MACHINDRA BABURAO CHAVAN, Mumbai V. ITO 34(2)(1), Mumbai

ITA 2816/MUM/2022

AI Insights

The case involves Machindra Baburao Chavan, the appellant, who challenged the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, which was passed under section 250 of the Income Tax Act, 1961, for the Assessment Year 2014-15. The primary issues in the appeal were the disallowance of exemption under section 54 for capital gains on the sale of two houses and the partial disallowance of deduction under section 80TTA for savings bank interest. The Assessing Officer had initially disallowed these claims, which was upheld by the CIT(A). The Tribunal found that the CIT(A) had not adequately considered the submissions and evidence provided by the assessee, leading to the decision to remand the matter back to the CIT(A) for a thorough examination on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125781 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 02-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside
• Section: 54; 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B R BASKARAN, AM AND MS. KAVITHA RAJAGOPAL, JM I TA N o. 281 6/ M u m / 20 22 ( A s s e ss me nt Y ea r: 20 1 4- 15 ) Machindra Baburao Chavan Flat No. A/403, 4 th Floor, Evershine Cosmic Building, Orhiwara, Jogeshwari (W), Mumbai-400 102 V s. ITO-34(2)(1) Mumbai P A N / G I R N o. A C RP C 579 0 N (Appellant) : (Respondent) Assessee by : Shri D. B. Shah Revenue by : Ms. Mahita Nair D a te o f H e a r i n g : 13.03.2023 D ate of P ro n ou n ce me n t : 09.06.2023 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15. 2. The assessee has raised the following grounds: 1) On the facts in circumstances of the case and in law the learned Commissionner of Income Tax Appeals erred in stating that the appellant failed to submit the relevant documents and further erred in dismissing the appeal when submissions dated 12 th August, 2022 were already available on record. 2) On the facts in circumstances of the case and in law the learned Commnissionner of Income Tax (Appeals) erred in confirming disallowance of exemption under section 54 by the Assessing Officer amounting to Rs. 25,83,160/- in respect of investment of capital gain on sale of two houses converted into one house, by investing capital gain in one residential house. 2 ITA No. 2 8 1 6 / M u m / 2 0 2 2 ( A . Y . 2 0 1 4 - 1 5 ) Machindra Baburao Chavan vs. ITO 3) On the facts in circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) has erred in not allowing full deduction u/s 80TTA in respect of Savings Bank Interest as a result of dismissal of the appeal without considering the submissions made by the appellant during the appeal proceedings. 3. The brief facts of the case are that the assessee is an individual and had filed his return of income dated 11.02.2016, declaring total income of Rs.5,88,720/-. The assessee’s case was selected for scrutiny and the assessment order dated 28.12.2016 was passed u/s. 143(3) of the Act, determining the total income at Rs.61,21,190/- by making disallowance u/s. 56(2)(vii) and u/s. 54 of the Act of the Act amounting to Rs.55,32,475/- on the ground that the assessee has sold two flats, i.e., 706 & 707 in the building name Nikita Apartments admeasuring 195.6 sq. ft. and 195.34 sq. ft. respectively. The A.O. has observed that the assessee has sold two flats and has purchased one flat at Evershine Cosmic and, therefore, the A.O. disallowed the exemption claimed by the assessee u/s. 54 of the Act on the proportionate amount of capital gain derived from one flat out of two. 4. The assessee was in appeal before the ld. CIT(A) who vide an ex parte order dated 08.09.2022 upheld the addition/disallowances made by the A.O. for the reason that the assessee has failed to furnish any documentary evidence in support of his claim. The A.O. has also disallowed interest income of Rs.5,295/- received by the assessee for the reason that the assessee has failed to offer the said income under the original return of income and has also not claimed deduction thereon. It is also observed that the A.O. has disallowed the said interest for the reason that the assessee has filed his return of income belatedly and, therefore, rejected the claim of deduction u/s. 80TTA of the Act. 5. Aggrieved by the said order, the assessee is in appeal before us. 3 ITA No. 2 8 1 6 / M u m / 2 0 2 2 ( A . Y . 2 0 1 4 - 1 5 ) Machindra Baburao Chavan vs. ITO 6. We have heard the rival submissions and perused the materials available on record. It is observed that the first appellate authority has dismissed the appeal filed by the assessee for the reason of failure to furnish any evidences in support of the assessee’s claim. During the appellant proceeding, the ld. AR for the assessee contended that the ld. CIT(A) has failed to consider the submission made by the assessee and has also failed to pursue the documentary evidences filed in support of the assessee’s claim. It is evident from the ld. CIT(A)’s order that the aforementioned issues has not been decided on merits. Hence, we are of the considered opinion that all these issues may be set aside to the file of the ld. CIT(A) to decide the grounds raised by the assessee on merits of the facts and after duly considering the documentary evidences filed by the assessee inorder to adhere to the principles of natural justice. 7. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 09.06.2023. Sd/- Sd/- (B. R. Baskaran) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 09.06.2023 Roshani , Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai