TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 501
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....rporated in the year 1946. The company was in the engineering business of manufacturing of shafts and gears. The assessee company later diversified into renewable energy in 2011 looking to the future of this industry. The company entered the solar business with initial capital of Rs. 5,00,00,000/- in February 2011. To commence the business of solar power, valid Power Purchase Agreement (PPA) of any State or Central Government is the prime requirement. However, there was no PPAs given and only option was to buy companies which had valid PPA, since PPA per se was not transferrable. Gujarat Government had allotted PPA in phase-1 and phase-2 which was valid till 31/12/2011 and 31/12/2012 respectively. Accordingly, in February 2011, the assessee company purchased S. J. Green Parks Pvt. Ltd., which had valid PPA under phase-2 and Euro Solar Power Pvt. Ltd., which had valid PPA under phase-1. The assessee purchased entire shareholdings of both the companies in February 2011. However, the assessee company could not get sufficient financing from the banks and hence, the project could not be started before the stipulated date. For this purpose, the assessee company had to pay heavy penalti....
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....,673/-, thereby resulting in short term capital loss of Rs. 2,41,33,673/-. 2.3. The assessee company later resorted to sell 42 acres of land (Non-NA land) to Madhav Group which was purchased by Mrs. Neelakshi Khurana (who is related to Madhav Group Promoters). As per the agreement of Banakhat, purchaser agreed to pay Rs. 4 Crores for 42 acres of land after NA is done. Hence, the deal was with NA i.e. after assessee is successful in getting the land NA done. It was submitted by the ld. AR that sale value of the deal was higher since NA had always commanded premium. As per the agreement, the purchaser paid Rs. 1.75 Crores and balance was to be paid after NA and actual transfer is done. The assessee derived capital gains on sale of this land to the tune of Rs. 3,20,33,576/- which was duly offered for taxation under the head capital gains. 2.4. The land NA could not be done by assessee within reasonable time. Accordingly, being the aggrieved party, purchaser Mrs. Neelakshi Khurana cancelled the transaction in May 2014 on account of assessee company selling this entire stake in ESPL to Madhav Group. The amount received from Mrs. Neelakshi Khurana by the assessee was refunded. Hence, ....
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....book value after sale of shares, value of shares cannot be taken at less than book value. With these observations, the ld. AO had proceeded to disallow the short-term capital loss on sale of shares of Rs. 2,41,33,673/- in the assessment. 2.7. We find that the ld. AR had submitted that the observations of the ld. AO as stated hereinabove are factually incorrect. All the documentary evidences together with necessary explanation were duly furnished before the ld. AO vide letter dated 19/03/2015 which is also enclosed in pages 40-45 of the paper book filed before us. 2.8. It was submitted by the ld. AR that the entire transactions of the assessee with ESPL are to be understood as under:- (a) Madhav Group to acquire 50% stake from assessee company in ESPL (b) ESPL to retain only land required to 5 MW solar power project (i.e. 35 acres). Balance land of 105 acres transferred to assessee company by ESPL. (c) Madhav Group Mrs. Neelakshi Khurana purchased 42 acres of land from assessee company at a price of Rs. 4 Crores which includes cost of NA permission which is the responsibility of assessee company. 2.9. It was submitted that all the above were transactions with assessee compa....
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....ion on various arguments made by the learned Counsel for the assessee and all those issues are left open. Assessee is also at liberty to furnish additional evidences, if any, in support of its contentions. Accordingly, ground No.1 raised by the revenue is allowed for statistical purposes. 3. Ground No.2 raised by the revenue is with regard to observation of the ld. CIT(A) that assessee had not made any claim of deduction towards bad debts u/s.36(1)(vii) of the Act in the sum of Rs. 2,27,62,719/-. 3.1. We have heard rival submissions and perused the materials available on record. We find that assessee had reflected certain bad debts on certain receivables which were carried forward from earlier years. To get rid of possible litigation that might arise on the allowability of the said issue as deduction, it had chosen not to claim any deduction towards bad debts while filing its return of income. The bad debts arose in respect of debts receivable from the following parties as under:- (a) Barayu / Golden Rose - Rs. 2,15,22,719/- (b) Excavator Ethopia - Rs. 7,40,000/- (c) Saffron Advisors - Rs. 5,00,000/- Total Rs. 2,27,62,719/- 3.2. We find that the ld. AO had duly recorded ....
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....round No.2 which has already been disposed off by us hereinabove. Accordingly, the ground No.3 raised by the revenue is also dismissed. 5. Ground No.4 & 5 raised by the revenue are general in nature and does not require any specific adjudication. 6. It is pertinent to mention here that this order is pronounced after a period of 90 days from the date of conclusion of the hearing. In this regard, we place reliance on the decision of co-ordinate bench of this Tribunal in the case of JSW Ltd in ITA Nos. 6264 & 6103/Mum/2018 dated 14.5.2020, wherein this issue has been addressed in detail allowing time to pronounce the order beyond 90 days from the date of conclusion of hearing by excluding the days for which the lockdown announced by the Government was in force. The relevant observations of this tribunal in the said binding precedent are as under:- 7. However, before we part with the matter, we must deal with one procedural issue as well. While hearing of these appeals was concluded on 7th January 2020, this order thereon is being pronounced today on 14th day of May, 2020, much after the expiry of 90 days from the date of conclusion of hearing. We are also alive to the fact that ru....
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....he question then arises whether the passing of this order, beyond ninety days, was necessitated by any "extraordinary" circumstances. 9. Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon‟ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. As a matter of fact, even before this formal nationwide lockdown, the functioning of the Income Tax Appellate Tribunal at Mumbai was severely restricted on account of lockdown by the Maharashtra Government, and on account of strict enforcement of health advisories with a view of checking spread of Covid 19. The epidemic situation in Mumbai being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon‟ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with ord....
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....aw being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon‟ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon‟ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed "while calculating the 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". The extraordinary steps taken suo motu by Hon‟ble jurisdictional High Court and Hon‟ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our....