. New Cochin Real Estate Developers, ... vs Assessee

STAY PETITION No. 35/Coch/2015 Arising out of ITA No. 155/Coch/2015 (Asst Year 2008-09 ) New Cochin Real Estate Developers Vs The Dy Commr of Income Tax Citadel House Cen.Cir 1,Ernakulam Nadathara PO C Nagar, Thrissur 680 751 ( Applicant) (Respondent)

PAN No. AAGFN8053J Assessee By Shri K Kittu Revenue By Shri Anil Kuumar, CIT-DR Date of Hearing 12th May 2015 Date of pronouncement 12th May 2015

ORDER

PER B.R. BASKARAN, AM:

The assessee has moved this stay application seeking stay of

outstanding demand of Rs. 9.21 crores.

2 The ld counsel appearing for the assessee submitted that the assessee

did not file the return of income for the year under consideration and hence,

the AO completed the assessment to the best of his judgment u/s 144 of the

Act by determining the total income at Rs. 16.74 crores. The ld counsel

submitted that the AO has estimated the income of the assessee at a higher

level, which has resulted in raising of huge demand upon the assessee. When

the appeal was filed before the CIT(A), the first appellate authority dismissed

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the appeal of the assessee on the technical ground that the assessee has failed

to pay the tax due on the returned income, by invoking the provisions of sec.

249(4)(a) of the Act. The ld counsel submitted that the question of payment of

self assessment tax u/s 140A of the Act shall not arise in the instant case,

since the assessee has not filed any return of income. Accordingly, he pleaded

for stay of the entire outstanding demand.

3 On the contrary, the ld DR submitted that the assessee was subjected to

survey operations u/s 133A of the Act and a lot of incriminating documents

were impounded. The assessee did not file return of income and hence the AO

has completed the assessment by properly analyzing the impounded

documents. The ld DR further submitted that the assessee should have been

paid the advance tax due on its income and non- payment advance tax would

also resulting in non admission of appeal by the ld CIT(A) as per section

249(4)(b) of the Act.

4 In the rejoinder, the ld AR submitted that the assessee was also not

liable to pay any advance tax and hence, the provisions of sec. 249(4)(b) also

shall not apply to the assessee.

5 When a specific query was asked to the ld AR whether the assessee has

disputed all the additions made by the AO, the ld AR fairly conceded that the

addition of Rs. 2.83 crores pertaining to the profit on the transfer of 7.34 acres

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of land near KINFRA SEZ may not be effectively contested by the assessee. He

further submitted that the addition of Rs. 1.03 crores pertaining to profit on

compensation has been recommended to be deleted by the AO himself in the

remand proceedings. The remaining addition of Rs. 13.31 crores shall be

effectively challenged by the assessee since the AO has adopted abnormal rate

of interest @ 40% for estimating the profit. In effect, the ld AR fairly conceded

that the assessee is liable to pay considerable amount as tax for the year under

consideration.

6 Having considered the rival contentions, we are of the view that the

balance of convenience is in favour of granting partial stay to the assessee.

Accordingly, we direct the assessee to pay a sum of Rs. 50 lacs in five

installments of Rs. 10 lacs each and the first installment should be paid on or

before 30.5.2015. The assessee should also furnish security to the satisfaction

of the AO for the balance portion of the outstanding amount. Subject to the

payment of installments and provision of security, referred above, the balance

portion of outstanding tax shall be stayed for a period of six months from the

date of this order or till the date of disposal of the assessee whichever date

expires earlier.

7. The registry is directed to post the appeal in the normal course. The

assessee should not seek adjournment without reasonable cause on the date of

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hearing of the appeal, failing which the present stay order shall be subjected to

review by the division bench hearing the appeal.

8 In the result, the Stay Application filed by the assessee is partly allowed.

Order pronounced in the open Court on this 12th day of May 2015.

Sd/- Sd/- ( V DURGA RAO) (B.R. BASKARAN) Judicial Member Accountant Member

Cochin: Dated 12th May 2015 Raj*

Copy to:

1. Appellant - 2. Respondent - 3. CIT(A) 4. CIT, -Kochi 5. DR 6. Guard File

By order

Assistant Registrar ITAT, COCHIN

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