MALTI MAHEDRA MEHTA THROUGH LEGAL HEIGHER, MUMBAI V. ITO 21(3)(3), MUMBAI

ITA 2223/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7707 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-01-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY R SINGH
• Keywords: Sale consideration of property below Jantri Value; Deemed owner of house property; Opportunity of being heard; Cost of acquisition; Valuation report
• Section: 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MU MBAI , , , , ! BEFORE SHRI RAJENDRA , AM AND SHRI AMARJIT SINGH, J M / I.T.A. NO.2223/MUM/2013 ( '# $# / ASSESSMENT YEAR:2005-06) LATE SMT. MALTI MAHENDRA MEHTA THROUGH HER LEGAL HEIGHER 301, NEER DARSHAN, 387, SHANKAR MATTHAM ROAD, MATUNGA (CR) MUMBAI 400019 / VS. THE INCOME TAX OFFICER 21(3)(3) R. NO.507, 5 TH FLOOR, PRATAYAKSKAR BHAWAN, BANDRA KURLA COMPLEX BANDRA (E) MUMBAI 400 051 ./ ./PAN/GIR NO. :AAFPM7738J ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 24.03.2017 /DATE OF PRONOUNCEMENT: 29.03.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 27.02.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE A.Y. 2005-06. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY: SHRI AJAY R. SINGH & SHRI RAVINDRA POOJARY REVENUE BY: SHRI RAJGURU M. V. ITA NO.2223/M/2013 A.Y.2005-06 2 1. NO REASONS WERE PROVIDED TO THE ASSESSEE FOR RE -OPENING OF ASSESSMENT FOR A.Y.2005-06 AND THE ASSESSMENT MADE BY LEARNED INCOME TAX OFFICER AND NOT DEALT WITH BY THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW. MOREOVER, IT IS WITHOUT JURISDICTION AS THE ASSESSE E REQUESTED TO TRANSFER THE CASE AT THE CORRECT JURISDICTION WHICH WAS NOT DONE. 2. THE LEARNED INCOME TAX OFFICER ERRED AND NOT DEA LT WITH BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN MAK ING ADDITIONS AS DEEMED HOUSE PROPERTY INCOME AS THE AS SESSEE DID NOT LET OUT THE PROPERTY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN TAKING INDEXATION FORM F.Y.2000-01 INSTEAD OF 1991- 92 WHICH WAS THE DATE OF AGREEMENT. 4. THAT LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) WAS NOT JUSTIFIED IN MAKING ADDITIONS AND THE SAME IS ARBIT RARY AND ILLEGAL. 5. THAT THE ADDITIONS MADE BY THE LEARNED INCOME TA X OFFICER MAY BE DELETED. 6. THE ASSESSEE RESERVES THE RIGHT TO ADD / ALTER A NY GROUND OF THE TIME AND OR BEFORE THE HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HER RETURN OF INCOME FOR THE A.Y.2008-09 ON 31.08.2005 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,48,106/-. THEREAFTER, THE CASE WAS RE OPENED BY ISSUANCE OF NOTICE U/S.148 OF THE INCOME TAX ACT, 1961 ( IN SHO RT THE ACT) AFTER RECORDING THE REASONS. NOTICES U/S. 143(2) AND 142 (1) OF THE ACT WERE ISSUED AND DULY SERVED UPON THE ASSESSEE. THE ASSE SSEE WAS AN INDIVIDUAL AND SHOWN HER INCOME FROM HOUSE PROPERTY. IT WAS O BSERVED THAT THE ASSESSEE WAS THE OWNER OF THE TWO SHOPS I.E. SHOP N O.1 AT AIROLI AND SHOP NO.24 AT VASHI. NO INCOME FROM THE HOUSE PROPERTY WAS OFFERED AGAINST ITA NO.2223/M/2013 A.Y.2005-06 3 THE PROPERTIES HELD. THEREFORE, THE DEEMING PROVIS ION WAS APPLIED AND THE INCOME WAS ASSESSED TO THE TUNE OF RS.93,950/- (RS. 76,450/- + RS.17,500/-). THE ASSESSE HAD ALSO SOLD HER IMMOVABLE PROPERTY DU RING THE RELEVANT F.Y. AND TOOK THE COST OF ACQUISITION TO THE TUNE OF RS. 20,08,021/- AFTER TAKING THE COST OF INDEXATION FOR THE YEAR OF PURCHASE BEI NG 1991-92. IT WAS ALSO FOUND THAT THE ASSESSEE ENTERED INTO AN AGREEMENT O F SALE DATED 28.11.1991 WITH M/S. JAIN SANTOSHI DEVELOPERS PVT. LTD. BUT EX ECUTED THE CONFIRMATION DEED DATED 13.03.2000. THE PAYMENT WAS ASKED AND T HE ASSESSEE PAID THE PAYMENT ON 07.05.1999 TO THE TUNE OF RS.6,75,000/-, ON 27.03.1999 TO THE TUNE OF RS.1,47,413/-, ON 13.03.2000 TO THE TUNE OF RS.10,080/- TOTAL TO THE TUNE OF RS.8,32,493/-. SINCE THE AGREEMENT WAS UNR EGISTERED, THEREFORE, ASSESSEE WAS ASKED TO SUBMIT THE VALUATION REPORT A ND ACCORDINGLY, THE ASSESSEE SUBMITTED THE VALUATION REPORT OF SHRI BHA RAT V. DAVE DATED 29.06.2004. SINCE THE ASSESSEE BECAME THE OWNER ON 13.03.2000, THEREFORE, THE COST OF INDEXATION WAS APPLIED FOR THE A.Y.2000 -01 AND THE COST OF ACQUISITION CAME TO THE TUNE OF RS.10,27,239/-. TH E COST OF PROPERTY ASSESSED BY THE GOVERNMENT VALUER WAS MUCH BELOW OF THE COST OF STAMP DUTY AUTHORITIES, THEREFORE, THE SAME WAS CONSIDERE D AND THE L.T.C.G WAS ASSESSED TO THE TUNE OF RS.17,13,761/-. THE TOTAL INCOME WAS ASSESSED TO THE TUNE OF RS.19,55,817/-. SINCE THE ASSESSEE WAS NOT SATISFIED, THEREFORE THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE, THEREFORE THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1:- 4. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE VALIDITY OF REOPENING U/S.147 OF THE ACT. THE LEARNED REPRESEN TATIVE OF THE ASSESSEE ITA NO.2223/M/2013 A.Y.2005-06 4 HAS ARGUED THAT THE CIT(A) DID NOT DECIDE THIS ISSU E ON MERITS, THEREFORE, IN THE SAID CIRCUMSTANCES, THE CIT(A) IS REQUIRED TO B E DIRECTED TO DECIDE THIS ISSUE BY GIVING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE IN ACCORDANCE WITH LAW. HOWEVER, ON THE OTHER HAND, LEARNED REPR ESENTATIVE OF THE DEPARTMENT HAS ARGUED THAT THE ASSESSEE FAILED TO A PPEAR BEFORE THE CIT(A) DESPITE SERVICE OF NOTICE, THEREFORE, THE CIT(A) HA S DECIDED THE MATTER OF CONTROVERSY ON MERITS IN ACCORDANCE WITH LAW WHICH IS NOT REQUIRED TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ON APPRAIS AL OF THE ORDER PASSED BY THE CIT(A) IN QUESTION, IT CAME INTO THE NOTICE THA T THE CIT(A) DECIDED THE APPEAL IN THE ABSENCE OF THE ASSESSEE. HOWEVER, TH E SAID ORDER IN QUESTION DATED 27.02.2012 SPEAKS ABOUT THE SERVICE OF NOTICE S NUMBER OF TIMES MENTIONED THEREIN. BUT ANYHOW IT IS ALSO APPARENT ON RECORD THAT THE CIT(A) ONLY DEALT THE ISSUE U/S.50C OF THE ACT, HOW EVER, WHILE DECIDING THE SAID APPEAL THE CIT(A) DID NOT DECIDE THE ISSUE OF REOPENING U/S.147 / 148 OF THE ACT. IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ISSUE REQUIRED NECESSARILY ADJUDICATED IN THE INTER EST OF JUSTICE. IN VIEW OF THE SAID CIRCUMSTANCES WHEN THE CIT(A) DID NOT DECI DE THE ISSUE OF REOPENING U/S.147 / 148 OF THE ACT. THEREFORE, IN THE INTEREST OF JUSTICE WE DIRECT THE CIT(A) TO DECIDE THIS ISSUE AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH L AW. THE FILE IS HEREBY RESTORED BACK TO THE CIT(A) TO DECIDE THIS ISSUE AC CORDINGLY. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVEN UE. ISSUE NO.2 TO 4:- 5. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE FINDING OF THE CIT(A) VIDE WHICH THE CIT(A) HAS CONFIRMED THE VALU E OF THE SOLD ITA NO.2223/M/2013 A.Y.2005-06 5 PROPERTY ON THE BASIS OF STAMP DUTY VALUE U/S.50C O F THE ACT FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. ON APPRAISAL OF THE ORDER PASSED BY THE CIT(A) IN QUESTION IT IS NOT IN DISPUTE THAT THE SAID ORDER HAS BEEN PASSED BY THE CIT(A) EX-PARTE. THE ASSESSEE F AILED TO APPEAR BEFORE THE CIT(A) NO DOUBT DESPITE SERVICE OF NOTIC E BUT THE PLEA WHICH HAS BEEN TAKEN BY THE ASSESSEE IS IN CONNECTI ON WITH THE HEALTH GROUND OF THE ASSESSEE WHO ALSO DIED ON 01.05.2012 AS PER THE DEATH CERTIFICATE ATTACHED IN THE APPLICATION. THE DATES OF THE ISSUANCE AND THE SERVICES OF THE NOTICES ARE 12.09.2011, 14.10.2 011, 22.12.2011, 02.01.2012, 23.01.2012 AND 10.02.2012. THE NON-APP EARANCE ON ACCOUNT OF HEALTH GROUND SEEMS JUSTIFIABLE IN VIEW OF THE DEATH CERTIFICATE WHICH SPEAKS ABOUT THE DEATH OF THE ASS ESSEE ON 01.05.2012. ANYHOW, THE LEGAL HEIR WANTS TO REPRES ENT THE APPEAL AND WANTS AN OPPORTUNITY TO DEFINED THE CASE, THEREFORE , IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT THE ISSUE U/S.50C OF THE ACT IS ALSO REQUIRED TO BE ADJUDICATED BY THE CIT(A) AFTER GIVI NG AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH L AW. THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE A ND DIRECT THE CIT(A) TO DECIDE THE MATTER AFRESH AFTER GIVING A REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THESE IS SUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE. ITA NO.2223/M/2013 A.Y.2005-06 6 ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2017 . SD/- SD/- ( RAJENDRA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED :29 TH #$ , 2017 MP & '$ / 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. / BY ORDER, ! ! //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI