Shri Mukeshbhai Manjibhai Patel, Surat V. The Dy. Commissioner of Income Tax, Circle-3(3), Surat

ITA 2873/AHD/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3472 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 01-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K
• Assessee Lawyers: A K PARESH
• Keywords: Cost of acquisition; Corroborative evidences
• Section: 143(3); 48

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND SHRI DR.ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) . . . I.T.A NO.2873/AHD/2016 [ [ / ASSESSMENT YEAR: 2012-13 SHRI MUKESHBHAI MANJIBHAI PATEL, 4, LAXMIVILLA, SHUBHAM BUNGLOWS, NR.SANGAM SOCIETY, CITY LIGHT ROAD, SURAT. [PAN: ABGPP 6222 Q] V S . THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(3), SURAT. / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI A.K.PARESH CA /REVENUE BY SHRI B.K.PANDA SR.DR / DATE OF HEARING: 10 . 1 1 .20 20 /PRONOUNCEMENT ON: 10 . 1 1 .20 20 /O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3 [LD.CIT(A)], SURAT DATED 26.08.2016, WHICH IN TURN ARISE FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE I.T.ACT, 1961 DATED 30.03.2015 FOR THE ASSESSMENT YEAR (AY) 2012-13. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL AS UNDER: 1. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 1,00,00,000/- PAID FOR SETTLEMENT OF CLAIM WITH ENCROACHER AS COST OF ACQUISITION / IMPROVEMENT FROM CONSIDERATION RECEIVED IN COMPUTING THE INCOME UNDER THE SHRI MUKESHBHAI MANJIBHAI PATEL VS. DCIT, CIRCLE-3(3), SURAT/ ITA NO.2873/AHD/2016 FOR A.Y. 2011-12 2 HEAD ' CAPITAL GAIN' U/S. 48 OF THE ACT. THE ADDITION OF RS. 1,00,00,000/- SHOULD THEREFORE, BE DELETED. 2. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 48,36,000/- INCURRED BY APPELLANT FOR RENOVATION OF FLAT AS COST OF IMPROVEMENT U/S. 48 OF THE ACT WITHOUT APPRECIATING THE EXPLANATION AND EVIDENCES OF APPELLANT. THE ADDITION OF RS. 48,36,000/- SHOULD THEREFORE, BE DELETED. 3. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 26,82,046/- INCURRED BY APPELLANT FOR BROKERAGE AND STAMP DUTY PAID ON RE-REGISTRATION OF DEED CANCELLED BY THE ORDER OF THE HIGH COURT AS COST OF ACQUISITION U/S. 48 OF THE ACT WITHOUT APPRECIATING THE EXPLANATION AND EVIDENCES OF APPELLANT. THE ADDITION OF RS. 26,82,046/- SHOULD THEREFORE, BE DELETED. 4. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE TAX DETERMINED BY ASSESSING OFFICER ON TOTAL DISALLOWANCE OF RS. 1,75,18,046/- IN GR.NO. 1 TO 3 AS COST OF ACQUISITION / IMPROVEMENT AT NORMAL RATE OF 30% AS AGAINST TAXING THE RETURNED CAPITAL GAIN U/S. 112 OF THE ACT WITHOUT APPRECIATING THE FACTS THAT DISALLOWANCES INCREASE THE LONG TERM CAPITAL GAIN. IN ANY CIRCUMSTANCES THE DISALLOWANCES IF CONFIRMED BE TAXED U/S. 112 OF THE ACT. 5. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, MODIFY, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL BEFORE HEARING. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM PARTNERSHIP FIRM, FILED HIS RETURN OF INCOME FOR A.Y. 2012-13 ON 29.03.2015 DECLARING INCOME OF RS.1.10 CRORE. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER (AO) PASSED ASSESSMENT ORDER UNDER SECTION 143(3) ON 30.03.2015. DURING THE ASSESSMENT THE AO NOTED THAT THE ASSESSEE HAS SHOWN CAPITAL GAIN ON SALE OF A FLAT AT NEPENSEA ROAD MUMBAI AND CLAIMED VARIOUS EXPENSES, EITHER ON ACCOUNT OF ACQUISITION OR IMPROVEMENT OF ASSET. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER MADE FOLLOWING THREE ADDITION/ DISALLOWANCE; SHRI MUKESHBHAI MANJIBHAI PATEL VS. DCIT, CIRCLE-3(3), SURAT/ ITA NO.2873/AHD/2016 FOR A.Y. 2011-12 3 1 AMOUNT PAID FOR SETTLEMENT OF CLAIM TO TENANT DINESH BHAI MANJI BHAI PATEL TO SURRENDER TENANCY RIGHT IN FLAT (REAL BROTHER OF ASSESSEE) RS.1.00 CRORE 2 RENOVATION EXPENSES RS. 48.36 LAKHS 3 BROKERAGE AND STAMP DUTY RS. 1.75 CRORE 4. THE AO MADE ADDITIONS/ DISALLOWANCES BY TAKING VIEW THAT THE EVIDENCES FURNISHED BY THE ASSESSEE TO SUBSTANTIATE IS NOT COGENT AS DISCUSSED IN PARA 5 TO 7 OF ASSESSMENT ORDER. THE AO MADE A TOTAL DISALLOWANCE OF RS.1.75 CRORE. 5. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF AO WAS UPHELD. THE LD. CIT(A) UPHELD THE ADDITIONS IN EX-PARTE ORDER. THUS, FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 6. WE HAVE HEARD THE SUBMISSION OF LD.AR OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE. AT THE OUTSET, THE LD.AR OF THE ASSESSEE SUBMITS THAT THE LD. CIT(A) PASSED EX- PARTE ORDER AGAINST THE ASSESSEE WITHOUT GIVING PRIOR OPPORTUNITY TO THE ASSESSEE. THE LD. CIT(A) ISSUED NOTICE TO THE ASSESSEE ON THE OLD ADDRESS. HOWEVER, THE ASSESSEE FURNISHED THE FRESH ADDRESS WHILE FILING APPEAL BEFORE THE LD. CIT(A) IN FORM 35 [APPEAL FORM BEFORE THE LD.CIT(A)]. THE LD.AR FOR THE ASSESSEE FURTHER SUBMITS THAT ON THE SAME DAY I.E. 26.08.2016 THE LD. CIT(A) ALSO PASSED SIMILAR ORDER AGAINST THE WIFE OF ASSESSEE. THE WIFE OF ASSESSEE FILE APPEAL BEFORE TRIBUNAL VIDE ITA NO.2874/AHD/2016 AND THE TRIBUNAL VIDE ORDER DATED 04.09.2020 RESTORED BACK APPEAL OF THE WIFE OF THE ASSESSEE TO THE FILE OF THE AO TO DECIDE ALL THE ISSUES SHRI MUKESHBHAI MANJIBHAI PATEL VS. DCIT, CIRCLE-3(3), SURAT/ ITA NO.2873/AHD/2016 FOR A.Y. 2011-12 4 AFRESH. THE LD.AR FOR ASSESSEE PRAYED THAT THIS APPEAL MAY ALSO BE RESTORED TO THE FILE OF THE AO FOR DECIDING ALL THE ISSUE AFRESH. 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE WAS GRANTED OPPORTUNITY BY THE LD. CIT(A) TO CONTEST THE APPEAL ON MERIT. THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY SUBMISSIONS TO SUBSTANTIATE VARIOUS GROUNDS OF APPEAL. THUS, THE LD. CIT(A) DECIDED THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 8. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED ON THE ORDER OF TRIBUNAL IN ASSESSEES WIFE CASE IN ITA NO.2874/AHD/2020. WE HAVE NOTED THAT APPEAL OF THE ASSESSEE AS WELL AS OF HIS WIFE WAS ADJUDICATED BY THE LD.CIT(A) BY ORDER DATED 26.08.2016 BY TAKING VIEW THAT NOTICE OF HEARING FIXED ON 31.05.2016 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE NEITHER APPEARED NOR FURNISHED SUBMISSION AND THE CASE WAS ADJOURNED TO 23.08.2016. FURTHER, THERE WAS NO COMPLIANCE ON 23.08.2016. THE LD. CIT(A) BY TAKING VIEW THAT ASSESSEE IS NOT INTERESTED IN PERUSING HIS APPEAL AS NO DETAILS DURING THE APPELLATE PROCEEDINGS ARE FILED. IT WAS FURTHER HELD THAT AS PER SECTION 102 EVIDENCE ACT THE BURDEN OF PROVE WAS ON THE ASSESSEE AND THAT THE ASSESSEE HAS NOT DISCHARGED HIS ONUS. WE HAVE NOTED THAT THE LD. CIT(A) HAS NOT ADJUDICATED THE APPEAL BY PASSING THE ORDER AS MANDATED UNDER SECTION 250(6) OF THE INCOME TAX ACT. WE HAVE FURTHER NOTED THAT THE ASSESSEE HAS FURNISHED FRESH ADDRESS IN FORM-35, WHILE SHRI MUKESHBHAI MANJIBHAI PATEL VS. DCIT, CIRCLE-3(3), SURAT/ ITA NO.2873/AHD/2016 FOR A.Y. 2011-12 5 FILING APPEAL BEFORE LD. CIT(A), THE LD CIT(A) HAS ISSUED NOTICE AT THE ADDRESS MENTIONED ON THE ASSESSMENT ORDER. FURTHER, WE HAVE NOTED THAT ON SIMILAR SET OF FACT, ON SIMILAR CIRCUMSTANCES WE HAVE ALREADY RESTORED THE APPEAL WIFE OF ASSESSEE TO THE FILE OF AO TO DECIDE ALL THE ISSUE AFRESH ON MERIT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE THAT ASSESSEE FURNISHED HIS NEW ADDRESS WHILE FILING APPEAL BEFORE THE LD. CIT(A), NO NOTICE OF SUCH FRESH ADDRESS WAS SERVED UPON THE ASSESSEE. WE HAD SEEN THAT THE AO MADE VARIOUS ADDITIONS BY TAKING VIEW THAT NO COGENT EVIDENCE OR SUPPORTING EVIDENCE IS FURNISHED BY ASSESSEE WITH REGARD TO VARIOUS CLAIMS. THEREFORE, WE DEEM IT APPROPRIATE TO SET-ASIDE THE ORDER OF LD. CIT(A) AND TO RESTORE THE MATTER BACK TO THE FILE TO THE FILE OF THE AO. NEEDLESS TO ORDER THAT BEFORE PASSING THE ORDER OF THE AO SHALL GRANT OPPORTUNITY TO THE ASSESSEE AND TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. THE ASSESSEE IS ALSO DIRECTED TO PROVIDE AL NECESSARY EVIDENCES AND INFORMATION TO THE AO AND NOT TO TAKE ADJOURNMENT WITHOUT ANY VALID REASON. 9. IN THE RESULT, APPEAL OF THE ASSESSEE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10-11-2020. SD/- SD/- (DR.ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 10 TH NOV , 2020 / S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT