ACIT, New Delhi V. Ms. Sita Nanda, New Delhi

ITA 2457/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6663 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-01-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH GUPTA
• Assessee Lawyers: SHWETA NAKRA DUTTA
• Keywords: Salary income; Additional evidence; Cost of acquisition
• Section: 54F; 148; 54

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI H S SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2457 /DEL/2013 (ASSESSMENT YEAR: 2004 - 05 ) ACIT CIRCLE 22(1) NEW DELHI VS. SITA NANDA H - 10 MAHARANI BA G H NEW DELHI 110065 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI UMESH GUPTA , FCA RESPONDENT BY: MS SHWETA NAKRA DUTTA S R DR DATE OF HEARING 19/01/2017 DATE OF PRONOUNCEMENT 27/02/2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS FILED BY REVENUE A GAINST THE ORDER OF THE LD. CIT (A) XX III DATED 31/01/2013 FOR ASSESSMENT YEAR 2004 05 IN APPEAL PREFERRED BY THE ASSESSEE BEFORE HIM AGAINST THE ORDER OF THE LD. ASSESSING OFFICER PASSED UNDER SECTION 143 (3) READ WITH SECTION 148 OF THE INCOME TAX ACT, 1961 ON 12/12/2011 . THE FOLLOWING GROUNDS OF APPEAL ARE RAISED FOR US: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE WITHOUT CONSIDERING THE STAND OF THE AO THAT THE SUBMISSION MADE DURING THE REMAND REPORT PROCEEDINGS WERE TOTALLY BASELESS AND BAD IN LAW, THUS VIOLATING RULE 46A (3) OF THE INCOME TAX RULES, 1962. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS CARRIED IN REDUCING THE ADDITION FROM RS. 7200000/ AS UNDISCLOSED INCOME TO RS. 1695565/ ACCESSIBLE UNDER THE LONG - TERM CAPITAL GAIN AS PER REVISED COMPUTATION OF INCOME. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ADDED IN ALLOWING EXEMPTION UNDER SECTION 54 OF THE INCOME TAX ACT WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE HAD NOT CLAIMED ANY EXEMPTION IN HIS ORIGINAL RETURN OF INCOME AND EVEN IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. PAGE 2 OF 6 2. TO PUT THE FACTS IN A NARROW COMPASS , ASSESSEE IS AN INDIVIDUAL WHO FILED HIS ORIGINAL RETURN OF INCOME AND WAS PROCESSED UNDER SECTION 143 (1) OF THE ACT ON 18/05/2005 AT THE RETURNED INCOME OF RS. 750 184/ . IN THE RETURN OF INCOME, ASSESSEE HAS SHOWN INCOME FROM SALARY, HOUSE PROPERTY, WORKING ALLO WANCE AND INTEREST ON CAPITAL FROM THE PARTNERSHIP FIRM AND OTHER SOURCES. SUBSEQUENTLY, THE LD. ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAS RECEIVED SOME CHEQUES DURING THE YEAR OF RS. 7200000 / - FROM TWO PRIVATE LIMITED COMPANIES. IT WAS ALSO NOTED THAT ASSESSEE HAS SOLD SOME SHARES OF M/S P.R.INDUSTRIES (P) LTD AT RS. 36,000 PER SHARE, WHICH WERE PURCHASED BY THE ASSESSEE AT THE RATE OF RS. 1620/ PER SHARE IN APRIL 2002. CONSEQUENTLY, NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT WAS IS SUED ON 30/03/2011. IN RESPONSE TO THIS NOTICE ASSESSEE SUBMITTED THE ORIGINAL RETURN FILED MAY BE CONSIDERED AS RETURN