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Income Tax Appellate Tribunal - Bangalore

M/S.Cornersstone Property ... vs Income-Tax Officer, Ward-2(1)(2), ... on 10 November, 2017

               IN THE INCOME TAX APPELLATE TRIBUNAL
                        BANGALORE BENCH ' C '

      BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND
              SHRI LALIET KUMAR, JUDICIAL MEMBER

                           S.P. No.248/Bang/2017
                       (In I.T. A. No.665/Bang/2017)
                        (Assessment Year : 2008-09)

M/s. Cornerstone Property Investments Pvt. Ltd.,
No.583, 9th Main, Of CMH Road, Indiranagar, 1st Stage,
Bangalore-560 038.                                             .... Petitioner.

        Vs.

Income Tax Officer,
Ward 2(1)(2), Bangalore.                                    ..... Respondent.

Petitioner By : Shri H. N. Khincha, C.A.
Respondent By : Shri M. K. Biju, JCIT (D.R)

Date of Hearing : 10.11.2017.
Date of Pronouncement : 10.11.2017.

                                O R D E R

Per Shri Jason P Boaz, A.M. :

This Stay Petition ('S.P') arises out of the assessee's appeal in ITA No.665/Bang/2017 for the Assessment Year 2008-09.

2. Briefly stated, the facts relevant for disposal of this Stay Petition are as under :

2.1 The assessee company engaged in the real estate business, filed its return of income for Assessment Year 2008-09 on 30.09.2008 declaring loss of Rs.6,86,051. A revised return was filed on 14.10.2008 wherein the loss declared was reduced to Rs.5,23,251. The return was processed under Section 143(1) of the Income Tax Act, 1961 (in short 'the Act').

Proceedings under Section 147 of the Act were initially initiated and dropped. For the second time, the Assessing Officer initiated proceedings under Section 147 of the Act and after recording reasons to believe that income of the assessee liable to tax for the year under consideration had escaped assessment, issued Notice under Section 148 of the Act to the assessee on 28.6.2013. The assessment was concluded under Section 143(3) r.w.s. 147 of the Act vide order dt.20.3.2015 wherein the assessee's income was determined at Rs.49,44,76,249 in view of addition of Rs.49.50 Crores was made in respect of share premium received by the assessee @ Rs.990 per share for proposed issue of 5,00,000 shares. On appeal, the CIT (Appeals) - 2, Bangalore dismissed the assessee's appeal vide order dt.31.3.2015. The assessee is now in further appeal before this Tribunal and we are informed by both parties that the hearing of this appeal has already been notified for hearing on 20.11.2017 before the 'C' Bench of this Tribunal.

2.2.1 The learned Authorised Representative for the assessee was heard in the matter and reiterated the submissions put forth in the stay petition. According to the learned Authorised Representative the total demand raised in the Assessment Year 2008-09 was Rs.37,08,34,356 3 S.P. No.248/Bang/2017 which comprised of an amount of Rs.20,38,29,116 being the interest charged under Sections 234B, 234C and 220(2) of the Act. It is submitted that out of the total tax demand of Rs.16,80,05,238, the assessee has so far paid taxes amounting to Rs.5 Crores in three instalments of Rs.2.50 Crores on 20.2.2017, Rs. 1 Crore on 24.3.2017 and Rs.1.5 Crores on 27.3.2017. The balance tax demand outstanding is Rs. 11,80,05,238. 2.2.2 The assessee submits that its Stay Petition dt.26.10.2017 filed before the Pr. CIT-2, Bangalore for stay on recovery of balance demand till disposal of appeal was rejected and hence this Stay Petition has been filed before the Tribunal. The learned Authorised Representative inviting our attention to the assessee's paper book pages 1 to 47, submitted that the current / present financial condition of the company as on 31.3.2017 was precarious since as per Balance Sheet on page 10 of paper book, it shows that the shareholders funds was negative i.e. (-) Rs.9.42 Crores and the assessee's borrowings were approx. Rs.250 Crores. It was also pointed out that as per P & L account at page 11 of paper book, current year's revenue's had fallen to approx. Rs.1.38 Crores from Rs.69 Crores in the immediately preceding year and the business loss for the current year is approx. Rs.21.09 Crores. It was pleaded that in these circumstances, further recovery of outstanding demand be stayed till disposal of the appeal.

2.3 Per contra, the learned Departmental Representative for revenue vehemently opposed the grant of stay on recovery of outstanding demand.

2.4 We have heard the rival contentions, perused and carefully considered the material on record. We find that out of the total demand raised of Rs.37,08,34,356, the tax demand is Rs.16,80,05,238 and the balance of Rs.20,38,29,118 comprises interest charged under Section 234B, 234C and 220(2) of the Act. It is seen that out of the tax demand of Rs.16,80,05,238 the assessee has so far paid Rs.5 Crores and the outstanding amount in this regard is presently Rs.11,80,05,238. After due consideration of the facts of the case, the financial position of the assessee and the balance of convenience, we are of the considered opinion that this is a fit case for grant of stay on recovery of outstanding demand for a period of 90 days, commencing today or till disposal of the appeal whichever is earlier, and do so, but subject to the following conditions :

(i) That the assessee pays further tax of an amount of Rs.4 Crores in two instalments as under :

a) Rs.2 Crores on or before 17.11.2017.

b) Rs.2 Crores on or before 30.11.2017.

(ii) The hearing of this appeal for Assessment Year 2008-09 is already fixed for hearing on 20.11.2017. Therefore there is no requirement for the Registry to issue notices to the parties separately in the matter. We make it clear that the assessee should not seek any adjournments in the course of hearing of this appeal without justifiable reasons.

(iii) Should the assessee breach any of the aforesaid conditions without justifiable reasons, this stay granted shall stand vacated automatically.

3. In the result, the Stay Petition for Assessment Year 2008-09 is allowed.

Order pronounced in the open court on the 10th day of Nov.,2017.

                        Sd/-                                Sd/-
                  (LALIET KUMAR)                     (JASON P BOAZ)
                Accountant Member                    Judicial Member
Bangalore,
Dt. 10.11.2017.


*Reddy gp



Copy to :
            1   Appellant      4        CIT(A)
            2   Respondent     5        DR. ITAT, Bangalore
            3   CIT            6        Guard File




                                              Senior Private Secretary
                                           Income Tax Appellate Tribunal
                                                     Bangalore.