M/s. Merino Limited, CHENNAI V. Joint Director of Income Tax, CHENNAI

ITA 1832/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81123 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 18-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 14-10-2013
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: V SRINIVASAN ITP
• Keywords: Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 1832/MDS/2013 / ASSESSMENT YEAR : 2007-08 M/S.MERINO LIMITED, POA HOLDER , MR.PRATAPKARAN PAUL, B-8, GEMS COURT, NO.25/14, KHADER NAWAZ KHAN ROAD, NUNGAMBAKKAM, CHENNAI 600 006 [PAN: AAFCM 3039 B] ( !% /APPELLANT) VS JOINT DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXATION) CHENNAI ( &'!% /RESPONDENT) / APPELLANT BY : SHRI V.SRINIVASAN, ITP / RESPONDENT BY : SHRI GURU BHASHYAM, JCIT / DATE OF HEARING : 18-08-2014 ! / DATE OF PRONOUNCEMENT : 18-08-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-VII, CHENNAI DATED 02-08-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. I.T.A. NO. 1832/MDS/2013 2 2. THE ASSESSEE HAS FILED THE APPEAL WITH A DELAY O F SEVEN DAYS. THE ASSESSEE HAS FILED APPLICATION SEEKING C ONDONATION OF DELAY. AFTER GOING THROUGH THE APPLICATION, WE AR E SATISFIED THAT THE DELAY IN FILING OF THE APPEAL WAS NOT INTENTION AL OR WILLFUL. THE DELAY OF SEVEN DAYS IN FILING OF THE APPEAL IS COND ONED. THE APPEAL IS ADMITTED TO BE HEARD ON MERITS. 3. THE FACTS AS EMANATING FROM THE RECORDS ARE AS U NDER: THE ASSESSEE IS A NON-RESIDENT COMPANY. THE ASSESS EE FILED ITS RETURN OF INCOME FOR THE AY. UNDER CONSIDERATION ON 31-03-2008 DECLARING TAXABLE INCOME AS ` 1,37,34,407/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 30-09-2008. THE ASSESSEE IN ITS RETURN OF INCOME HAD DISCLOSED LONG TERM CAPITAL GAIN FROM THE SALE OF 33,800 SHARES OF I FLEX LTD. THE ASSESSEE FURTHER DISCLOSED INTEREST INCOME OF ` 5,40,800/- EARNED DURING THE RELEVANT PERIOD. ASSESSEE BEING A NON-RESIDENT COMPANY COMPUTED TAX ON CAPITAL GAINS BY APPLYING THE PROVISIONS OF SECTION 112(1)( C) OF THE ACT. AT THE TIME OF FILING RETURN, THE ASSESSEE FAILED TO C ONSIDER THE PROVISIONS OF SECTION 48 IN DETERMINING CAPITAL GAI NS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURN ISHED I.T.A. NO. 1832/MDS/2013 3 COMPUTATION BASED ON THE FIRST PROVISO TO SECTION 4 8. HOWEVER, THE ASSESSING OFFICER REFUSED TO ACCEPT THE SAME. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE AY.2007-08, BEYOND THE DUE DATE OF FILING OF RE TURN. SINCE, THE ORIGINAL RETURN HAS BEEN FILED BELATEDLY, THE ASSES SEE IS BARRED FROM FILING REVISED RETURN UNDER THE PROVISIONS OF THE ACT. IN THE ABSENCE OF REVISED RETURN, THE FRESH CLAIM OF ASSES SEE CANNOT BE ACCEPTED. THE ASSESSING OFFICER ACCORDINGLY MADE A SSESSMENT REJECTING THE REVISED COMPUTATION OF THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 16-02-2010 , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS). T HE CIT(APPEALS) VIDE IMPUGNED ORDER CONFIRMED THE FIND INGS OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSES SEE. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE T RIBUNAL ASSAILING THE ORDER OF CIT(APPEALS). 4. SHRI V.SRINIVASAN, APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT DURING THE PERIOD RELEVANT TO AY.200 7-08, THE ASSESSEE HAD SOLD SHARES OF I-FLEX FOR TOTAL CONSI DERATION OF ` 7,04,39,200/-. THE ASSESSEE HAD PURCHASED THE SAID SHARES DURING THE YEARS 2000-01 AND SOME OF THE SHARES WER E PURCHASED IN THE YEAR 2005. THE SHARES WERE PURCHASED BY THE ASSESSEE FOR I.T.A. NO. 1832/MDS/2013 4 8,02,273.17 (POUND STERLING) REMITTED ON VARIOUS D ATES. TAX ON CAPITAL GAINS WAS PAID BY APPLYING THE RATE PRESCRI BED U/S.112(1)(C)(III). AT THE TIME OF FILING OF RETUR N, THE ASSESSEE DID NOT CONSIDER THE FIRST PROVISO TO SECTION 48. DURI NG THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSEE FURNISHED REVISED COMPUTATION OF CAPITAL GAINS IN THE MANNER PROVIDED AS PER FIRS T PROVISO TO SECTION 48. THE ASSESSING OFFICER REJECTED THE REQ UEST OF THE ASSESSEE CITING THE DECISION OF THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD., VS. CIT REPORTED AS 284 ITR 323. THE APPEAL OF THE ASSESSEE WAS ALSO DISMISSED BY TH E CIT(APPEALS) FOR THE REASON THAT THE ASSESSEE HAS N OT FILED ITS CLAIM IN THE REVISED RETURN OF INCOME. 5. ON THE OTHER HAND, SHRI GURU BHASHYAM, APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE IMPU GNED ORDER. THE LD.DR SUBMITTED THAT THE ASSESSEE HAD FILED ORI GINAL RETURN AFTER THE DUE DATE. THE ASSESSEE CAN RAISE FRESH C LAIM BY FILING REVISED RETURN IN ACCORDANCE WITH LAW. SINCE, THE ORIGINAL RETURN WAS FILED BELATEDLY, THE ASSESSEE IS BARRED FROM FI LING REVISED RETURN. THE ASSESSING OFFICER HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE IN THE ABSENCE OF ANY REVISED RETURN. I.T.A. NO. 1832/MDS/2013 5 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES, AND HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UN-DISPU TED FACT THAT THE ASSESSEE IS A NON-RESIDENT COMPANY INCORPORATED OUT SIDE INDIA. SECTION 48 OF THE ACT DEALS WITH THE MODE OF COMPUT ATION OF CAPITAL GAINS. THE FIRST PROVISO TO SECTION 48 DEALS WITH T HE COMPUTATION OF CAPITAL GAINS ARISING FROM TRANSFER OF CAPITAL ASSE TS BEING SHARES OR DEBENTURES OF AN INDIAN COMPANY. THE ASSESSEE DURI NG THE AY.2007-08 HAS SOLD SHARES OF I-FLEX LTD. AT THE TIME OF FILING OF RETURN, THE ASSESSEE FAILED TO TAKE INTO CONSIDERAT ION THE PROVISIONS OF SECTION 48 OF THE ACT AND MERELY APPLIED THE RAT ES PRESCRIBED U/S.112(1)(C)(III) OF THE ACT. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, THE ASSESSEE REALIZED ITS MISTAKE AND FILED REVISED COMPUTATION OF LONG TERM CAPITAL GAINS IN ACCORDANC E WITH THE PROVISIONS OF SECTION 48. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD., VS. CIT (SUPRA) HAS HELD THAT THE ASSESSING OFFICER CANNOT ENTERTAIN FRESH CLAIM FOR DEDUCTION OTHERWIS E THEN BY A REVISED RETURN. HOWEVER, THE POWERS OF THE APPELLA TE AUTHORITIES ARE NOT IMPINGED TO ENTERTAIN THE CLAIM OF ASSESSEE . IN THE PRESENT CASE, THE ASSESSEE HAS NOT RAISED ANY FRESH CLAIM B UT HAS PRAYED I.T.A. NO. 1832/MDS/2013 6 FOR ACCEPTING REVISED COMPUTATION OF CAPITAL GAINS MADE IN ACCORDANCE WITH PROVISIONS OF SECTION 48 OF THE ACT . IN VIEW OF THE WELL SETTLED LAW AND THE FACT, THAT THE ASSESSEE HAD FAILED TO COMPUTE CAPITAL GAINS IN ACCORDANCE W ITH THE PROVISIONS OF SECTION 48, WE REMIT THE FILE BACK TO THE ASSESSING OFFICER TO ACCEPT THE REVISED COMPUTATION FURNISHE D BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 18 TH AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) '#$ / VICE PRESIDENT % &' / JUDICIAL MEMBER (% /CHENNAI, )& /DATED: 18 TH AUGUST, 2014 TNMM &* +,-, /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ./0 /CIT(A) 4. . /CIT 5. ,12 3 /DR 6. 245 /GF