ITO 24(1)3, MUMBAI V. THE LEGAL HAIR OF LATE SHRI BERNARD J CORREA, MUMBAI

ITA 2690/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3086 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 05-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2013
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Cost of acquisition; Fair market value
• Section: 54F; 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO.2690/MUM/2013 ASSESSMENT YEAR: 2006 - 07 ITO 24(1)(3), R.NO.501, C - 13, 5 TH FLOOR, PR ATYAKSHAKAR BHAVAN, BKC, BANDRA (EAST), MUMBAI - 400051 VS. THE LEGAL HEIR OF LATE SHRI BERNARD J. CORREA, 3/ 7, JOSEPH COTTEGE, CHINCHOLI BUNDER ROAD, MALAD (W), MUMBAI - 400064 PAN:AEBPC14400K (APPELLANT) (RESPONDENT) ITA NO.4008/MUM/2013 ASSESSMENT YEAR: 2004 - 05 ITA NO.4009/MUM/2013 ASSESSMENT YEAR: 2005 - 06 ITA NO.4010/MUM/2013 ASSESSMENT YEAR: 2006 - 07 THE LEGAL HEIR OF LATE SHRI BERNARD J. CORREA, 3/7, JOSEPH COTTEGE, CHINCHOLI BUNDER ROAD, MA LAD (W), MUMBAI - 400064 PAN:AEBPC14400K VS. ITO 24(1)(3), R.NO.501, C - 13, 5 TH FLOOR, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (EAST), MUMBAI - 400051 (APPELLANT) (RESPONDENT) / ASSESSEE BY : SHRI BHUPENDRA SHAH / REVENUE BY : SHRI AARSI PRASAD (DR) / DATE OF HEARING : 07.09.2015 / DATE OF PRONOUNCEMENT : 30 .09.2015 O R D E R PER BENCH: THE PRESENT APPEALS ARE DIRECTED AGA INST THE IMPUGNED ORDER DATED 06.02.2013 PASSED BY THE CIT(A) - 34 , MUMBAI THEREBY PARTLY ALLOWING THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 2 ITA NOS.2690,4008,4009 &4010/M/2013 SHRI BERNARD J. CORREA 24.12.2008 PASSED BY THE ASSESSING OFFICER (AO) . THE A FOREMENTIONED FOUR APPEALS UNDER CONSIDERATION PERTAINS TO ITA NOS. 4008, 4009 & 4010/MUM/13 BY THE ASSESSEE AND APPEAL NO. 2690/M/13 PERTAINS TO REVENUE AND SINCE ALL THE APPEALS ARE INTERCONNECTED AND BETWEEN THE SAME PARTIES AND COUNSELS ARE ALSO SAME T HEREFORE, CONSIDERING THE SIMILARITY OF ALL THE APPEALS, THE SAME ARE DISPOSED OF BY THIS COMPOSITE ORDER ON THE FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO TAKE FAIR MARKET VALUE OF THE PLOT AS ON 01.04.1981 AT ` . 7,40,336/ - AS PER DVOS REPORT IGNORING THE FACT THAT THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY AS ON 01.04.1981. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRE D IN SETTING ASIDE THE ISSUE OF ALLOWANCE OF CLAIM U/S 54F WHEREAS AMENDED PROVISIONS OF I.T. ACT, 1961 DO NOT AUTHORIZED CIT(A) TO DO SO. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE NOTICE U/S 148 OF THE ACT WAS SERVED ON THE ASSESSEE. THE ASSESSEE DID N OT COMPLY AND THEREAFTER STATUTORY NOTICE U/S 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE STATING THAT HE HAS NOT FILED THE RETURN OF INCOME WITHIN THE GIVEN TIME LIMIT . DURING THE RE - ASSESSMENT, ALLOWING LONG TERM CAPITAL LOSS OF RS. 41,98,865/ - WAS THE AREA OF CONTENTION. ASSESSEE REPORTED THE SAID LOSS ON SALE OF OPEN PLOT TO ATUL BUILDERS FOR A SUM OF RS. 80 LAKHS. FOR WANT OF DETAILS, AO DENIED THE SAID LOSS AND MADE ADDITION OF RS. 80 LAKHS AS PER PARA 4 OF THE RE - ASSESSMENT ORDER. AO DENIED DEDU CTION TOWARDS COST OF ACQUISITION AND ALSO DEDUCTION U/S 54F OF THE ACT. AFTER PROVIDING AN OPPORTUNITY OF HEARING, ASSESSMENT ORDER U/S 143 R.W.S 147 OF THE ACT WAS PASSED BY THE AO ON 24.12.2008 DETERMINING THE ASSESSED INCOME AT RS. 1,04,43,530/ - AGAIN ST THE RETURNED INCOME OF RS. 26,780/ - . 3 ITA NOS.2690,4008,4009 &4010/M/2013 SHRI BERNARD J. CORREA 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) . D URING THE PENDENCY OF APPEAL BEFORE THE CIT(A), THE ASSESSEE MOVED AN APPLICATION UNDER RULE 46A OF THE I.T. RULES FOR LEADING ADDITI ONAL EVIDENCE AND THE CIT(A) DID NOT ADMIT THE ADDITIONAL EVIDENCE . C ONSEQUENTLY , CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE ON 06.02.2013. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AS WELL AS THE REVE NUE BEFORE US ON THE GROUNDS REPRODUCED HEREINABOVE. THE ISSUE OF ALLOWING DEDUCTION TOWARDS COST OF ACQUISITION AS ON 1.4.1981 AND CLAIM OF DEDUCTION U/S 54F OF THE ACT ARE THE ISSUES RAISED IN THE GROUNDS. 5. AT THE VERY OUTSET, THE COUNSEL OF THE APPELL ANT BROUGHT OUR ATTENTION TO THE APPLICATION DATED 23.01.2013 MOVED UNDER RULE 46A OF THE ACT AND SUBMITTED THAT LATE BERNARD CORREA WAS AN OLD MAN MORE THAN 80 YEARS AND WAS NOT KEEPING WELL AT THE TIME WHEN ASSESSMENT TOOK PLACE . T HEREFORE, DURING HIS L I FE TIME, HE COULD NOT ATTEND THE ASSES SMENT PROCEEDINGS BEFORE THE AO. T HEREFORE, THERE WAS GAP IN FURNISHING THE RELEVANT DETAILS/DOCUMENTS AS D EMANDED BY THE AO. SUBSEQUENTLY, SHRI BERNARD CORREA PASSED AWAY IMMEDIATELY AFTER MAKING THE ASSESSMENT BY THE AO. THEREFORE, THE APPELLANT BEING LEGAL REPRESENTATIVE OF BERNARD CORREA COULD NOT GATHER THE DETAILS REQUIRED BY THE AO AND THE RE - ASSESSMENT WAS COMPLETED EX - PARTE. SINCE THERE WERE GENUINE REASONS BEYOND THE CONTROL OF ASSESSEE AS THE APPELLANT S WERE DEPRIVED OF THE REASONABLE OPPORTUNITY OF BEING HEARD COMPRISING THE FACTS ON RECORD. THE APPELLANT FURNISHED VARIOUS PAPERS AND DETAILS IN ORDER TO SUPPORT THEIR CASE , SO THAT THE ADDITIONS MADE BY AO COULD BE DELETED BY THE CIT(A). THE ASSESSEE ALSO MADE PRAYER FOR LEAD ING THE 4 ITA NOS.2690,4008,4009 &4010/M/2013 SHRI BERNARD J. CORREA ADDITIONAL EVIDENCE. H OWEVER, THE CIT(A) REJECTED THE SAME BY INVOKING THE PROVISIONS OF RULE 46A OF THE I.T. RULES, 1962 . T HE CIT(A) DISMISSED THE APPEAL OF THE A SSESSEE . 6. AGGRIEVED BY THE SAID ORDER OF CIT(A), THE LEGAL REPRE SENTATIVE OF ASSESSEE I.E. THE ASSESSEE FILED THREE APPEAL IN ALL THREE AYS WHICH IS MENTIONED ABOVE. 7. AT THE VERY OUTSET, LD. COUNSEL BROUGHT OUR ATTENTION TO LETTER DATED 23.01.2013 REFERRING TO RULE 46A OF THE RULES AND IN THE SAID APPLICATION IT IS MENTIONED THAT THE ASSESSEE WAS NOT KEEPING WELL AT THE TIME WHEN RE - ASSESSMENT TOOK PLACE . S UBSEQUENTLY , THE ASSESSEE DIED IMMEDIATELY AFT ER ASSESSMENT WAS OVER AND THIS REASON IS GENUINE REASON WHICH WAS BEYOND THE CONTROL OF THE PRESENT APPELLANT, THERE FORE, THE ASSESSEE S WERE DEPRIVED OF THE REASONABLE OPPORTUNITY OF PRESENTING THE FACTS ON RECORD. NOW THE ASSESSEE S HAVE COMPLIED WITH FULL ADDITIONS MADE BY THE AO WITH FULL SUPPORTING DOCUMENTS ON RECORD. THE ASSESSEE S HAVE GOT ALL THE DETAILS OF ALL VO UCHERS, CAPITAL GAIN AND CASH CREDIT AS WELL AS INTEREST CLAIMED. THE A SSESSEE S HAVE ALSO GOT SU MMARY OF CASH TRANSACTIONS SHOWING DEPOSIT AND WITHDRAWAL FROM TIME TO TIME SUPPORTED BY BANK STATEMENT. THE ASSESSEE SUBMITTED LEDGER COPIES FOR FRESH VERIFICA TION OF THE AO AND ALSO R ELIED ON THE DECISION IN THE CASE OF CIT VS. RAVINDRANATHAN NAIR (265 ITR 217 ) . ON PERUSAL OF THE ABOVE, WE FIND THAT THE CIT(A) IS NOT FAIR IN NOT APPRECIATING THE BASIC FACTS OF THE PRESENT CASE, THE ASSESSEE WAS OCTOGENARIAN AND IT CAN VERY WELL BE PRESUMED THAT A MAN OF 80 YEARS WOULD NOT BE IN A POSITION TO ATTEND THE DAY TO DAY HEARING BEFORE THE AO . M OREOVER, THE ASSESSEE HAD DIED IMMEDIATELY AFTER THE ASSESSMENT WAS OVER. THEREFORE, IT IS NATURAL ON 5 ITA NOS.2690,4008,4009 &4010/M/2013 SHRI BERNARD J. CORREA THE PART OF THE APPELLAN T S THAT THEY C OULD NOT SUBMIT THE DETAILS REQUIRED BY THE AO AND THEREFORE, THE RE - ASSESSMENT WAS COMPLETED EX - PARTE. 8. AFTER HEARING BOTH THE PARTIES ON THIS PRELIMINARY ISSUE RELATING TO THE ADDITIONAL EVIDENCE FILED BEFORE US, WE FIND THAT DOCUMENTS PL ACED ON RECORD BY WAY OF ADDITIONAL EVIDENCE BY THE APPELLANT S ARE OF UTMOST IMPORTANCE AS THE DOCUMENTS SOUGHT TO BE PRODUCED BY WAY OF ADDITIONAL EVIDENCE WOULD GO TO THE ROOTS OF THE CASE AND WOULD E NABLE THE AUTHORITIES BELOW TO PASS ORDERS MORE EFFECT IVELY AND WOULD ALSO SERVED THE PURPOSE OF SUBSTANTIAL JUSTICE BETWEEN THE PARTIES. THEREFORE, CONSIDERING THE FACTS OF THE CASE AND THE NATURE OF DOCUMENTS, WE ADMIT THE SAME . W E ARE OF THE OPINION THAT THE GROUNDS RAISED BY THE ASSESSEE ON MERITS SHOULD NOT BE ADJUDICATED, CONSIDERING THE PRINCIPLES OF AUDI ALTR A M PARTA M . T HEREFORE, WE REMAND THE ADDITIONAL EVIDENCES / PAPERS TO THE FILE OF AO FOR FRESH DECISION ON MERITS . FURTHER, WE DIRECT THE AO TO ADMIT FURTHER DOCUMENTS , IF ANY, ASSESSEE LIKES TO SUBMIT DURING SET - ASIDE/REMAND PROCEEDINGS. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE IN ALL THE THREE APPEALS AND BY THE REVENUE IN IT A NO. 2690/MUM/13 ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, APPEAL S FILED BY THE REVENUE AS WE LL AS ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUN CED IN THE OPEN COURT ON THI S 30 TH DAY OF SEPTEMBER, 2015. SD/ - SD/ - (D.KARUNAKARA RAO) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30 .09 .2015 SHARWAN P.S. / OKK SR. P.S 6 ITA NOS.2690,4008,4009 &4010/M/2013 SHRI BERNARD J. CORREA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR B BENCH BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.