FILED IN COMPLIANCE TO NOTICE UNDER SECTION 148 OF THE ACT. THE REASONS RECORDED FOR REOPENING OF THE CASE WERE SUPPLIED TO THE ASSESSEE ON 14/10/2011. SUBSEQUENTLY THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF PROPERTY PURCHASED BY HIM OUT OF THE SALE PROCEEDS OF THE SHARES. THE ASSESSEE SUBMITTED BEFORE THE LD. ASSESSING OFFICER THAT SHE HAS SOLD 200 SHARES OF AN UNLISTED COMPANY M/S P.R.INDUSTRIES FOR RS. 72 LAKHS TO 2 PRIVATE LIMITED COMPANIES. THE LD. ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSES SEE THAT WHY AN ADDITION OF RS. 72 LAKHS NOT BE MADE TO THE TOTAL INCOME DECLARED BY THE ASSESSEE. IN RESPONSE TO THIS IT WAS SUBMITTED THAT ASSESSEE IS TRYING HER BEST TO COLLECT ALL THE DETAILS AND DOCUMENTS IN RELATION TO INVESTMENT MADE UNDER SECTION 54/54F OF THE INCOME TAX ACT. HOWEVER, TILL THE ASSESSMENT WAS FINALIZED NOTHING WAS SUBMITTED BY THE ASSESSEE. THEREFORE, THE LD. ASSESSING OFFICER MADE AN ADDITION OF RS. 72 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE OF RS. 750184/ AND MADE AN ASSESSMENT ON 12/12/2011 AT A TOTAL TAXABLE INCOME OF RS. 7 950184/ . 3. AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFFICER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT THAT ASSESSEE HAS PAID COMMISSION FOR SALE OF SHARES OF RS. 110000/ AND THEREFORE THE NET SALE CONSIDERATION IS RS. 7090000/ . IN ADDITION, THE INDEXED COST OF ACQUISITION OF PAGE 3 OF 6 THE SHARE IS RS. 37 4049/ AND THEREFORE THE RESULTANT CAPITAL GAIN IS ONLY RS. 6715951/ . OUT OF THAT THE ASSESSEE HAS SUBMITTED THAT IT HAS PURCHASED A HOUSE FOR RS. 53 L AKHS AND THEREFORE EXEMPTION UNDER SECTION 54F OF THE ACT WAS CLAIMED OF RS. 5020386/ . THEREBY RESULTIN G CAPITAL GAIN OF ONLY RS. 1 695565/ . THESE FACT WAS BELIEVED BY THE LD. CIT(A) AND THE TOTAL CAPITAL GAIN WHICH WAS CHARGED TO TAX OF RS. 72 LAKHS BY THE LD. ELDERS ASSESSI NG OFFICER WAS REDUCED TO RS. 1 695565/ - . THEREFORE AGGRIEVED BY THE ORDER OF THE L D. CIT A CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED BEFORE US THAT LD. CIT(A) HAS TAKEN INTO CONSIDERATION THE REVISED COMPUTATION OF INCOME IN CASE OF THE ASSESSEE ON ACCOUNT OF CAPITAL GAIN WHERE THE ASSESSE E HAS CLAIMED DEDUCTION OF THE PURCHASE PRICE AS WELL AS SAME WAS INDEXED AND FURTHER THE DEDUCTION OF RS. 110,000/ - WAS ALSO GRANTED TOWARDS COMMISSION PAID FOR SALE OF SHARES. HE FURTHER SUBMITTED THAT THE LD. CIT(A) IS ALSO GRANTED THE DEDUCTION TO THE A SSE SSEE UNDER SECTION 54F OF RS. 5 020386/ . ALL THE SAID BEEN DONE BY THE LD. CIT(A) BY ADMITTING THE ADDITIONAL EVIDENCES WHICH I S IN VIOLATION OF RULE 4 6A OF THE INCOME TAX RULES , 1962. HE VEHEMENTLY CONTESTED THAT THE FACTS STATED IN PARA NO. 3.1 OF THE ORDER OF THE LD. CIT(A) IS INCORRECT. THE ASSESSEE HAS GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE DETAILS AND AS NO INFORMATION WAS FORTHCOMING THEREAFTER, THE LD. ASSESSIN G OFFICER HAS PASSED AN ASSESSMENT ORDER. THEREFORE, THE CLAIM OF THE ASSESSEE THAT PROPER OPPORTUNITY WAS NOT GIVEN IS INCORRECT AS NO FACTS RELATING TO THE INADEQUATE OPPORTUNITY WERE MENTIONED. HE FURTHER SUBMITTED THAT THE REASONS GIVEN BEFORE THE LD. CIT(A) WERE NOT AT ALL GIVEN TO THE ASSESSING OFFICER ABOUT THE ILLNESS OF HER MOTHER. HE SUBMITTED THAT THE ASSESSMENT YEAR INVOLVED IS ASSESSMENT YEAR 2004 - 05 AND THE REASSESSMENT IS TAKING PLACE IN 2011, THEREFORE, THERE WAS ENOUGH TIME, AVAILABLE WITH THE ASSESSEE TO PRODUCE THE DETAILS CALLED FOR . 5. ON THE SECOND GROUND OF THE APPEAL HE SUBMITTED THAT THAT THE COST OF ACQUISITION OF THE SHARE SHOWN BY THE ASSESSEE IS RS. 1640/ - PER SHARE IN THE YEAR 2000. HOWEVER, NO INFORMATION HAS BEEN SUBMITTED BY TH E ASSESSEE PAGE 4 OF 6 BEFORE THE LD. CIT(A) ABOUT SUCH COST OF ACQUISITION AND HE MERELY BELIEVED THE WRITTEN SUBMISSION OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE PROVISION OF SECTION 54F WAS NOT AT ALL EXAMINED BY THE LD. CIT(A) . 6. ON THE THIRD GROUND OF APPEAL H E SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED THE EXEMPTION UNDER SECTION 54 OF THE INCOME TAX ACT BY FILING THE ORIGINAL RETURN OF INCOME AS WELL AS NOT IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. HE THEREFORE SUBMIT TED THAT THERE WAS NO CLAIM OF SUCH DEDUCTION IN THE RETURN OF INCOME AND SECTION 54F CONTAINS LOT OF CONDITIONS, WHICH ARE REQUIRED TO BE FULFILLED FOR GETTING DEDUCTION. ALL THESE CONDITIONS WHETHER HAVE BEEN FULFILLED OR NOT IS NOT AT ALL BEEN EXAMINED BY THE LD. CIT(A) . THEREFORE, HE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN GRANTING DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT TO THE ASSESSEE. 7. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED A PAPER BOOK BEFORE US CONTAINING 110 PAGES. HE SUBMITTED TH AT LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES , A FTER OBTAINING THE REMAND REPORT FROM THE LD. ASSESSING OFFICER, WHICH IS PLACED AT PAGE NUMBER 29 - 34 OF THE PAPER BOOK. THEREFORE, THE FACT IS NOT CORRECT THAT THE LD. ASSESSING OFFICER HAS ADMITTED TH E ADDITIONAL EVIDENCES WITHOUT GIVING AN OPPORTUNITY OF HEARING TO THE LD. ASSESSING OFFICER. WITH RESPECT TO THE OTHER CLAIM OF THE ASSESSEE SUBMITTED THAT THE DETAILS OF SALE OF SHARES IS AVAILABLE AT PAGE NO. 66 - 67 AND FURTHER THE HOLDING IS ALSO AVAI LABLE AT PAGE NO. 68 - 69 OF THE PAPER BOOK. WITH RESPECT TO THE DETAILS OF COMMISSION PAID THE INFORMA TION IS AVAILABLE AT PAGE NO.70 - 71. WITH RESPECT TO THE COPY OF THE PURCHASE DEED OF THE PROPERTY WHICH IS AVAILABLE AT PAGE NO. 72 - 95 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT THE SALE DEED WAS MADE PURCHASE OF THE PROPERTY ON 15 DAY OF OCTOBER 2003 AND ASSESSEE WAS HAVING 50% SHARE IN THAT PARTICULAR PROPERTY. HE THEREFORE SUBMITTED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F OF THE INCOME TAX ACT IS IN ORDER. HE FURTHER REFERRED THAT THE ASSESSEE HAS ALREADY DISCLOSED BY WAY OF NOTE IN THE RETURN OF INCOME FILED, WHICH IS PLACED AT PAGE NO. 51 OF THE PAPER BOOK . HE REFERRED TO THE COMPUTATION OF PAGE 5 OF 6 THE TOTAL INCOME AND NOTE WAS PLACED THEREIN. THEREFORE, ACCORDING TO HIM, THE CLAIM OF THE ASSESSEE IS IN ORDER AND THE ORDER OF THE LD. CIT(A) WAS IN ACCORDANCE WITH THE LAW.. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. ADMITTEDLY, THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES IN THE FORM OF DETAILS FOR PURCHASE OF THE SHARES AND RELATED SALE CERTIFICATES, LEDGER ACCOUNT OF ASSESSEE AND COPY OF VOUCHERS IN T HE BOOKS OF M/S INTERCONTINENTAL TRAVANCORE PRIVATE LIMITED, DETAILS OF THE PARTIES, ROOM 200 SHARES OF M/S P R INDUSTRIES PRIVATE LIMITED, COPY OF PAYMENT OF COMMISSION FOR THE SALE OF SHARES, IN NEW DELHI, AND COPY OF CONFIRMATION LETTER FROM THE VARIO US PARTIES WHO PURCHASED THE SHARES OF THE COMPANY. WE HAVE CAREFULLY PERUSED THE ORDER OF THE LD. CIT ( A ) F ROM PAGE NO. 1 - 18 OF HIS ORDER, HE HAS MERELY DISCUSSED THE WRITTEN SUBMISSION OF THE ASSESSEE AS WELL AS THE WRITTEN SUBMISSION OF THE LD. ASSESSING OFFICER IN THE REMAND REPORT AND REJOINDER OF THE ASSESSEE. ON PAGE NO. 19 OF HIS ORDER IN PARA NO. 4, HE DISMISSED GROUNDS OF APPEAL NO. 1 TO 3 OF THE ASSESSEE. FROM PAGE NO. 19 PARA NO. 5, HE HAS ALLOWED THE APPEAL OF THE ASSESSEE ACCEPTING THE C OMPUTATION OF LONG - TERM CAPITAL GAIN AT RS. 1695565/ . THE LD. A R OF THE ASSESSEE COULD NOT SHOW US THE FINDING OF THE LD. CIT(A) THAT HOW THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ARE ADMISSIBLE IN ACCORDANCE WITH THE RULE 46A OF INCOME TAX RU LES, 1962, NOR COULD WE FIND ANY OF THE FINDING IN THE ORDER OF THE LD. CIT(A) ON THIS ASPECT. THEREFORE, IT IS APPARENT THAT THE LD. CIT(A) HAS PASSED AN ORDER ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT GIVING ANY FINDING ON THE ADMISSIBILITY OF ADDITION AL EVIDENCE FILED BY THE ASSESSEE. IN VIEW OF THIS THE GROUND NO. 1 OF THE APPEAL OF THE REVENUE CONTESTING THE ADMISSION OF ADDITIONAL EVIDENCES ADMITTED BY THE LD. CIT(A) IS ALLOWED AND APPEAL IS RESTORED IN TOTO TO THE FILE OF LD. CIT(A) WITH A DIRECTI ON TO PASS A SPEAKING ORDER ON THE ADMISSION OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND THERE AFTER GIVING PROPER OPPORTUNITY OF HEARING TO BOTH THE PARTIES TO DECIDE THE ISSUE AFRESH. IN THE RESULT GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS ALLO WED. PAGE 6 OF 6 9. AS WE HAVE ALREADY SET ASIDE THE ISSUE TO THE FILE OF THE LD. CIT(A) ON GROUND NO. 1 OF THE APPEAL. WE DO NOT ADJUDICATE ON GROUND NO. 2 AND GROUND NO. 3 OF THE APPEAL OF THE REVENUE. THEREFORE, SAME ARE DISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 11. OR DER PR ONOUNCED IN THE OPEN COURT ON 2 7 / 02/2017 . - S D / - - S D / - ( H . S . SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 / 02 /201 7 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI