SUMAN KHURANA, MUMBAI V. ASST CIT CEN CIR 20, MUMBAI

ITA 1132/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1058 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAVITA BUNDAS LD
• Assessee Lawyers: SHEKHAR GUPTA LD
• Keywords: Cost of acquisition
• Section: 143(3); 263

Judgement Text

ITA NO.1132/M/2015 SUMAN KHURANA ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1132/MUM/2015 ( / ASSESSMENT YEAR: 2010-11) SUMAN KHURANA 501, RAHEJA CENTRE FREE PRESS JOURNAL MARG NARIMAN POINT MUMBAI-400 021 / VS. ASSTT. COMMISSIONER OF INCOME TAX (HQ) (JUDL.)(CENTRAL)-2 AAYKAR BHAVAN MUMBAI ./ ./ PAN/GIR NO. AAHPK-0190-Q ( /APPELLANT ) : ( !' / RESPONDENT ) A SSESSEE BY : SHEKHAR GUPTA, LD. AR RE VENUE BY : SAVITA BUNDAS, LD. CIT DR / DATE OF HEARING : 02/05/2017 / DATE OF PRONOUNCEMENT : 05 /05/2017 ITA NO.1132/M/2015 SUMAN KHURANA ASSESSMENT YEAR 2010-11 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2010-11 ASSAILS THE EXERCISE OF REVISIONAL JURISDIC TION U/S 263 BY LD. COMMISSIONER OF INCOME TAX (CENTRAL)-2 [CIT] VIDE O RDER DATED 30/01/2015. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT IND IVIDUAL ASSESSEE, WAS ASSESSED FOR IMPUGNED AY U/S 143(3) WHERE THE R ETURNED INCOME OF RS.56,06,930/- E-FILED BY ASSESSEE ON 28/09/2010 WA S ACCEPTED AS SUCH. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING IN SHARES . SUBSEQUENTLY, THE ASSESSMENT WAS SUBJECTED TO REVIS IONAL JURISDICTION U/S 263 VIDE CIT ORDER DATED 30/01/2015 WHEREIN THE LD. CIT OBSERVED THAT THE ASSESSEE HAS AVAILED INDEXATION BENEFIT ON SALE OF A FLAT FROM THE DATE OF ITS ALLOTMENT, WHEREAS, THE SAME, IN THE OP INION OF LD. CIT, WAS AVAILABLE ONLY FROM THE DATE OF POSSESSION OF THE F LAT AND THEREFORE, THE QUANTUM ORDER BEING ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE WAS SET ASIDE. AGGRIEVED, THE ASSESSEE HAS, BY WAY OF THIS APPEAL, ASSAILED THE JURISDICTION ACQUIRED BY THE LD. CIT U /S 263. 3. THE LD. COUNSEL FOR ASSESSEE [AR] DREW OUR ATTEN TION TO THE FACTUAL MATRIX OF THE CASE BY CONTENDING THAT THE ASSESSE S OLD THE FLAT DURING IMPUGNED AY ON 30/10/2009 FOR RS.40 LACS. THE SAID FLAT WAS ACQUIRED BY THE ASSESSEE FROM THE BUILDER AT TOTAL PRICE OF RS.7.76 LACS BY WAY OF ALLOTMENT LETTER DATED 07/12/1993 AND THEREFORE, TH E ASSESSEE WAS ENTITLED FOR INDEXATION BENEFIT QUA COST OF ACQUISITION FROM FINANCIAL YEAR ITA NO.1132/M/2015 SUMAN KHURANA ASSESSMENT YEAR 2010-11 3 1993-94 ITSELF AS PER VARIOUS SETTLED JUDICIAL PRON OUNCEMENTS PARTICULARLY BY RECENT JUDGMENT OF MUMBAI TRIBUNAL IN ANITA D.KANJANI VS. ACIT [79 TAXMANN.COM 67 ORDER DATED 13/02/2017] . FURTHER, THE ASSESSEE FILED COMPLETE DETAILS REGARDING CAPITAL GAINS DURING PRO CEEDINGS U/S 143(3) AND THE LD. AO DULY APPLIED HER MIND ON THE ISSUE A ND ACCEPTED THE CLAIM OF THE ASSESSEE. THEREFORE, SINCE AO HAS TAKE N A PLAUSIBLE VIEW, THE ORDER CANNOT BE HELD TO BE ERRONEOUS AND THEREF ORE, INVOCATION OF SECTION 263 WAS NOT JUSTIFIED. 4. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE AO, DURING ASSESSMENT PROCEEDINGS, FAILED TO MAKE A NY INQUIRY ON THE ISSUE RAISED BY THE LD. CIT AND THEREFORE, THE POWE R WAS CORRECTLY EXERCISED AS THE ORDER WAS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF THE REVENUE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORDS. SO FAR AS THE MERITS OF THE CASE ARE CO NCERNED, WE FIND THAT THE PRESENT APPEAL BY ASSESSEE QUESTIONS THE EXERCI SE OF REVISIONAL JURISDICTION U/S 263 BY LD. CIT AND NOT THE MERITS OF THE CASE. THE LIMITED ISSUE TO BE DECIDED BY US IS THAT WHETHER THE LD. C IT, ON THE FACTS, WAS JUSTIFIED IN INVOKING SECTION 263 OR NOT? A PERUSAL OF THE AOS ORDER U/S 143(3) REVEALS THAT THIS ISSUE IS NOWHERE DISCUSSED BY THE AO IN HER ORDER. WE FIND THAT CERTAIN DETAILS REGARDING WORKI NG OF CAPITAL GAINS WERE PROVIDED BY ASSESSEE IN COMPUTATION OF INCOME BY ME NTIONING DATE OF SALE / DATE OF PURCHASE AND OTHER FACTUAL DATA. FUR THER, A LETTER DATED 01/01/2013 APPARENTLY SUBMITTED BY ASSESSEE DURING QUANTUM PROCEEDINGS CONTAINS SIMILAR DETAILS WHEREIN COPIES OF SALE AGREEMENT AND PROOF OF BOND INVESTMENT U/S 54EC WERE SUBMITTE D AND NOTHING ITA NO.1132/M/2015 SUMAN KHURANA ASSESSMENT YEAR 2010-11 4 MORE. THE ASSESSEE HAS PLACED ON RECORD AN ALLOTMEN T LETTER DATED ISSUED BY THE BUILDER ON 07/12/1993 REGARDING WHICH , PRIMA FACIE WAS NEVER BEFORE LD. AO. ALSO, THE DETAILS OF PAYMENT MADE BY ASSESSEE QUA THE ACQUISITION OF FLAT WERE NOWHERE GIVEN. ALL THE SE FACTORS LEAD US TO CONCLUDE THAT THERE WAS NO APPLICATION OF MIND O N THE ISSUE BY AO. THE ASSESSEE HAS RAISED ANOTHER PLEA THAT THE CAPIT AL GAINS HAS BEEN INVESTED IN BONDS ELIGIBLE FOR SECTION 54EC DEDUCTI ON AND THEREFORE, THE ORDER WAS NOT PREJUDICIAL TO THE INTEREST OF THE RE VENUE IN ANY MANNER. HOWEVER, WE FIND NO STRENGTH IN THE ARGUMENT AS ASS ESSEE HAS INVESTED ONLY THE AMOUNT OF CAPITAL GAINS AND NOT THE ENTIRE SALE PROCEEDS AND THEREFORE, THE SAME DO NOT HELP ASSESSEE IN ANY WAY . 6. THEREFORE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT TWIN CONDITIONS OF SECTION 263 VIZ. ORDER BEING ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WERE FULFILLED. FURT HER, QUANTUM ORDER HAS BEEN PASSED ON 24/01/2013 WHEREAS ORDER U/S 263 IS PASSED ON 30/01/2015 WHICH IS WITHIN THE STATUTORY TIME LIMIT . THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE SECTION 263 ORDER OF L D. CIT AT THIS STAGE AND THEREFORE, DISMISS ASSESSEES APPEAL. 7. HOWEVER, IT IS NOTED THAT THE ASSESSEE HAS PLACE D BEFORE US ALLOTMENT LETTER DATED 07/12/1993 ISSUED BY THE BUI LDER AND THEREFORE, WE HOLD THAT THE PERIOD OF HOLDING SHALL BE COMPUTED F ROM THE DATE OF ALLOTMENT AS PER THE RATIO OF CITED ORDER OF THE TR IBUNAL. THE ASSESSEE SHALL BE ENTITLED FOR INDEXATION BENEFIT YEAR-WISE QUA COST OF ACQUISITION AS PER THE ACTUAL PAYMENT MADE BY HIM FROM TIME TO TIME. WITH THESE OBSERVATIONS, THE ASSESSEE IS FREE TO SUBSTANTIATE HIS CLAIM ON MERITS ITA NO.1132/M/2015 SUMAN KHURANA ASSESSMENT YEAR 2010-11 5 DURING THE RELEVANT PROCEEDINGS AND AO IS AT LIBERT Y TO DECIDE THE ISSUE AS PER LAW ON MERITS. 8. THE ASSESSEES APPEAL STANDS DISMISSED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH MAY, 2017. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 05 .05.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. !$, , , , / DR, ITAT, MUMBAI 6. -. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI