Sarita Alice Sequeira, GOA V. Income Tax Officer, Ward - 11(2)(1), Mumbai, MUMBAI

ITA 2913/MUM/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9402 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 13-12-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 20-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Set aside
• Section: 147; 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI RAHUL CHAUDHARY, JM ITA No. 2913/Mum/2023 (Assessment Year: 2011-12) Sarita A l ice Se quei ra C/o Man ish D. Lad age & Co. Charte red Ac count ants, 1003/04, Centrum I T Park, Ne xt to Sat kar Gra nde Hotel, W agle Estate, T hane, Mum bai-400 604 Vs. Income Tax Officer, Ward-11(2)(1) Room No.673/674, Aaykar Bhavan, Maharshi Karve Road, New Marine Lines, Mumbai-400 020 (Appellant) (Respondent) PAN No. AYLPS9213Q Assessee by : Shri Ashwin Jain, AR Revenue by : Shri Prashant Mahajan, DR Date of hearing: 14.12.2023 Date of pronouncement : 21.12.2023 O R D E R PER PRASHANT MAHARISHI, AM: 01. ITA No.2913/Mum/2023 is filed by the assessee for A.Y. 2011-12, against the appellate order passed by National Faceless Appeal Centre, Delhi (NFAC), dated 23 rd June, 2023, wherein the appeal filed by the assessee against the assessment order passed by the Income Tax Officer, ward 11(2)(1), Mumbai under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) dated 24 th December, 2018, was dismissed. Page | 2 ITA No. 2913/Mum/2023 Sarita Alice Sequeira; A.Y. 2011-12 02. Assessee aggrieved with the same has preferred the appeal raising following grounds of appeal:- “1. On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in passing ex parte order in gross violation of principles of natural justice. Your appellant, therefore, prays that the impugned order be set aside. 2. On the facts and in the circumstances of the case, and also in law, the notice dated 28.03.2018 issued u/s. 148 is bad in law in as much as the mandate of section 148 is not satisfied. Your appellant, therefore, prays that the impugned assessment order u/s. 143(3) r. w. s. 147 dated 24.12.2018 be quashed. 3. On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs.3,12,50,000/- made by the Ld. AO as alleged undisclosed short term capital gains. Your appellant, therefore, prays the aforesaid addition of Rs.3,12,50,000/- be deleted.” 03. Brief facts of the case shows that assessee is an individual, who filed her return of income on 31 st March, 2013, at a total income of ₹12,42,210/-, which was processed under Section 143(1) of the Act and assessed under Section 143(3) of the Act on 10 th March, 2014, at the returned income. 04. Subsequently, the information was received on 25 th March, 2018, from the Investigation Wing, that huge non-cash transactions took place in the newly opened savings bank Page | 3 ITA No. 2913/Mum/2023 Sarita Alice Sequeira; A.Y. 2011-12 account of assessee along with her husband Mr. CR Rajesh Nair. The information also states that assessee sold one property jointly with her husband to Birla Edutech Limited for a consideration of ₹10 Crores and being 50% owner of the property ₹5 crores deposited in her bank account. Out of ₹ 5 crores, ₹ 3 crores were transferred to her husband bank account. The learned Assessing Officer found that assessment under Section 143(3) of the Act was passed in the case of the husband of the assessee treating the short term capital gain which was offered by him as business income. In the return of income of the assessee the above short term capital gain was not shown and therefore, the case of the assessee was reopened by issue of notice under Section 148 of the Act on 28 th March, 2018. The assessee reiterated her return originally filed on 26 th April, 2018. 05. The assessee was issued a notice to show cause why the share of the assessee of short term capital gain should not be added back in the hands of the assessee. The assessee stated that entire short term capital gain has shown by the assessee’s husband in her return of income. The learned Assessing Officer rejected the contention of the assessee and computed the short term capital gain on sale of the property. 06. According to the learned Assessing Officer, the property was sold for ₹10 crores, which was purchased by the joint owners for ₹3,75,00,000/- and therefore, short term capital gain of ₹6.25 crores resulted to the co-owners. As Page | 4 ITA No. 2913/Mum/2023 Sarita Alice Sequeira; A.Y. 2011-12 the share of the assessee was 50%, he computed and added short term capital gain of ₹3,12,50,000/- in the hands of the assessee. The assessment order under Section 143(3) read with section 147 of the Act was passed on 24 th December, 2018, determining the total income of the assessee at ₹3,24,92,140/- against the return income of ₹12,42,140/-. 07. On appeal before the learned CIT (A), assessee was given four opportunities of hearing but assessee did not represent herself, therefore, learned CIT (A) passed the order ex-parte. The learned CIT (A) confirmed the order of the learned Assessing Officer. While confirming the order of the learned CIT (A), noted that identical situation arose in the hands of the husband of the assessee. He disclosed this income as business income which was treated by the learned Assessing Officer as short term capital gain. On appeal before the learned CIT (A), the addition was confirmed; therefore, the addition was to be made in the hands of the assessee. 08. At the time of hearing of the case, assessee sought an adjournment by letter dated 14 th December, 2023. However, it is found that as the learned CIT (A) has disposed of the appeal of the assessee without hearing the assessee. No doubt the assessee has been granted four opportunities to put her case before him. But she failed all the times. At the time of seeking adjournment, it was promised that assessee will appear before the learned CIT (A) if one more chance is given to her. Page | 5 ITA No. 2913/Mum/2023 Sarita Alice Sequeira; A.Y. 2011-12 09. The learned Departmental Representative though objected that assessee has been given four opportunities but did not appear before the learned CIT (A), however, the learned Authorized Representative promised to represent the case of the assessee by her. Therefore, in the interest of justice, one more opportunity is granted to the assessee to make her submissions before the learned CIT (A) within 90 days on receipt of this order. The learned CIT (A) may decide the issue afresh after taking into consideration the submission of the assessee. 010. In the result, adjournment request of the assessee is rejected and appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21.12.2023. Sd/- Sd/- (RAHUL CHAUDHARY) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 21.12. 2023 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai