Sri.Suhail Ameer manappat, Kochi V. The DCIT(Int.Taxation), Kochi

ITA 296/COCH/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8615 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-04-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 13-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJINARK P
• Assessee Lawyers: A S BINDHU
• Keywords: Cost of acquisition; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 296 /COCH/201 8 : ASST.YEAR 2012 - 2013 SRI. SUHAIL AMEER AHMED 3 RDS, NEDUNGADAN RESIDENCY, ST.BENEDICT RD KOCHI 682 018. PAN : ADTPA2400Q. VS. THE DY.COMMISSIONER OF INCOME - TAX (INTERNATIONAL TAXATION), KOCHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.A.S.BINDHU, SR.DR RESPONDENT BY : SRI. RAJINARK P. DATE OF HEARING : 04.04.2018 DATE OF PRONOUNCEMENT : 10 .04.2019 O R D E R PER GEORGE GEORGE K, JM THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE COMMISSIONER OF INCOME - TAX (APPEALS)S ORDER DATED 05.04.2018. THE RELEVANT ASSESSMENT YEAR IS 2012 - 2013. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS REGARDING CORRECTION OF A MISTAKE CREPT IN THE COMPUTATION STATEMENT OF INCOME. 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A NRI. FOR THE ASSESSMENT YEAR 2012 - 2013, RETURN OF INCOME WAS FILED ON 08.08.2013 DECLARING A TOTAL INCOME OF RS.11,51,96,230. THE RETURN OF INCOME CONSISTS OF THE FOLLOWING: - ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 2 (I) INCOME FROM HOUSE PROPERTY RS. 1,76,807 (II) LONG TERM CAPITAL GAIN RS.11,44,73,010 (III) INCOME FROM OTHER SOURCES RS. 5,46,41 0 -------------------- TOTAL INCOME RETURNED RS.11,51,96,230 ============== 3.1 THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 28.03.2015. THE TOTAL INCOME ASSESSED WAS RS.11,67,98,280. 3.2 THE ASSESSEE FILED AN APPEAL TO THE FIRST APPELLATE AUTHORITY CONTENDING THAT THE LONG TERM CAPITAL GAIN COMPUTED BY THE ASSESSEE WAS MISTAKE . ACCORDING TO THE ASSESSEE, INSTEAD OF STATING THE COST OF ACQUISITION AS RS.20,00,000 BY AN INADVERTENT MISTAKE, IT MENTIONED AS RS.2 LAKH (THE NUMBER OF SHARES INSTEAD OF COST OF SHARES). ACCORDING TO THE ASSESSEE THIS MISTAKE HAD RESULTED IN OVERSTATING OF LONG TERM CAPITAL GAIN BY RS.27,22,543. THE CIT(A), HOWEVER, REJECTED THE CONTENTION RAISED BY THE ASSESSEE BY OBSERVING AS UNDER: - 4 .2 I HAVE PERUSED THE FACTS AVAILABLE ON RECORD. THIS MISTAKE ON PART OF THE APPELLANT IS NOT A PART OF THE ASSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT HAS NOT FILED A REVISED RETURN, RECTIFYING HIS OWN MISTAKE. HE ALSO DID NOT BRING THIS MISTAKE TO TH E NOTICE OF THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THEREFORE NOTHING WRONG WITH THE ASSESSMENT ORDER CAN BE FOUND. THIS IS ALSO NOT A LEGAL ISSUE, WHICH CAN BE TAKEN UP AT ANY STAGE OF APPEAL. IN VIEW OF THESE FACTS, AND LEGAL PROVISIONS, THIS GROUND OF APPEAL OF THE APPELLANT IS NOT MAINTAINABLE AND THE SAME IS HEREBY DISMISSED. ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 3 4. THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE CIT(A) HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED AR HAS FILED THE COMPUTATION STATEMENT OF TOTAL INCOME AND SCHEDULE ATTACHED ALONG WITH THE SAME WHEREIN THE CALCULATION OF LONG TERM CAPITAL GAIN IS ENCLOSED. THE LEARNED AR HAS ALSO PLACED ON RECORD CERTIFICATE OF THE COMPANY SECRETARY OF M/S. AGNICE FIRE PROTECTION LIMITED, WHEREIN IT IS CLEARLY STATED THAT THE ASSESSEE WAS ALLOTTED 2 LAKH SHARES OF FACE VALUE OF RS.10 WAY BACK IN THE FINANCIAL YEAR 2006 - 2007. THE ASSESSEE HAS ALSO PLACED ON RECORD RBI CONFIRMATION OF ASSESSEES INVESTMENT OF 2 LAKH SHARES OF VALUE OF RS.20 LAKH IN THE COMPANY M/ S.AGNICE FIRE PROTECTION LIMITED. FORM NO.2 AS REGARDS THE ALLOTMENT OF SHARES IS ALSO FURNISHED. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A) . IT WAS CONTENDED THAT IT IS ONLY AN INADVERTENT MISTAKE AND SAME SHOUL D HAVE BEEN CORRECTED BY THE CIT(A). IT WAS SUBMITTED THAT THIS INADVERTENT MISTAKE HAS RESULTED IN OVERSTATING OF CAPITAL INVESTMENT BY A SUM OF RS.27,22,543. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE FIRST APPELLATE AUTHORITYS ORDER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLITARY ISSUE RAISED IN THE PRESENT APPEAL IS REGARDING THE CORRECTION OF AN MISTAKE CREPT INTO THE COMPUTATION STATEMENT OF INCOME . THE ASSESSEE HAD ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 4 PURCHASED 2,00,000 SHARES @ RS. 10 PER SHARE; THE COST OF ACQUISITION BEING RS. 20,00,0 00 . BUT, WHILE MARKING THE COST AT RS. 20,00,000 IN THE CAPITAL GAINS COMPUTATI ON, BY MISTAKE IT WAS MARKED AS RS. 2,00,000 (THE NUMBER OF SHARES INSTEAD OF THE COST OF SHARES). THIS MISTAKES HAS RESULTED IN AN ERROR OF OVERSTATING THE CAPITAL GAINS BY RS. 27,22,543. 6 . 1 THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE PRAYER O F THE ASSESSEE ON A TECHNICAL GROUND THAT THE MISTAKE WAS COMMITTED BY THE ASSESSEE HIMSELF AND NOT BY THE ASSESSING AUTHORITY AND THAT THE ASSESSEE HAD NOT FILED ANY REVISED RETURN TO CORRECT THE MISTAKE. THE REVISED RETURN COULD HAVE BEEN FILED BY THE AS SESSEE ONLY IF THE MISTAKE WAS NOTED BEFORE COMPLETION OF THE ASSESSMENT. IN THE PRESENT CASE, THE MISTAKE CAME TO NOTICE ONLY WHEN THE ASSESSMENT ORDER WAS RECEIVED AND PERUSED. THERE IS NO RULE OR LAW WHICH PREVENTS THE CORRECTION OF A HONEST MISTAKE. TH E PRAYER OF THE ASSESSEE WAS NOT BASED ON ANY NEW SET OF FACTS THAT WAS NOT PLACED BEFORE THE ASSESSING AUTHORITY; THE PRAYER WAS TO CORRECT A MISTAKE AND ADOPT THE CORRECT AMOUNT FROM THE PARTICULARS ALREADY PLACED ON RECORD BEFORE THE ASSESSING AUTHORITY . 6.2 THE STATUTORY FUNCTION OF ASSESSMENT IS QUASI - JUDICIAL. THE ASSESSING AUTHORITY NEEDS TO BE JUST AND FAIR IN DETERMINING THE TAX LIABILITY. THE HON'BLE DELHI HIGH COURT IN CIT VS. SAM GLOBAL SECURITIES LTD. (2014) 360 ITR 682 HAS HELD THAT ASSESSMEN T PROCEEDINGS ARE NOT ADVERSARIAL IN NATURE. IF ANY MISTAKE IS FOUND IN THE COMPUTATION FILED BY THE ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 5 ASSESSEE, IT IS THE LAWFUL OBLIGATION CAST ON THE ASSESSING AUTHORITY TO CORRECT IT. IT IS IMMATERIAL, WHETHER SUCH CORRECTION BENEFITS THE ASSESSEE OR REV ENUE. 6. 3 IN A CASE, RACHNA S TALREJA V S. DCIT (MUM) (T), CONSIDERED BY ITAT, ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FILED REVISED COMPUTATION OF INCOME AND CLAIMED ADDITIONAL DEDUCTION IN RESPECT OF PAYMENT OF INTEREST. ASSESSING AUTHORIT Y REFUSED TO CONSIDER THE REVISED CLAIM ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY REVISED RETURN U/S.139(5). IN APPEAL, THE CIT(A) UPHELD THE ORDER RELYING ON GOETZE (INDIA) LTD. VS. CIT 284 ITR 323 (SC). BUT, THE ITAT ADMITTED THE ADDITIONAL CLAI M AND ALLOWED THE APPEAL REFERRING TO PRADEEPKUMAR HARLARKAR V S. ACIT (2011) 47 SOT 2014 URO (MUM)(TRIB). 6.4 IN RICOH INDIA LTD. VS. DCIT (2013) 38 TAXMANN.COM 264(MUM) (TRIB), IT WAS HELD THAT THE RESTRICTION DISCUSSED IN GOETZE (INDIA) LTD. VS. CIT 284 ITR 323 (SC) APPLIES TO ASSESSING AUTHORITY ALONE AND NOT APPLY TO APPELLATE AUTHORITIES. 6 . 5 IN THE PRESENT CASE, THE ASSESSEE IS NOT CLAIMING ANY NEW/ADDITIONAL DEDUCTION. THE PRAYER IS TO ADOPT THE CORRECT AMOUNT OF CAPITAL GAINS, THE PARTICULARS OF WHICH HAVE ALREADY BEEN FURNISHED TO AND AVAILABLE WITH THE ASSESSING AUTHORITY. THEREFORE, THE DECISION RENDERE D IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT 284 ITR 323 (SC) DOES NOT APPLY. ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 6 6 . 6 CBDT CIRCULAR NO. 14(XL35) DATED 1110411955 PROVIDES FOR RESPONSIBLE ASSESSMENT THAT THE ASSESSING AUTHORITY TO HAVE REASONABLE APPROACH IN COMPLETING AN ASSESSMENT, TO GRA NT LAWFUL AND ELIGIBLE DEDUCTION TO THE ASSESSEE, EVEN IF IT WAS NOT CLAIMED BY THE ASSESSEE. THE ASSESSING AUTHORI TY HAS TO SEE THAT THE INCOME OF THE ASSESSE E HAS BEEN DETERMINED AFTER ALLOWING ALL THE LAWFUL OUTGOINGS AND STATUTORY DEDUCTIONS. 6.7 THE RECENT JUDGMENT OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF RAGHAVAN NAIR V. ACIT [(2018) 402 ITR 400 (KER.)] HAD HELD THAT IT IS THE DUTY OF THE ASSESSING OFFICER TO REFRAIN FROM ASSESSING AN NON - TAXABLE INCOME RETURNED BY THE ASSESSEE ON MI STAKEN UNDERSTANDING. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READS AS FOLLOWS: - 11. IT IS BEYOND DISPUTE THAT THE POWERS OF THE ASSESSING OFFICERS UNDER THE ACT ARE QUASI - JUDICIAL IN NATURE AND THEY ARE DUTY - BOUND, THEREFORE, TO ACT FAIRLY IN THE DISCHARGE OF THEIR FUNCTIONS. THEY ARE ALSO INVESTED WITH THE AUTHORITY TO DO JUSTICE TO THE ASSESSEES. TRUE, IN A GIVEN CASE WHERE THE SELF - ASSESSMENT MADE BY AN ASSESSEE IS PROPOSED TO BE REVISED ON THE GROUND THAT THE DEDUCTION MADE BY HIM IN THE R ETURN UNDER A PARTICULAR HEAD IS INADMISSIBLE, THE ASSESSING OFFICER, IN THE ABSENCE OF A REVISED RETURN, WOULD PROCEED ON THE BASIS OF THE FACTS DISCLOSED BY THE ASSESSEE IN THE RETURN. BUT, IN A CASE WHERE IT IS APPARENT ON THE FACE OF THE RECORD THAT THE ASSESSEE HAS INCLUDED IN HIS RETURN, AN INCOME WHICH IS EXEMPTED FROM PAYMENT OF INCOME - TAX, ON ACCOUNT OF IGNORANCE OR BY MISTAKE, ACCORDING TO ME, THE ASSESSING OFFICER IS BOUND TO TAKE INTO ACCOUNT THE SAID FACT IN A PROCEEDING UNDER SECTION 143 OF THE ACT. IN OTHER WORDS, IF THE CAPITAL GAINS ON A TRANSACTION IS EXEMPTED FROM PAYMENT OF TAX, THE ASSESSING OFFICER HAS A DUTY TO REFRAIN FROM LEVYING TAX ON THE SAID CAPITAL GAINS AND THE ASSESSING OFFICER CANNOT, IN SUCH CASES, REFUSE TO GRANT RELIEF U NDER SECTION 143 OF THE ACT TO THE ASSESSEE ON THE TECHNICAL PLEA THAT THE ASSESSEE HAS NOT FILED A REVISED RETURN. 6.8 FOR THE AFORESAID REASONING, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO THE RELIEF SOUGHT FOR IN THIS APPEAL. IT IS ORDERED AC CORDINGLY. ITA NO. 296 / COCH /201 8 SRI. SUHAIL AMEER AHMED . 7 6.9 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 10 TH DAY OF APRIL, 2019 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 10 TH APRIL, 2019 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE PR.CIT, KOCHI. 4. THE CIT(APPEALS) - II, KOCHI. 5. DR, ITAT, COCHIN 6 . GUARD FILE.