LATE SHRI KANAIYALAL DEOMAL PURSNANI THROUGH LEGAL HEIR SMT. MOHINI PURNANI, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 1081/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1779 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Opportunity of being heard; Cost of acquisition
• Section: 143(3); 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . , / BEFORE SHRI D. MANMOHAN, VICE PRESIDENT /AND !'# , ! . . SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 1081/MUM/2012 $ $ $ $ / ASSESSMENT YEAR 2007-08 LATE SHRI KANAIYALAL DEOMAL PURSNANI - THROUGH: LEGAL HEIR MR. RAJESH KANAYALAL PURSNANI, C/O. MR. ASHOK CHOTRANI, MOHINI LEATHER COLLECTION, SHOP NO. 54-F, OBEROI SHOPPING CENTER, NARIMAN POINT, MUMBAI-400 021. PAN: AAJPP 3266 A VS. THE INCOME TAX OFFICER 19(3)(2), 2 ND FLOOR, PIRAMAL CHAMBER, MUMBAI-400 012. ( %& / APPELLANT ) ( '(%& / RESPONDENT ) %& ) ! / APPELLANT BY : SHRI DHIRENDRA M. SHAH '(%& + ) ! / RESPONDENT BY : SHRI MANOJ KUMAR + ,- / DATE OF HEARING : 14-02-2013 .$ + ,- / DATE OF PRONOUNCEMENT : 22-02-2013 /!0 / O R D E R PER RAJENDRA, A.M. THE FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY TH E LEGAL-HEIR OF THE ASSESSEE AGAINST THE ORDER DT. 30-12-2011 OF THE CIT(A)-30, MUMBAI : 1.(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN PASSING ORDER EX-PARTY WITHOUT GIVING JUST AND REAS ONABLE OPPORTUNITY OF BEING HEARD. HENCE THE APPELLATE ORDER PASSED BE CANCELL ED. (B) THE LEARNED CIT(A) ERRED IN STATING THAT, THE NOTICES WERE SERVED ON THE LEGAL HEIR ITA NO. 1081/MUM/2012 2 AND THE ACCOUNTABLE PERSON WHEN NO SUCH NOTICES HAV E BEEN RECEIVED OR SERVED ON THE LEGAL HEIR AND ACCOUNTABLE PERSON. 2. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE REVISED GROUNDS OF APPEAL FILED ON 24/11/2010. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER PASSED U/S.144 R.W.S.143(3) WH ICH BEING BAD IN LAW AND CONTRARY TO THE FACTS AND EVIDENCE ON RECORD IT SHO ULD BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED ASSESSING OFFICER ERRED IN UTILIZING EVIDENCY AND INFORMATION GATHERE D WITHOUT GIVING JUST AND REASONABLE OPPORTUNITY TO CROSS VERIFY THE SAME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 8,69,500/- MADE AS UNEXPLAINED MONEY U/S.69A, WHICH IS CONTRARY TO THE FACTS AND EVIDENCE ON RECORD. TH E APPELLANT PRAYS THAT, THE ADDITION OF RS.8,69,500/- MADE BE DELETED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER ERRED IN TAKING THE MARKET VALUE OF THE PROPERTY SOLD AT RS. 43,47,500/- AS AGAINST RS. 26,61,000/-. THE APPELLANT PRAYS THAT, THE VALUE RE CEIVED ON SALE OF THE PROPERTY BE ACCEPTED AND NOT RS.43,47,500/- AS ADOPTED BY THE A SSESSING OFFICER. 7. (A) ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, THE ASSESSING OFFICER ERRED IN TREATING THE AMOUNT OF RS.8,69,500/- AS INCOME FROM OTHER SOURCES WHEN IT SHOULD BE TREATED AS LONG TERM CAPITAL AGAIN AS THE AMOUNT RE CEIVED ON SALE OF IMMOVABLE PROPERTY. (B) THE ASSESSING OFFICER ERRED IN NOT DEDUCTING T HE COST OF PURCHASE OF PROPERTY AND ALSO NOT GIVING BENEFIT OF INDEXATION. THE APPELLANT PRAYS THAT, THE ASSESSING OFFICER BE DIRECTED TO DELETE THE ADDITION AS INCOME FROM OTHER SOURCE AND TO ADOPT T HE GAIN RECEIVED AS LONG TERM CAPITAL GAIN AFTER CONSIDER OF PURCHASE COST AND OR INDEXATION COST. 8. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR ALTER ANY OR ALL THE GROUNDS OF APPEAL. 2. ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 14-03-2008 DECLARING TOTAL INCOME OF RS. 1,38,720/-. ASSESSMENT WAS FINA LISED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (ACT). DURING THE ASSESSMENT PROCEEDINGS, AO ISSUED NOTICE S TO THE ASSESSEE ON VARIOUS DATES, BUT NO ONE APPEARED BEFORE HIM. ON 01-12-2009, ONE ADVOCATE FILED A LETTER BEFORE THE AO INFORMING HIM THAT ASSESSEE HA S EXPIRED ON 19-02-2009, THAT WIFE AND LEGAL-HEIR OF ASSESSEE WAS OUT OF INDIA. FACTS OF THE CASE : 3. ON THE BASIS OF THE AIR INFORMATION, AO HELD THAT ASSESSEE HAD ENTERED INTO AN IMMOVABLE PROPERTY TRANSACTION, FOR WHICHPURCHASE DEEDWAS SIGNED ON 29-08-2006. ITA NO. 1081/MUM/2012 3 AS PER THE AO, SALE CONSIDERATION AMOUNTING TO RS . 43.47 LAKHS WAS RECEIVED BY THE ASSESSEE ALONG WITH FOUR OTHER PERSONS. AO FUR THER FOUND THAT THE ASSESSEE AND HIS ASSOCIATES HAD SOLD THE PROPERTY FOR A CONSIDERATIO N OF RS. 26.61 LAKHS AND THE MARKET VALUE OF THE SAID PROPERTY WAS DETERMINED BY THE RE GISTRATION AUTHORITIES AT RS. 43.47 LAKHS FOR THE PURPOSE OF STAMP DUTY VALUATION. AO FOUND THAT SALE PROCEEDS OF THE PROPERTY WERE NOT OFFERED FOR TAXATION BY THE ASSES SEE FOR THE AY UNDER CONSIDERATION. HE ADDED RS. 8.69 LAKHS U/S. 69A OF THE ACT (1/5 TH SHARE OF MARKET VALUE DETERMINED BY THE STAMP DUTY AUTHORITIES) TO THE INCOME OF THE ASSESSEE. 4. LEGAL-HEIR OF THE ASSESSEE THROUGH HER ADVOCATE FI LED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). AS PER FAA, THREE-FOUR OPPORTUNITIES WERE GIVEN TO THE LEGAL-HEIR OF THE ASSESSEE TO APPEAR BEFORE HIM. B UT, NO ONE APPEARED. FAA HELD THAT ASSESSEE HAD NOT FILED DETAILS BEFORE THE AO, THAT AO WAS JUSTIFIED IN PASSING ORDER U/S. 144 OF THE ACT. WITH REGARD TO THE ADDITION M ADE BY THE AO U/S. 69A OF THE ACT, FAA HELD THAT INCOME RECEIVED FROM SALE CONSIDERATI ON OF THE PROPERTY-IN-QUESTION WAS NOT OFFERED FOR TAXATION, THAT AO HAD RIGHTLY I N ASSESSED THE SUM OF RS. 8.69 LAKHS IN THE HANDS OF THE LATE ASSESSEE. 5. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTE D THAT AIR INFORMATION RECEIVED BY THE ASSESSEE WAS NEVER DISCLOSED TO LEG AL-HEIR OF THE LATE ASSESSEE, THAT SMT. MOHINI K. PURSNANI WAS STAYING WITH HER SON IN PANAMA, THAT SHE HAD DIVORCED THE LATE ASSESSEE ABOUT 14 YEARS BACK, THAT FAA DID NOT SEND THE NOTICE ON THE POSTAL ADDRESS GIVEN TO HIM. DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO AND THE FAA. 5.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. IT IS FOUND THAT NOW SMT. MOHINI K. PURSNANI HAS ALSO PAS SED AWAY, AFTER THE APPEAL WAS FILED BEFORE THE TRIBUNAL. NOW, SON OF LATE ASSESS EE HAS BEEN BROUGHT ON RECORD AS LEGAL REPRESENTATIVE AND REVISED GROUNDS OF APPEAL HAVE BEEN FILED BY HIM. IT IS FOUND THAT ON 21-10-2010 SMT. MOHINI K. PURSNANI TH ROUGH HER ADVOCATE SHRI ASHOK CHOTRANI HAD INFORMED THE FAA TO SEND LETTERS WITH REGARD TO APPEAL FILED AGAINST THE ORDER OF THE AO DT. 24-12-2009 AT FOLLOWING ADDRESS : C/O. MR. ASHOK CHOTRANI, MOHINI LEATHER COLLECTION SHOP NO. 54-F, OBEROI SHOPPING CENTER, NARIMAN POINT, MUMBAI 400 021. WE FURTHER FIND THAT ON 24-01-2012, ORDER OF THE FA A WAS RECEIVED BY THE ADVOCATE OF THE ASSESSEE AT NARIMAN POINT ADDRESS. ADVOCATE OF THE ASSESSEE VIDE ITS LETTER 04-02-2012 INFORMED THE FAA THAT AFTER RECEI VING HIS ORDER, HE CAME TO KNOW ABOUT THE NOTICES CLAIMED TO HAVE BEEN ISSUED BY TH E OFFICE OF THE FAA. FAA HAS NOT SENT ANY DENIAL LETTER IN RESPONSE TO SAID LETTER. 6. CONSIDERING THE FACTS, THAT LATE ASSESSEE AND HIS WIFE BOTH HAVE EXPIRED DURING ASSESSMENT/APPELLATE PROCEEDINGS, THAT SMT. MOHINI K. PURSNANI WAS NOT LIVING WITH HER HUSBAND, THAT SON OF LATE ASSESSEE WAS NOT AWAR E OF THE TRANSACTIONS CARRIED OUT BY HIS FATHER, THAT HE IS RESIDING OUT OF INDIA; WE A RE OF THE OPINION THAT IN THE INTEREST OF ITA NO. 1081/MUM/2012 4 JUSTICE, MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. AO IS DIRECTED TO AFFORD THE LEGAL-HEIR OF THE LATE ASSESSEE REASONABLE OPPORTUNITY OF HEARING. AS A RESULT, APPEAL FILED BY THE ASSESSEES LEGAL-H EIR STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2013 /!0 + .$ - ! ' 1 2/ 22 3 , 2013 + 4 5 SD/- SD/- ( . / D. MANMOHAN) ( !'# / RAJENDRA) / VICE PRESIDENT !- /6 / ACCOUNTANT MEMBER MUMBAI, 2/ DATE: 22 - 02-2013 TNMM /!0 /!0 /!0 /!0 + ++ + ',7 ',7 ',7 ',7 8!7$, 8!7$, 8!7$, 8!7$, / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE (7, ', //TRUE COPY// /!0 /!0 /!0 /!0 / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI