DCIT, New Delhi V. Sh. Dinesh Shrama, New Delhi

ITA 226/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3409 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Earning of tax free income; Cost of acquisition; Revised return; Ignorance of law
• Section: 143(3); 45(5); 142(1); 153A; 139(5); 147; 148; 12; 28; 144; 2; 11; 139

Judgement Text

I.T.A .NO.-226/DEL/2013 DC IT VS DINESH SHRAMA IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SH. SUDHANSHU SRIVASTAVA, JUDIC IAL MEMBER AND SH.ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A .NO.-226/DEL/2013 (ASSESSMENT YEAR-2008-09) DCIT, CIRCLE-32(10, ROOM NO.1502, BLOCK E-2, 15 TH FLOOR, SHYAMA PRASAD MUKHERJEE CIVIC CENTRE, MINTO ROAD, NEW DELHI. ( APPELLANT) VS DINESH SHARMA, 389, MASJID MOTH, NDSE-II, NEW DELHI- 110027. PAN-AARPS5040F (RESPONDENT) ASSESSEE BY SH.ANIL KUMAR SHARMA, SR. DR REVENUE BY SH.G.N.GUPTA, ADV. ORDER PER ANADEE NATH MISSHRA, ACCOUNTANT MEMBER (A). THE PRESENT APPEAL HAS BEEN FILED BY THE REVEN UE AGAINST THE ORDER DATED 31.10.2012 OF CIT(A)-XXVI, DELHI PERTAINING TO A.Y. 2008-09. GROUNDS OF APPEAL ARE AS UNDER:- 1. WHETHER THE LD.CIT(A) IS JUSTIFIED ON MERITS IN HOLDING THAT AMOUNTING OF RS.20,60,810/- WAS RECEIVED U/S 28 OF THE LAND ACQUISITION ACT WHICH IS EXEMPT FROM TAX. 2. WHETHER THE LD. CIT(A) IS EMPOWERED UNDER THE AC T REDUCE THE RETURNED INCOME OF ASSESSEE AFTER EXPIRY OF PERIOD SPECIFIED U/S 1339(5) AND WITHOUT ANY REVISED RETURNED FILED BY A SSESSEE U/S 139(5) OF THE ACT. 3. WHETHER THE LD.CIT(A) IS JUSTIFIED ON MERITS IN HOLDING THAT INDEXATION SHOULD BE GIVEN FROM THE YEAR WHEN THE P ROPERTY WAS ACQUIRED BY THE PREVIOUS OWNER FOR COMPUTING LONG T ERM CAPITAL GAIN. (B). THE ASSESSEE FILED ORIGINAL RETURN OF INCOME O N 10.02.2009 SHOWING TOTAL INCOME OF RS.91,48,470/-. THIS WAS A BELATED RETURN U/S 139 (4) OF THE I.T.ACT, 1961 (IN SHORT ACT) AND NOT A RETURN FILED BY DUE DATE, U/S PAGE 2 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA 139(1) OF THE ACT. THE ASSESSMENT ORDER DATED 30.1 1.2010 WAS PASSED BY THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) OF THE ACT WHEREIN TOTAL INCOME WAS ASSESSED AT RS.1,12,09,885/- AND THE FOL LOWING ADDITIONS WERE MADE:- (A) ADDITION TO INCOME FROM OTHER SOURCES RS.20,60,81 0/- (B) ADDITION TO LONG TERM CAPITAL GAINS RS.1,32,608/- (B.1). THE ASSESSEE FILED APPEAL AGAINST THE AFORES AID ASSESSMENT ORDER DATED 30.11.2010 BEFORE THE LD.CIT(A) ON THE FOLLOW ING GROUNDS:- '1) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID. ACIT, CIRCLE-32(L), NEW DELHI (HEREINAFTER CALLED THE ASS ESSING OFFICER FOR SHORT) HAS ERRED IN HOLDING THAT RS.20,60,810/-RECE IVED AS INTEREST FROM COMPULSORY ACQUISITION IS TAXABLE INCOME. 2) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ID. ASSESSING OFFICER HAS ERRED IN NOT ALLOWING A RELIE F OF RS,79,32,289/- WRONGLY SHOWN AS TAXABLE INCOME IN THE RETURN OF IN COME. 3) THAT ON THE FACTS IN THE CIRCUMSTANCES OF THE CA SE, EVEN IF FOR THE SAKE OF ARGUMENT THOUGH NOT CONCEDING IT, THE INTER EST INCOME IS CONSIDERED AS TAXABLE, ID. ASSESSING OFFICER HAS ER RED IN TAXING THE INTEREST INCOME ON RECEIPT BASIS INSTEAD OF ACCRUAL BASIS. 4) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ASSESSING OFFICER HAS ERRED IN DISALLOWING A SUM OF RS.1,32,6 08/- U/S 48 OF THE IT ACT, 1961 BEING THE INDEXED COST OF ACQUISITION. ' (B.2). VIDE ORDER DATED 31.10.2012 THE LD.CIT(A) DE LETED THE AFORESAID ADDITION OF RS.20,60,810/-. FURTHER, IN RESPECT OF ADDITION OF RS.1,32,608/- ON ACCOUNT OF LONG TERM CAPITAL GAINS , THE LD.CIT(A) DIRECTED THE AO TO RE-COMPUTE THE LONG TERM CAPITAL GAINS. IN RESPECT OF GROUND NO.2 OF APPEAL FILED BY THE ASSESSEE BEFORE LD.CIT(A) WAS REGARDING RS.79,32,289/-, THE LD.CIT(A) ALLOWED THE GROUND DI RECTED THE AO TO REDUCE THE TAXABLE INCOME BY RS.79,32,289/-. THIS GROUND WAS TAKEN BY THE ASSESSEE, THOUGH THE AO HAD NOT MADE ANY ADDITI ON IN RESPECT OF THE PAGE 3 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA AFORESAID RS.79,32,289/- AND INSTEAD, THE ASSESSEE HIMSELF HAD INCLUDED THUS AMOUNT AS TAXABLE INCOME AS PER (BELATED) RETU RN FILED U/S 139(4) OF I.T.ACT. TILL THE COMPLETION OF ASSESSMENT ORDER, THE ASSESSEE HAD NOT GIVEN ANY INTIMATION TO THE AO EXCLUDING THIS AMOUN T FROM TAXABLE INCOME. (E). THE REVENUE HAS FILED THIS APPEAL AGAINST AFOR ESAID ORDER OF LD.CIT(A) DATED 31.10.2012. THE FIRST GROUND IN THE APPEAL F ILED BY THE REVENUE IS IN RESPECT OF THE ADDITION OF RS.20,60,810/-. THIS ADDITION WAS MADE BY THE AO ON THE GROUND THAT THIS WAS INTEREST INCOME U/S 34 OF THE LAND ACQUISITION ACT. LD.CIT(A) DELETED THIS ADDITION. THE RELEVANT PORTION OF THE ORDER OF LD.CIT(A) IS REPRODUCED AS UNDER:- 5.1. THE BRIEF FACTS OF THE CASE ARE THAT THE APPE LLANT RECEIVED AN AMOUNT OF RS.1,96,37,642/- AS COMPENSATION FROM THE LAND ACQUISITION OFFICER, URBAN ESTATE, FARIDABAD FOR CO MPULSORY ACQUISITION OF AGRICULTURAL LAND OF THE APPELLANT IN VILLAGE, C HANDAWALI, TEHSIL BALLABHGARH, DISTRICT FARIDABAD IN THE FINANCIAL YE AR 1998-99. AGGRIEVED WITH THE AMOUNT RECEIVED, THE APPELLANT W ENT BEFORE THE HIGHER APPELLATE AUTHORITIES FOR ENHANCEMENT OF COM PENSATION. THE APPELLANT GOT SUBSTANTIAL ENHANCEMENT IN THE COMPEN SATION AMOUNT IN THE COURT OF THE ADJ AND SUBSEQUENTLY THE HIGH COUR T IN DIFFERENT YEARS. ON PERUSAL OF THE DETAILS FILED, THE AO NOTE D THAT THE APPELLANT RECEIVED THE AMOUNTS MENTIONED BELOW AS ADDITIONAL COMPENSATION, INCLUDING INTEREST, SOLATIUM AND ENHANCED COMPENSAT ION IN DIFFERENT YEARS: ASSESSMENT YEAR 2002-03 RS.95,30,6697- ASSESSMENT YEAR 2004-05 RS.95,72,1897- ASSESSMENT YEAR 2008-09 RS.1,96,37,1427- IT WAS OBSERVED BY THE AO THAT DURING THE YEAR UNDE R CONSIDERATION, THE APPELLANT RECEIVED AN AMOUNT OF RS.99,16,799/- AS INTEREST U/S.34 OF THE LAND ACQUISITION ACT, ON THE DELAYED PAYMENT OF ENHANCED COMPENSATION ALONG WITH RS.97,20,344/- WHICH WAS RE CEIVED AS ADDITIONAL COMPENSATION U/S.23 (1-A), 23(2) AND 28 OF THE LAND ACQUISITION ACT. AFTER CONSIDERING THE FACTS OF THE CASE, THE AO PAGE 4 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA OBSERVED THAT THE APPELLANT WAS ELIGIBLE TO AVAIL T HE BENEFITS U/S. 10(37) OF THE ACT AS THE ENHANCED COMPENSATION WAS RECEIVED BY THE APPELLANT AFTER 1/4/2004 AND ON FULFILLING THE OTHE R CONDITIONS, THE ENHANCED ADDITIONAL COMPENSATION RECEIVED BY THE AP PELLANT DOES NOT FORM A PART OF THE TOTAL INCOME AND WAS NOT SUBJECT ED TO CAPITAL GAINS AS PER THE SPECIFIC PROVISIONS LAID DOWN U/S. 45(5) OF THE INCOME-TAX ACT, 1961. IT WAS ALSO OBSERVED BY THE AO THAT NO B ENEFIT WOULD BE AVAILABLE TO THE APPELLANT IN RESPECT OF INTEREST R ECEIVED U/S.34 OF THE LAND ACQUISITION ACT ON THE DELAYED PAYMENT OF ENHA NCED/ADDITIONAL COMPENSATION AND THAT THE SAME WAS CHARGEABLE TO TA X AS INCOME FROM OTHER SOURCES. IT WAS ALSO NOTED BY THE AO THAT THE ENTIRE INTERES T INCOME OF RS.99,16,799/- RECEIVED BY THE APPELLANT WAS INTERE ST ON DELAYED PAYMENT U/S.34 OF THE LAND ACQUISITION ACT AND WAS TO BE TREATED AS INCOME FOR THE ASSESSMENT YEAR 2008-09. IT WAS ALSO NOTED BY THE AO THAT THE APPELLANT REFLECTED ONLY RS.78,55,969/- IN THE RETURN OF INCOME. RELYING ON THE JUDGEMENT BY THE HON'BLE SUP REME COURT IN THE CASE OF CIT VS. GHANSHYAM DASS HUF (2009) 315 ITR 1 , THE AO BROUGHT TO TAX THE DIFFERENCE IN THE INTEREST INCOM E RECEIVED BY THE APPELLANT ON ENHANCED COMPENSATION AMOUNTING TO RS. 20,60,810/- AS INCOME FROM OTHER SOURCES AND ADDED THE SAME TO THE INCOME RETURNED BY THE APPELLANT. 5.2. IN THE COURSE OF THE APPELLATE PROCEEDINGS, TH E AR OF THE APPELLANT FILED THE FOLLOWING SUBMISSIONS: 'THE FACTS OF THE CASE ARE THAT DURING THE ASSESSME NT YEAR THE ASSESSEE RECEIVED CERTAIN SUMS OF MONEY TOWARDS ENH ANCED COMPENSATION ON THE AGRICULTURAL LANDS ACQUIRED BY THE GOVERNMENT. THE AO ADDED RS.20,60,810/- AS INTEREST INCOME U/S 34 OF THE LAND ACQUISITION ACT, 1894 CHARGEABLE TO TAX UNDER INCOME FROM OTHER SOURCES. THE SAID ADDITION WAS MA DE IGNORING THE FACT THAT THE INTEREST RECEIVED BY THE ASSESSEE IS U/S 28 OF THE LAND ACQUISITION ACT AND NOT U/S 34 OF THE LAND ACQ UISITION ACT, 1894 AS MENTIONED BY THE AO. YOUR HONOUR SIR, WITH DUE REGARDS I WOULD LIKE TO D RAW YOUR BENIGN ATTENTION TO THE THREE LAND MARK JUDGEMENTS BY THE HON'BLE SUPREME COURT: CIT VS GHANSHYAM (HUF) [2009] 315 ITR 'L RAMA BAI VS CIT [1990] 181 ITR 400 GURPREET SINGH VS UNION OF INDIA [2006] PLJ 593 IN THE CASE OF CIT VS GHANSHYAM (HUF), ALSO REFERRE D TO BY THE AO, WHILE MAKING THE ADDITION, IT HAS BEEN VERY CLEARLY STATED THAT INTEREST IS DIFFERENT FROM COMPENSATION. HOWEVER, INTEREST P AID ON THE EXCESS AMOUNT UNDER SECTION 28 OF THE 1894 ACT DEPENDS UPO N CLAIM BY THE PAGE 5 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA PERSON WHOSE LAND IS ACQUIRED WHEREAS INTEREST UNDE R SECTION 34 IS FOR DELAY IN MAKING PAYMENT. THIS VITAL DIFFERENCE NEED S TO BE KEPT IN MIND IN DECIDING THIS MATTER. INTEREST UNDER SECTIO N 28IS PART OF THE AMOUNT OF COMPENSATION WHEREAS INTEREST UNDER SECTI ON 34 IS ONLY FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOU NT IS DETERMINED. INTEREST UNDER SECTION 28 IS A PART OF ENHANCED VALUE OF THE LAND WHICH IS NOT THE CASE IN THE MATTER OF PAY MENT OF INTEREST UNDER SECTION 34. THE COURT FURTHER GOES ON TO SAY THAT INTEREST UNDER SECTION 28 UNLIKE INTEREST UNDER SECTION 34 IS AN A CCRETION TO THE VALUE' HENCE IT IS A PART OF ENHANCED COMPENSATION OR CONS IDERATION WHICH IS NOT THE CASE WITH INTEREST UNDER SECTION 34 OF THE 1894 ACT. THE COURT VERY CLEARLY HAS LAID THE GUIDELINE THAT ONLY INTER EST UNDER SECTION 34 OF THE 1894 ACT IS TAXABLE RECEIVED UNDER SECTION 2 8. WHEN WE TOOK OUR SUBMISSIONS ON 22 ND NOVEMBER, 2010 EXPLAINING THAT THE INTEREST RECEIVED BY US WAS UNDER SECTION 28, THE LETTER WAS REFUSED TO BE ACCEPTED ON THE PRETEXT THAT THE ORDE R HAS ALREADY BEEN PASSED WHEREAS THE ORDER HAS BEEN PASSED ON 30TH NO VEMBER, 2010. THE SUPREME COURT HAS VERY CLEARLY DISCUSSED IN THE CASE OF GURPREET SINGH VS. UNION OF INDIA AS TO WHEN THE INTEREST WI LL BE CONSIDERED U/S 28 AND WHEN IT SHALL BE CONSIDERED U/S 34 OF THE LA ND ACQUISITION ACT, 1894. PARA 27 OF THE ORDER SAYS GOING BY THE PRINCI PLE AND FOR THE MOMENT KEEPING OUT THE SCHEME OF THE LAND ACQUISITI ON ACT, IT APPEARS TO US THAT ON PAYMENT OR DEPOSIT OF THE AMOUNT AWAR DED BY THE COLLECTOR IN TERMS OF SECTION 11 READ WITH SECTION 31 OF THE ACT, THE CLAIMANT CAN NOT THEREAFTER CLAIM ANY INTEREST ON T HAT PART OF THE COMPENSATION PAID TO HIM OR DEPOSITED FOR THE PAYME NT TO HIM ONCE NOTICE OF DEPOSIT IS GIVEN TO HIM. THEREAFTER, WHEN THE REFERENCE COURT ENHANCES THE COMPENSATION WITH CONSEQUENTIAL ENHANC EMENT IN SOLATIUM AND INTEREST UNDER SECTION 23(1A) OF THE A CT AND FURTHER AWARDS INTEREST ON THE ENHANCED COMPENSATION IN TER MS OF SECTION 28 OF THE ACT, THE CLAIMANT/DECREE HOLDER CAN SEEK AN APPROPRIATION OF THE AMOUNTS DEPOSITED PURSUANT TO THAT AWARD DECREE, ON LY TOWARDS THE ENHANCED AMOUNT SO AWARDED BY THE REFERENCE COURT. WHILE MAKING THE APPROPRIATION, HE CAN APPLY THE AMOUNT DEPOSITE D, FIRST TOWARDS THE SATISFACTION OF HIS CLAIM TOWARDS INTEREST ON T HE ENHANCED AMOUNT, THE COSTS, IF ANY AWARDED AND THE BALANCE TOWARDS T HE LAND VALUE, SOLATIUM AND THE PAYMENT UNDER SECTION 23(1A) OF TH E ACT AND IF, THERE IS A SHORTFALL, CLAIM THAT PART OF THE COMPENSATION WITH INTEREST THEREON AS PROVIDED IN SECTION 28 OF THE ACT AND AS COVERED BY THE AWARD DECREE. THE MANDATE OF SECTION 34 AND SECTION 28 TH AT INTEREST WOULD RUN FROM THE DATE THE COLLECTOR TAKES POSSESSION TI LL THE PARTICULAR AMOUNT IS DEPOSITED AS PROVIDED IN THOSE SECTIONS E NSURES THAT THE CLAIMANT IS RECOMPENSED ADEQUATELY. SECTION 28 ENSU RES SUCH RECOMPENSE AT EACH STAGE OF ENHANCEMENT OF COMPENSA TION. PAGE 6 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA IN THE LIGHT OF THE ABOVE TWO JUDGEMENTS IT IS VERY CLEAR THAT INTEREST UNDER SECTION 34 ARISES ONLY AT THE FIRST STAGE OF COMPENSATION, WHEN THE COLLECTOR TAKES POSSESSION OF LAND AND PAYS THE COMPENSATION. IN ALL OTHER STAGES, WHERE ENHANCEMENT IS DECREED, INT EREST IS PAID UNDER SECTION 28 OF THE 1894, ACT. EVEN IF FOR THE SAKE OF ARGUMENT, THOUGH NOT CONCED ING IT, IT IS AGREED THAT WHOLE OF THE INTEREST RECEIVED IS UNDER SECTIO N 34 OF THE 1894 LAND ACQUISITION ACT, THEN ALSO GOING BY THE RAMA B AI'S CASE, ONLY 6 YEARS INTEREST ACCRUED TO THE ASSESSEE IS TAXABLE. WHERE THE COMPENSATION AWARDED UNDER THE LAND ACQUI SITION ACT IS ENHANCED BY THE ORDER OF COURT INTEREST ON ENHANCED COMPENSATION CANNOT BE TAXED ALL IN LUMP SUM AS HAVING ACCRUED O N THE DATE ON WHICH THE COURT PASSES THE ORDER FOR ENHANCED COMPE NSATION; THE INTEREST HAS TO BE SPREAD OVER ON AN ANNUAL BASIS R IGHT FROM THE DATE OF DELIVERY OF POSSESSION TILL THE DATE OF THE ORDE R OF THE COURT ON A TIME BASIS - KS KRISHNA RAO VS. CIT [1990] 181 ITR 408 ( SC). THE RAMA BAI'S CASE AND GHANSHYAM HUF ARE QUITE APA RT IN THE SENSE THAT WHEREAS GHANSHYAM HUF TALKS OF TAXING TH E CAPITAL AMOUNT RECEIVED UNDER LAND ACQUISITION ACT ON RECEI PT BASIS, RAMA BAI'S CASE TALKS OF TAXING INTEREST UNDER SECTION 3 4 OF THE ACT. WHEREAS, HITHERTO ASSESSEES IN THE CASES OF DISPUTE , WERE NOT PAYING TAX ON THE AMOUNT OF LAND COMPENSATION WHICH WAS TA KEN CARE OF BY THE GHANSHYAM HUF CASE.' 5.3 IN THE COURSE OF THE APPEAL PROCEEDINGS, THE AR OF THE APPELLANT FILED THE FOLLOWING ON 8/5/2012 AS UNDER: 'THE ASSESSING OFFICER HAS GONE AHEAD AND DECIDED O N HER OWN THAT THE INTEREST RECEIVED BY US IS UNDER SECTION 3 4 OF THE LAND ACQUISITION ACT, 1894 WITHOUT GIVING US ANY REASONA BLE OPPORTUNITY OF BEING HEARD OR EVEN ASKING US WHETHE R THE INTEREST RECEIVED BY US WAS UNDER 28 OR 34.' IN ORDER TO GIVE AN OPPORTUNITY THE UNDERSIGNED PUT FORTH A QUERY TO THE AR OF THE APPELLANT TO FILE CATEGORICALLY TH E FACT AS TO WHETHER INTEREST ON ENHANCED ADDITIONAL COMPENSATION WAS RE CEIVED U/S.34 OR U/S.28 OF THE LAND ACQUISITION ACT. VIDE LETTER DAT ED 8/5/2012, THE AR STATED THAT AN AMOUNT OF RS.99,16,799/- WAS INTERES T RECEIVED DURING THE YEAR U/S.28 OF THE LAND ACQUISITION ACT. SINCE THERE AROSE A DISPUTE BETWEEN THE AO WHERE INTEREST RECEIVED ON C OMPENSATION WAS BROUGHT TO TAX U/S.34 OF THE LAND ACQUISITION ACT A ND THE APPELLANT'S PLEA THAT SUCH INTEREST WAS RECEIVED U/S.28 OF THE LAND ACQUISITION ACT, THE REPLY DATED 8/5/2012 OF THE APPELLANT WAS FORWARDED TO THE AO TO EXAMINE THE FACTS OF THE CASE AND TO COMMENT ON THE TAXABILITY OF INTEREST INCOME ON ENHANCED COMPENSATION. VIDE LETT ER DATED 4/9/2012, THE AO SUBMITTED A REPLY WHEREIN AFTER CO NSIDERING THE PAGE 7 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA FACTS REITERATED THE STAND TAKEN BY THE AO IN HER O RDER DATED 20/11/2012. 5.4. I HAVE CONSIDERED THE ASSESSMENT ORDER AND REM AND REPORT OF AO AS WELL AS THE ARGUMENTS AND WRITTEN SUBMISSIONS AN D THE REJOINDER TO REMAND REPORT FILED BY THE AR OF THE APPELLANT. THE AO MADE AN ADDITION OF RS.20,60,810/- AS INCOME OF THE APPELLA NT ON THE PRETEXT THAT THIS IS THE INTEREST INCOME U/S 34 OF THE LAND ACQUISITION ACT. THE APPELLANT RELIED ON THE DECISION OF THE HON'BLE SUP REME COURT IN THE CASE OF CIT VS. RAMA BAI 131 ITR 400 IN WHICH IT WA S HELD THAT WHERE COMPENSATION IS ENHANCED BY THE ORDER OF DISTRICT C OURT/HIGH COURT ON REFERENCE OR ON FURTHER APPEALS, INTEREST ON COMPEN SATION AWARDED CANNOT BE TAXED ALL IN A LUMPSUM ON THE DATE ON WHI CH THE COURT PASSES AN ORDER FOR ENHANCED COMPENSATION BUT THAT IT HAS TO BE SPREAD OVER ON AN ACCRUAL BASIS RIGHT FROM THE DATE OF DELIVERY OF POSSESSION TILL THE DATE OF ORDER OF THE COURT ON A TIME BASIS. THE AO IN HER ORDER DATED 20/11/2010 MADE A REFERENCE TO THE JUDICIAL PRONOUNCEMENT IN THE CASE OF CIT VS. GHANSHYAM DASS HUF (2009) 315 ITR 1 (SC). WHEREAS THE SUBMISSION OF THE AR OF THE APPELLANT IS THAT THE INTEREST INCOME RECEIVED ON ENHANCEMENT OF COMPENSATION WAS RECEIVED U/S.28 OF THE LAND ACQUISITION ACT 189 4 AND HENCE IT IS EXEMPT FROM INCOME TAX. THE AR ALSO STRONGLY CONTEN DED THAT THE AO DID NOT PROVIDE ANY REASONABLE OPPORTUNITY BEFORE C ONCLUDING THAT THE INTEREST RECEIVED ON ENHANCED COMPENSATION WAS UNDE R SECTION 34 OF THE LAND ACQUISITION ACT. 5.4.1. IN ORDER TO PROVIDE AN OPPORTUNITY TO THE AP PELLANT, THE SUBMISSION DATED 8/5/2012 WAS FORWARDED TO THE AO F OR HIS COMMENTS. VIDE REPORT DATED 4/9/2012, THE AO OPTED TO KEEP SILENT ON THE ISSUE OF NOT PROVIDING AN OPPORTUNITY TO THE AP PELLANT BEFORE CONCLUDING THAT INTEREST WAS RECEIVED U/S.34 OF THE LAND ACQUISITION ACT. BESIDES, ON THE OTHER HAND, THE APPELLANT FILE D A COPY OF THE JUDGEMENT PASSED BY THE HON'BLE PUNJAB & HARYANA HI GH COURT IN HIS OWN CASE. A PERUSAL OF THE ORDER REVEALED THAT THE INTEREST INCOME WAS RECEIVED U/S.28 OF THE LAND ACQUISITION ACT. HENCE THE FINDING OF THE AO THAT INTEREST WAS RECEIVED ON ENHANCED COMPENSAT ION WAS U/S.34 OF THE SAID ACT IS INCORRECT. 5.4.2. THE NEXT ISSUE INVOLVED IS WHETHER THE INTER EST INCOME RECEIVED U/S 28 OF THE LAND ACQUISITION ACT IS TAXABLE OR EX EMPT. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. GHANS HYAM HUF (2009) 315 ITR 1, HELD THAT INTEREST RECEIVED U/S 28 OF TH E LAND ACQUISITION ACT, 1894 IS EXEMPT FROM TAX. RESPECTFULLY FOLLOWIN G THE DECISION OF THE HON'BLE APEX COURT IN CASE OF GHANSHYAM HUF SUPRA, I HOLD THAT THE INTEREST RECEIVED BY APPELLANT U/S 28 OF THE LAND A CQUISITION ACT IS PAGE 8 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA EXEMPT AND THE ADDITION MADE BY THE AO AMOUNTING TO RS.20,60,810/- IS HEREBY DELETED. (C.1). AT THE TIME OF HEARING BEFORE US, THE LD. DE PARTMENTAL REPRESENTATIVE (IN SHORT DR) RELIED ON THE ORDER OF THE AO. HOWEVER, HE WAS UNABLE TO POINT OUT ANY INFIRMITY OR DEFECT OR ERROR IN THE ORDER OF LD.CIT(A). ON THE OTHER HAND, THE LD. COUNSEL APPE ARING FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF THE LD.CIT(A). HE A LSO FILED A COPY OF LETTER OF LAND ACQUISITION OFFICER URBAN ESTATES, FARIDABA D, THE RELEVANT PORTION WHICH IS REPRODUCED AS UNDER:- IT IS INFORMED THAT INTEREST OF ENHANCED COMPENSAT ION PAID IN THE ABOVE NOTED CASE IN THE YEAR 2007-08 HAS BEEN CALCU LATED U/S 28 OF THE LAND ACQUISITION ACT. IT IS FURTHER SUBMITTED THAT INTEREST IN ALL ENHANCEMENT CASES IS GIVEN UNDER THE PROVISIONS OF SECTION 28 OF THE LAND ACQUISITION ACT. NO INTEREST U/S 34 OF THE LA ND ACQUISITION ACT, 1894 ON ENHANCED COMPENSATION HAS BEEN PAID IN THE ABOVE SAID L.A. CASE NO.84/99 DURING THE YEAR 2007-2008. (C.1.1). WE FIND THAT THE ORDER OF LD.CIT(A) IS BAS ED ON BINDING PRECEDENT IN THE CASE OF CIT VS GHANSHAYAM HUF 315 ITR 1 (SC). IN VIEW OF THE FACTUAL CLARIFICATION ISSUED BY THE LAND ACQUISITIO N OFFICER, URBAN ESTATE, FARIDABAD, AS AFORESAID AND IN VIEW OF THE BINDING PRECEDENT OF HONBLE APEX COURT IN THE CASE OF CIT VS GHANSHAYAMA HUF (S UPRA), WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AS FAR AS FIRST GROUND OF APPEAL BEFORE US, REGARDING ADDITION OF AFORESAID RS.20,60 ,810/- IS CONCERNED. THEREFORE, FIRST GROUND OF APPEAL IN THE APPEAL FIL ED BY THE REVENUE IS DISMISSED. PAGE 9 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA (C.2). THE SECOND GROUND OF APPEAL IS IN RESPECT OF THE DIRECTION OF THE LD.CIT(A) IN PARA 6.1 OF HER APPELLATE ORDER DATED 31.10.2012 WHEREIN THE LD.CIT(A) DIRECTED THE AO TO REDUCE THE TAXABLE INC OME BY RS.79,32,289/-. AS A RESULT OF THIS DIRECTION OF THE LD.CIT(A), THE ASSESSED INCOME OF THE ASSESSEE BECOMES EVEN LOWER THAN THE RETURNED INCOM E. IN THE SECOND GROUND OF APPEAL, THE REVENUE HAS OBJECTED TO THE D IRECTION OF THE LD.CIT(A) BY POINTING OUT THAT PERIOD SPECIFIED U/S 139(5) OF I.T.ACT HAD EXPIRED AND THE ASSESSEE HAD NOT FILED ANY REVISED RETURN. THE AFORESAID AMOUNT OF RS.79,32,289/- WAS SHOWN BY THE ASSESSEE AS TAXABLE INCOME IN THE RETURN FILED BY THE ASSESSEE U/S 139(4) OF T HE I.T.ACT. THE ASSESSEE DID NOT PLEAD BEFORE THE AO TILL THE COMPLETION OF ASSESSMENT PROCEEDINGS, THAT THE AFORESAID AMOUNT WAS NOT RS.79,32,289/- TA XABLE INCOME. THE ASSESSEE HAD NOT GIVEN ANY INTIMATION TO THE AO, T ILL FINALIZATION OF THE ASSESSMENT ORDER, EXCLUDING THIS AMOUNT FROM TAXABL E INCOME; AND THE AFORESAID AMOUNT CONTINUED TO BE OFFERED AS TAXABLE INCOME BY THE ASSESSEE TILL THE ASSESSMENT ORDER WAS PASSED. IN A NY CASE, THE ASSESSEE WAS NOT ELIGIBLE TO REVISE THE RETURN U/S 139(5) OF I.T.ACT AS THE RETURN FILED BY THE ASSESSEE WAS A BELATED RETURN U/S 139(4) OF THE ACT. IT WAS FOR THE FIRST TIME BEFORE LD.CIT(A) THAT THE ASSESSEE TOOK THE PLEA THAT THE AFORESAID AMOUNT OF RS.79,32,289/- WAS NOT TAXABLE INCOME. THE LD.CIT(A) DIRECTED THE AO TO REDUCE THE TAXABLE INC OME BY AFORESAID RS.79,32,289/-. THE RELEVANT PORTION OF THE APPELL ATE ORDER OF LD.CIT(A) IS REPRODUCED AS UNDER:- PAGE 10 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA 6.1. IN THE COURSE OF THE APPELLATE PROCEEDINGS, T HE APPELLANT INTER ALIA OBJECTED THE ACTION OF THE AO FOR NON COMPUTIN G THE INCOME AS PER LATEST DECISION OF APEX COURT IN THE CASE OF CIT VS . GHANSHYAM DASS HUF, WHILE FILING THE RETURN OF INCOME THE APPELLAN T INCLUDED INTEREST INCOME OF RS.79,32,289 AS TAXABLE. THE AO ACCEPTED THE INCOME DECLARED BY THE APPELLANT AND MADE AN ADDITION OF R S.20,60,810/- WHICH IS DELETED BY ME IN MY THIS ORDER. THE GRIEVA NCE OF THE APPELLANT IS THAT DUE TO THE IGNORANCE OF LAW THE APPELLANT O FFERED THE EXEMPT INCOME FOR TAX AND PAID THE INCOME TAX ON EXEMPT IN TEREST INCOME, WHICH WAS RECEIVED U/S 28 OF THE LAND ACQUISITION A CT, 1894. IN THE REMAND REPORT THE AO HAS STATED THAT THE APPELLANT VOLUNTARILY OFFERED THE INTEREST AMOUNT FOR TAXATION AND SINCE THE AO W AS OF THE VIEW THAT THIS IS TAXABLE INCOME HENCE THE QUESTION OF RE-COM PUTING THE INCOME DOES NOT ARISE. I HAVE CONSIDERED THE FACTS OF THE CASE CAREFULLY. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GHANS HAYAM HUF SUPRA HAS HELD THAT THE INTEREST RECEIVED U/S 28 OF THE L AND ACQUISITION ACT IS EXEMPT FROM TAX. ADMITTEDLY THE INTEREST RECEIVE D BY APPELLANT IS U/S 28 OF THE LAND ACQUISITION ACT, HENCE IS EXEMPT FROM TAX. THIS IS ALSO AN ADMITTED FACT THAT THE APPELLANT HAS OFFERE D THIS AMOUNT FOR TAXATION BEFORE THE DECISION OF HON'BLE APEX COURT IN THE CASE OF GHANSHYAM DASS HUF. AFTER THIS DECISION THE SITUATI ON HAS CHANGED AND THE AMENDMENT MADE IN STATUTE BY FINANCE ACT, 2 010 IS APPLICABLE FROM THE ASSESSMENT YEAR 2010-11. HENCE AMENDED PROVISION IS NOT APPLICABLE N THIS CASE SINCE APPEA L RELATES TO ASSESSMENT YEAR 2008-09. IT IS SETTLED LAW THAT THE APPELLANT IS ENTITLED TO RAISE AN ADDITIONAL CLAIM BEFORE THE AO OR THE APPELLATE AUTHORITY WHICH WAS NOT RAISED EARLIER. USEFUL REFE RENCE CAN BE MADE TO THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PARABOLIC SPRINGS LTD. 306 ITR 42 (DEL). THE HON'BL E APEX COURT OF INDIA, CIT VS. MAHALAXMI SUGAR MILL CO. LTD. (1986) 58 CTR 138 (SC) HELD THAT THERE IS DUTY CAST ON THE AO TO APPLY THE RELEVANT PROVISIONS OF THE INCOME TAX ACT 1961 FOR THE PURPOSE OF DETER MINING THE TRUE FIGURE OF TAXABLE INCOME AND CONSEQUENTIAL TAX LIAB ILITY. THAT THE APPELLANT FAILS TO CLAIM THE BENEFIT CANNOT RELIEVE THE AO OF HIS DUTY TO APPLY THE RELEVANT PROVISION OF THE ACT. FROM THE A BOVE OBSERVATION OF HON'BLE APEX COURT IT IS CLEAR THAT THE AO IS DUTY BOUND TO DETERMINE THE CORRECT TAXABLE INCOME IRRESPECTIVE OF THE FACT S WHETHER THE APPELLANT HAS CLAIMED THE BENEFIT OR NOT. AS I HELD IN THE EARLIER PART OF MY ORDER THAT THE INTEREST RECEIVED BY APPELLANT IS RECEIVED U/S 28 OF THE LAND ACQUISITION ACT THEREFORE IS EXEMPT FROM T AX. THE AMOUNT OF RS.79,39,289 WAS ALSO RECEIVED U/S 28 OF THE LAND A CQUISITION ACT, AND IS EXEMPT FROM TAX. MERELY NOT MAKING A CLAIM C ANNOT BE BASIS TO DEPRIVE THE APPELLANT FROM A LEGITIMATE CLAIM. IN V IEW OF ABOVE, THE AO IS DIRECTED TO ALLOW THE RELIEF TO THE APPELLANT AN D REDUCE THE TAXABLE PAGE 11 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA INCOME BY RS.79,32,289/- WHICH IS ALREADY INCLUDED IN INCOME ASSESSED BY THE AO. ACCORDINGLY THIS GROUND OF APPE AL IS ALLOWED. (C.2.1). BEFORE US, AT THE TIME OF HEARING, THE LD. DR SUPPORTED THE SECOND GROUND OF APPEAL AND RELIED ON THE ASSESSMEN T ORDER. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE STRONGLY S UPPORTED THE ORDER OF LD.CIT(A) AND RELIED ON THE ORDER OF LD.CIT(A). WE HAVE HEARD BOTH SIDES PATIENTLY. WE HAVE ALSO CONSIDERED ALL MATERIALS ON RECORD. WE HAVE NOTICED THAT THE RETURN THAT WAS FILED U/S 139 OF T HE ACT BY THE ASSESSEE WAS, BEING A BELATED RETURN, A RETURN FILED U/S 139 (4) OF THE ACT. HAD THE ASSESSEE FILED THE RETURN BY DUE DATE, IT WOULD HAV E BEEN A RETURN FILED U/S 139(1) OF THE ACT. PROVISIONS REGARDING FILING OF REVISED RETURN ARE CONTAINED IN SECTION 139(5) OF THE ACT AND ITS PERU SAL SHOWS THAT, WHILE THE ASSESSEE IS PERMITTED TO FILE A REVISED RETURN, IF THE ORIGINAL RETURN WAS FILED U/S 139(1) OF THE ACT OR WAS FILED IN RESPONSE TO NOTICE U/S 142(1) OF THE I.T.ACT. HOWEVER, THERE IS NO PERMISSION U/S 139(5) FOR THE ASSESSEE TO FILE A REVISED RETURN IF THE ORIGINAL RETURN WAS FILED BELATEDLY U/S 139(4) OF THE ACT. THUS, THE RETURN FILED BY THE ASSESSEE U/S 139(5) OF THE ACT IS FINAL QUA THE ASSESSEE, AS FAR AS CLAIMS BENEFICIAL TO THE ASSESSEE ARE CONCERNED. W HILE REVENUE IS AUTHORIZED TO SCRUTINIZE AND EXAMINE THE CLAIMS OF THE ASSESSEE BY TAKING ACTION U/S 143 OR 147 OF THE I.T.ACT; THE AS SESSEE HAS NO AUTHORITY UNDER LAW TO MAKE A CLAIM BEFORE THE ASSE SSING OFFICER BENEFICIAL TO THE ASSESSEE SUBSEQUENT TO FILING OF (BELATED) RETURN U/S PAGE 12 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA 139(4) OF THE I.T.ACT. AS THE ASSESSEE IS BARRED F ROM MAKING ANY CLAIMS EVEN BEFORE THE ASSESSING OFFICER BENEFICIAL TO HIM AFTER FILING OF (BELATED) RETURN U/S 139(4) OF THE ACT; RIGHT OF MAKING ANY SUCH CLAIMS AT A LATER STAGE SUCH AS IN APPELLATE PROCEE DINGS HAVE TO BE, BY NECESSARY IMPLICATION, INTERPRETED AS NOT AVAILABLE TO THE ASSESSEE. IT IS TO BE APPRECIATED THAT EVEN FOR THE INSTANCES WH EN AN ASSESSEE HAS BEEN PERMITTED TO FILE REVISED RETURN U/S 139(5) OF THE ACT; SUCH AS WHEN THE ORIGINAL RETURN WAS FILED U/S 139(1) OF T HE ACT WITHIN DUE DATE OR WHEN IT WAS IN RESPONSE TO NOTICE U/S 142(1 ) OF THE ACT; EVEN THEN THE PERMISSION TO FILE A REVISED RETURN IS AVA ILABLE TO THE ASSESSEE ONLY UPTO TIME BEFORE THE EXPIRY OF ONE YE AR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETI ON OF THE ASSESSMENT, WHICHEVER IS EARLIER. IN THE INSTANT CASE, THE CLAIM BY THE ASSESSEE REGARDING THE AFORESAID AMOUNT OF RS.79,32 ,289/- WAS MADE WELL AFTER THE TIME PRESCRIBED FOR FILING OF REVISED RET URN U/S 139(5) OF THE ACT. THIS MATTER WAS CONSIDERED BY THE HONBLE SUPREME C OURT IN THE CASE OF GOETZE (INDIA) LTD. V CIT [2006] 157 TAXMAN 1 (SC) IN WHICH THE HONBLE APEX COURT HELD THAT THE ASSESSING AUTHORITY HAS NO POWER AFTER FILING ORIGINAL RETURN OTHERWISE THAN BY FILING REVISED RE TURN. DESPITE THESE FACTS AND CIRCUMSTANCES, THE LEGAL POSITION AND THE PRECE DENT IN THE CASE OF GOETZE (INDIA) PVT. LTD. (SUPRA), IF THE CLAIM OF THE ASSESSEE REGARDING AFORESAID AMOUNT OF RS.79,32,289/- IS TO BE CONSIDE RED FAVOURABLY ON MERITS, AS THE LD.CIT(A) HAS DONE IN THE IMPUGNED O RDER, IT RESULTS IN AN PAGE 13 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA EXTRA-ORDINARY SITUATION WHEREIN THE ASSESSED INCOM E (AFTER CONSIDERING THE AFORESAID CLAIM OF THE ASSESSEE AMOUNTING TO RS .79,32,289/-) TURNS OUT TO BE EVEN LESS THAN THE RETURNED INCOME. WE H AVE GIVEN OUR ANXIOUS CONSIDERATION TO THIS EXTRA-ORDINARY SITUATION AND EXAMINED THE STATUTORY POSITION WHETHER INCOME CAN BE ASSESSED AT AN INCOM E LOWER THAN THE RETURNED INCOME. THE PROVISIONS REGARDING INITIATI ON OF ASSESSMENT PROCEEDINGS ARE CONTAINED IN SECTION 143(2) OF THE ACT. THE PROVISIONS U/S 143(2) OF THE ACT, AS THEY STOOD AT THE RELEVANT TI ME BEFORE AMENDMENT BY FINANCE ACT, 2016 W.E.F 01.06.2016, ARE REPRODUCED BELOW:- 143(2). WHERE A RETURN HAS BEEN FURNISHED UNDER SE CTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, THE ASSESSING OFFICER OR THE PRESCRIBED INCOME-TAX AUTH ORITY, AS THE CASE MAY BE, IF, CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER-PAID THE TAX IN ANY MANNER, SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND THE OFFICE OF THE ASSESSI NG OFFICER OR TO PRODUCE, OR CAUSE TO BE PRODUCED BEFORE THE ASSESSI NG OFFICER ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN: PROVIDED THAT NO NOTICE UNDER THIS SUB-SECTION SHALL BE SERV ED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE EN D OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. (C.2.2). FROM A PERUSAL OF THE AFORESAID PROVISIONS OF SECTION 143(2) OF THE ACT, IT IS NOTICED THAT THE PURPOSE OF ASSESSMENT PROCEEDINGS IS TO ENSURE THAT THE ASSESSEE HAD NOT UNDERSTATED THE IN COME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID THE T AX IN ANY MANNER. IT CAN BE READILY INFERRED THAT THE ASSESSMENT PROC EEDINGS ARE MEANT FOR SCRUTINIZING THE CLAIMS MADE BY THE ASSESSEE AN D NOT FOR PAGE 14 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA ENTERTAINING ANY CLAIMS WHICH HAVE NOT BEEN MADE BY THE ASSESSEE. THE ASSESSMENT PROCEEDINGS ARE NOT MEANT FOR THE B ENEFIT OF THE ASSESSEE AND CANNOT BE CARRIED OUT TO CONFER A BENE FIT TO THE ASSESSEE, SPECIALLY WHEN SUCH CLAIM FOR BENEFIT WAS NOT MADE BY THE ASSESSEE BY DUE DATE OR EVEN BY THE TIME OF COMPLET ION OF ASSESSMENT PROCEEDINGS. THE FILING OF RETURN BY THE ASSESSEE U /S 139(1) OR U/S 139(4) OR IN RESPONSE TO NOTICE U/S 142(1) OF THE I .T.ACT, IS ON THE BASIS OF SELF-ASSESSMENT BY THE ASSESSEE IN ACCOR DANCE WITH SECTION 140A OF THE I.T.ACT. THE SELF-ASSESSMENT BY THE ASSESSEE CAN BE ALTERED BY THE REVENUE TO THE DISADVANTAGE OF THE A SSESSEE IF THE CASE IS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143 (2) OF THE ACT WHICH RESULTS IN ASSESSMENT ORDER U/S 143(3) OR U/S 144 O F THE I.T.ACT. REVENUE DOES NOT SELECT ALL THE RETURNS FILED BY TH E ASSESSEE FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF I.T.ACT. IT IS COM MON KNOWLEDGE AND A WELL-KNOWN FACT THAT A VERY SMALL PERCENTAGE OF RET URNS FILED BY THE ASSESSEE ARE SELECTED FOR SCRUTINY BY ISSUE OF NOTI CE U/S 143(2) OF THE ACT. UNLESS THE RETURN IS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT RESULTING IN AN ASSESSMENT ORDER U/S 143(3) OR U/S 144 OF THE ACT, THE RETURN FILED BY THE ASSESSEE IN ACCORDANCE WITH SELF-ASSESSMENT MADE BY THE ASSESSEE IS FINAL (BA RRING EXCEPTIONAL CIRCUMSTANCES WHEN NOTICE U/S 148 OR U/S 153A OR U/ S 153C OR U/S 158BC OR U/S 158BD ETC. IS ISSUED SUBSEQUENTLY). THE SELECTION OF A CASE FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT CANNOT PUT THE PAGE 15 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA ASSESSEE IN A MORE ADVANTAGEOUS POSITION THAN HAD T HE CASE NOT BEEN SELECTED FOR SCRUTINY, IN WHICH CASE THE SELF-ASSE SSMENT MADE BY THE ASSESSEE AND RETURN FILED BY THE ASSESSEE WOULD HAV E BECOME FINAL (BARRING EXCEPTIONAL CIRCUMSTANCES WHEN NOTICE U/S 148 OR U/S 153A OR U/S 153C OR U/S 158BC OR U/S 158BD ETC. IS ISSUED S UBSEQUENTLY). IN THE INSTANT CASE, THE CONSEQUENCE OF FAVOURABLY CONSIDE RING THE CLAIM OF THE ASSESSEE REGARDING AFORESAID AMOUNT OF RS.79,32,289 /-, IS THAT THE ASSESSED INCOME OF THE ASSESSEE BECOMES MUCH LOWER THAN THE RETURNED INCOME AND PUTS THE ASSESSEE IN A MUCH MORE ADVANTA GEOUS POSITION THAN HAD THE RETURN OF THE ASSESSEE NOT BEEN SELECTED FO R SCRUTINY IN WHICH CASE THE SELF-ASSESSMENT MADE BY THE ASSESSEE AND RETU RN FILED BY THE ASSESSEE WOULD HAVE BECOME FINAL. AS WE HAVE DISCU SSED EARLIER SUCH A SITUATION IS NOT PERMISSIBLE UNDER LAW ON CAREFUL P ERUSAL OF SECTION 143(2) OF THE I.T.ACT. REFERENCE TO ORDER OF HONBLE APE X COURT IN THE CASE OF CIT VS SUN ENGINEERING WORKS (P.) LTD.[1992] 198 ITR 29 7 (SC) IS USEFUL WHEREIN HONBLE SUPREME COURT HELD THAT SINCE THE P ROCEEDINGS UNDER SECTION 147 OF THE ACT ARE FOR THE BENEFIT OF THE R EVENUE AND NOT FOR AN ASSESSEE, AND ARE AIMED AT GATHERING THE ESCAPED I NCOME OF AN ASSESSEE. THOUGH THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS SUN ENGINEERING WORKS (P) LTD. [SUPRA] WAS IN THE CONTE XT OF PROCEEDINGS U/S 147 OF THE ACT, THE PRINCIPLE IS APPLICABLE EVEN FO R PROCEEDINGS U/S 143(2) OF THE ACT BECAUSE, AS WE HAVE SEEN BEFORE, ON PERU SAL OF PROVISIONS U/S 143(2) OF THE ACT, IT CAN BE READILY INFERRED THAT THE ASSESSMENT PAGE 16 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA PROCEEDINGS U/S 143(2) OF THE ACT ARE NOT MEANT FOR THE BENEFIT OF THE ASSESSEE BUT ARE FOR THE BENEFIT OF REVENUE ONLY SO THAT THE AO IS ABLE TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER PAID T HE TAX IN ANY MANNER. (C.2.3). WE HAVE ALREADY NOTICED THAT THE AFORESAID CLAIM OF RS.79,32,289/-, WAS MADE BY THE ASSESSEE AFTER THE TIME LIMIT PRESCRIBED U/S 139(5) OF THE ACT FOR REVISION OF RETURN. WE HA VE ALSO NOTICED THAT, IN ANY CASE THE ASSESSEE WAS NOT ELIGIBLE TO REVISE TH E RETURN BECAUSE THE RETURN FILED BY THE ASSESSEE WAS NOT RETURNED FILED U/S 139(1) OF THE ACT BY PRESCRIBED DUE DATE BUT WAS A BELATED RETURN UNDER SECTION 139(4) OF THE ACT FOR WHICH THERE IS NO STATUTORY PERMISSION U/S 139(5) OF THE ACT TO REVISE THE RETURN. WE HAVE ALSO NOTICED THAT THE CLAIM OF THE ASSESSEE FOR THE AFORESAID AMOUNT OF RS.79,32,289/- HAVING B EEN FAVOUARBLY CONSIDERED BY THE LD.CIT(A) HAS RESULTED IN THE EXT RA-ORDINARY SITUATION, NOT TENABLE IN LAW ON PERUSAL OF SECTION 143(2) OF THE ACT, WHEREIN THE ASSESSED INCOME OF THE ASSESSEE TURNS O UT TO BE LOWER THAN THE RETURNED INCOME THEREBY PLACING THE ASSESS EE IN A MUCH ADVANTAGEOUS SITUATION, CONTRARY TO LAW, AS COMPARE D TO THE LIKELY SITUATION IF THE RETURN FILED BY THE ASSESSEE HAD N OT BEEN SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT. WE ARE AWARE OF CERTAIN PRECEDENTS WHEREIN IT HAS BEEN HELD THAT AP PELLATE AUTHORITIES CAN ADMIT A LEGAL GROUND TAKEN BY APPELLANT AT ANY STAG E OF APPELLATE PAGE 17 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA PROCEEDINGS PROVIDED ALL RELEVANT FACTS ARE ON RECO RD AND FRESH INVESTIGATION OF FACTS IS NOT NECESSARY. HOWEVER, IN THE INSTANT CASE A FRESH INVESTIGATION OF FACTS ON MERITS OF THE CLAIM MADE BY THE ASSESSEE WAS NECESSARY, THE OPPORTUNITY FOR WHICH WAS NOT GI VEN BY THE LD.CIT(A) TO THE AO. IN ANY CASE, IN VIEW OF THE CLEAR LEGAL PO SITION UNDER SECTIONS 143(2), 139(1), 139(4) AND 139(5) OF THE ACT AS DIS CUSSED EARLIER IN DETAIL; AND IN VIEW OF THE FACTS AND CIRCUMSTANCES AS DISCU SSED EARLIER IN DETAIL; AND IN VIEW OF PRECEDENTS OF HONBLE SUPREME COURT IN THE CASES OF GOETZE (INDIA) PVT. LTD. [SUPRA] AND CIT VS SUN E NGINEERING WORKS (P) LTD. [SUPRA], WE HOLD THAT THE LD.CIT(A) ERRED IN F AVOURABLY CONSIDERING THE CLAIM OF THE ASSESSEE FOR THE AFORESAID AMOUNT OF R S.79,32,289/-. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD.CIT(A ) ON THIS ISSUE AND REVERSE HIS DIRECTION GIVEN TO THE AO TO REDUCE THE TAXABLE INCOME BY RS.79,32,289/-. WE DIRECT THAT THIS AMOUNT OF RS.7 9,32,289/- WILL CONTINUE TO BE INCLUDED AS INCOME OF THE ASSESSEE I N ACCORDANCE WITH RETURN FILED BY THE ASSESSEE U/S 139(4) OF THE I.T. ACT. THUS, SECOND GROUND OF APPEAL FILED BY THE REVENUE IS ALLOWED. (D). THIRD GROUND OF APPEAL IS REGARDING THE BENEFI T OF INDEXATION IN RESPECT OF LONG TERM CAPITAL GAIN. THE ASSESSEE HAD INHERITED A PROPERTY WHICH DEVOLVED ON THE ASSESSEE IN F.Y.1987-88. THE PROPERTY WAS ACQUIRED BY THE PREVIOUS OWNER IN AN EARLIER YEAR. THE RELEVANT FACTS HAVE BEEN STATED IN PARAGRAPHS 5 TO 5.5 OF THE ASSESSME NT ORDER AND PARAGRAPHS 7 TO 7.3.6 OF THE IMPUGNED ORDER OF LD.C IT(A). THE PROPERTY PAGE 18 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA HAS BEEN SOLD BY THE ASSESSEE IN THIS YEAR AND LONG TERM CAPITAL GAIN HAS ARISEN TO THE ASSESSEE. THE DISPUTE IS WHETHER TH E BENEFIT OF INDEXATION, FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN, IS ALLOWABLE TO THE ASSESSEE FROM THE F.Y. 1987-88 (AS HELD BY THE AO) OR FROM 1981-82 [AS CLAIMED BY THE ASSESSEE AND ALLOWED BY THE LD.C IT(A) IN THE IMPUGNED ORDER]. THE LD.CIT(A) HAS DISCUSSED THE FACTS OF T HE CASE AND THE LEGAL POSITION IN DETAIL IN HER IMPUGNED APPELLATE ORDER. SHE HAS RELIED ON THE ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST VS CIT [2012]. AT THE TIME OF HEARING, THE LD.DR APPEARING FOR T HE REVENUE RELIED ON THE ORDER OF THE AO. HOWEVER, HE WAS UNA BLE TO POINT OUT ANY INFIRMITY OR DEFECT OR ILLEGALITY IN THE ORDER OF LD.CIT(A). THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER OF TH E LD.CIT(A) AND CONTENDED THAT THE SAME SHOULD BE UPHELD IN VIEW OF THE ORDER OF THE DELHI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST (SUPRA). WE HAVE HEARD BOTH SIDES ATTENTIVELY. WE HAVE ALSO CONSIDE RED ALL MATERIALS CAREFULLY. WE ARE OF THE VIEW THAT THE ORDER OF LD .CIT(A) ON THIS ISSUE IS A WELL-REASONED ORDER AND IN ACCORDANCE WITH LAW IN T HE FACTS AND CIRCUMSTANCES OF THIS CASE. LD. DR HAS FAILED TO M AKE OUT A CASE FOR ANY INTERFERENCE WITH THE ORDER OF LD.CIT(A) ON THIS IS SUE. THE ORDER OF THE LD.CIT(A) IS ALSO BASED ON PRECEDENT OF HONBLE DEL HI HIGH COURT IN THE CASE OF ARUN SHUNGLOO TRUST (SUPRA). IN VIEW OF TH E FOREGOING, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THI S ISSUE AND DISMISS THIRD PAGE 19 OF 19 I.T.A .NO.-226/DEL/2013 DCIT VS DINESH SHRAMA GROUND OF APPEAL FILED BY THE REVENUE. ACCORDINGLY , THE ORDER OF LD.CIT(A) ON THIS ISSUE IS UPHELD. (E). IN THE RESULT, THE APPEAL OF THE REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL 2017. SD/- SD/- (SUDHANSHU SRIVASTAVA) (ANAD EE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:-21 ST APRIL, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI