SUBHASH V. SULE, MUMBAI V. ITO , WARD 26 (3)(3), MUMBAI

ITA 2664/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8752 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 30-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Capital asset; Application of stay; Additional evidence; Cost of acquisition; Fair market value; Set aside; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI PRAMOD KUMAR,VICE PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.2664/MUM/2019(A.Y. 2010-11) & S.A.NO.357/MUM/2019 (ARISING OUT OF ITA NO.2664/MUM/2019,A.Y.2010-11) SHRI SUBHASH V. SULE, BHARAT CHITRA MANDIR,STATION ROAD, KURLA(W),MUMBAI 400 070. PAN:AAUPS1043B ...... APPELLANT VS. THE ITO WARD 26(3)(3), 505,5 TH FLOOR, C-11,BKC, BANDRA(E), MUMBAI 400051 ..... RESPONDENT APPELLANT BY : SHRI M.SUBRAMANIAN RESPONDENT BY : SHRI AVNEESH TIWARI DATE OF HEARING : 13/09/2019 DATE OF PRONOUNCEMENT : 13/09/2019 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF CIT(A)-38, MUMBAI DATED 18/01/2019 FOR ASSESSMENT YEAR 2010-1 1. 2. SHRI M.SUBRAMANIAN, APPEARING ON BEHALF OF THE A SSESSEE SUBMITTED THAT THE ASSESSEE HAD INHERITED 30% SHARE IN A PAR CEL OF LAND ADMEASURING ABOUT 1506.3 SQ.MTS AT NEW MILL ROAD, K URLA, MUMBAI ALONGWITH STRUCTURES THEREON. THE ASSESSEE DURING THE PERIOD RELEVANT TO 2 ITA NO.2664/MUM/2019(A.Y. 2010-11) & S.A.NO.357/MUM/2019 ASSESSMENT YEAR UNDER APPEAL ENTERED INTO DEVELOPM ENT AGREEMENT IN RESPECT OF HIS SHARE IN LAND FOR A CONSIDERATION OF RS.1.30 CRORES. THE ASSESSEE RECEIVED RS. 10,00,000/- IN F.Y.2009-10 AS ADVANCE. THE ASSESSING OFFICER IN RE-ASSESSMENT PROCEEDINGS MA DE ADDITION OF ENTIRE RS.1.30 CRORES AS LONG TERM CAPITAL GAIN AFTER TAKI NG COST OF ACQUISITION AS NIL. IN ASSESSMENT PROCEEDINGS THE ASSESSEE COUL D NOT PRODUCE RELEVANT DOCUMENTS TO SHOW COST OF ACQUISITION. ADMITTEDLY , THE PROPERTY INHERITED BY THE ASSESSEE WAS ACQUIRED PRIOR TO 01 /04/1981, THEREFORE, COST OF ACQUISITION WOULD BE FAIR MARKET VALUE AS O N 01/04/1981 SUBJECT TO INDEXATION. THE ASSESSEE HAD FILED ADDITIONAL EVID ENCES BEFORE THE CIT(A), HOWEVER, CIT(A) REFUSED TO ACCEPT THE SAME. THE LD . AUTHORIZED REPRESENTATIVE SUBMITTED THAT IF AN OPPORTUNITY IS GRANTED TO THE ASSESSEE, THE ASSESSEE WOULD PRODUCE NECESSARY EVI DENCES BEFORE THE ASSESSING OFFICER INDICATING THE COST OF ACQUISIT ION OF THE ASSET. THE LD. AUTHORIZED REPRESENTATIVE FURTHER CONTENDED THAT IF THE ISSUE RAISED IN THE APPEAL IS RESTORED TO THE FILE OF ASSESSING OFF ICER, STAY APPLICATION FILED BY THE ASSESSEE WOULD BECOME INFRUCTUOUS. 3. SHRI AVNEESH TIWARI, APPEARING ON BEHALF OF THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE STAY APPLICATION AS WELL AS THE APPEAL OF THE ASSES SEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT A PERUSA L OF DOCUMENTS ON RECORD WOULD CLEARLY SHOW THAT THE ASSESSEE HAD NOT DECLARED LONG TERM CAPITAL GAIN ON TRANSFER OF RIGHTS IN CAPITAL ASSET IN THE RETURN OF INCOME. 3 ITA NO.2664/MUM/2019(A.Y. 2010-11) & S.A.NO.357/MUM/2019 4. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SIDE S AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE HAS INHERITED A SHARE (38%), IN A NON-AGRICULTURAL FREE-HOLD LAND A DMEASURING 1506.3 SQUARE METERS (APPROX) AT KURLA, MUMBAI ALONG WITH STRUCTURES STANDING THEREON. A DEVELOPMENT AGREEMENT WAS EXECUTED ON 1 6/11/2009 AND THE SAME WAS REGISTERED ON 09/12/2009 IN RESPECT O F SAID LAND. THE GAIN ARISING ON ASSESSEES SHARE WAS ASSESSED TO TAX UND ER THE HEAD CAPITAL GAINS. HOWEVER, WHILE COMPUTING LONG TERM CAPITAL GAIN, COST ON ACQUISITION OF THE SAID ASSET WAS TAKEN AS NIL BY T HE ASSESSING OFFICER. THE PROVISIONS OF SECTION 55(2)(B) OF THE ACT MANDATE THAT IF ANY CAPITAL ASSET IS ACQUIRED PRIOR TO 01/04/1981, THE COST OF ACQUIS ITION HAS TO BE DETERMINED WITH REFERENCE TO FAIR MARKET VALUE AS O N 01/04/1981 AND INDEXED COST HAS TO BE DETERMINED WHILE COMPUTING L ONG TERM CAPITAL GAIN UNDER THE PROVISIONS OF THE ACT. IN THE INSTANT CA SE, IT IS NEITHER DURING THE ASSESSMENT PROCEEDINGS NOR DURING THE APPELLATE PRO CEEDINGS, THE BENEFIT OF COST OF ACQUISITION HAS BEEN GIVEN TO THE ASSESS EE. THE ASSESSEE HAD FILED ADDITIONAL EVIDENCES BEFORE THE CIT(A) FOR CL AIMING COST OF ACQUISITION, HOWEVER, THE CIT(A) HAS REJECTED THE SAME. 5. TAKING INTO CONSIDERATION ENTIRE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE RAISED IN APPEAL NEEDS A REVISI T TO THE FILE OF ASSESSING OFFICER FOR RECOMPUTATION OF LONG TERM CAPITAL GAIN . THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTE LONG TERM CAPITAL GAIN A FTER ALLOWING BENEFIT OF COST OF ACQUISITION IN ACCORDANCE WITH PROVISIONS O F THE ACT. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSING ORDER AFRESH. 4 ITA NO.2664/MUM/2019(A.Y. 2010-11) & S.A.NO.357/MUM/2019 6. IN THE RESULT, IMPUGNED ORDER IS SET ASIDE AND T HE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. S.A. NO.357/MUM/2019 : 7. SINCE WE HAVE RESTORED THE ISSUE RAISED IN THE A PPEAL TO THE FILE OF ASSESSING OFFICER, THE STAY APPLICATION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS SUCH. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE AND STAY APPLICATION FILED BY THE ASSESS EE IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING TH E APPEAL ON FRIDAY, THE 13 TH DAY OF SEPTEMBER 2019. SD/- SD/- (PRAMOD KUMAR) (VIKAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DATED 13/09/2019 VM , SR. PS(O/S) 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