Nityanand Sonthalia , Kolkata V. Principal CIT, Central - 1, Kolkata , Kolkata

ITA 1164/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0152 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: NIRAV SHETH
• Keywords: Set aside
• Section: 54F; 153A; 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KOLKATA BEFORE SHRI S. S. GODARA, JM & DR. A. L. SAINI, AM ./I.T.A NO.1164/KOL/2018 ( [ [ / ASSESSMENT YEAR: 2010-11) NITYANAND SONTHALIA 34, PANKAJ MALLICK LANE, JAYANTIKA APARTMENT, 1 ST FLOOR, BALLYGUNGE, KOLKATA 700019. VS. PR. CIT, CENTRAL-1, KOLKATA ./ ./PAN/GIR NO.: ALDPS5358M (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI NIRAV SHETH, FCA RESPONDENT BY : SHRI RADHEY SHYAM, CIT / DATE OF HEARING : 16/12/2019 /DATE OF PRONOUNCEMENT : 31/12/2019 / O R D E R PER SHRI S. S. GODARA: THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES AGAINST THE PR. COMMISSIONER OF INCOME TAX, KOLKATA DATED 16.03.2018 INVOLVING PROCEEDINGS U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE PCIT HAS ASSUMED HIS REVISION JURISDICTION WHILST SETTING ASIDE THE ASSESSMENT IN QUESTION DATED 25.12.16 AS UNDER: 5. AS PER DETAILS AVAILABLE ON RECORD, THE ASSESSEE HAD SOLD A FLAT AT DHANBAD ON 18.12.2009 AND LAND AND BUILDING AT DAHIYA ON 24 12.2009 EARNING LONG TERM CAPITAL GAIN (LTCG) OF RS 5,72,502 AND RS 23,11,098 RESPECTIVELY TOTALLING TO RS 28,63,600/-. AGAINST SUCH LONG TERM CAPITAL GAIN EARNED BY THE ASSESSEE., HE HAS CLAIMED DEDUCTION U/S 54 & 54F, ON ACCOUNT OF PURCHASE OF RIGHT IN A FLAT AT UNIWORLD CITY HORIZONS BY BENGAL UNITECH IN NEW TOWN, KOLKATA BEING BUILT BY BENGAL UNITECH ON 10TH JUNE 2010 FROM SHRI RAM MULTICOM PVT LTD BY PAYING RS.40,00,000/-. I.T.A NO.1164/KOL/2018 NITYANAND SONTHALIA PAGE | 2 THERE IS NO DETAIL AVAILABLE ON THE RECORD TO SHOW THAT AS TO WHEN THE FLAT WAS ACQUIRED BY THE ASSESSEE FROM BENGAL UNITECH. JUST BY PURCHASING OF ANY RIGHT IN THE FLAT UNDER CONSTRUCTION, IT CANNOT BE SAID THAT THE ASSESSEE HAS ACQUIRED ANY FLAT BY WAY OF 'PURCHASE OR 'CONSTRUCTION. THEREFORE, THE AO HAS WRONGLY ALLOWED DEDUCTION U/S 54 & 54F, ONLY ON THE BASIS OF PURCHASE OF RIGHT IN A FLAT UNDER CONSTRUCTION. FROM EXAMINATION OF RECORD OF AY 2014-15, IT HAS BEEN FOUND THAT THIS RIGHT HAS BEEN SOLD BY THE ASSESSEE IN SEPTEMBER, 2013. THEREFORE, I FOUND THAT PRIMA FACIE DEDUCTION U/S 54 & 54E, WAS WRONGLY ALLOWED BY AO WITHOUT EXAMINING THE DETAIL OF NATURE OF ACQUISITION MADE BY THE ASSESSEE OF A FLAT FROM BENGAL UNITECH. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, AS DISCUSSED ABOVE AND TAKING INTO ACCOUNT THE FACT THAT NO SUBMISSION HAS BEEN MADE BY THE ASSESSEE AGAINST MY NOTICE U/S 263, I SET ASIDE THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3)/153A DATED 30/12/2016 AND RESTORE IT TO THE FILE OF THE AO TO THE EXTENT OF EXAMINING THE ISSUE RELATING TO ALLOWING DEDUCTION TO ASSESSEE U/S 54 & 54F AFTER EXAMINING THE NATURE OF RIGHT PURCHASED BY ASSESSEE IN A FLAT UNDER CONSTRUCTION AT UNIWORLD CITY HORIZON IN NEW TOWN KOLKATA BEING BUILT WHETHER IT IS WITHIN THE TIME PERIOD GIVEN IN THE PROVISIONS OF 54 & 54DF OR NOT AND WHETHER THE SAID FLAT WAS SOLD BY THE ASSESSEE AFTER THE TIME LIMIT OF THREE YEAR OR NOT, AFTER TAKING THE POSSESSION OF THE FLAT AND ACCORDINGLY DETERMINE, THE ELIGIBILITY OF ASSESSEE TO ALLOW DEDUCTION U/S 54 & 54F OF THE ACT AND THEN PASS A FRESH ASSESSMENT ORDER IN THIS REGARD BY COMPUTING CORRECT AMOUNT OF TAXABLE LONG TERM CAPITAL GAIN IN THE HAND OF THE ASSESSEE. OTHER ADDITIONS MADE BY THE AO IN ORIGINAL ASSESSMENT ORDER SHALL REMAIN INTACT. 6. IN THE RESULT, THE ASSESSMENT ORDER DATED 30.12.2016 IS SET ASIDE TO THE EXTENT OF EXAMINATION OF DEDUCTION U/S.54 AND 54F AND PASSING OF A FRESH ASSESSMENT ORDER AS DIRECTED ABOVE. 3. WE NOW ADVERT TO THE BASIC RELEVANT FACTS. THERE IS HARDLY ANY DISPUTE THAT WE ARE IN ASSESSMENT YEAR 2009-10. THE DEPARTMENT HAD CARRIED OUT SEARCH IN QUESTION DATED 05.08.2014 IN M/S KUSHAL GROUP, KOLKATA. THE SAME CULMINATED IN INITIATION OF SECTION 153A PROCEEDINGS VIDE NOTICE DATED 20.03.2015. THE ASSESSEE FILED HIS RETURN ON 15.05.15 STATING INCOME OF RS.18,62,070/-. THE ASSESSING OFFICER THEN COMPLETED THE REGULAR ASSESSMENT ACCEPTING THE ABOVE RETURN INCOME. SUFFICE TO SAY, IT IS THE SAID ASSESSMENT WHICH HAS BEEN SUBJECTED TO REVISION PROCEEDINGS IN PCITS ORDER UNDER CHALLENGE ON THE GROUND THAT THE ASSESSING OFFICER HAS WRONGLY ACCEPTED THE ASSESSEES SECTION 54 & 54F DEDUCTION CLAIM (SUPRA). 4. BOTH THE LEARNED REPRESENTATIVES REITERATED THEIR RESPECTIVE PLEADINGS AGAINST AND IN SUPPORT OF THE PCITS ASSUMPTION OF REVISION JURISDICTION. HONBLE APEX COURTS LANDMARK DECISION IN MALABAR INDUSTRIES CO. VS. CIT 243 ITR 83 HOLDS THAT BEFORE AN ASSESSMENT IS SOUGHT TO BE REVISED IN PROCEEDINGS U/S 263 OF THE ACT, THE SAME HAS TO BE ERRONEOUS AS WELL AS CAUSED PREJUDICE TO INTEREST OF THE REVENUE; SIMULTANEOUSLY. AND ALSO AN ASSESSMENT CANNOT BE TERMED AS ERRONEOUS CAUSING I.T.A NO.1164/KOL/2018 NITYANAND SONTHALIA PAGE | 3 PREJUDICE TO INTEREST OF THE REVENUE IN CASE THE ASSESSING OFFICER ADOPTS ONE OF THE POSSIBLE VIEW. REVERTING BACK TO IMPUGNED REGULAR ASSESSMENT, WE NOTICE THAT THE ASSESSING OFFICER HAD CLAIMED YET ANOTHER REGULAR ASSESSMENT ON 30.11.10 INVOKING SECTION 153A/143(3) PROCEEDINGS WHILST ASSESSING THE TOTAL INCOME OF RS.18,62,400/- ONLY. THAT BEING THE CASE, IT IS SUFFICIENTLY CLEAR THAT THE IMPUGNED SECOND ASSESSMENT DATED 25.12.16 PERTAINED TO THE SEARCH DATED 05.08.14 ONLY QUA THE ALLEGED INCRIMINATING MATERIAL FOUND/SEIZED. IT EMERGES FROM THE CASE RECORDS THAT THE ASSESSEE HAD CLAIMED THE IMPUGNED SECTION 54 AND 54F DEDUCTION RELIEF AT THE FIRST INSTANCE IN FORMER ASSESSMENT. THIS ISSUE NOWHERE FORMED SUBJECT MATTER OF DEDUCTION IN THE LATTER ASSESSMENT THEREFORE. WE CONCLUDE IN THESE FACTS THAT SINCE THE ASSESSING OFFICER COULD NOT HAVE EVEN TAKEN UP THE ASSESSEES ABOVE DEDUCTION CLAIM DURING LATTER ASSESSMENT, THE PCIT HAS ERRED IN LAW AND ON FACTS IN TERMING THE SAME AS ERRONEOUS CAUSING PREJUDICE TO INTEREST OF THE REVENUE. WE THEREFORE RESTORE THE ASSESSING OFFICERS REGULAR ASSESSMENT DATED 25/30.12.16 AND REVERSE THE PCITS REVISION DIRECTIONS UNDER CHALLENGE. 5. THIS ASSESSEES APPEAL IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.12.2019. SD/- ( A. L. SAINI ) SD/- (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER /KOLKATA; / DATE:31/12/2019 (RS, SR.PS) I.T.A NO.1164/KOL/2018 NITYANAND SONTHALIA PAGE | 4 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE APPELLANT - NITYANAND SONTHALIA 2. THE RESPONDENT- PR. CIT, CENTRAL-1, KOLKATA 3. ( ) / THE CIT(A), KOLKATA [SENT THROUGH EMAIL] 4. / CIT 5. , , / DR, ITAT, KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.