SUNIL RAMBHAU WAGH, PUNE V. INCOME TAX OFFICER WARD-3(3), PUNE, PUNE

ITA 159/PUN/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2103 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-05-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 24-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHARAD A SHAH
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition
• Section: 147; 148; 271(1)(c); 144; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA Nos.159 & 160/PUN/2024 Assessment Year : 2011-12 Sunil Rambhau Wagh Flat No.32, Building 7, Gopinath Nagar Housing Society, Near Gandhi Bhavan, Kothrud, Pune – 411038 Vs. ITO, Ward-3(3), Pune PAN : ABEPW9782C (Appellant) (Respondent) Assessee by : Shri Sharad A Shah Department by : Shri Sourabh Nayak, Addl.CIT Date of hearing : 29-05-2024 Date of pronouncement : 29-05-2024 O R D E R PER R. K. PANDA, VP : ITA No.160/PUN/2024 filed by the assessee is directed against the order dated 29.11.2023 of the CIT(A) / NFAC, Delhi relating to assessment year 2011- 12. ITA No.159/PUN/2024 filed by the assessee is directed against the order dated 30.11.2023 of the CIT(A) / NFAC, Delhi confirming the penalty levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). For the sake of convenience, both the appeals were heard together and are being disposed off by this common order. 2 ITA Nos.159 & 160/PUN/2024 ITA No.160/PUN/2024 2. Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income. It was gathered that the assessee along with others has sold an immovable property at Rs.1,30,00,000/- on 12.01.2011 but the capital gain on sale of such property was not offered to tax. The Assessing Officer, therefore, after recording reasons and after obtaining the prior approval of the competent authority re-opened the case u/s 147 of the Act. Notice u/s 148 of the Act was accordingly issued and served on the assessee. However, the assessee did not file any return in response to the said notice. Subsequently, the statutory notice issued u/s 142(1) of the Act also remained non-complied with. The Assessing Officer, therefore, proceeded to complete the assessment u/s 144 of the Act. Since the assessee has sold the property at Rs.1,30,00,000/- along with Mrs. Padma Neelkanth Shirole, the Assessing Officer determined 50% share of the assessee at Rs.65,00,000/- and brought the same to tax under ‘Long term capital gain’. 3. Before the CIT(A) / NFAC, the assessee submitted that the share of the assessee in the immovable property sold is only 1/3 rd and that the Assessing Officer has not given the benefit of cost of acquisition and the amount paid to the consenting party. The CIT(A) / NFAC forwarded the additional evidences to the Assessing Officer for his comments and the Assessing Officer in his report submitted that he has no objection for admission of the additional evidences now furnished by the assessee. 3 ITA Nos.159 & 160/PUN/2024 4. The CIT(A) / NFAC although held that the property is owned by three persons, however, he upheld the action of the Assessing Officer in treating the share of the assessee at Rs.65,00,000/- in the property sold. Although the Ld. CIT(A) / NFAC accepted the contention of the assessee regarding the computation of capital gain by allowing the share of cost of acquisition, however, he directed the Assessing Officer to verify the same and allow accordingly. So far as the payment of Rs.20,00,000/- to the consenting party is concerned, he rejected the same on the ground that there is no provision in the I.T. Act, 1961 for allowing such expenses out of the sale consideration. 5. Aggrieved with such order of CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1. The Ld. AO and Ld CIT(A) ought to have considered my share of Rs.43,33,333/- in total sale consideration instead of Rs.65,00,000/- as taxed by him. 2. The Ld. AO and Ld CIT(A) erred in ignoring the fact that my share in total consideration was only 33.333% only. 3. The Ld. CIT(A) erred in directing the Ld AO to consider the cost of acquisition at Rs.7,50,000 whereas the assessee’s share in cost of acquisition was Rs.15,00,000/-. 4. The Ld AO erred in and Ld CIT(A) erred in not allowing the payment made to consenting party as expenses on transfer of Rs.20,00,000/-. 5. The Ld. AO and Ld CIT(A) ought to have allowed Rs.13,33,333/- being amount paid directly to consenting party by buyer as expenses in connection with transfer. 6. The Ld. Counsel for the assessee submitted that although the sale deed clearly and categorically states that there are three sellers, the CIT(A) / NFAC 4 ITA Nos.159 & 160/PUN/2024 committed an error by not allocating 1/3 rd share of the sale consideration and instead upheld the action of the Assessing Officer in determining the share of the assessee at Rs.65,00,000/-. Further, the amount paid by the assessee to the consenting party was not allowed as a deduction from the sale consideration for determination of the capital gain. Referring to various pages of the paper book, he submitted that the assessee was duty bound to pay the amount of Rs.20,00,000/- to one Mr. Ankush Rambhau Chandere who is the consenting party without which the property could not have been sold. The Ld. Counsel for the assessee also filed certain additional evidences in the form of affidavit for payment from Mr. Ankush Rambhau Chandere confirming the receipt of consideration and handing over the possession of the land. He accordingly submitted that the grounds raised by the assessee should be allowed. 7. The Ld. DR on the other hand, heavily relied on the orders of Assessing Officer and Ld. CIT(A) / NFAC. 8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case determined the long term capital gain in the hands of assessee at Rs.65,00,000/- being 50% of the sale consideration for sale of immovable property at Rs.1,30,00,000/-. We find although the CIT(A) / NFAC accepted that the share of the assessee is 1/3 rd , 5 ITA Nos.159 & 160/PUN/2024 however, he upheld the action of the Assessing Officer in treating the share of the assessee at Rs.65,00,000/-. Further, he did not allow the amount of Rs.20,00,000/- paid to one Mr. Ankush Rambhau Chandere who is the consenting party as deduction. Since the order of the CIT(A) / NFAC is erroneous to the extent that he has considered the share of the assessee at 50% as against 1/3 rd and since the assessee has filed certain additional evidences in support of his claim of deduction of the amount paid to the consenting party, therefore, after admitting the additional evidence, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh as per fact and law after affording due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. ITA No.159/PUN/2024 9. The assessee in the impugned appeal has challenged the order of CIT(A) / NFAC in confirming the penalty of Rs.13,06,040/- levied by the Assessing Officer u/s 271(1)(c) of the Act. 10. After hearing both the sides, we find that the quantum appeal filed by the assessee has been restored to the file of Assessing Officer for fresh adjudication. We, therefore, deem it proper to restore the issue of penalty also to the file of the Assessing Officer for adjudication afresh as per fact and law after affording due 6 ITA Nos.159 & 160/PUN/2024 opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 11. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court at the time of hearing itself i.e. 29 th of May, 2024. Sd/- Sd/- (VINAY BHAMORE) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दिन ांक Dated : 29 th May, 2024 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 7 ITA Nos.159 & 160/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 29.05.2024 Sr. PS/PS 2 Draft placed before author 29.05.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order