LALCHAND A. TAHILRAMANI, MUMBAI V. ASST CIT CIR 1, MUMBAI

ITA 222/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9469 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: SURESH N OTWANI
• Keywords: Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.222/MUM/2017 (ASSESSMENT YEAR: 2011-12) SHRI LALCHAND A. TAHILRAMANI VS. ACIT, CIRCLE 1 C/O. SHRI S.N. OTWANI, ADVOCATE 305, 3 RD FLOOR, ADAMJI BLDG. 413, KATHA BASAR, MUMBAI-09 THANE (OLD) INCOME TAX OFFICER 4(1)(1) MUMBAI (NEW) PAN AAGPT7944Q APPELLANT RESPONDENT ASSESSEE BY: SHRI SURESH N. OTWANI REVENUE BY: MS. N. HEMALATHA DATE OF HEARING: 03.08.2017 DATE OF PRONOUNCEMENT: 29.09.2017 O R D E R PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE CIT(A)-1, THANE DATED 14.09.2016 FOR A.Y. 2011-12. 2. IN THIS APPEAL THE ONLY DISPUTE RAISED BY THE ASSES SEE IS THE MANNER OF COMPUTING CAPITAL GAINS ON SALE OF PROPERTY. 3. BEFORE PROCEEDING FURTHER IT MAY BE NOTICED THAT TH ERE IS A DELAY OF 13 DAYS IN FILING OF THE APPEAL BEFORE THE TRIBUNAL . IN THIS CONTEXT THE REASONS HAVE BEEN EXPLAINED BY THE ASSESSEE BY WAY OF AN APPLICATION DATED 04.01.2017. CONSIDERING THAT THE REASONS ARE NOT IN DISPUTE AND ALSO THE FACT THAT THERE IS ONLY A SMALL DELAY OF 1 3 DAYS, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATIO N. 4. THE RELEVANT FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD A PROPERTY AT KALPA NA APARTMENTS, KHAR, MUMBAI. WHILE COMPUTING THE COST OF ACQUISITION THE ASSESSEE HAD INCLUDED AN ELEMENT OF INTEREST PAYMENT OF ` 2,86,550/- WHOSE INDEXED COST WAS TAKEN AS ` 4,24,452/-. THE AO REJECTED THIS COMPONENT OF THE ITA NO. 222/MUM/2017 SHRI LALCHAND A. TAHILRAMANI 2 COMPUTATION OF CAPITAL GAINS ON ACCOUNT OF THE FACT THAT THERE WAS NO DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM. BEFOR E THE CIT(A) THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO TO THE EFFECT THAT THE INTEREST OF ` 2,86,550/- WAS CAPITALISED TO THE COST OF THE PROPE RTY IN A.Y. 2005-06. THE CIT(A) HAS ALSO REJECTED THE PLEA OF THE ASSESSEE ON ACCOUNT THAT THE DETAILS FURNISHED BY THE ASSESSEE WAS MERELY A SHEET OF PAPER AND THERE WAS NO DOCUMENTARY EVIDENCE TO SHOW FROM WHOM THE LOAN WAS TAKEN AND WHETHER THE LOAN AMOUNT WAS USED FOR ACQUISITION OF THE PROPERTY IN QUESTION. AGAINST THE SAID DECISION OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE ME THE LEARNED A.R. OF THE ASSESSEE REFERRED TO PAGE 6 OF THE PAPER BOOK TO POINT OUT THAT IN A.Y. 2005-06 THE AS SESSEE HAD INCURRED TOTAL INTEREST COST OF ` 13,62,350/- OUT OF WHICH ` 2,86,550/- WAS CAPITALISED IN RELATION TO THE IMPUGNED FLAT AND THEREFORE THE CLAIM WAS QUITE JUSTIFIED. THE LEARNED A.R. POINTED OUT THAT THE ASSESSMENT FO R A.Y. 2005-06 WAS COMPLETED UNDER SECTION 143(3) OF THE ACT DATED 14. 12.2007, A COPY OF THE SAID ORDER HAS BEEN PLACED ON RECORD. IT WAS THEREF ORE CONTENDED THAT THE CLAIM OF THE ASSESSEE HAS BEEN UNJUSTLY REJECTED AN D THAT THE ASSESSEE WOULD BE SATISFIED IF THE MATTER IS RESTORED BACK T O THE FILE OF THE AO WHO MAY VERIFY THE ASSERTIONS OF THE ASSESSEE WHICH ARE SUPPORTED BY ADEQUATE DOCUMENTARY EVIDENCE. 6. THE LEARNED D.R. OF THE REVENUE, ON THE OTHER HAND, HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. OSTENSIBLY, IN THE INSTANT YEAR THE CASE OF THE ASSESSEE IS BASED ON T HE INTEREST COST INCURRED IN A.Y. 2005-06 AND IT IS POINTED OUT THAT THE SUM HAS ALSO BEEN CONSIDERED IN AN ASSESSMENT FINALISED UNDER SECTION 143(3) OF THE ACT FOR A.Y. 2005-06. BEFORE ME THE LEARNED A.R. HAS REFERR ED TO THE PAPER BOOK FILED BY THE ASSESSEE WHICH, INTER ALIA, CONTAINS T HE DETAILS OF INVESTMENT MADE IN THE FLAT WHICH HAS BEEN SOLD DURING THE YEA R. THE ASSESSEE HAS ALSO FURNISHED A BREAKUP OF THE TOTAL INTEREST EXPE NDITURE INCURRED IN A.Y. 2005-06 AND THE AMOUNT RELATABLE TO THE FLAT IN QUE STION. IN MY CONSIDERED ITA NO. 222/MUM/2017 SHRI LALCHAND A. TAHILRAMANI 3 OPINION IT WOULD BE IN THE FITNESS OF THINGS IF THE PLEAS OF THE ASSESSEE ARE PROPERLY VERIFIED BY THE AO AND THEREAFTER ADJUDICA TED AS PER LAW. NEEDLESS TO MENTION THAT THE ASSESSEE SHOULD BE PROVIDED REA SONABLE OPPORTUNITY OF HEARING BY THE AO BEFORE ADJUDICATING THE ISSUE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2017. SD/ - (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATED: 29 TH SEPTEMBER, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -1, THANE 4. THE PR. CIT 1, THANE 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.