Mrs Mangala Dilip Sable, Pune V. ITO, Pune

ITA 1728/PUN/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9525 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-12-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 24-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANT KUMAR C LUEVA
• Keywords: Capital asset; Rectification of order; Period of limitation; Cost of acquisition; Competent authority; Time period of passing order; Reassessment proceedings
• Section: 234B; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . . , , , BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1728 /P U N/201 2 / ASSESSMENT YEAR : 1999 - 2000 MANGALA DILIP SABLE, 1182, SHUKRAWAR PETH, PUNE 411002 PAN : AIDPS80003N ....... / APPELLANT / V S. INCOME TAX OFFICER, WARD 5(3), PUNE / RESPONDENT ASSESSEE BY : SHRI PERCY PARDIWALLA & SMT. DEEPA KHARE REVENUE BY : SHRI HEMANT KUMAR C. LUEVA / DATE OF HEARING : 0 9 - 03 - 2017 / DATE OF PRONOUNCEMENT : 09 - 05 - 201 7 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - III, PUNE DATED 31 - 08 - 2011 FOR THE ASSESSMENT YEAR 1999 - 2000. 2. THE ASSESSEE HAS ASSAILED THE REASSESSMENT PROCEEDINGS AND HAS IMPUGNED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOLLOWING GROUNDS OF APPEAL : 2 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 1 . HON. THE C.I.T. (A) ERRED IN UPHOLDING THE ASSUMPTION OF JURISDICTION BY THE A.O. BY ISSUING OF NOTICE U/S. 148 DT. 20.06.2007 WITHOUT APPRECIATING THAT THE PROCEEDINGS WERE BARRED BY LIMITATION AND IN ANY EVENT WERE INITIATED WITHOUT COMPLYIN G WITH THE JURISDICTIONAL PRE CONDITIONS NECESSARY FOR A VALID ASSUMPTION OF JURISDICTION. 2 . HON. THE C.I.T. (A) OUGHT TO HAVE DIRECTED TO THE A.O. TO GRANT A CREDIT FOR TAXES PAID AS A ADVANCE TAX ON CAPITAL GAIN DISCLOSED IN THE RETURN FOR THE ASSESSMENT YEA R 1997 - 98 AS IF THE SAME WAS A ADVANCE TAX FOR ASSESSMENT YEAR 1999 - 2000. 3 . THE C.I.T. (A) ERRED UPHOLDING THE LEVY OF INTEREST U/S. 234A AND 234 B. 4 . THE C.I.T. (A) HAVE ERRED IN UPHOLDING THE ACTION OF THE A.O. IN BRINGING TO TAX THE C APITAL GAIN AS A SHORT TERM CAPITAL GAIN IN THE ASSESSMENT YEAR 1999 - 2000. 5 . THE APPELLANT CRAVES, LEAVES TO ADD, ALTER AMEND, MODIFY OR RAISE ANY OF THE GROUND OF THE APPEAL AT THE TIME OF HEARING AS THE OCCASION DEMAND. 3. SHRI PERCY PARDIWALLA APPEA RING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN UPHOLDING THE VALIDITY OF NOTICE ISSUED U/S. 148 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) DESPITE THE FACT THAT THE NOTICE WAS ISSUED AFTER MORE THAN 6 YEARS FROM THE DATE OF PASSING OF THE ASSESSMENT ORDER AND THUS, IS BARRED BY LIMITATION. GIVING THE DETAILS OF DATES AND EVENTS THE LD. AR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER ON THE GROUND OF LIMITATION ALONE. THE DATES AND EVENTS LISTED BY LD. AR NECESSARY FOR PROPER APPRECIATION OF FACTS IN THE CASE ARE AS UNDER : DATE EVENTS 01 - 11 - 1990 THE ASSESSEE ENTERED INTO AN AGREEMENT FOR PURCHASE OF THREE SHOPS AT SHIVAJI NAGAR BY PAYING 10% OF THE ESTIMATED PRICE. 15 - 12 - 1995 THE ASSESSEE ENTERED INTO AN AGREEMENT WITH IDBI FOR ASSIGNING THE RIGHTS IN THE SHOPS FOR ` 55,50,000/ - . 02 - 02 - 1998 THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997 - 98 DECLARING LONG TERM CAPITAL GAIN FROM 3 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 SALE OF SHOPS ` 43,36,235/ - AFTER CLAIMING INDEXED COST OF ACQUISITION AND STAMP DUTY CHARGES AT ` 12,13,765/ - . 12 - 05 - 1998 ACTUAL SALE DEED EXECUTED IN RESPECT OF THE SAID SHOPS. 30 - 11 - 1999 THE ASSESSING OFFICER COMPLETED ASSESSMENT MAKING CERTAIN ADDITIONS/DISALLOWANCES IN THE CAPITAL GAIN DECLARED BY THE ASSESSEE FROM SALE OF SHOPS. THE ASSESSING OFFICER COMPUTED LONG TERM CAPITAL GAIN FROM SALE OF SHOPS AS ` 61,19,325/ - . 20 - 12 - 1999 RECTIFICATION ORDER U/S. 154 OF THE ACT WAS PASSE D BY THE ASSESSING OFFICER, RE - COMPUTING LONG TERM CAPITAL GAIN AS ` 47,51,621/ - . 30 - 03 - 2001 ASSESSMENT U/S. 143(1) COMPLETED IN RESPECT OF RETURN FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 1999 - 2000. 30 - 04 - 2001 THE COMMISSIONER OF INCOME TAX (APPEALS) IN FIRST APPEAL FOR ASSESSMENT YEAR 1997 - 98 HELD THE GAIN FROM SALE OF SHOPS AS SHORT TERM CAPITAL GAIN ` 48,59,900/ - . THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER DISALLOWED STAMP DUTY CHARGES ` 69,000/ - CLAIMED BY THE ASSESSEE. 30 - 03 - 2006 THE ASSESSEE C ARRIED THE MATTER IN SECOND APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL UPHELD THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN TREATING THE GAIN FROM SALE OF SHOPS AS SHORT TERM CAPITAL GAIN. HOWEVER, THE TRIBUNAL HELD THAT THE SHORT TERM CAPITAL GA IN IS NOT ASSESSABLE TO TAX IN ASSESSMENT YEAR 1997 - 98 BUT IS LIABLE TO BE TAXED IN ASSESSMENT YEAR 1999 - 2000. 20 - 06 - 2007 NOTICE U/S. 148 OF THE ACT ISSUED TO THE ASSESSEE IN RESPECT OF ASSESSMENT YEAR 1999 - 2000. THE ASSESSEE IN APPEAL NOW HAS CHALLENGED THE VALIDITY OF NOTICE, BEING BARRED BY LIMITATION AND ISSUED WITHOUT PROPER SANCTION AS ENVISAGED U/S. 151 OF THE ACT. 3.1 THE LD. AR SUBMITTED THAT A PERUSAL OF NOTICE ISSUED U/S. 148 OF THE ACT AT PAGE 19 OF THE PAPER BOOK WOULD SHOW THAT THE SAM E HAS 4 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 BEEN ISSUED WITHOUT RECORDING PROPER SATISFACTION AFTER THE PERIOD OF 6 YEARS. THE LD. AR FURTHER SUBMITTED THAT THE SAID NOTICE IS BAD AND INVALID AS NO PROPER SANCTION AS REQUIRED U/S. 151 OF THE ACT HAS BEEN TAKEN. THE LD. AR POINTING TO PARA 3 OF THE NOTICE CONTENDED THAT IT HAS BEEN MARKED AS X. IN PARA 3 OF THE PROFORMA NOTICE, IT HAS BEEN MENTIONED THAT NECESSARY SANCTION HAS BEEN OBTAINED FROM COMMISSIONER OF INCOME TAX/CBDT. IT APPEARS THAT IN CASE OF ASSESSEE NO SANCTION HAS BEEN TAKEN , THEREFORE, AGAINST PARA 3 X HAS BEEN MARKED. THE LD. AR REFERRING TO THE PROVISIONS OF SECTION 148(2) SUBMITTED THAT THE ASSESSING OFFICER WAS BOUND TO RECORD REASONS BEFORE ISSUING NOTICE U/S. 148 OF THE ACT. IN THE PRESENT CASE, NO SUCH REASONS HAV E BEEN RECORDED BY THE ASSESSING OFFICER BEFORE ISSUING NOTICE. THE LD. AR FURTHER REFERRING TO THE PROVISIONS OF SECTION 149 SUBMITTED THAT THE NOTICE FOR RE - ASSESSMENT FOR ASSESSMENT YEAR 1999 - 2000 WAS ISSUED IN JUNE, 2007. THE NOTICE U/S. 148 WAS ISSU ED AFTER THE LAPSE OF MORE THAN 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN UTTER VIOLATION OF THE PROVISIONS OF SECTION 149 OF THE ACT. THE LD. AR SUBMITTED THAT THE NOTICE U/S. 148 COULD NOT HAVE BEEN ISSUED EVEN UNDER THE PROVISIONS OF SECT ION 150(2) OF THE ACT , AS OBSERVATIONS OF THE TRIBUNAL , THAT THE SHORT TERM CAPITAL GAIN FROM SALE OF SHOPS IS TAXABLE IN ASSESSMENT YEAR 1999 - 2000 , IN APPEAL OF THE ASSESSEE ITA NO. 1058/PN/20 01 FOR ASSESSMENT YEAR 1997 - 98 DECIDED ON 03 - 03 - 2006 ARE REDUND ANT AND WERE NOT REQUIRED TO DISPOSE OF THE APPEAL OF THE ASSESSEE FOR THAT ASSESSMENT YEAR . IN S UPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I . INCOME TAX OFFICER VS. MURLIDHAR BHAGWAN DAS, 52 ITR 335 (SC); II . KALA NIKETAN VS. UNION OF INDIA, 76 TAXMANN.COM 281 (BOM); 5 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 III . GHANSHYAM K. KHABRANI VS. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS, 346 ITR 443 (BOM). IV . SMT. MAYA RASTOGI VS. COMMISSIONER OF INCOME TAX AND OTHERS, 331 ITR 116 (ALL); 3.2 THE LD. AR POINTED THAT DURING THE FIRST APPELLATE PROCEEDINGS THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN ITS FINDINGS WITH RESPECT TO ADDITION OF SHORT TERM CAPITAL GAIN IN ASSESSMENT YEAR 1999 - 2000 BY PLACING RELIANCE ON THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSE SSMENT YEAR 1997 - 98 WITHOUT ADDRESSING ASSESSEES GRIEVANCE WITH RESPECT TO NOTICE ISSUED U/S. 148 BEING WITHOUT JURISDICTION AND BARRED BY LIMITATION. 3.3 THE LD. AR FURTHER CONTENDED THAT IF AT ALL VALIDITY OF REASSESSMENT PROCEEDINGS FOR ASSESSMENT Y EAR 1999 - 2000 ARE UPHELD , THAN THE ASSESSEE SHOULD BE GIVEN CREDIT OF TAX PAID IN RESPECT OF LONG TERM CAPITAL GAIN FROM SALE OF SHOPS RETURNED IN ASSESSMENT YEAR 1997 - 98 , IN THE ASSESSMENT YEAR 1999 - 2000 . IT IS THE SAME TRANSACTION THAT HAS BEEN BROUGHT TO TAX IN ASSESSMENT YEAR 1999 - 2000. IT IS A WELL SETTLED LAW THAT THE SAME TRANSACTION CANNOT BE TAXED TWICE AND THE ASSESSEE SHOULD NOT BE BURDENED WITH TAX LIABILITY TWICE FOR SAME TRANSACTION. 3.4 IN RESPECT OF GROUND NO. 3 RELATING TO LEVY OF INTE REST U/S. 234A AND 234B , T HE LD. AR SUBMITTED THAT NO INTEREST SHOULD BE LEVIED U/S. 234B AS THE ASSESSEE HAD ALREADY DEPOSITED ADVANCE TAX IN THE ASSESSMENT YEAR 1999 - 2000. THE LD. AR REFERRED TO INTIMATION RECEIVED U/S. 143(1) FOR ASSESSMENT YEAR 1999 - 2 000 AT PAGE 101 OF THE PAPER 6 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 BOOK TO SHOW PAYMENT OF ADVANCE TAX . THE LD. AR FURTHER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS INVOKED E XPLANATION 2 TO SECTION 234B IN AN ARBITRARY AND UNJUSTIFIED MANNER TO LEVY INTEREST. THE ASSESSEE H A D FILED RETURN OF INCOME FOR ASSESSMENT YEAR 1999 - 2000, ON WHICH ASSESSMENT U/S. 143(1) WAS MADE. THUS, THERE IS NO OCCASION FOR LEVY OF INTEREST U/S. 234A AND 234B OF THE ACT. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF INCOME TAX OFFICER VS. KEWAL RAM : INTERVENER, BACHU LAL KAPOOR REPORTED AS 60 ITR 74. 4. SHRI HEMANT KUMAR C. LUEVA REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORT ING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) SUBMITTED , THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE FOR ASSESSMENT YEAR 1999 - 2000 IN PURSUANCE TO DIRECTIONS OF THE TRIBUNAL IN ITA NO. 1058/PN/2001 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1997 - 98. NO SEPARATE RE ASONS WERE REQUIRED TO BE RECORDED AS THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE DIRECTIONS OF THE TRIBUNAL. UNDER THE CIRCUMSTANCES , THE ASSESSING OFFICER CANNOT FORM HIS OWN INDEPENDENT OPINION AND CANNOT HAVE OWN REASONS TO BELIEVE. THE LD. DR FURTHER SUBMITTED THAT WHILE ISSUING NOTICE U/S. 148 THE ASSESSING OFFICER HAD OBTAINED ALL PROCEDURAL SANCTIONS AND THUS, THERE IS NO VIOL ATION OF ANY PROVISIONS OF THE STATUTE. THE LD. DR PLACED ON RECORD THE CARBON COPY OF NOTICE ISSUED U/S. 148 TO REBUT THE CONTENTIONS OF LD. AR THAT AGAINST PARA 3 OF NOTICE X HAS BEEN MARKED. THE LD. DR POINTED THAT NO SUCH MARKING IS THERE ON THE OR IGINAL NOTICE. THE LD. DR SUBMITTED THAT AS FAR AS OBJECTIONS OF THE ASSESSEE WITH REGARD TO ISSUANCE OF NOTICE U/S. 148 AFTER LIMITATION PERIOD IS CONCERNED, SINCE, THE REASSESSMENT PROCEEDINGS WERE INITIATED 7 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 ON THE DIRECTIONS OF THE TRIBUNAL , TH E REASSE SSMENT PROCEEDINGS ARE INSULATED BY THE PROVISIONS OF SECTION 15 0 OF THE ACT. WITH RESPECT TO LEVY OF INTEREST U/S. 234A AND 234B THE LD. DR CONTENDED THAT THERE IS NO PROVISIONS FOR GIVING BENEFIT OF ADVANCE TAX PAID IN THE EARLIER ASSESSMENT YEAR . L EVY OF INTEREST U/S. 234A AND 234B IS MANDATORY AND CONSEQUENTIAL , TH EREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY AFFIRMED LEVY OF INTEREST U/S. 234A AND 234B OF THE ACT. THE LD. DR VEHEMENTLY DEFENDING THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS) PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. CONTROVERTING THE SUBMISSIONS MADE ON BEHALF OF THE DEPARTMENT, THE LD. AR SUBMITTED THAT EVEN IF REASSESSMENT PROCEEDINGS ARE INITIATED ON THE DIRECTIONS OF TRIBUNAL , PROPER PROCEDUR E HAS TO BE FOLLOWED BEFORE ISSUING NOTICE U/S. 148 OF THE ACT. R EASONS HAVE TO BE RECORDED AND SANCTION FROM THE COMPETENT AUTHORITY HAS TO BE TAKEN. 6. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE IN APPEAL HAS PRIMARILY ASSAILED ISSUANCE OF NOTICE U/S. 148 DATED 20 - 06 - 2007 ON THE GROUND THAT THE NOTICE HAS BEEN ISSUED AFTER THE LAPSE OF MORE THAN 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. ASSESSME NT YEAR 1999 - 2000 AND THUS, THE NOTICE IS TIME BARRED IN THE LIGHT OF THE PROVISIONS OF SECTION 149 OF THE ACT. THE FACTS, LIST OF DATES AND EVENTS NARRATED ABOVE ARE NOT IN DISPUTE. THE CONTENTIOUS ISSUE IN APPEAL IS, WHETHER NOTICE U/S. 148 FOR REOPENI NG OF THE ASSESSMENT CAN BE ISSUED BEYOND THE TIME PERIOD SPECIFIED U/S. 149 OF THE ACT , ON THE BASIS OF DIRECTIONS OF APPELLATE AUTHORITY. 8 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 7. THE PROVISIONS OF SECTION 149 OF THE ACT SPECIFY THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S. 148 FOR INITIATING REASSESSMENT PROCEEDINGS. THE L EGISLATURE IN ITS WISDOM HAS SPECIFIED THE TIME LIMIT FOR REOPENING ASSESSMENT AND HAS LAID DOWN CERTAIN OTHER CONDITIONS SO THAT THE ASSESSING OFFICER D OES NOT ASSUME UNFETTERED POWERS TO REOPEN ASSESSMENT ON HIS WHIMS AND FANCIES AND HARASS THE ASSESSEE. HOWEVER, THERE ARE CERTAIN CIRCUMSTANCES UNDER WHICH REASSESSMENT PROCEEDINGS CAN BE INITIATED ON THE DIRECTIONS OF THE APPELLATE AUTHORITIES BEYOND THE PERIOD OF LIMITATION AS SPECIFIED U/S. 149 OF THE ACT. TO CATER SUCH SITUATION S, PROVISIONS OF SECTION 150 OF THE ACT COME INTO PLAY. FOR THE SAKE OF CONVENIENCE AND READY REFERENCE THE PROVISIONS OF SECTION 150 ARE REPRODUCED HERE - IN - BELOW : 150. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 149, THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY TIME FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AUTHORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY OF APPEAL, REFERENCE OR REVISION 41[OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW]. (2) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUTATION AS IS REFERRED TO IN THAT SUB - SECTION RELATES TO AN ASSESSMENT YEAR IN RESPECT OF WHICH AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHICH WAS THE SUBJECT - MATTER OF THE APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN. A BARE PERUSAL OF PROVISIONS OF SECTION 150 WOULD SHOW THAT THE SECTION STARTS WITH NON - OBSTANTE CLAUSE AND PROVIDES FOR EXCEPTIONS TO THE TIME LIMIT SPECIFIED U/S. 149 OF THE ACT FOR ISSUANCE OF NOTICE U/S. 148 OF THE ACT. IN THE PRESENT CASE, NOTICE U/S. 148 HAS BEEN ISSUED TO THE ASSESSEE ON 20 - 06 - 2007 IN RESPECT OF ASSESSMENT YEAR 1999 - 2000. THE NOTICE U/S. 148 HAS BEE N ISSUED IN COMPLIANCE OF THE ORDER OF 9 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 TRIBUNAL IN ASSESSEES OWN APPEAL IN RESPECT OF ASSESSMENT YEAR 1997 - 98. 8. BEFORE PROCEEDINGS FURTHER WE DEEM IT APPROPRIATE TO BRIEFLY RECAPITULATE THE FACTS. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO PURCHA SE SHOPS ON 01 - 11 - 1990. AT THE TIME OF EXECUTING AGREEMENT THE ASSESSEE HAD PAID 10% OF THE ESTIMATED PRICE. THEREAFTER, ON 15 - 12 - 1995 THE ASSESSEE ENTERED INTO AN AGREEMENT WITH IDBI FOR ASSIGNING THE RIGHTS IN THE SHOPS WHEREAS THE ACTUAL SALE DEED WA S EXECUTED BY THE ASSESSEE ON 12 - 05 - 1998. THE ASSESSEE IN ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 1997 - 98 DECLARED SURPLUS ARISING FROM SALE OF SHOPS AS LONG TERM CAPITAL GAIN. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFIC ER MADE CERTAIN ADDITIONS/DISALLOWANCES IN THE CAPITAL GAIN RETURNED BY THE ASSESSEE. AGAINST THE SAID ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE GAI N ARISING ON SALE OF SHOPS IS SHORT TERM CAPITAL GAIN. THE ASSESSEE CARRIED THE MATTER IN SECOND APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 30 - 03 - 2006 AFFIRMED THE VIEW OF COMMISSIONER OF INCOME TAX (APPEALS) THAT THE GAIN ARISING ON SALE OF SHOPS IS A SHORT TERM CAPITAL GAIN , H OWEVER, THE TRIBUNAL HELD THAT THE SHORT TERM CAPITAL GAIN IS NOT ASSESSABLE TO TAX IN ASSESSMENT YEAR 1997 - 98 BUT IS LIABLE TO BE TAXED IN THE ASSESSMENT YEAR 1999 - 2000. THE RELEVANT EXTRACT OF THE FINDINGS OF TRIB UNAL ON THE ISSUE ARE REPRODUCED HERE - IN - BELOW : 4.2 IN THE INSTANT CASE, THE ASSESSEE BOOKED THREE SHOPS ON 01.11.1990 WITH A VIEW TO TAKE POSSESSION OF THE SHOPS AND GET THEM CONVENED ON FULFILLMENT OF RECIPROCAL OBLIGATIONS OF THE BUYER AND THE SELLER. IT HAS BEEN ARGUED IN THE CASE OF TATA SERVICES LTD., SUCH AN AGREEMENT DOES 10 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 NOT CREATE ANY RIGHTS IN FAVOUR OF THE ASSESSEE UNDER THE TRANSFER OF PROPERTY ACT . WHEN THE SHOPS WERE UNDER CONSTRUCTION, THEY WERE AGREED TO BE SOLD TO THE IDBI ON 15.12.1995. THE OBSERVATION ABOVE REGARDING ANY RIGHT UNDER THE TRANSFER OF PROPERTY ACT SHALL APPLY IN RESPECT OF THESE TRANSACTIONS ALSO. THE NARRATION IN FORM NO. 37 - I THAT THE RIGHT TO CONVEYANCE ETC. WAS BEING TRANSFERRED WILL NOT BE CONCLUSIVE OF THE MATTER AS WE HAVE TO SEE THE SUBJECT MATTER OF PURCHASE AND THE SUBJECT MATTER OF SALE. THE INTENTION WAS TO BUY THREE SHOPS. SIMILARLY, THE INTENTION WAS TO SEL L THE THREE SHOPS. THE CERTIFICATE FOR COMPLETION OF THE SHOPS WAS OBTAINED FROM THE PUNE MUNICIPAL CORPORATION ON 24.12.1996. BEFORE THAT THE ASSESSEE COULD NEITHER HAVE TAKEN POSSESSION OF THE SHOPS NOR HANDED OVER THE POSSESSION OF THE SHOPS. SALE DEED WITH THE IDBI WAS EXECUTED ON 12.05.1998, WHEREBY THE POSSESSION WAS DIRECTLY GIVEN TO THE IDBI. THIS WAS DONE BY WAY OF AN AGREEMENT MADE BY THE ASSESSEE WITH THE IDBI IN WHICH THE OWNER ALSO ACTED AS A CONSENTING PARTY. THUS, GIVING POSSESSION TO IDBI ON 12.05.1998 ALSO INVOLVED GIVING POSSESSION TO THE ASSESSEE BY THE OWNER ON THE SAME DAY. IN TERMS OF PROVISIONS OF SECTION 2(47)(V) , THE DATES OF TRANSFER IN RESPECT OF PURCHASE AND SALE WERE, THUS, THE SAME, I.E. 12.05.1998. THEREFORE, WE ARE OF THE VIEW THAT IT IS A CASE OF A SHORT - TERM CAPITAL GAIN RESULTING AS A CONSEQUENCE OF SALE AND ASSIGNMENT DEED DATED 12.05.1998. 4.3 THE LEARNED COUNSEL OF THE ASSESSEE HAD ALSO POINTED OUT THAT THE ASSESSEE PAI D STAMP DUTY OF RS. 69,010/ - AT THE TIME OF MAKING AGREEMENT OF PURCHASE WITH THE OWNER ON 16.11.1990. WE ARE OF THE VIEW THAT SUCH PAYMENTS, IF ACTUALLY MADE, LEADS TO BETTERMENT OF THE TITLE OF THE ASSESSEE AND, THEREFORE, IT REPRESENTS COST OF IMPROVEME NT OF THE ASSET. 4.4 WE HAVE ALREADY POINTED OUT THAT THE INSTANT TRANSACTION OF PURCHASE AND SALE OCCURRED ON 12.05.1998. THEREFORE, THE CAPITAL GAINS ARE NOT LIABLE TO BE TAXED IN THE PROCEEDINGS OF AY 1997 - 98. THE CAPITAL GAINS ARE LIABLE TO BE TAXED I N THE PROCEEDINGS OF AY 1999 - 00. 4.5 COMING TO THE ISSUE OF CHARGING OF INTEREST UNDER SECTION 234B , THE CASE OF THE ASSESSEE WAS THAT IT COULD NOT HAVE CONTEMPLATED THAT THE LONG - TERM CAPITAL GAINS WOULD BE TAXED AS SHORT - TERM CAPITAL GAINS. THEREFORE, IT WAS CONTENDED THAT THE INTEREST SHOULD BE CHARGED AS IF THE TRANSACTION LED TO THE EARNING OF THE LONG - TERM CAPITAL GAINS. AS THE CAPITAL GAINS ARE NOT LIABLE TO THE TAXED IN THIS YEAR, THERE WOULD BE NO QUESTION OF CHARGING INTEREST UNDER SECTION 234B EITHER ON THE BASIS OF LONG - TERM CAPITAL GAIN OR SHORT - TERM CAPITAL GAIN. THIS ISSUE WILL ARISE IN 11 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 AY 1999 - 00 IN WHICH THE AO SHALL BE FREE TO CONSIDER THE MATTER AFTER HEARING THE ARGUMENTS OF THE ASSESSEE. 5. IN VIEW OF THE ABOVE DISCUSSION, VARIOUS GROUNDS OF APPEAL ARE DECIDED AS UNDER: (I) GROUND NO. 1 IS TREATED AS DISMISSED AND IT IS HELD THAT CAPITAL GAINS AMOUNTED TO SHORT - TERM CAPITAL GAINS, TAXAB LE IN THE ASSESSMENT YEAR 1999 - 00; (II) GROUND NO. 2 IS TREATED AS ALLOWED AND THE AO SHALL ALLOW DEDUCTION OF THE PAYMENT OF STAMP DUTY OF RS. 69,010/ - IN THE YEAR OF TAXATION AFTER VERIFICATION OF THE FACT THAT IT WAS PAID BY THE ASSESSEE IN RESPECT OF AGREEMENT DATED 16.11.1990; (III) GROUND NO. 3, WHICH IS WITHOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL, IS ALLOWED AND IT IS HELD THAT THE ENTIRE CAPITAL GAINS IS ASSESSABLE IN AY 1999 - 00; AND (IV) GROUND NO. 4 IS ALLOWED TO THE EXTENT THAT NO INTEREST IS CHARGEABLE IN THE PROCEEDINGS OF THIS YEAR, BUT THE AO MAY CONSIDER THE CHARGEABILITY OF INTEREST UNDER SECTION 234B WHILE ASSESSING SHORT - TERM CAPITAL GAINS IN THE PROCEEDINGS OF AY 1999 - 00. A PERUSAL OF THE ABOVE ORDER OF THE TRIBUNAL SHOWS THAT THERE IS A CATEGORIC FINDING THAT SHORT TERM CAPITAL GAIN IS ASSESSABLE IN ASSESSMENT YEAR 1999 - 2000 AND NOT IN ASSESSMENT YEAR 1997 - 98. THE TRIBUNAL FURTHER OBSERVED THAT STAMP DUTY PAID AT THE TIME OF EXECUTION OF AGREEMENT HAS TO BE ALLOWED AS DEDUCTION IN THE YEAR OF TAXATION. 9. THE LD. AR OF THE ASSESSEE ASSERTED THAT WHILE DECIDING THE ISSUE OF CAPITAL GAIN ARISING FROM SALE OF SHOPS IN THE APPEAL FOR ASSESSMENT YEAR 1997 - 98 , THE OBSERVATION S OF THE TRIBUNAL THAT SHORT TERM CAPITAL GAIN IS ASSESSABLE IN ASSESSMENT YEAR 1999 - 2000 IS IRRELEVANT AND REDUNDANT. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF KALA NIKETAN VS. UN ION OF INDIA (SUPRA) . IN THE SAID CASE THE ASSESSEE FIRM WAS CARRYING ON BUSINESS FROM THREE PLACES. BY A DEED OF RETIREMENT, 12 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 RETIRING PARTNERS WERE ALLOTTED BUSINESS CARRIED OUT AT ONE BRANCH. THE ASSESSEE CLAIMED THAT BUSINESS OF ONE BRANCH ALONG WITH ALL ASSETS AND LIABILITIES HAD BEEN ALLOTTED TO RETIRING PARTNERS IN PURSUANCE OF FAMILY ARRANGEMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER TOOK A VIEW THAT PROVISIONS OF SECTION 45(4) ARE ATTRACTED AND HENCE, ALLOTMENT OF TH E BRANCH AMOUNTED TO DISTRIBUTION OF A CAPITAL ASSET BY WAY TRANSFER. IN FIRST APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER. THE MATTER TRAVELLED TO THE TRIBUNAL. THE TRIBUNAL HELD THAT ON RETIREMENT OF PARTN ERS, ALLOTMENT OF ONE BRANCH OF BUSINESS, THERE WAS NO TRANSFER WITHIN THE MEANING OF SECTION 45(4) OF THE ACT. THE TRIBUNAL FURTHER OBSERVED THAT BUSINESS HOURS ON 31 - 03 - 1990 CLOSED AT 8 PM, I.E., DURING THE FINANCIAL YEAR 1989 - 90 RELEVANT TO ASSESSMENT YEAR 1990 - 91, THEREFORE, THE ISSUE REGARDING CAPITAL GAINS, IF ANY, ON RETIREMENT OF PARTNERS FROM THE FIRM WOULD NOT ARISE IN THE YEAR UNDER APPEAL, I.E. ASSESSMENT YEAR 1991 - 92. ON THE BASIS OF OPINION OF TRIBUNAL THE ASSESSING OFFICER REOP ENED THE ASSE SSMENT FOR ASSESSMENT YEAR 1990 - 91 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR UNDER THE PROVISIONS OF SECTION 150(1) OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE HONBLE HIGH COURT. IN THE BACKDROP OF ABOV E FACTS THE HONBLE HIGH COURT HELD : 19. ALTHOUGH THE APPEAL IS DISPOSED OF NOT ON MERIT, WE FIND NO SUBSTANCE IN RELIANCE PLACED BY THE RESPONDENTS REVENUE UPON SO CALLED FINDING OF THE REVENUE. THE FINDING OF THE TRIBUNAL IS THAT THERE WAS NO TRANSFE R. THIS FINDING IS ONE WHICH WAS REQUIRED FOR THE DISPOSAL OF THE APPEAL THE TRIBUNAL WAS SEIZED OF. THE OBSERVATION THAT INCOME MAY HAVE ACCRUED DURING ANOTHER YEAR WAS NOT A FINDING REQUIRED FOR DISPOSAL OF THE APPEAL AND HENCE IT FALLS BEYOND THE SCOP E OF SECTION 150 READ WITH THE EXPLANATION (2) TO SECTION 153(3). 13 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 10. IN THE PRESENT CASE THE FINDING GIVEN BY THE TRIBUNAL TO ASSESS THE SHORT TERM CAPITAL GAIN IN ASSESSMENT YEAR 1999 - 2000 WAS THE FINDING GIVEN WHILE ADJUDICATING THE SPECIFIC G ROUNDS RAISED IN THE APPEAL BY THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL FOR ASSESSMENT YEAR 1997 - 98 BEFORE THE TRIBUNAL WERE : 1. THE LEARNED CIT(A) ERRED IN UPHOLDING CAPITAL GAIN OF RS.48,59,900/ - AS SHORT - TERM CAPITAL GAIN AS AGAINST RS. 44,44,725/ - ASSESSED BY THE LEARNED AO AS LONG TERM CAPITAL GAIN AND RS. 43,36,235/ - SHOWN BY THE ASSESSEE AS LONG TERM CAPITAL GAIN, THEREBY ENHANCING THE ASSESSMENT. IT IS SUBMITTED THAT LONG TERM CAPITAL GAIN AS SHOWN BY THE ASSESSEE MAY KIND LY BE UPHELD AS CORRECT. 2. WITHOUT PREJUDICE TO GR. NO. 1 ABOVE, THE LEARNED CIT(A) ERRED IN NOT ALLOWING DEDUCTION OF RS. 69,010/ - BEING STAMP DUTY PAID BY THE ASSESSEE ON AGREEMENT DATED 16.11.1990 PAID BY THE ASSESSEE ON DEMAND BY THE REGISTERING AUTH ORITIES. IT IS REQUESTED THAT THE SAID AMOUNT BE ALLOWED TO BE DEDUCTED IN COMPUTING THE CAPITAL GAIN. 3. WITHOUT PREJUDICE TO GR. NO. 1 & 2 AND ALTERNATELY, WITHOUT ADMITTING THE CORRECTNESS OF THE ORDER OF THE LEARNED CIT(A), IF HIS FINDING THAT THE TRA NSFER TOOK PLACE ON 12.05.1998 IS TO BE UPHELD, THEN, THE ENTIRE CAPITAL GAIN WOULD BE ASSESSABLE IN AY 1999 - 00 IN WHICH CASE THE CAPITAL GAIN EVEN AS DECLARED BY THE ASSESSEE MAY KINDLY BE DIRECTED TO BE DELETED FROM THE INCOME OF THE AY 1997 - 98. 4. FURT HER WITHOUT PREJUDICE TO GR. NO. 1 & 2, IF THE ORDER OF THE LEARNED CIT(A) IS TO BE UPHELD CONFIRMING ASSESSMENT OF SHORT TERM CAPITAL GAIN, THE INTEREST UNDER SECTION 234B MAY BE DIRECTED TO BE COMPUTED A S PER ORIGINAL ASSESSMENT, SINCE THE ASSESSEE COULD NOT BE EXPECTED TO ANTICIPATE THAT THE CAPITAL GAIN WOULD BE TREATED AS SHORT TERM CAPITAL GAIN. 11. THE FINDING OF THE TRIBUNAL THAT THE SHORT TERM CAPITAL GAIN ARISING FROM SALE OF SHOPS IS ASSESSAB LE TO TAX IN ASSESSMENT YEAR 1999 - 2000 WAS GIVEN AS A POSITIVE FINDING TO THE GROUNDS RAISED IN THE APPEAL. THE FINDINGS OF THE TRIBUNAL ON THE ISSUE ARE NEITHER OBITER NOR A PASSING REFERENCE TO THE ISSUES RAISED BEFORE THE TRIBUNAL IN 14 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 APPEAL FOR ASSESSMENT YEAR 1997 - 98. THUS, THE SPECIFIC FINDING OF THE TRIBUNAL THAT SHORT TERM CAPITAL GAIN IS ASSESSABLE IN ASSESSMENT YEAR 1999 - 2000 AND NOT IN ASSESSMENT YEAR 1997 - 98 IS NEITHER IRRELEVANT NOR REDUNDANT AS HAS BEEN POINTED BY THE LD. AR. THE RATI O LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KALA NIKETAN VS. UNION OF INDIA (SUPRA) WOULD NOT APPLY IN THE PRESENT CASE AS THE FACTS IN THE INSTANT CASE ARE DISTINGUISHABLE. 12. ANOTHER OBJECTION HAS BEEN TAKEN BY THE LD. AR OF THE ASSESSEE IS THAT THE ASSESSING OFFICER HAS NEITHER RECORDED HIS SATISFACTION NOR HAS TAKEN SANCTION FROM COMPETENT AUTHORITY BEFORE ISSUING NOTICE U/S. 148 OF THE ACT. THE LD. AR HAS ASSERTED THAT EVEN IF THE NOTICE U/S. 148 HAS BEEN ISSUED ON THE DIRECT ION OF TRIBUNAL PROPER PROCEDURE HAS TO BE FOLLOWED AND SANCTION HAS TO BE TAKEN FROM THE COMPETENT AUTHORITY. TO BUTTRESS HIS SUBMISSIONS , RELIANCE IS PLACED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GHANSHYAM K. KHABRANI VS. ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS (SUPRA) AND THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. MAYA RASTOGI VS. COMMISSIONER OF INCOME TAX AND OTHERS (SUPRA). THE LD. AR OF THE ASSESSEE HAS POINTED THAT IN THE NOTICE ISSUED U/S. 148 , A GAINST PARA 3 CROSS X HAS BEEN MARKED. IN PROFORMA NOTICE , PARA 3 SPECIFIES THAT THE SANCTION HAS BEEN TAKEN FROM CONCERNED COMMISSIONER OF INCOME TAX/CBDT. SINCE, IT HAS BEEN MARKED X THIS INDICATES THAT NO SANCTION HAS BEEN TAKEN BY THE ASSESSING O FFICER. 13. IN THE PRESENT CASE, THE NOTICE U/S. 148 HAS BEEN ISSUED IN PURSUANCE TO DIRECTIONS OF THE TRIBUNAL. SINCE, THE ASSESSING OFFICER HAS ISSUED NOTICE U/S. 148 ON THE DIRECTIONS OF TRIBUNAL , T HERE WAS NO 15 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 OCCASION FOR ASSESSING OFFICER TO APPLY HIS OWN MIND AND RECORD HIS OWN REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AS ENVISAGED U/S. 147 OF THE ACT. THE LD. DR HAS PLACED ON RECORD A COPY OF NOTING - SHEET WHEREIN THE ASSESSING OFFICER HAS RECORDED THAT THE NOTICE U/S. 148 IS ISSUED T O THE ASSESSEE FOR ASSESSMENT YEAR 1999 - 2000, IN ACCORDANCE WITH THE DIRECTIONS OF PUNE BENCH OF THE TRIBUNAL IN ITA NO. 1058/PN/2001 DATED 03 - 03 - 2006. WE ARE OF THE CONSIDERED VIEW THAT UNDER THE GIVEN CIRCUMSTANCES, BEYOND RECORDING THIS FACT THE ASSESS ING OFFICER COULD NOT HAVE RECORDED ANY OTHER REASON FOR ISSUING NOTICE U/S. 148 OF THE ACT. AS FAR AS THE OBJECTION OF THE LD. AR OF THE ASSESSEE THAT PROPER SANCTION HAS NOT BEEN TAKEN FROM THE COMPETENT AUTHORITY , AS PARA 3 OF THE NOTICE HAS BEEN MA RKED X , WE FIND THAT THE OBJECTION IS WITHOUT ANY MERIT. THE LD. DR DURING THE PROCEEDINGS HAS PLACED ON RECORD A COPY OF ORIGINAL NOTICE . THERE IS NO SUCH X MARKING AGAINST PARA 3 IN THE ORIGINAL NOTICE U/S. 148 OF THE ACT. MARK X POINTED BY THE LD. AR IN THE NOTICE IS APPEARING IN PHOTOCOPY , WHICH APPEARS TO BE AN ABERRATION CAUSED WHILE MAKING A PHOTOCOPY OF THE ORIGINAL NOTICE. APART FROM MARKING X NO OTHER IRREGULARIT Y HAS BEEN POINTED BY THE LD. AR TO SUGGEST THAT SANCTION U/S. 150(1) WAS NOT OBTAINED BY THE ASSESSING OFFICER BEFORE ISSUING NOTICE U/S. 148 OF THE ACT. THUS, IN VIEW OF OUR ABOVE FINDINGS GROUND NO. 1 RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED BEING DEVOID OF ANY MERIT. 14. THE NEXT ISSUE IN APPEAL RELATES TO GRANT OF CREDIT OF TAXES PAID IN ASSESSMENT YEAR 1997 - 98 AS ADVANCE TAX AGAINST CAPITAL GAIN ASSESSABLE IN ASSESSMENT YEAR 1999 - 2000 AS PER THE DIRECTIONS OF THE 16 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 TRIBUNAL. THE LD. AR POINTED THAT THE ASSESSEE HA D PAID ADVANCE TAX IN ASSESSMENT YEAR 1999 - 2 000 AND THE ADVANCE TAX IN RESPECT OF SHORT TERM CAPITAL GAIN IN ASSESSMENT YEAR 1999 - 2000 HAS ARISEN AS COROLLARY TO THE FINDINGS OF TRIBUNAL TO ASSESS THE SHORT TERM CAPITAL GAIN IN ASSESSMENT YEAR 1999 - 2000 INSTEAD OF ASSESSMENT YEAR 1997 - 98. WHILE MA KING SUBMISSIONS FOR GRANTING THE BENEFIT OF ADVANCE TAX PAID IN ASSESSMENT YEAR 1997 - 98, AGAINST FRESH TAX LIABILITY IN ASSESSMENT YEAR 1999 - 2000 , THE LD. AR HAS FAILED TO SHOW ANY PROVISION IN THE ACT, UNDER WHICH SUCH RELIEF CAN BE GRANTED. THEREFORE, WE ARE UNABLE TO ACCEPT THE PRAYER MADE BY THE LD. AR. SIMILAR PRAYER WAS MADE BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) IN AN ELABORATE MANNER HAD EXPLAINED THE COURSE AVAILABLE TO THE ASSE SSEE TO SEEK ADJUSTMENT FOR TAX PAID IN ASSESSMENT YEAR 1997 - 98 AGAINST THE TAX LIABILITY ARISEN IN ASSESSMENT YEAR 1999 - 2000. THE RELEVANT FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE ARE AS UNDER : 5.2 THE SUBMISSIONS MADE BY THE APPELLANT ARE CAREFULLY CONSIDERED WITH REFERENCE TO THE DETAILS PLACED ON RECORD. THE FIRST CONTENTION OF THE APPELLANT IS THAT AFTER SHIFTING OF THE CAPITAL GAINS FROM A.Y. 1997 - 98 TO A.Y. 1999 - 00, THE ADVANCE TAX ATTRIBUTABLE TO SAID CAPITAL GAINS PAID FOR ASSESSMENT YEAR 1997 - 98 OUGHT TO HAVE BEEN TREATED AS ADVANCE TAX PAID FOR THE ASSESSMENT YEAR 1999 - 00. THIS CLAIM OF THE APPELLANT IS NOT LEGALLY SUSTAINABLE. THERE IS NO PROVISION UNDER THE LT. ACT TO TREAT THE ADVANCE TAX PAID FOR A PARTICULAR ASSES SMENT YEAR AS ADVANCE TAX FOR DIFFERENT ASSESSMENT YEAR. THE PROPER COURSE OF ACTION IN SUCH CASES IS TO CLAIM REFUND OF EXCESS ADVANCE TAX PAID IN A PARTICULAR YEAR ALONG WITH INTEREST U/S.244A, IF ANY, AND SEEK ADJUSTMENT OF SUCH EXCESS ADVANCE TAX AND I NTEREST AGAINST THE TAXES, IF ANY, DUE IN OTHER YEARS. THEREFORE, THE REQUEST OF THE APPELLANT TO TREAT THE ADVANCE TAX PAID FOR ASSESSMENT YEAR 1997 - 98 AS ADVANCE TAX FOR ASSESSMENT YEAR 1999 - 00 CANNOT BE ACCEPTED. THE ALTERNATE SUBMISSION OF THE APPELLAN T IS THAT THE ASSESSING OFFICER OUGHT TO HAVE THE GRANTED THE CREDIT FOR EXCESS TAX PAID FOR THE A.Y. 1997 - 98 IN THE A.Y. 1999 - 2000 WHEN HE WAS SHIFTING THE SAME 17 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 INCOME DECLARED BY THE. APPELLANT TO ASSESSMENT YEAR 1999 - 00, THOUGH AS SHORT TERM CAPITAL GAINS INSTEAD OF LONG TERM CAPITAL GAINS. AS PER THE TAX COMPUTATION FOR THE ASSESSMENT YEAR 1997 - 98 FILED BY THE APPELLANT, THERE IS A REFUND OF RS.11,37,323/ - DUE TO THE APPELLANT CONSEQUENT TO THE SHIFTING OF CAPITAL GAIN S FROM THE ASSESSMENT YEAR 1997 - 98 TO THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE QUANTUM OF REFUND WORKED OUT BY THE APPELLANT CONSEQUENT TO THE EXCLUSION OF CAPITAL GAINS FROM THE TOTAL INCOME OF A.Y. 1997 - 98 AND IF THE CLAIM IS FOUND TO BE CORRECT, TH E REFUND DUE MAY BE ADJUSTED AGAINST THE TAX LIABILITY FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, AFTER PASSING NECESSARY CONSEQUENTIAL ORDER FOR THE ASSESSMENT YEAR 1997 - 98 AS PER LAW. WITH THESE OBSERVATIONS, THIS GROUND IS PARTLY ALLOWED . WE DO NOT FIND ANY ERROR IN THE OBSERVATIONS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. ACCORDINGLY, THE SAME ARE UPHELD AND GROUND NO. 2 RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED. 15. IN GROUND NO. 3 OF APPEAL THE ASSESSEE HAS ASSAILE D LEVY OF INTEREST U/S. 234A AND 234B OF THE ACT. INTEREST U/S. 234A IS LEVIED FOR DEFAULT IN FURNISHING OF RETURN OF INCOME AND INTEREST U/S. 234B IS DEFAULT FOR PAYMENT OF ADVANCE TAX. THE LEVY OF INTEREST U/S. 234A AND 234B IS MANDATORY IN NATURE AND IS CONSEQUENTIAL, THEREFORE THE INTEREST, IF ANY HAS TO BE CHARGED, ACCORDINGLY. THUS, THE GROUND NO. 3 RAISED IN THE APPEAL BY ASSESSEE IS DISMISSED. 16. IN GROUND NO. 4 THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE ACTION OF ASSESSING OFFICER IN BRINGING TO TAX THE CAPITAL GAIN AS A SHORT TERM CAPITAL GAIN IN THE ASSESSMENT YEAR 1999 - 2000. WE DO NOT FIND ANY MERIT IN GROUND NO. 4 RAISED BY THE ASSESSEE. THE ASSESSING OFFICER HAS BROUGHT TO TAX SHORT TERM CAPITAL GAIN ARISING FROM SALE OF SHOPS IN ASSESSMENT YEAR 1999 - 2000 AS CONSEQUENCE TO THE DIRECTIONS OF THE 18 ITA NO . 1728/PUN/2012, A.Y. 1999 - 2000 TRIBUNAL IN ITA NO. 1058/PN/2001. THE AUTHORITIES BELOW ARE DUTY BOUND TO FOLLOW THE ORDER OF APPELLATE AUTHORITIES. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) HAS FOLLOWED THE ORDER OF TRIBUNAL AND THUS, HAVE NOT COMMITTED ANY ER ROR IN BRINGING TO TAX THE SHORT TERM CAPITAL GAIN IN ASSESSMENT YEAR UNDER APPEAL. ACCORDINGLY, GROUND NO. 4 RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 09 TH DAY OF MAY, 201 7 . SD/ - SD/ - ( . . / R.K. PANDA) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 09 TH MAY, 201 7 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - III, PUNE 4. / THE CIT - III, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE