ASST CIT CIR 21(1), MUMBAI V. KAMLESH G. MATHREJA, MUMBAI

ITA 2771/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92688 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 01-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-04-2012
• Court: TRIBUNAL
• Keywords: Deduction for capital gain; Capital asset; Principle of natural justice
• Section: 143(3); 54F; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES A, MUMBAI BEFORE SHRI I P BANSAL, JM, & SHRI RAJENDRA, AM ITA NO.2771/MUM/2012 ASSESSMENT YEAR:2008-09 ASST. CIT CIR 21(1), MUMBAI VS. KAMLESH G MATHREJA, TRISHUL, PLOT NO.6, ROAD NO.6, HATKESH SOC., JVPD SCHEME, VILE PARLE (W) MUMBAI- 400 056 PAN AFXPM7948D (A PPELLANT) ( RESPONDENT) CO NO.81/MUM/2013 (ARISING OUT OF ITA NO.2771/MUM/2012 ASSESSMENT YEAR:2008-09 KAMLESH G MATHREJA, MUMBAI VS. ASST. CIT CIR 21(1), MUMBAI (CROSS - OBJECTOR ) ( RESPONDENT) APPELLANT BY : SHRI ASGHAR ZAIN CROSS OBJECTOR BY : SHRI N R AGARWAL DATE OF HEARING : 01.06.2015 DATE OF PRONOUNCEMENT 01.06.2015 O R D E R PER I P BANSAL, JUDICIAL MEMBER THE APPEAL IS FILED BY THE REVENUE AND THE CROSS-OB JECTION BY THE ASSESSEE. BOTH ARE DIRECTED AGAINST THE ORDER PASSED BY THE C IT(A) DATED 29.02.2012 FOR A.Y. 2008-09. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 2 ITA NO.2771/M/2012 & CO 81/M/2013 AY:2008-09 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING LONG TERM CAPITAL GAIN EXEMPTION OF RS.1,80,43,695/- 2. THE CIT(A) HAS FAILED TO APPRECIATE THAT THE DY. SUPERINTENDENT OF LAND RECORDS HAS ISSUED A CERTIFICATE 13.12.2010 STATING THAT THE VALSHIND VILLAGE IS ABOUT 1600 TO 1700 METERS FROM THE BNMC JURISDICTIO NAL LIMIT. 3. THE CIT(A) HAS FAILED TO APPRECIATE THAT AS PER THE MAP SUBMITTED BY THE AO, THERE IS A MOTORABLE ROAD CUTTING THE MUMBAI NA SHIK BHIWANDI BYPASS, LEADING TO PISE DAM AS PER WHICH THE OVERALL ROAD D ISTANCE OF THE ASSESSEES PLOT FROM THE MUNICIPAL LIMITS OF BNMC IS ONLY 5.5 KMS. AND THAT THE NOTIFICATION ISSUED IN RESPECT OF SECTION 2(14)(II) (B) IS VERY CLEAR THAT THE DISTANCE OF 8 KMS FROM THE MUNICIPAL LIMITS SHOULD BE CONSIDERED IN ALL DIRECTIONS. 4. THE CIT(A) HAS FAILED TO APPRECIATE THAT THE DY. COLLECTOR OF URBAN LAND DEVELOPMENT VIDE ORDER DATED 24.05.2007 HAS DESCRIB ED THE SAID LAND AS URBAN AND THAT NO AGRICULTURAL ACTIVITY WAS CARRIED ON BY THE ASSESSEE AND NO AGRICULTURAL INCOME WAS DECLARED BY THE ASSESSEE IN HIS RETURNS OF INCOME FOR ANY OF THE PRECEDING YEARS. 5. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CI T(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE CROSS-OBJECTION READ AS UNDER: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE VALI DITY OF REOPENING U/S. 148 OF THE ACT. 2. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE DEDUCTION OF THE INDEX COST RS.2,65,204/- FROM SALE PROCEEDS & DEDUCTION U /S. 54F FOR INVESTMENT IN HOUSE PROPERTY. 3. THE LEARNED CIT(A) ERRED IN NOT DISPOSING OFF AL TERNATIVE SUBMISSION FOR DEFINITION OF CAPITAL ASSET U/S. 2(14)(III) CLAUSE (A) OF THE ACT. 4. THE LEARNED CIT(A) ERRED IN NOT DISPOSING OFF AP PELLANTS SUBMISSION ABOUT NON DISPOSAL OF OBJECTIONS BY A.O. 3. AT THE OUTSET, IT WAS SUBMITTED BY THE LEARNED A R THAT THE ISSUE RAISED BY THE REVENUE IN THE PRESENT APPEAL IS COVERED BY THE EAR LIER ORDERS OF THE TRIBUNAL IN THE CASE OF SONS OF THE ASSESSEE AND ONLY THE NAME OF T HE ASSESSEE IS CHANGED AND ALL OTHER FACTS REMAIN THE SAME. REFERENCE WAS MADE TO THE ORDER OF THE TRIBUNAL DATED 07.03.2014 PASSED IN ITA NOS. 6562 & 6564/MUM /2011 IN THE CASES OF ACIT 3 ITA NO.2771/M/2012 & CO 81/M/2013 AY:2008-09 VS. SUNIL G MATHREJA & ACIT VS. VISHAL G MATHREJA R ESPECTIVELY . COPY OF THIS ORDER IS PLACED AT PAGES 33- 38 OF THE PAPER-BOOK. REFERENC E WAS MADE TO PARA 8 OF THE SAID ORDER, WHICH FOR THE SAKE OF CONVENIENCE IS RE PRODUCED BELOW: 8. WE HAVE HEARD THE RIVAL PARTIES AND CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE RELEVANT MATERIAL EVI DENCE BROUGHT ON RECORD. THE ENTIRE DISPUTE REVOLVES AROUND THE ISSUE WHETHE R THE IMPUGNED AGRICULTURAL LAND IS SITUATED WITHIN 8 KMS FROM THE LIMITS OF MU NICIPALITY AS ALLEGED BY THE REVENUE OR IT IS BEYOND 8 KMS AS CLAIMED BY THE ASS ESSEE. THE ENTIRE EXERCISE OF THE AO DEPENDS ONLY ON ONE THING WHICH IS THE PH YSICAL VERIFICATION OF THE DISTANCE DONE BY THE AO. HOWEVER, IT IS NOT IN DISP UTE THAT WHILE MEASURING THE DISTANCE, THE AO TOOK AN APPROACH ROUTE WHICH IS OW NED BY MCGM FOR MAINTENANCE OF CHLORINATION PLANT. THIS IS ESTABLIS HED BY THE CERTIFICATE OF THE DY. HYDRAULIC ENGINEER (OPERATIONS), MUNICIPAL CORP ORATION OF GREATER MUMBAI. IT IS ALSO A FACT THAT THIS CERTIFICATE WAS SUBMITT ED BY THE ASSESSEE BEFORE THE LD. CIT(A). 8.1. A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOW S THAT THE LD. CIT(A) INVOKING HIS POWERS U/S. 250(4) OF THE ACT ASKED TH E ASSESSEE TO FURNISH CERTAIN DETAILS. IN RESPONSE TO WHICH, THE ASSESSEE FILED T HIS CERTIFICATE. THEREFORE, IN OUR UNDERSTANDING OF THE LAW, THIS CANNOT BE TERMED AS VIOLATION OF RULE 46A. HOWEVER, AT THE SAME TIME, EVEN IF THERE ARE NO EXP RESS PROVISIONS WHICH COULD SUGGEST THAT THE LD. CIT(A) IS BOUND TO GIVE AN OPP ORTUNITY TO THE AO IN RESPECT OF THE EVIDENCE GATHERED BY VIRTUE OF SEC. 250(4) OF THE ACT, IN OUR CONSIDERED VIEW THE PRINCIPLES OF NATURAL JUSTICE D EMAND THAT NOTHING SHOULD BE USED AGAINST A PERSON WHICH HAS BEEN COLLECTED BEHI ND THE BACK OF THAT PERSON, THEREFORE, IN OUR HUMBLE OPINION, THIS CERT IFICATE OF DY. HYDRAULIC ENGINEER (OPERATIONS) NEED TO BE CONFRONTED TO THE AO FOR THIS LIMITED PURPOSE OF WHETHER THE APPROACH ROAD TAKEN BY THE AO IS A P RIVATE ROAD OR PUBLIC ROAD . WE RESTORE THE MATTER BACK TO THE FILES OF THE AO. THE ASSESSEE IS DIRECTED TO FILE A COPY OF THE SAID LETTER OF DY. HYDRAULIC ENG INEER (OPERATIONS) BEFORE THE AO. THE AO IS DIRECTED TO VERIFY THE GENUINENESS OF THE SAID LETTER AND DECIDE THE ISSUE OF DISTANCE ACCORDINGLY. WE WOULD LIKE TO MAKE IT VERY CLEAR THAT THE AO IS ONLY DIRECTED TO VERIFY THE GENUINENESS OF TH IS LETTER OF DY. HYDRAULIC ENGINEER (OPERATIONS) ONLY. IF THE AO IS SATISFIED WITH THE GENUINENESS OF THE LETTER, THE IMPUGNED LAND SHALL BE TREATED AS AN AG RICULTURAL LAND EXEMPT FROM CAPITAL GAIN TAX. 9. IN THE RESULT, THESE TWO APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. 4. IT WAS FURTHER SUBMITTED BY THE LEARNED AR THAT THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO ONLY FOR THE PURPOSE OF VERIF YING THE GENUINENESS OF THE LETTER ISSUED BY DY. HYDRAULIC ENGINEER (OPERATIONS) AND A FTER VERIFYING SUCH FACTS, THE LEARNED AO IN THE CASE OF SON OF THE ASSESSEE VIZ. SUNIL G MATHREJA HAS FOUND THAT 4 ITA NO.2771/M/2012 & CO 81/M/2013 AY:2008-09 THE SAID LETTER ISSUED WAS GENUINE AND APPROPRIATE RELIEF WAS ALLOWED BY THE AO IN THE CASE OF THE SON OF THE ASSESSEE VIDE ASSESSMENT ORDER PASSED BY THE AO IN RESPECT OF SON OF THE ASSESSEE VIZ. SHRI SUNIL G MA THREJA VIDE ORDER PASSED U/S. 143(3) R.W.S. 254 OF THE I.T.ACT, 1961. A COPY OF THIS ORDER IS FILED AT PAGES 41- 44 OF THE PAPER-BOOK. LEARNED AR ALSO POINTED OUT TO THE LETTER, DATED 06.08.2014, SENT BY THE AO IN THE CASE OF SUNIL G MATHREJA TO T HE EXECUTIVE ENGINEER, O/O THE DY. HYDRAULIC ENGINEER (OPERATION), COPY OF WHICH I S PLACED AT PAGE 39 OF THE PAPER- BOOK, INQUIRING WITH REGARD TO THE GENUINENESS OF T HE LETTER FOR WHICH THE MATTER WAS RESTORED TO THE AO. THE LEARNED AR ALSO REFERRED TO THE RESPONSE RECEIVED FROM THE OFFICE OF THE EXECUTIVE ENGINEER (OPERATIONS), WHIC H IS DATED 02.09.2014 AND RECEIVED BY THE AO ON 04.09.2014, COPY OF THIS LETT ER IS PLACED AT PAGE 40 OF THE PAPER-BOOK. HE SUBMITTED THAT ON THE BASIS OF THIS LETTER THE AO IN THE CASE OF THE SON OF THE ASSESSEE HAS ACCEPTED THE ISSUE. THUS, IT WAS PLEADED BY THE LEARNED AR THAT IN THE CASE OF THE ASSESSEE, SINCE THE MATTER HAS BEEN ACCEPTED IN THE CASE OF SON OF THE ASSESSEE, THE DEPARTMENTAL APPEAL SHOULD BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IT IS THE CASE OF THE LEARNED AR THAT BASED UPON THE AFOREMENTIONED ORDER OF THE TRIBUNAL DATED 07.03.2014, IN WHICH SI MILAR ISSUE WAS RAISED IN THE CASE OF SONS OF THE ASSESSEE AND SUCH PLEA HAS BEEN ACCE PTED, THEREFORE, RELIEF SHOULD BE GRANTED TO THE ASSESSEE ON THE BASIS OF THE ASSESSM ENT MADE BY THE AO IN PURSUANCE OF THE DIRECTIONS OF THE TRIBUNAL. WE DO NOT FIND SUCH ARGUMENT OF THE LEARNED AR AS CONVINCING. UNDISPUTEDLY, THE VERIFI CATION WHICH WAS MADE BY THE AO IN THE CASE OF THE SON OF THE ASSESSEE RELATES TO T HE CASE OF SON OF THE ASSESSEE. THEREFORE, ON THE BASIS OF ACCEPTANCE OF THE CLAIM IN THE CASE OF THE SON OF THE ASSESSEE, WE CANNOT ACCEPT SUCH CLAIM, UNLESS SIMIL AR VERIFICATION IS CARRIED OUT IN THE CASE OF ASSESSEE. THEREFORE, RESPECTFULLY FOLL OWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL IN THE CASE OF SON OF THE ASSESSEE, WE PASS SIMILAR ORDER AND THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR MAKING S IMILAR VERIFICATION. WE ORDER ACCORDINGLY. 6. THE APPEAL FILED BY THE REVENUE IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSE IN THE MANNER AFORESAID. 5 ITA NO.2771/M/2012 & CO 81/M/2013 AY:2008-09 7. SO FAR AS IT RELATES TO THE CROSS-OBJECTIONS FIL ED BY THE ASSESSEE, THE LEARNED AR DURING THE COURSE OF HEARING DID NOT PRESS THE C ROSS-OBJECTION AND THIS FACT IS ENDORSED ON THE ORDER SHEET, WHERE THE LEARNED AR H AS STATED THAT THE CROSS- OBJECTION IS NOT PRESSED. ACCORDINGLY, THE CROSS- OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 8. TO SUM UP, THE APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSE IN THE MANNER AFORESAID AND THE CROSS-OBJECTION FIL ED BY THE ASSESSEE IS DISMISSED AS BEING NOT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF JUNE, 2015. SD/- SD/- (RAJENDRA) (I P BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 1 ST JUNE, 2015 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, A BENCH, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI