Mrs Dagny D'Souza, Reis Magos, Goa V. ACIT, Circle - 2(1), Panaji

CO 2/PAN/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4870 (ITAT-PANAJI)
• Duration Of Justice: 4 year(s) 2 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH NAYAK
• Keywords: Capital asset; Search and seizure; Opportunity of being heard; Source of fund; Additional evidence; Question of law; Cost of acquisition; Tax effect; Revised return; Set aside; Capital Gains
• Section: 43B; 2(14); 143(1); 143(2); 54EC

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ,पणजीमɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI (Through virtual Court- at Raipur) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER Sl. No. CO No. Name of Appellant/cross objector Name of Respondent Asst. Year 1. 01/PAN/2018 (arising out of ) ITA No. 368/PAN/2017 Mr. Elvino De Souza C/o. M/s. Osborne Resorts, Gaurawaddo, Calangute, Portais Verem, Reis Magos, Bardez, Goa PAN : ABTPD0915D ACIT, Goa Circle- 2(1), Panaji, Goa 2007-08 2. 02/PAN/2018 (arising out of ) ITA No. 369/PAN/2017 Mrs. Dagny De Souza C/o. M/s. Osborne Resorts, Gaurawaddo, Calangute, Portais Verem, Reis Magos, Bardez, Goa PAN : AAWPN2707M ACIT, Goa Circle- 2(1), Panaji, Goa 2007-08 3. 03/PAN/2018 (arising out of ) ITA No. 370/PAN/2017 Mr. Joseph Da Silva Portais Verem, Reis Magos, Bardez, Goa PAN : ABTPD0917B ACIT, Goa Circle- 2(1), Panaji, Goa 2007-08 4. 04/PAN/2018 (arising out of ) ITA No. 371/PAN/2017 Mrs. Dina Maria Da Silva Portais Verem, Reis Magos, Bardez, Goa PAN : ABTPD0917B ACIT, Goa Circle- 2(1), Panaji, Goa 2007-08 Assessee by : Shri Shyam J Kamath, AR Revenue by : Shri Saurabh Nayak, DR 2 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 स ु नवाई कȧ तारȣख / Date of Hearing :25.02.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 05.04.2022 आदेश / ORDER PER RAVISH SOOD, JM : The present cross-objections filed by the captioned assessee’s arises from the respective appeals filed by the Revenue in ITA No.(s) 368 to 371/PAN/2017 for assessment year 2007-08. Before proceeding any further, we may herein observe that the aforementioned appeals of the Revenue i.e. ITA No.(s) 368 to 371/PAN/2017 had been disposed off by the Tribunal, for the reason, that the tax effect therein involved was below the monetary limit as prescribed by the CBDT Circular No.17/2019. As common issues are involved in the captioned cross-objections, therefore, the same are being taken up and disposed off together by way of a consolidated order. We shall first take up Cross-objection No.02/PAN/2018 for the assessment year 2007-08 in the case of Mrs. Dagny De Souza. 3 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 2. The assessee had objected to the impugned order passed by the CIT (Appeals) on the following grounds before us: “1. The learned CIT(A) has erred in not adjudicating the additional ground praying for exemption of gains on sale of agricultural land, instead of the same being assessed as capital gains. 2. The CIT(A) has erred in not holding the actual payment Rs.12,52,250/- to the landowners in excess of the respective stamp duty amounts as allowable acquisition/improvement cost. 3. The CIT(A) has erred in not holding the actual payment of Rs.700000/- to the land owner of the strip of land, the rights in which were extinguished as allowable acquisition /improvement cost. 4. The CIT(A) has erred in not holding the actual payment of Rs.4,75,000/- of brokerage at the time of purchase of the asset, as allowable acquisition cost, which brokerage of Rs.4,75,000/- was allowed by the respondent in the assessment without following the procedure in section 251(2) of the Act, 1961. 5. The CIT(A) has erred in not holding the actual payment of Rs.4,20,000/- of brokerage at the time of sale of the asset, as allowable expenses for transfer. 6. The respondent craves leave to add to or modify the above ground of cross objection.” 3. Succinctly stated, the assessee had filed her return of income for the assessment year 2007-08 on 24.10.2007, declaring an income of Rs.7,26,077/- i.e, after applying the provisions of Section 5A of the Act. The return of income filed by the assessee was initially processed as such u/s. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 4 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 4. During the course of assessment proceedings, it was observed by the Assessing Officer that the assessee had declared long term capital gain (LTCG) of Rs. 6,81,876/- in her return of income for the year under consideration. On a perusal of the details, it was gathered by the Assessing Officer that the assessee had sold land at Baga in Village- Calangute of Bardez, Taluka (North Goa District) to M/s. Elliot Goa Resorts Pvt. Ltd. for a consideration of Rs.3,08,97,500/-. The assessee’s communion had 50% share in the aforementioned property. It was noticed by the Assessing Officer that the assessee after claiming deduction of indexed cost of acquisition and exemption u/s.54F and 54EC of the Act, had offered for tax the balance amount of LTCG of Rs.6,81,876/-. Holding a conviction that the assessee had purchased the aforementioned property in question for a business purpose i.e, for development and construction of multi-storied buildings comprising of residential flats, holiday homes and shops etc., the Assessing Officer re-characterized the sale of the property in question as a business transaction and brought the income arising therefrom to tax as “business income” in the hands of the assessee. After disallowing 5 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 certain expenses that were claimed by the assessee while computing the LTCG on sale of the property under consideration i.e, brokerage etc., the A.O vide his order passed u/s.143(3), dated 20.12.2019 assessed her income at Rs.63,02,017/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). The assessee assailed the re-characterization of the sale transaction of the property in question as a business transaction by the Assessing Officer i.e, as against that claimed by her as a transaction involving sale of a capital asset. Also, the assessee assailed the disallowance made by the Assessing Officer of her claim for deduction of certain expenses i.e., brokerage, payments made to tenants, disallowance of claim for deduction u/s.54F and 54EC of the Act etc. Observing, that the assessee was neither in the business of real estate development, nor was engaged in purchase and sale of properties, the CIT(Appeals) concurred with the claim of the assessee that the income/gains that were earned by her from sale of property could not be treated as gains of business. Accordingly, the CIT(Appeals) directed the Assessing Officer to treat the income/gains arising from sale of the 6 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 property as LTCG earned from sale of a capital asset. After deliberating on the other issues that were raised by the assessee before him the CIT(Appeals) partly allowed the appeal. 6. The assessee has objected to the order of the CIT(Appeals) before us, primarily for the reason that the CIT(Appeals) had while disposing off the appeal failed to adjudicate her claim that as the property in question i.e, agricultural lands were situated beyond a distance of 8 kms from the municipal limits of Mapusa - Goa, therefore, the same not being a capital asset, the gain/surplus arising on the sale of the same was not exigible to tax under the head LTCG. In order to buttress her aforesaid claim the Ld. Authorized Representative (for short ‘AR’) for the assessee had drawn our attention to the report of a Government Registered Valuer, dated 16.06.2008, wherein it was certified by him that the properties bearing Survey No. 277/1 to 52, Survey No. 278/1 to 29 situated at Baga in Village-Calangute of Bardez, Taluka (North Goa District) were at a distance of 9.50 kms (approximately) from Mapusa Municipal limits/boundary. It was submitted by the Ld. AR that the aforesaid certificate was filed in the 7 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 course of the proceedings before the CIT (Appeals). Also, our attention was drawn by the Ld. AR to Form-I & XIV which evidenced that the property in question was agricultural land. It was claimed by the Ld. AR that the aforesaid Form I & XIV were filed in the course of the proceedings before the Assessing Officer as well as before the CIT (Appeals). Further, the Ld. AR had taken us through a certificate dated 13.02.2018 that was issued by the Executive Engineer, Ward Division- XIII(R), PWD, Mapusa, Goa wherein it was stated by him that the property bearing survey No.277/278 at Baga in Village-Calangute of Bardez was at a distance of more than 8 kms from the municipal limits of Mapusa. It was submitted by the Ld. AR that as the aforesaid certificate of the Executive Engineer, PWD dated 13.02.2018 was obtained after culmination of the proceedings before the CIT (Appeals), therefore, the same being in the nature of “additional evidence” may be admitted as the same goes to the very root of the controversy involved in the present appeal. Backed by the aforesaid facts, it was submitted by the Ld. AR that though it had on the basis of supporting documents claimed before the CIT(Appeals) that as the 8 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 agricultural lands in question were situated beyond a distance of 8 kms from the municipal limits, therefore, the same not being a capital asset, the gain/surplus arising there from would not be exigible to tax under the head “Capital gain”, however, the said aspect had not been adjudicated by him. On the basis of his aforesaid contentions, it was submitted by the Ld. AR, that now when the agricultural lands in question as held by the CIT (Appeals) were admittedly a ‘capital asset’, therefore, considering the fact that the same were situated beyond a distance of 8 kms from the municipal limits, the gain/surplus arising on the sale of the same could not have been brought to tax under the head ‘capital gain’. 7. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 8. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. Although, it is the claim of the assessee that she had raised an additional ground of appeal before the CIT(Appeals), 9 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 therein, seeking exemption of gains/surplus on sale of agricultural lands, for the reason, that the same were situated beyond a distance of 8 Kms from the notified municipal limits, however, we are afraid that the order passed by the CIT (Appeals) does not reflect so. At the same time, we may herein observe, that as the issue in hand i.e. exigibility to tax under the head ‘capital gain’ of the gain/surplus arising from the sale of agricultural lands in question which are situated beyond the distance of 8 kms from the municipal limits of the notified area i.e., Mapusa, Goa (as claimed by the assessee on the basis of supporting documents) being essentially a question of law based on the facts borne from the records, the same can be permitted to be raised for the first time in the course of proceedings before us. At this stage, we may herein observe, the Certificate, dated 16.06.2008 of the Government Registered Valuer, viz. Shri Hemant Sawkar & Associates and Form-1 & XIV that were filed by the assessee in the course of the proceedings before the lower authorities prima facie supports her claim that the property in question were ‘agricultural lands’ situated at Baga, Village- Calangute (under jurisdiction of Calangute Panchayat) in Bardez Taluka 10 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 (North Goa District) which were approximately at a distance of 9.50 kms (approximately) from the Mapusa-Goa municipal limit/boundary i.e., beyond a distance of 8 kms from Mapusa Municipal limits. Also, as the certificate dated 13.02.2018 issued by Executive Engineer, PWD at Mapusa, Goa which had been filed by the assessee before us as ‘additional evidence’ goes to the very root of the issue in hand i.e, distance of the property from the municipal limits of Mapusa, therefore, the same having a strong bearing on the issue in question is herein admitted. 9. Backed by the aforesaid facts, we are of the considered view that the claim of the assessee that the property in question were agricultural lands which were situated beyond a distance of 8 kms from the municipal limits of Mapusa- Goa, therefore, the same not being a ‘Capital asset’ within the meaning of section 2(14) of the Act, the gain/surplus arising from the sale of the same could not be brought to tax in her hands under the head ‘capital gain’ involves purely a question of law based on the facts borne from the records, thus, the same merits admission. Our aforesaid view is fortified by the judgment 11 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 of the Hon’ble Bombay High Court in the case of CIT Vs. Pruthvi Brokers & shareholders Pvt. Ltd. (2012) 349 ITR 336 ( Bom.) wherein it was observed that the question of law though not raised before lower authorities can be raised for the first time in the course of proceedings before appellate authorities. The Hon’ble High Court while concluding as hereinabove, had observed as under: “10. A long line of authorities establish clearly that an assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also additional claims to wit claims not made in the return filed by it. It is necessary for us to refer to some of these decisions only to deal with two submissions on behalf of the department. The first is with respect to an observation of the Supreme Court in Jute Corporation of India Limited v. Commissioner of Income Tax, 1991 Supp (2) SCC 744 = (1991) 187 ITR 688. The second submission is based on a judgment of the Supreme Court in Goetze (India) Limited v. Commissioner of Income Tax. 11(A). In Jute Corporation of India Limited v. CIT, for the assessment year 1974-75 the appellant did not claim any deduction of its liability towards purchase tax under the provisions of the Bengal Raw Jute Taxation Act, 1941, as it entertained a belief that it was not liable to pay purchase tax under that Act. Subsequently, the appellant was assessed to purchase tax and the order of assessment was received by it on 23 rd November, 1973. The appellant challenged the same and obtained a stay order. The appellant also filed an appeal from the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner (AAC) permitted it to raise the claim and allowed the deduction. The Tribunal held that the AAC had no jurisdiction to entertain the additional ground or to grant relief on a ground which had not been raised before the Income Tax Officer. The Tribunal also refused the appellant's application for making a reference to the High Court. The High Court upheld the decision of the Tribunal and refused to call for a statement of case. It is in these circumstances that the appellant filed the appeal before the Supreme Court. The Supreme Court held as under :- "5. In CIT v. Kanpur Coal Syndicate, a three Judge bench of this Court discussed the scope of Section 31(3)(a) of the Income Tax Act, 1922 which is almost identical to Section 251(1)(a). The court held as under: (ITR p. 229) 12 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 "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 this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations if any prescribed by the statutory provisions. In the absence of any statutory provision the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. There appears to be no good reason and none was placed before us to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income Tax Officer." [emphasis supplied] (B) It is clear, therefore, that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities, but is also entitled to raise additional claims before them. The appellate authorities have the discretion whether or not to permit such additional claims to be raised. It cannot, however, be said that they have no jurisdiction to consider the same. They have the jurisdiction to entertain the new claim. That they may choose not to exercise their jurisdiction in a given case is another matter. The exercise of discretion is entirely different from the existence of jurisdiction. 12. At page 694, after referring to certain observations of the Supreme Court in Additional Commissioner of Income-tax v. Gurjargravures P. Ltd., (1978) 111 ITR 1, the Supreme Court observed at Page 694 as under :- "The above observations do not rule out a case for raising an additional ground before the Appellate Assistant Commissioner 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 that the ground became available on account of change of circumstances or law. There may be several factors justifying raising of such new plea in appeal, and each case has to be considered on its own facts. If the Appellate Assistant Commissioner is satisfied he would be acting within his jurisdiction in considering the question so raised in all its aspects. Of course, while permitting the assessee to raise an additional 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 13 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 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 appellate authorities, therefore, have jurisdiction to deal not merely with additional grounds, which became available on account of change of circumstances or law, but with additional grounds which were available when the return was filed. The first part viz. "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... "clearly relate to cases where the ground was available when the return was filed and the assessment order was made but "could not have been raised" at that stage. The words are "could not have been raised" and not "were not in existence". Grounds which were not in existence when the return was filed or when the assessment order was made fall within the second category viz. where "the ground became available on account of change of circumstances or law." 14. The facts in Jute Corporation of India Ltd., various judgments referred to therein as well as in subsequent cases, which we will refer to, establishes this beyond doubt. In many of the cases, the grounds were, in fact, available when the return was filed and/or the assessment order was made. In Jute Corporation of India Ltd., the ground was available when the return was filed. The assessee did not claim any deduction of its liability to pay purchase tax as "it entertained a belief that it was not liable to pay purchase tax under the Bengal Raw Jute Taxation Act, 1941". Thus, the ground existed when the return was filed. The assessment order was even made and received by the assessee. It is only after the appeal was filed that the assessee claimed a deduction in respect of the amount paid towards the purchase tax under the said Act. It is also significant to note that the assessee's entitlement to claim deduction had been held to be valid in view of an earlier judgment of the Supreme Court in Kedarnath Jute Manufacturing Company Limited v. Commissioner of Income-tax, (1971) 82 ITR 363. This was, therefore, a case of error in perception/judgment. Despite the same, the Supreme Court upheld the decision of the Appellate Assistant Commissioner in allowing the deduction. The words "could not have been raised" must, therefore, be construed liberally and not strictly. 15. It is indeed a question of exercise of discretion whether or not to allow 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 14 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 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 Company Limited v. Commissioner of Income-tax, (1974) 97 ITR 334, held that such amounts represented allowable deductions on revenue account. The appellant, therefore, raised a new claim and additional grounds before the Tribunal in that connection. The Tribunal rejected the same. The second question which was raised in the reference before the Division Bench was as under :- "(2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in not allowing the assessee leave to raise in its own appeals additional grounds and in the departmental appeals cross objections regarding the deductibility of the sums transferred to contingency reserve and tariff and dividend control reserve?" (B) The Division Bench