ITO WD 19(3)(4), MUMBAI V. MANJEET HIRANAND ASRANI AND SMT MONICA ROHAN VASWANI L/H OF LATE SMT. SUREKHA HIRANAND ASRANI, MUMBAI

ITA 1555/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84344 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 26-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2013
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV SR AR SHRI M
• Keywords: Fair market value; Tax effect
• Section: 143(3); 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO. 1555/M/2013 ( AY: 2007 - 2008 ) ITO - WARD 19(3)(4), PIRAMAL CHAMBERS, R.NO.304, LALBAUG, MUMBAI 400 012. / VS. SHRI MANJEET HIRANAND ASRANI AND SMT. MONICA ROHAN VASWANI, LEGAL HEIRS OF LATE SMT. SUREKHA HIRANAND ASRANI, 10 SEA BIRD, 114, BYRAMJE JEEJEEBHOY ROAD, BANDRA (W), MUMBAI - 50. ./ PAN : AADPA 5252H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AKHILENDRA YADAV, SR. AR / RESPONDENT BY : SHRI M. SUBRAMANIAN / DATE OF HEARING : 26.11.2014 / DATE OF PRONOUNCEMENT : 26 .11.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 25.2.2013 IS AGAINST THE ORDER OF THE CIT (A) - 18, MUMBAI DATED 27.12.2012 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DIRECTING TO RE - COMPUTE THE LONG TERM CAPITAL GAINS BY ADOPTING FAIR MARKET VALUE AS ON 1.4.1981 WITHOUT APPRECIATING THE FOLLOWING FACTS; A) THE ASSESSEE BECAME THE OWNER OF PROPERTY IN FY 1982 - 83 AS PER AGREEMENT DATED 30.6.1982. B) THE EXPLANATION (III) TO SECTION 48 CLEARLY STATES THAT THE COST INFLATION INDEX SHALL BE ADOPTED FROM THE FIRST YEAR IN WH ICH THE ASSET WAS HELD BY THE ASSESSE. C) THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF MANJULA J SHAH [35 SOT 105 (MUM) SB] HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN ALLOWING THE EXEMPTION U/S 54F OF THE ACT WITHOUT APPRECIATING THE FACT THAT THERE IS NO PROVISION TO ALLOW THE DEDUCTION WITH RESPECT TO THE SECOND RESIDENTIAL 2 HOUSE AND THE SECTION SPECIFICALLY SAYS THAT THE ASSESSEE SHOULD NOT OWN MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF TRANSFER. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE ENUMERATED THE BRIEF FACTS OF THE CASE AND MENTIONED THAT I N THE PRESENT CASE THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 22,49,211/ - AFTER MAKING CERTAIN DISALLOWANCES CLAIMED BY THE ASSESSEE. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST A PPELLATE AUTHORITY. DURING THE FIRST APPELLATE PROCEEDINGS, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) PARTLY ALLOWED THE APPEAL AND DIRECTED THE ASSESSING OFFICER TO RE - COMPUTE THE LTCG BY ADOPTING THE FAIR MARKET VALUE AS ON1.4.1981 AND ALSO ALLOWED THE EXEMPTION U/S 54F CLAIMED BY THE ASSESSEE. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FO R THE ASSESSEE BROUGHT OUR ATTEN TION TO THE WORKING SHOWING THE DETAILS OF TAX EFFECT AFTER GIVING EFFECT TO THE CIT (A)S ORDER DATED 27.12.2012 AND DEMONSTRATED THAT IN THE PRESENT CASE THE TAX EFFECT IS RS. 3,36,783/ - WHICH IS LESS THAN 4 LAKHS. HE FUR THER MENTIONED THAT AS PER THE MONETARY LIMIT PRESCRIBED BY THE CBDT, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. IT IS A SETTLED PROPOSITION THAT AS PER THE INSTRUCTIONS ISSUED BY THE CBDT, NO APPEAL SHOULD BE FILED WHERE TAX EFFECT OF THE DISPUTED ISSUE IS LESS THAN RS. 4 LAKHS AND THE SAME WAS AFFIRMED BY THE ITAT IN VARIOUS ORDERS AND ITA NO. 934/M/2013 (AY 2009 - 2010), DATED 21.11.2014 IS ONE OF THE THEM, WHEREIN ONE US (AM) IS A PARTY TO THE SAID TRIBUNALS ORDER. CONSIDERING TH SAME WE ARE OF THE OPINION THAT THE SAID DECISION OF THE ITAT APPLIES TO THE PRESENT CASE TOO. THEREFORE, F OR THE SAKE COMPLETENESS OF THIS ORDER, RELEVANT PORTION FROM THE SAID ORDER OF THE TRIBUNAL IS EXTRACTED WHICH READS AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIE S AS WELL AS THE CITED DECISION OF THE ITAT IN THE CASE OF DCIT VS. M/S. SHINHAN BANK (SUPRA). ON PERUSAL OF PARA 5 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA), WE FIND THE SAME ARE RELEVANT IN THIS REGARD AND THEREFORE, THE SAME IS REPRODUCED AS UNDER: 3 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT AFTER THE ORDER OF THE TRIBUNAL DATED 27.6.2007, THE ONLY AMOUNT FOR WHICH PENALTY WAS LEVIABLE WAS THE GUARANTEE COMMISSION OF RS. 7.32 LAKHS. AS PER THE CALCULATION F URNISHED BY THE ASSESSEE AND VERIFIED BY THE DR, THE TAX EFFECT [@ 41.82] IS 3.06 LAKHS. WE FIND THAT AS PER THE INSTRUCTION NO.5, DATED 10.7.2014, ISSUED BY THE CBDT, NO APPEAL SHOULD BE FILED WHERE TAX EFFECT OF THE DISPUTED ISSUE WAS LESS THAN RS. 4 LA KHS. WE FIND THAT IN THE CASE MADHUKAR INAMDAR (185 TAXMAN 101) AND SURESHCHANDRA D KHATOD (31 TAXMANN.COM 74) RESPECTIVELY, HONBLE BOMBAY HIGH COURT AND HONBLE GUJARAT HIGH COURT HAVE HELD THAT CIRCULAR OF THE CBDT WERE APPLICABLE TO THE CASES WHERE AP PEALS WERE PENDING AND NOT ONLY TO THE APPEALS TO BE FILED AFTER THE CIRCULAR IS ISSUED. AS THE TAX EFFECT, IN THE CASE UNDER CONSIDERATION IS RS. 3.06 LAKHS I.E., LESS THAN THE MONETARY - LIMIT PRESCRIBED BY THE BOARD, SO WE DECIDE THE EFFECTIVE GROUNDS OF APPEAL AGAINST THE AO. 8. FROM THE ABOVE, IT IS A SETTLED POSITION OF THE ISSUE THAT AS PER THE INSTRUCTION NO.5, DATED 10.7.2014, ISSUED BY THE CBDT, NO APPEAL SHOULD BE FILED WHERE TAX EFFECT OF THE DISPUTED ISSUE WAS LESS THAN RS. 4 LAKHS. CONSIDERI NG THE FACT THAT THE TAX EFFECT IN THE INSTANT CASE IS BELOW THE SAID MONETARY LIMIT, THE GROUNDS RAISED BY THE REVENUE SHOULD BE DECIDED AGAINST THE REVENUE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7 . CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOU NCED IN THE OPE N COURT ON 2 6 T H NOVEMBER, 2014. S D / - S D / - ( AMIT SHUKLA ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 2 6 /11/2014 . . ./ OKK , SR. 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 . //TRUE COPY// 4 / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI