Indubai Dharmraj Mule, Ahmednagar V. Income tax Officer,

ITA 123/PUN/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7708 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 17-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P U N A Y; MUKESH JHA ITA NO
• Keywords: Capital asset; Additional evidence; Cost of acquisition
• Section: 54F; 54

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVE DI, AM . / ITA NO. 123/PUN/2017 / ASSESSMENT YEAR : 2012-13 INDUBAI DHARMRAJ MULE, AT SHIPLAPUR, SHIPLAPUR MALWADI, SANGAMNER, AHMEDNAGAR-422 605. PAN : BJFPM3454D ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-4, AHMEDNAGAR. / RESPONDENT . / ITA NO. 124/PUN/2017 / ASSESSMENT YEAR : 2012-13 DASHRATH DHARMRAJ MULE, AT SHIPLAPUR, SHIPLAPUR MALWADI, SANGAMNER, AHMEDNAGAR-422 605. PAN :BJMPM9270Q ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD-4, AHMEDNAGAR. / RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI MUKESH JHA. 2 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 / DATE OF HEARING : 09.04.2018 / DATE OF PRONOUNCEMENT : 24.04.2018 / ORDER PER ANIL CHATURVEDI, AM 1. THESE TWO APPEALS FILED BY TWO DIFFERENT ASSESSEES ARE EMANATING OUT OF THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPE ALS)- 2, PUNE DATED 14.09.2016 AND 15.09.2016 FOR A.Y. 2012-13. 2. BEFORE US, AT THE OUTSET, LD.D.R. SUBMITTED THAT THOUG H THE TWO APPEALS FILED BY TWO DIFFERENT ASSESSEES ARE AGAINST THE SEPARATE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, PUNE BUT THE ISSUE INVOLVED IN BO TH THE APPEALS ARE IDENTICAL EXCEPT FOR THE AMOUNTS AND THE ASSESSEES AND THEREFORE, HIS ARGUMENTS WILL ALSO BE COMMON AND THEREFORE THESE TWO AP PEALS CAN BE HEARD AND DISPOSED OF TOGETHER. WE THEREFORE FOR THE SAKE OF CONVENIENCE PROCEED TO DISPOSE OF THE TWO APPEALS BY A CONSOLIDATED ORDER, BUT H OWEVER, PROCEED WITH NARRATING THE FACTS IN ITA NO.123/PUN/2017 FOR ASSESSMENT YEAR 2012-13. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER:- ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM CAPITAL GAINS, BANK INTEREST AND OTHER SOURCES. THE ASSESSING OFFICER NO TED THAT ASSESSEE HAD SOLD IMMOVABLE PROPERTY ON 30.12.2011 (LAND AT SURVEY NO. 203(3), SANGAMNER, BUDRUK, AHMEDNAGAR) JOINTLY ALONG WITH 20 MEM BERS FOR RS.96,00,000/-. ASSESSING OFFICER FURTHER NOTICED THAT ASSESS EE HAD NOT FILED THE RETURN OF INCOME. THE ASSESSING OFFICER THEREFORE HELD THAT CAPITA L GAIN HAS ESCAPED ASSESSMENT AND ACCORDINGLY, NOTICE WAS ISSUED T O THE ASSESSEE 3 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 U/S.148 OF THE INCOME TAX ACT, 1961 ON 11.03.2015 WHICH W AS DULY SERVED ON ASSESSEE ON 16.03.2015. IN RESPONSE TO THE NOTICE U/S.14 8 OF THE ACT, ASSESSEE FILED RETURN OF INCOME ON 04.06.2015 DECLARING TOTA L INCOME AS NIL. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER, ASSE SSMENT WAS FRAMED U/S.143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 04.06.201 5 AND THE TOTAL INCOME WAS DETERMINED AT RS. 8,64,455/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A ) WHO VIDE ORDER DATED 14.09.2016 (IN APPEAL NO.PN/CIT(A)-2/WD-4/AN/356/201 5-16) DISMISSED THE APPEAL OF ASSESSEE BY HOLDING AS UNDER: 5. THE FACTS OF THE CASE ARE THAT THE APPELLANT SOLD AN JOINTLY HELD IMMOVABLE PROPERTY ON 30/12/2011 FOR TOTAL SALE CONSIDERATION OF RS. 96,00,000/-. HOWEVER, SHE DID NOT FILE RETURN OF INCOME FOR THE YEAR IN QUESTION. THEREFORE, THE CASE WAS REOPENED BY ISSUING NOTICE U/S.148 OF THE ACT. IN RESPONSE TO THE NOTICE ISSUED U/S. 148, THE APPELLANT FILED RETURN OF INCOME ON 04.06.2015 ELECTRONICALLY DECLARING TOTAL INCOME OF RS. NIL. DURING THE ASSESSMENT PROCE EDINGS, THE APPELLANT CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT. HOWEVER, THE A.O. DISALLOWED THE SAME STATING THAT THE APPELLANT WAS NOT ENTITLED FOR THE SAID DEDUCTION AS THE CONSIDERATION WAS INVESTED IN THE NAME OF HIS SON I .E. NOT IN THE NAME OF THE APPELLANT. THE ASSESSMENT WAS COMPLE TED ON 04/06/2015 THEREBY MAKING PROPORTIONATE ADDITION OF RS. 8,64,455/- ON ACCOUNT OF LONG TERM CAPITAL GAIN, WHICH WAS AGREED BY THE APPELLANT AS WELL. 6. IN THE FIRST GROUND OF APPEAL, THE APPELLANT HAS STATED THE A.O D ID NOT CONSIDER THE COST OF ACQUISITION. ON PERUSAL OF THE ASSESSMENT ORDER, IT IS NOTICED THAT DURING ASS ESSMENT PROCEEDINGS THE APPELLANT WAS NOT PREVENTED FROM MAKING ANY SUCH CLAIM BEFORE A.O. AND HE ADMITTED THE ADDI TION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN. IN VIEW OF THIS, THE ADDITIONAL EVIDENCE PRODUCED DURING APPELLATE PROCEEDINGS IS N OT ADMISSIBLE IN THE LIGHT OF PROVISIONS OF RULE 46A OF I. T. RUL ES, 1962, AS HIS CASE IS NOT FALLING UNDER ANY OF THE EXCEPTIONAL CL AUSES AS MENTIONED IN RULE 46A. 7. WITH REGARDS TO THE SECOND GROUND OF APPEAL, IT IS NOTICED THAT THE APPELLANT MADE CLAIM U/S 54F OF THE ACT WHICH N OT ALLOWED BY THE A.O. AS THE 'CONSIDERATION WAS INVESTED IN THE NAME OF THE APPELLANT'S SON. AS PER THE PROVISIONS OF SECTION 5 4 F OF THE ACT, FOR CLAIMING THE SAID DEDUCTION THE AMOUNT OF SALE CONS IDERATION SHOULD BE INVESTED BY THE ASSESSEE IN HIS/HER OWN N AME. THERE IS NOWHERE WRITTEN UNDER THIS SECTION THAT THE DEDUCTI ON CAN BE CLAIMED IF THE INVESTMENT IS MADE IN ANY OTHER'S NAM E. THUS THE A.O. HAS RIGHTLY DISALLOWED THE DEDUCTION. 8. IN VIEW OF THE AFORESAID FACTS, I HOLD THAT THE A.O. HAS RIGHTLY MADE THE ADDITION OF RS.8,64,455/- ON ACCOUNT OF LO NG TERM CAPITAL GAIN DISALLOWING THE DEDUCTION CLAIMED BY THE APPEL LANT U/S 54F OF THE ACT. I DO NOT FIND ANY REASON TO INTERFERE WITH THE ASSESSMENT ORDER PASSED BY THE A.O. 4 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 4. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 5. THE GROUNDS RAISED BY THE ASSESSEE FILED ALONG WITH F ORM NO.36 ARE ARGUMENTATIVE IN NATURE AND NOT IN CONSONANCE WITH RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. HOWEVER, BEFORE US, LD. DR S UBMITTED THAT THE SOLITARY ISSUE IS WITH RESPECT TO TAXING OF CAPITAL GAINS. 6. THE CASE FILE REVEALS THAT THERE WAS DELAY OF 65 DAYS IN FILING THE PRESENT APPEAL. ON PERUSAL OF THE GROUNDS OF APPEAL WHICH ARE ARG UMENTATIVE IN NATURE, IT IS ASSESSEES SUBMISSION THAT THE ASSESSEE IS AN OLD LADY AGED 73 YEARS AND IS STATED TO BE SUFFERING FROM SERIOUS ILLNESS BEC AUSE OF WHICH DELAY HAS OCCURRED IN FILING THE PRESENT APPEAL AND THEREFORE, T HE DELAY BE CONDONED. CONSIDERING THE AFORESAID FACTS AND IN VIEW OF THE SETTLED LAW THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICALITIES ARE PITTED AGAINST EA CH OTHER, THEN THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, WE IN THE INTEREST OF JUSTICE, CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 7. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF ASS ESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. WE, THEREFORE, PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER CONSIDERING THE MATERIAL ON RECORD AND AFTER HEARING THE LD.D.R. 8. BEFORE US, LD. DR SUPPORTED THE ORDER OF ASSESSING OFFICER. 9. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND PERUSED THE MATERIAL ON RECORD. ON PERUSAL OF GROUNDS OF APPEAL WHICH ARE ARGUMENTATIVE AND DESCRIPTIVE IN NATURE, THE FACTUAL POSITION THAT EMERGE S IS THAT ASSESSEE HELD AN AGRICULTURAL LAND (211 GUNTHAS-5.227 ACRES) LOCATED AT SURVEY NO. 203(3), SANGAMNER, BUDRUK,, AHMEDNAGAR WHICHY WAS HELD JOINT LY BY ASSESSEE ALONG WITH 20 OTHER MEMBERS. THE LAND WAS ACQU IRED PRIOR TO 1981. 5 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 ASSESSEES SHARE IN THE LAND WAS 19 GUNTHAS. THE LAND WAS SOLD ON 30.12.2011 FOR RS.96 LACS AND ASSESSEES SHARE WAS RS.8,6 4,455/-. ASSESSING OFFICER CONSIDERED THE ENTIRE SHARE OF ASSESSEE OF RS.8,64,4 55/- AS CAPITAL GAINS. IT IS ASSESSEES CONTENTION THAT IF THE INDEXATION B ENEFIT IS CONSIDERED, THERE WOULD NOT BE ANY TAXABLE CAPITAL GAINS. ON PERUSING THE ASSESSMENT ORDER, WE FIND THAT THE ENTIRE SALE CONSIDERATION HAS BEEN CONSIDERE D AS CAPITAL GAINS AND NO INDEXATION BENEFIT HAS BEEN CONSIDERED WHILE W ORKING OUT THE CAPITAL GAINS. THE MODE AND MANNER OF COMPUTING CAPITAL GA INS IS GIVEN IN SECTION 48 OF THE ACT. THE 2 ND PROVISO TO SECTION 48 PROVIDES THAT WHERE LONG TERM CAPITAL GAINS ARISE FROM THE TRANSFER OF A LONG TERM C APITAL ASSET, THE COST OF ACQUISITION OF THE ASSET HAS TO BE READ AS INDEXED C OST OF ACQUISITION. INDEXED COST OF ACQUISITION HAS BEEN DEFINED IN CLAUSE-(III) OF THE EXPLANATION TO SECTION 48 AS AN AMOUNT WHICH BEARS TO THE COST OF ACQUISITION THE SAME PROPORTION AS THE COST INFLATION INDEX FOR THE YEAR IN WHICH THE ASSET IS TRANSFERRED BEARD TO THE COST INFLATION INDEX FOR THE FIRST YEAR IN WHICH THE ASSET WAS HELD BY THE ASSESSEE OR FOR THE YEAR BEGINNIN G ON THE 1 ST DAY OF APRIL, 1981, WHICHEVER IS LATER. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSET SOLD BY THE ASSESSEE IS NOT A LONG TERM CAPITAL ASSET AN D THE GAINS ARISING THERETO ARE NOT LONG TERM CAPITAL GAINS. IN SUCH A SITUAT ION, WE ARE OF THE VIEW THAT THE CAPITAL GAINS HAVE TO BE COMPUTED AFTER CONSIDE RING THE INDEXED COST OF ACQUISITION, WHICH HAS NOT BEEN DONE IN THE PRESENT CAS E. AT THIS JUNCTURE, IT WOULD BE RELEVANT TO REFER TO CBDT CIRCULAR NO.14 (XL-3 5) DATED 11/04/1955 WHICH STATES THAT THE OFFICERS OF THE DEPARTM ENT MUST NOT TAKE ADVANTAGE OF THE IGNORANCE OF AN ASSESSEE AS TO HIS RIGH TS & IT IS ONE OF THEIR DUTIES TO ASSIST A TAX-PAYER IN EVERY WAY PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEF. IT IS ALSO A SETTLED LAW THAT THE CIRCULA RS ISSUED BY CBDT ARE BINDING ON THE DEPARTMENT. 10. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE MATTER NEEDS TO BE REMANDED TO THE FILE OF A SSESSING OFFICER TO 6 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 WORK OUT THE CAPITAL GAINS IN ACCORDANCE WITH LAW. WE, THER EFORE, WITHOUT DECIDING THE ISSUE ON MERITS, RESTORE THE ISSUE BACK TO T HE FILE OF ASSESSING OFFICER AND DIRECT HIM TO DECIDE THE ISSUE AFRESH IN ACCORD ANCE WITH LAW. NEEDLESS TO STATE, THE ASSESSING OFFICER SHALL GRANT ADEQU ATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY ASSESSEE ARE ALLOWED IN STATISTICAL PURPOSES. 11. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS ES. 12. AS FAR AS APPEAL IN THE CASE OF ITA NO.124/PUN/2017 IN THE CASE OF DASHRATH DHARMRAJ MULE IS CONCERNED, SINCE THE FACTS IN T HE CASE OF DASHRATH DHARMRAJ MULE IN ITA NO.124/PUN/2017 ARE SIMILAR TO THE F ACTS OF THE CASE OF INDUBAI DHARMRAJ MULE (IN ITA NO.123/PUN/2017), WE, THERE FORE, FOR SIMILAR REASONS STATED HEREINABOVE WHILE DECIDING THE ISSUE OF IND UBAI DHARMRAJ MULE, ALLOW THE GROUNDS RAISED IN THE CASE OF DASHRATH DHA RMRAJ MULE IN ITA NO.124/PUN/2017 FOR STATISTICAL PURPOSE. THUS, THE APPEA L OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, BOTH APPEALS OF THE ASSESSEES ARE ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24TH DAY OF APRIL, 2018. SD/- SD/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; ! / DATED : 24 TH APRIL, 2018 SB 7 ITA NO. 123 & 124/PUN/2017 A.Y. 2012-13 ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-2, PUNE. 4. THE PR. CIT-1, PUNE. 5. '#$ %& , ' %& , - ()* , / DR, ITAT, SMC BENCH, PUNE. 6. $+, -. / GUARD FILE. // TRUE COPY // '/ / BY ORDER, 0 %* /PRIVATE SECRETARY ' %& , / ITAT, PUNE.