which heard the reference, finding that there was a conflict of decisions, placed the papers before the Hon'ble Chief Justice for constituting a larger bench to resolve the controversy. The Full Bench answered the reference in the affirmative and in favour of the assessee. The Full Bench held :- "Thus, the Appellate Assistant Commissioner has very wide powers while considering an appeal which may be filed by the assessee. He may confirm, reduce, enhance or annul the assessment or remand the case to the Assessing Officer. This is because, unlike an ordinary appeal, the basic purpose of a tax appeal is to ascertain the correct tax liability of an assessee in accordance with law. Hence an Appellate Assistant Commissioner also has the power to enhance the tax liability of the assessee although the Department does not have a right of appeal before the Appellate Assistant Commissioner. The Explanation to subsection (2), however, makes it clear that for the purpose of enhancement, the Appellate Assistant Commissioner cannot travel beyond the proceedings which were originally before the Income-tax Officer or refer to new sources of income which were not before the Income-tax Officer at all. For this purpose, there are other separate remedies provided under the Income-tax Act." (C) It is unnecessary to refer to all the judgments that the Full Bench referred to while answering the reference. The Full Bench referred to the observations of the Supreme Court in Jute Corporation of India Limited v. Commissioner of Income-tax (supra) set out above. It is important to note that even in this case, therefore, the ground existed 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. 15 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 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 banks. The interest received on such deposits was offered by the assessee itself for tax and the assessment was completed on that basis. Even before the Commissioner of Income-tax (Appeals), the inclusion of this amount was neither challenged by the assessee nor considered by the Commissioner of Income-tax (Appeals). The assessee filed an appeal before the Tribunal. The inclusion of the amount was not objected to even in the grounds of appeal as originally filed before the Tribunal. Subsequently, the assessee by a letter, raised additional grounds to the effect that the said sum could not be included in the total income. The assessee contended that on a erroneous admission, no income can be included in the total income. It was further contended that the ITO and the Commissioner of Income-tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it had raised these additional grounds on learning about the legal position subsequently. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under :- "4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: "Where on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee, whether the Tribunal has jurisdiction to examine the same." Under Section 254 of the Income Tax Act the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with the appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings 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." 16 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 18. In the case before us, the CIT(A) and the Tribunal have held the omission to claim the deduction of Rs.40,00,000/- to be inadvertent. Both the appellate authorities held, after considering all the facts, that the assessee had inadvertently claimed a deduction of Rs.20,00,000/- paid after the end of the year in question. We see no reason to interfere with this finding. We see less reason to interfere with the exercise of discretion by the appellate authorities in permitting the respondent to raise this claim. That the respondent is entitled to the deduction in law is admitted and, in any event, clearly established. In the circumstances, the respondent ought not be prejudiced. 19. The orders of the CIT(A) and the Tribunal clearly indicate that both the appellate authorities had exercised their jurisdiction to consider the additional claim as they were entitled to in view of the various judgments on the issue, including the judgment of the Supreme Court in National Thermal Power Corporation Limited. This is clear from the fact that these judgments have been expressly referred to in detail by the CIT(A) and by the Tribunal. 20. We wish to clarify that both the appellate authorities have themselves considered the additional claim and allowed it. They have not remanded the matter to the Assessing Officer to consider the same. Both the orders expressly direct the Assessing Officer to allow the deduction of Rs.40,00,000/- under section 43B of the Act. The Assessing Officer is, therefore, now only to compute the respondent's tax liability which he must do in accordance with the orders allowing the respondent a deduction of Rs.40,00,000/- under section 43B of the Act. 21. The conclusion that the error in not claiming the deduction in the return of income was inadvertent cannot be faulted for more than one reason. It is a finding of fact which cannot be termed perverse. There is nothing on record that militates against the finding. The appellant has not suggested, much less established that the omission was deliberate, mala-fide or even otherwise. The inference that the omission was inadvertent is, therefore, irresistible. 22. It was then submitted by Mr. Gupta that the Supreme Court had taken a different view in Goetze (India) Limited v. Commissioner of Income-tax. We are unable to agree. The decision was rendered by a Bench of two learned Judges and expressly refers to the judgment of the Bench of three learned Judges in National Thermal Power Company Limited vs. Commissioner of Income-tax (supra). The question before the Court was whether the appellant-assessee could 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 claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge 17 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 on the power of the Income-tax Appellate Tribunal under section 254 of the Income- tax Act, 1961. There shall be no order as to costs." [emphasis supplied]” 23. It is clear to us that the Supreme Court did not hold anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the assessing officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the Tribunal under section 254. 24. A Division Bench of the Delhi High Court dealt with a similar submission in Commissioner of Income-tax v. Jai Parabolic Springs Limited, (2008) 306 ITR 42. The Division Bench, in paragraph 17 of the judgment held that the Supreme Court dismissed the appeal making it clear that the decision was limited to the power of the assessing authority to entertain a claim for deduction otherwise than by a revised return and did not impinge on the powers of the Tribunal. In paragraph 19, the Division Bench held that there was no prohibition on the powers of the Tribunal to entertain an additional ground which, according to the Tribunal, arises in the matter and for the just decision of the case. 10. In the backdrop of our aforesaid deliberations, we are of the considered view that the aforesaid issue in hand i.e, exigibility to tax of the gains/surplus arising to the assesee from sale of the ‘capital asset’ i.e., agricultural lands, which as claimed by the assessee on the basis of supporting documentary evidence are situated beyond a distance of 8 kms from the notified area limits i.e, the municipal limits of Mapusa- Goa, having been categorically raised for the first time before us, thus, in all fairness would require to be adjudicated by the Assessing Officer. We, thus, in terms of our aforesaid observations restore the issue to the file of the Assessing Officer with a direction to re-adjudicate the assssee's claim that the gain/surplus arising on the sale of the 18 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 properties in question i.e, ‘agricultural lands’ situated at Baga, Village- Calangute (under jurisdiction of Calangute Panchayat) in Bardez Taluka (North Goa District) was not exigible to tax under the head “capital gain” after considering the documentary evidences which had been produced before us (including the Certificate, dated 13.02.2018 issued by Executive Engineer, PWD, Mapusa). Accordingly, in terms of our aforesaid observations we restore the issue to the file of the Assessing Officer. As we have set-aside the matter on the primary issue i.e, adjudication of the assessee’s claim that the gain/surplus arising from sale of the agricultural lands in question was not exigible to tax under the head ‘Capital gain’, therefore, we refrain from adverting to and therein adjudicating the other grounds raised by the assessee before us, which having been rendered as merely academic in nature are left open. 11. In the result, cross-objection filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations i.e., CO No.02/PAN/2018 is allowed. 19 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 CO No.(s) 01, 03 & 04/PAN/2018 A.Y.2007-08 12. As the facts and issues involved in the captioned cross-objections remains the same as were there before us in the asssesee’s cross- objection for assessment year 2007-08 in CO No.02/PAN/2018, therefore, our order therein passed while disposing off the cross- objection in CO No.02/PAN/2018 shall apply mutatis-mutandis for disposing off the captioned cross-objections in CO No.(s) 01, 03 & 04/PAN/2018 for the assessment year 2007-08. 13. In the result, all the cross-objections filed by the assessee are allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in Open Court on 05 th day of April, 2022. Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 05 th April, 2022 *SB 20 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-2, Panaji, Goa. 4. The Pr.CIT, Panaji, Goa. 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, पणजी / DR, ITAT, Panaji. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 21 CO No. 01, 02, 03 & 04/PAN/2018 A.Y.2007-08 Date 1 Draft dictated on 22.03.2021 Sr.PS/PS 2 Draft placed before author 22.03.2021 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order