Asstt/ Commissioner of Income tax, Central Cir. 2(3), Nagpur V. Shri Mahesh Gupta, Nagpur

ITA 124/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1808 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 18-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H WANARE
• Keywords: Cost of acquisition
• Section: 143(3); 54F; 153A; 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 124/NAG/2012 / ASSESSMENT YEAR 2002-03 ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3), AAYAKAR BHAVAN, NAGPUR 440 001. VS. SHRI MAHESH GUPTA, GUPTA BHAWAN, TEMPLE BAZAR, SITABULDI, NAGPUR 440 001. PAN: AATPG 8810 F . / ITA NO. 139/NAG/2012 / ASSESSMENT YEAR 2002-03 SHRI MAHESH GUPTA, C/O. M/S. LOYA BAGRI & CO., CHARTERED ACCOUNTANTS, GANDHIBAG, NAGPUR. PAN: AATPG 8810 F VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(3), AAYAKAR BHAVAN, NAGPUR. ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY : SHRI H. WANARE ASSESSEE BY : SHRI RAJESH LOYA ! '#$ / DATE OF HEARING : 30-01-2013 %& ! '#$ / DATE OF PRONOUNCEMENT : 08-02-2013 '( / O R D E R PER RAJENDRA, AM THE FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY BO TH THE ASSESSING OFFICER (AO) AS WELL AS THE ASSESSEE AGAINST ORDERS DT. 30- 01-2012 OF CIT(A)-I, NAGPUR. GROUNDS OF APPEAL FOR ITA NO. 124/NAG/2012 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) ERRED IN DIRECTING TO ALLOW EXEMPTION UNDER SECTION 54F IN RESPECT OF PUR CHASE CONSIDERATION PAID FOR ONE FLAT PURCHASED ON 12-02-2011 AS PER THE SALE DE ED. ITA NOS. 124/NAG/2012 & 139/NAG/2012 MAH ESH GUPTA 2 2. THE ORDER OF LEARNED CIT(A) IS CONTRADICTORY IN AS MUCH AS ON ONE HAND IT IS HELD THAT THE FLATS ARE UNFINISHED AND INHABITABLE AND H ENCE ASSESSEE IS DISENTITLED TO EXEMPTION WHILE ON THE OTHER IT IS HELD THAT THE EX EMPTION UNDER SECTION 54F IS ALLOWABLE ON SUCH UNFINISHED AND INHABITABLE PROPER TIES. 3. ANY OTHER GROUND THAT MAY BE RAISED DURING THE COUR SE OF HEARING IN APPEAL GROUNDS OF APPEAL FOR ITA NO. 139/NAG/2012 1. THAT THE ORDER OF THE AO IS BAD IN LAW AND THE LEAR NED CIT(A) ERRED IN CONFIRMING THE SAME. ON THE FACTS AND CIRCUMSTANCE S OF THE CASE THE ACTION OF THE CIT(A) IS UNJUSTIFIED. 2. THAT THE LEARNED AO ERRED IN LAW AND ON FACTS IN DI SALLOWING CLAIM OF EXPENDITURE ON INTEREST ETC. FOR RS. 1,65,480/- AND THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE ON THE BAS IS THAT THE EXPENDITURE SHOULD HAVE BEEN DEBITED IN THE BOOKS OF M/S. GUPTA EXPORT S. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE AUTHORITIES IS UNJUSTIFIED. 3. (A) THAT THE LEARNED AO ERRED IN LAW AND ON FACTS I N NOT ALLOWING CLAIM OF EXEMPTION OF RS. 1,04,07,408/- ON ACQUISITION OF RE SIDENTIAL FLATS AND LEARNED CIT(A) WAS NOT JUSTIFIED IN ALLOWING PART RELIEF OF EXEMPTION U/S. 54F TO THE EXTENT OF PURCHASE COST OF ONE FLAT. ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE AUTHORITIES IS UNJUSTIFIED. (B) THAT THE LEARNED CIT(A) WAS UNJUSTIFIED IN NOT CONSIDERING THE EXPENDITURE INCURRED FOR MAKING THE PROPERTY HABITABLE AND SHAR E OF COMMON EXPENDITURE WHILE ALLOWING EXEMPTION U/S. 54F. ON THE FACTS AN D CIRCUMSTANCES OF THE CASE THE ACTION OF THE LEARNED CIT(A) IN RESTRICTING THE EXEMPTION U/S. 54F TO THE EXTENT OF PURCHASE COST OF FLAT IS HIGHLY UNJUSTIFIED. (C) THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FAC TS IN DENYING THE EXEMPTION U/S. 54F ON TWO FLATS ON THE BASIS THAT THE TWO FLA TS PURCHASED BY ASSESSEE ARE NOT CONTIGUOUS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION OF LEARNED CIT(A) IN RESTRICTING THE DEDUCTION ONLY TO ONE FLA T IS ARBITRARY AND WITHOUT CONSIDERING THE BENEFICIAL PROVISIONS OF SECTION 54 F. 2. THE ASSESSEE, AN INDIVIDUAL, HAD FILED HIS RETURN OF INCOME U/S. 139(1) ON 31-03-2003 DECLARING TOTAL INCOME OF RS. 8,43,930/- AND AGRICULTURAL INCOME OF RS. 1,61,900/-. THE RETURN WAS PROCESSED U/S. 143( 1) OF THE INCOME TAX ACT, 1961 (ACT) ON 09-07-2003. SUBSEQUENTLY, THERE WAS A SEA RCH IN THE CASE OF THE ASSESSEE ON 24-12-2003. ACCORDINGLY, IN RESPONSE TO NOTICE U/S . 153A, THE ASSESSEE FILED RETURN OF INCOME ON 30-03-2006 DECLARING SOME INCOME I.E., TO TAL INCOME OF RS. 8.43 LAKHS AND AGRICULTURAL INCOME OF RS. 1.61 LAKHS. THE ASSESSM ENT WAS MADE U/S. 153A R.W.S 143(3) OF THE ACT ON 30-03-2006 DETERMINING TOTAL I NCOME OF RS. 1,24,69,925/- AND AGRICULTURAL INCOME OF RS. 1,26,500/-. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA) AGAINST THE ASSESSMENT ORDER OF THE AO, IN WHICH HE HAD DENIED THE ASSESSEES BENEFIT OF LONG TERM CAPITAL GAIN AND EXEMPTION CLAIMED U/S . 54F OF THE ACT. FAA VIDE HIS ITA NOS. 124/NAG/2012 & 139/NAG/2012 MAH ESH GUPTA 3 ORDER DT. 07-05-2007 ALLOWED THE CLAIM MADE BY THE ASSESSEE. LATER ON CIT(CENTRAL), NAGPUR ASSUMED THE JURISDICTION U/S. 263 AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE VIDE LETTER DT. 13-07-2007. 4. AFTER ANALYSING THE VARIOUS ISSUES RAISED IN THE R EVISIONAL PROCEEDINGS, NOTICES AND AFTER CONSIDERING THE SUBMISSION MADE BY THE AS SESSEE, CIT(C), NAGPUR VIDE ORDER U/S. 263 DT. 31-03-2008 FOUND THE ORDER OF TH E AO DT. 30-03-2006 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY DIRECTED THE AO TO REDO THE ASSESSMENT AFRESH AFTER TAKING DUE COGNIZANCE O F THE DEFICIENCIES POINTED OUT IN HIS ORDER. 5. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER OF THE AO , FAA DECIDED THE APPEAL. AS STATED EARLIER, AO AS WELL AS THE ASSESSEE HAS FILE D CROSS-APPEALS AGAINST THE SAID ORDER OF THE FAA. MEANWHILE, ORDER PASSED BY THE C IT U/S. 263 OF THE ACT WAS CHALLENGED BEFORE THE ITAT BY THE ASSESSEE. DEALIN G WITH THE ISSUES OF EXEMPTION CLAIMED U/S. 54F OF THE ACT, WHICH WAS ONE OF THE R EASONS OF INVOKING THE PROVISIONS OF 263 OF THE ACT, ITAT NAGPUR BENCH VIDE ITS ORDER DT. 15-10-2012 HELD AS UNDER: WE HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS THE CIT(A)S ORDER AND WE NOTED BOTH THESE ISSUES HAVE DULY BEEN CONSIDERED AND DEC IDED IN THE APPEAL BY THE CIT(A). IN VIEW OF SPECIFIC PROVISION UNDER EXPLANATION (C) TO SECTION 263, DEBARRING THE CIT FOR INVOKING SECTION 263 IN RESPECT OF THE ISSUE, W HICH HAS BEEN CONSIDERED AND DECIDED IN APPEAL. THE CIT IN THIS CASE HAS EXCEED ED HIS JURISDICTION BY INVOKING THE PROVISION OF SECTION 263 ON BOTH THESE ISSUES. ON THESE ISSUES, WE CANNOT SUSTAIN THE ORDER OF THE CIT. SIMILARLY, WITH REFERENCE TO THE EXEMPTION ON ACCOU NT OF INTEREST, TRIBUNAL HELD AS UNDER: SIMILARLY, THE ASSESSING OFFICER HAS VERIFIED THE C LAIM OF THE ASSESSEE IN RESPECT OF THE INTEREST AND EVEN THE ASSESSING OFFICER DISALLOWED THE INTEREST AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT (A) HAS DULY CONSIDERED THE ISSUE OF LIABILITY OF THE INTEREST. THE CIT IS DEBARRED IN VIEW OF EXPLANATION (C) TO SECTION 263 FROM INVOKING SECTION 263 IN RESPECT OF INTERES T ALSO. THIS IS A FACT THAT BOTH THE CONDITIONS THAT THE ORDER IS ERRONEOUS AND IS PREJU DICIAL TO THE INTEREST OF THE REVENUE MUST BE SATISFIED FOR INVOKING THE JURISDICTION U/S . 263 OF THE ACT AND INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF L AW SATISFIES THE REQUIREMENT OF THE ORDER BEING ERRONEOUS U/S. 263. IT IS NOT A CASE W HERE THERE IS AN INCORRECT ASSUMPTION OF THE FACT OR AN INCORRECT APPLICATION OF THE LAW. IF THE ASSESSING OFFICER IS TAKEN ONE OF THE POSSIBLE VIEW THAT DOES NOT MEA N THAT THERE IS AN ERROR IN THE ORDER UNLESS AND UNTIL THE VIEW TAKEN BY THE ASSESSING OF FICER IS UNSUSTAINABLE IN LAW. WHERE THERE IS ANOTHER VIEW POSSIBLE, THE REVISION IS NOT PERMISSIBLE. ERRONEOUS ORDER DOES NOT MEAN AN ORDER WITH WHICH COMMISSIONE R IS UNABLE TO AGREE. IN VIEW OF THE AFORESAID DISCUSSION, WE QUASH THE ORDER PAS SED U/S. 263 OF THE ACT. ITA NOS. 124/NAG/2012 & 139/NAG/2012 MAH ESH GUPTA 4 6. FROM THE ABOVE IT IS CLEAR THAT REVISIONARY ORDER PASSED BY THE CIT HAS BEEN QUASHED BY THE ITAT. AS THE ORIGINAL ORDER I.E., O RDER PASSED BY THE CIT U/S. 263 OF THE ACT DOES NOT SURVIVE ANY MORE, SO THE SUBSEQUEN T DEVELOPMENTS OCCURRED IN PURSUANCE OF THE SAME, SAID ORDER BECOMES INFRUCTUO US. IN THESE CIRCUMSTANCES, APPEALS FILED BY THE AO AND THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 8 TH DAY OF FEBRUARY, 2013 )* +,' - *-. / 8 0 # , 2013 & '( %&1' 2 . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) ', / JUDICIAL MEMBER $ ', / ACCOUNTANT MEMBER )* MUMBAI, 2' DATE: 8 TH FEBRUARY, 2013 TNMM COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE 1' ' //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT