R.Vishnumohan, Coimbatore V. ACIT, Coimbatore

ITA 1406/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9763 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2014
• Court: TRIBUNAL
• Assessee Lawyers: RAGHU SHRI AJIT KUMAR VAR
• Keywords: Capital asset; Revision of order
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' # , $ %& ' [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD , JUDICIAL MEMBER ] ./ I.T.A.NO.1406/MDS/2014 / ASSESSMENT YEAR : 2008-09 SHRI R.VISHNUMOHAN NO.24, SIVARAM NAGAR SOUTH EXTENSION SUNGAM BYEPASS ROAD RAMANATHAPURAM COIMBATORE 641 045 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE III COIMBATORE [PAN AEPPM 9577 D ] ( () / APPELLANT) ( #*() /RESPONDENT) / APPELLANT BY : SHRI RAGHU, ADVOCATE /RESPONDENT BY : SHRI AJIT KUMAR VARMA, CIT / DATE OF HEARING : 30 - 03 - 2016 / DATE OF PRONOUNCEMENT : 01 - 0 4 - 2016 + / O R D E R PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX-I, COIMBATORE, DATE D 27.3.2014 FOR ASSESSMENT YEAR 2008-0-9. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WI TH REGARD TO INVOKING JURISDICTION U/S 263 OF THE ACT BY THE CIT AND DIRECTING ITA NO. 1406/14 :- 2 -: THE ASSESSING OFFICER TO VERIFY THE CLAIM OF COST OF IMPROVEMENT AMOUNTING TO ` 74,10,954/- AND PASS FRESH ORDER. 3. FACTS OF THIS ISSUE ARE THAT IN THIS CASE ORIGINALL Y ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 22.12.2010. AGAINST THIS ASSESSMENT ORDER, THE ASSESSEE WENT IN APPEAL BEFO RE THE CIT(A). THE CIT(A) VIDE ORDER DATED 22.6.2011 GIVEN A DIRECTION ON THE ISSUE OF VALUE OF THE BUILDING WHILE DETERMINING THE LONG TE RM CAPITAL GAINS AS FOLLOWS: ON GOING THROUGH THE COMPLETE REGISTRATION DOCUMEN TS ALONGWITH ANNEXURE 1A, IT IS VERY CLEAR THAT THERE WAS SEPARA TE VALUE ASSIGNED TO THE BUILDING AND A DESCRIPTION OF THE B UILDING WAS ALSO MENTIONED. EVEN IN THE SCHEDULE OF THE PROPERTY, A T PAGE NO.30 OF THE REGISTERED DOCUMENT, THE DESCRIPTION OF THE BUILDING ALONGWITH THE BUILT UP AREA HAS BEEN MENTIONED. TA KING INTO CONSIDERATION, THE FACTS MENTIONED ABOVE, THE ASSES SING OFFICER IS DIRECTED TO GIVE DEDUCTION FOR THE VALUE OF THE BUI LDING WHILE COMPUTING THE LONG TERM CAPITAL GAINS. THE ASSESSI NG OFFICER MAY VERIFY THE CLAIMS OF THE APPELLANT REGARDING THE IM PROVEMENT, CONSTRUCTION AND MAINTENANCE OF THE SUPER STRUCTURE WHILE GIVING INDEXATION TO THE BUILDING. 4. AGAINST THIS, THE ASSESSING OFFICER PASSED THE GIVI NG EFFECT ORDER DATED 2.12.2011 CONSIDERING THE COST OF BUILD ING AND IMPROVEMENT AT ` 74,10,954, HENCE, THE CIT TOOK UP THE CASE FOR REVISION U/S 263 OF THE ACT AND OBSERVED THAT THE ASSESSING OFFICER HAS NOT VERIFIED THE COST OF IMPROVEMENT, CONSTRUCT ION AND MAINTENANCE OF THE SUPERSTRUCTURE WHILE GIVING INDE XATION TO THE BUILDING. THE DIRECTION OF THE CIT(A) WAS CONFIRME D BY THE TRIBUNAL IN ITA NO. 1406/14 :- 3 -: I.T.A.NO.1474/MDS/2011 AND CO.NO.145/MDS/2011 DATED 17.11.2011 BY OBSERVING THAT THE CIT(A) HAS RIGHTLY HELD THAT DEDUCTION MUST BE GIVEN TO THE VALUE OF THE BUILDING ALSO. IT IS IN THIS CONTEXT THAT THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO EXAMIN E THE CASE OF OTHER ITEMS OF DEDUCTION RELATING TO THE EXPENDITURE ON I MPROVEMENTS. THIS DIRECTION IS NOT OUT OF PLACE. THEREFORE, WE FIND THE APPEAL FILED BY THE REVENUE IS WITHOUT ANY MERIT AND IS LIABLE TO BE DI SMISSED. INSPITE OF THE DIRECTION OF THE CIT(A) AS WELL AS THE TRIBUNAL , THE ASSESSING OFFICER, WITHOUT ANY BASIS, DETERMINED THE COST OF IMPROVEMENT, CONSTRUCTION, MAINTENANCE OF SUPER STRUCTURE AT ` 74,10,954/-. AS SUCH, ACCORDING TO THE CIT, THIS IS AN ERROR COMMIT TED BY THE ASSESSING OFFICER WHILE PASSING GIVING EFFECT ORDER OF THE CI T(A) AND HE DIRECTED THE ASSESSING OFFICER TO RESTRICT THE CLAIM OF ASS ESSEE TO 50% WHEREVER MORE THAN 50% IS CLAIMED AS THE ASSESSEE IS HOLDING ONLY 50% SHARE IN THE PROPERTY. AGAINST THIS THE ASSES SEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THERE IS A DIRECTION BY THE C IT(A) IN THIS CASE AS REPRODUCED EARLIER TO EXAMINE THE ISSUE RELATING TO IMPROVEMENT, CONSTRUCTION AND MAINTENANCE OF THE SUPERSTRUCTURE WHILE DETERMINING THE LONG TERM CAPITAL GAINS ARRIVED AT THE SALE OF CAPITAL ASSET. THE ASSESSING OFFICER WHILE PASSING THE GIVING EFFECT O RDER DIRECTLY ITA NO. 1406/14 :- 4 -: DETERMINED THE COST OF IMPROVEMENT AT ` 74,10,954/- THOUGH THE ASSESSEE IS HOLDING ONLY 50% SHARE IN THE CAPITAL A SSET WHICH WAS SOLD. FURTHER, THERE IS NO BASIS FOR THE ASSESSING OFFICER TO QUANTIFY THE COST OF BUILDING AND IMPROVEMENT AT ` 74,10,954/-. THE ASSESSEE HAS ALSO NOT SUBSTANTIATED THE CLAIM OF COST OF THE BUILDING AND IMPROVEMENT. HE HAS JUST FILED A STATEMENT OF COM PUTATION OF INCOME SHOWING THE COST OF CONSTRUCTION AT ` 86,06,829/- MINUS ALLOWED IN ORIGINAL ASSESSMENT ` 11,97,875/- = 74,10,954/-. SINCE THERE IS NO BASIS FOR SUCH COMPUTATION AND THE CLAIM OF THE AS SESSEE IS NOT SUBSTANTIATED, THE CIT BY INVOKING JURISDICTION U/ S 263 OF THE ACT GIVEN THE ABOVE DIRECTION. THE DIRECTION OF THE CIT U/S 263 CANNOT BE SAID THAT HE SIT IN JUDGMENT OVER THE ORDER OF THE CIT(A ) OR THE TRIBUNAL. THE LD. AUTHORIZED REPRESENTATIVE PLACED RELIANCE O N THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS FORTALE ZA DEVELOPERS, [2015]374 ITR 510 WHEREIN HELD THAT WHEN CONCLUSION S ARRIVED AT BY THE TRIBUNAL ARE NEITHER PERVERSE NOR GIVING RISE T O ANY ERROR OF LAW APPARENT ON THE FACT OF THE RECORD, THAT ISSUE CANN OT BE REOPENED U/S 263 OF THE ACT BY THE CIT. BUT IN THE CASE OF THE ASSESSEE, THE DIRECTION WAS GIVEN BY THE CIT(A) TO EXAMINE THE CO ST OF CONSTRUCTION AND IMPROVEMENT OF THE BUILDING, HOWEVER, THE ASSES SING OFFICER HAS NOT AT ALL EXAMINED THE ISSUE IN THE LIGHT OF THE D IRECTION OF THE CIT(A) AND STRAIGHT AWAY CONSIDERED THE COST OF IMPROVEMEN T OF THE BUILDING ITA NO. 1406/14 :- 5 -: AT ` 74,10,954/-. HENCE, THE CIT WAS FORCED TO EXERCIS E HIS JURISDICTION U/S 263 OF THE ACT TO CORRECT THE ERR OR COMMITTED BY THE ASSESSING OFFICER WHILE PASSING GIVING EFFECT ORDER OF THE CIT(A). WE, THEREFORE, DO NOT FIND ANY MERIT IN THE ARGUMENT OF LD. A.R OF THE ASSESSEE AND THE GROUNDS RAISED BY THE ASSESSEE AR E DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2016, AT CHENNAI. SD/- SD/- ( !'# $ % ) (CHANDRA POOJARI) &' / ACCOUNTANT MEMBER # ( !) *+' & ) (CHALLA NAGENDRA PRASAD) + &' / JUDICIAL MEMBER !+ / CHENNAI ,& / DATED: 1 ST APRIL, 2016 RD &-## ./#0/ / COPY TO: # 1 . / APPELLANT 4. # 1 / CIT 2. / RESPONDENT 5. /2*# 3 / DR 3. # 1#(4 / CIT(A) 6. *5#6 / GF