MITHILAKSHI S. HEGDE, MUMBAI V. ITO WD 22(2)(3), NAVI MUMBAI

ITA 1306/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6366 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKASH KR AGARWAL
• Assessee Lawyers: RASHMIKANT C MOD I
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition; Set aside; Capital Gains
• Section: 80C; 201; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI RAJESH KUMAR ( AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 1306 /MUM/2017 ASSESSMENT Y EAR: 2011 - 12 MITHILAKSHI S. HEDGE, NO. 53, SINDHI COLONY, CST ROAD, CHEMBUR, MUMBAI - 400071 PAN : AAXPH4930P VS. THE INCOME TAX OFFICER, WARD 22 (2)(3), TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI - 400706 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RASH M IKANT C. MOD I (AR) REVENUE BY : SHRI VIKASH KR. AGARWAL (D R) DATE OF HEARING: 03 /01 /201 9 DATE OF PRONOUNCEMENT: 31 / 01 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 14.10.2016 PASSED BY THE COM MISSIONER OF INCOME TAX (APPEALS) - 25 (FOR SHORT THE CIT (A) ) , MUMBAI, FOR THE ASSESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS DISMISSED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 OF THE INCOME TAX ACT, 1961 (FOR SHO RT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL AND PROPRIETOR OF ADITYA BAR AND RESTAURANT, CHEMBUR, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 2,24,250/ - . SINCE , THE CASE WAS SELECTED FOR SCRUTINY, NOTICES U/ S 143 (2) AND 142 (1) WERE ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND SUBMITTED THE DETAILS CALLED FOR. IT WAS NOTICED THAT THE ASSESSEE HAD SURRENDERED THE TENANCY 2 ITA NO. 1306 /MUM/2017 ASSESSMENT YEAR: 2011 - 12 RIGHTS FOR A CONSIDERATION OF RS. 1.5 CRORE IN FAVOUR OF SHRI VISHINDAS DEVIDAS VAZIRANI , HOWEVER, THE ASSESSEE HAD NOT REVEALED THE SAME IN ITS RETURN OF INCOME. ACCORDINGLY, THE AO ISSUED NOTICE TO EXPLAIN AS TO W HY THE CAPITAL GAIN ARISING ON SURRENDERED OF TENANCY RIGHTS SHOULD NOT BE ASSESSED TO TAX UNDER THE HEAD CAPITAL GAIN. THE AR CONTENDED THAT THE LONG TERM CAPITAL GAIN WAS NOT MENTIONED INADVERTENTLY IN THE RETURN OF INCOME, BUT MENTIONED UNDER ADDITION T O FIX ASSETS. THE AR FURTHER CONTENDED THAT THE ASSESSEE HAD INCURRED EXPENSES AMOUNTING TO RS. 49,29,930/ - IN CONNECTION WITH REPAIR AND RENOVATION OF THE HOTEL DURING THE PERIOD 1993 TO 1996. THE AR FURTHER CONTENDED THAT AFTER CONSIDERING THE INDEXATION NO TAX LIABILITY REMAINS ON THE ASSESSEE. HOWEVER, THE AO REJECTING THE CONTENTION OF THE ASSESSEE MADE ADDITION OF RS. 1.5 CRORE AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 1,53,24,254/ - AFTER EXCLUDING THE LONG TERM CAPITAL GAIN AND ALLOWING DEDUCTION U/S 80C DETERMINED THE TOTAL INCOME AT RS. 1,50,00,000/ - . THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD.CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE DISMISSED THE APPEAL. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER PASSED BY THE LD.CIT (A). 3. THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE FOLLOWING EFFECTIVE GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING LONG TERM CAPITAL GAINS ON SURRENDERING TENANCY RIGHTS AT RS. 1,50,00,0 00/ - . 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING INDEXED COST OF ACQUISITION AS DEDUCTION IN CALCULATION OF LONG TERM CAPITAL GAINS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING INDEXED COST OF IMPROV EMENT TO TENANTED PREMISES AS DEDUCTION IN CALCULATION OF LONG TERM CAPITAL GAINS. 3 ITA NO. 1306 /MUM/2017 ASSESSMENT YEAR: 2011 - 12 4. A T THE OUTSET , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED AN APPLICATION FOR ADMITTING , COPY OF AGREEMENT FOR CONDUCTING DATED 04.06.1992 EN TERED INTO BETWEEN MS. ANJALI CHITRANJAN SETHI AND MS. MITHALAKSHMI SUDHAKAR HEDGE, A COPY OF GENERAL POWER OF ATTORNEY EXECUTED BY ANJALI CHITRANJAN SHETHI IN FAVOUR OF MS. MITHALAKSHMI SUDHAKAR HEDGE DATED 04.06.1992 AND COPIES OF BILLS FOR ADDITIONS A ND RENOVATIONS MADE, AS ADDITIONAL EVIDENCE, WHICH THE ASSESSEE COULD NOT PRODUCE BEFORE THE AUTHORITIES BELOW DUE TO CIRCUMSTANCES BEYOND ITS CONTROL . THE LD. COUNSEL FURTHER SUBMITTED THAT THESE DOCUMENTS ARE ESSENTIAL FOR PROPER ADJUDICATION OF THE ISSU ES INVOLVED IN THE PRESENT APPEAL, THEREFORE, THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THE APPLICATION ON THE GROUND THAT SINCE THE ASSESSEE HAS FAIL ED TO PRODUCE THE SAME BEFORE THE AUTHORITIES BELOW, THE ASSESSEE IS NOW ESTOPPED FR OM FILING THE SAME BEFORE THE TRIBUNAL . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE RELEVANT RECORD AVAILABLE ON RECORD. WE NOTICE THAT THE DOCUMENTS, WHICH THE ASSESSEE WANTS TO SUBMIT AS ADDITIONAL EVIDENCE , ARE ESSENTIAL FOR PROPER ADJUDICATION OF THE ISSUES INVOLVED IN THE PRESENT CASE. AS SUBMITTED BY THE LD. COUNSEL, SINCE THE SAID DOCUMENTS WERE NOT AVAILABLE WITH THE ASSESSEE DURING THE ASSESSMEN T PROCEEDINGS AND APPELLATE PROCEEDINGS, THE SAME COULD NOT BE PRODUCED BEFORE THE AUTHORITIES BELOW. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD GET ONE MORE OPPORTUNITY TO PRESENT ITS CASE IN THE LIGHT OF THE ADDITIO NAL EVIDENCE SUBMITTED BEFORE US. HENCE, WE ALLOW THE APPLICATION OF THE ASSESSEE AND ADMIT THE ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE AND FAIR PLAY. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT (A) AND REMIT THE APPEAL BACK TO THE AO WITH THE DIRECTION TO DECIDE THE ISSUES AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE 4 ITA NO. 1306 /MUM/2017 ASSESSMENT YEAR: 2011 - 12 ADMITTED BY THE TRIBUNAL, AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 12 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY , 2019 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUN TANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 01 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT( A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI