PRAKASH R. HIRANI, MUMBAI V. FORMERLY ITO WARD 15(1)(4), MUMBAI

ITA 2981/MUM/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5254 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 22-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Set aside
• Section: 142(1); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE SHRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2981 /MUM/2016 ASSESSMENT YEAR: 2011 - 12 SHRI PRAKASH R. HIRANI, 306, GOPALPURE BLDG., S.V. ROAD, MUMBAI - 400092 PAN: AAAPH4767P VS. THE ITO WARD 15(1)(4), MATRUMANDIR, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAKASH PANDIT ( AR ) REVENUE BY : SHRI RAJAT MITTAL (DR) DATE OF HEARING: 16/07/2018 DATE OF PRONOUNCEMENT: 10 /10 /2018 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 12.02.2016 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 44 , MUMBAI, FOR THE ASSESSMENT YEAR 201 1 - 12 , WHEREBY THE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE AN INDIVIDUAL RUNNING A PROPRIETARY CONCERN FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 2,37,371/ - . SINCE, THE CASE WAS SELECTED FOR SCRUTINY, AO ISSU ED NOTICE U/S 143(2) AND 142(1) OF THE ACT .IN RESPONSE TO THE SAID NOTICES AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND SUBMITTED THE DETAILS CALLED FOR. 2 ITA NO. 2981/MUM/2016 ASSESSMENT YEAR: 2011 - 12 3. AS PER THE AIR INFORMATION RECEIVED, ASSESSEE HAD SOLD IMMOVABLE PROPERTY FOR A TOTAL CON SIDERATION OF RS. 70,00,000/ - . ACCORDINGLY, THE AUTHORIZED REPRESENTATIVE WAS ASKED TO EXPLAIN AS TO WHY THE CAPITAL GAIN WAS NOT SHOWN IN THE RETURN OF INCOME. THE AR SUBMITTED THAT THE SAID TRANSACTION HAS TAKEN PLACE ON 31.03.2010 AND THE LONG TERM CAPI TAL GAIN DOES NOT PERTAIN TO THE ASSESSMENT YEAR 2010 - 11. HOWEVER, THE AO REJECTED THE CONTENTION OF THE ASSESSEE AND DETERMINED THE LONG TERM CAPITAL GAIN AT RS. 53,03,390/ - AND ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE CHALL ENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE REJECTED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY AO. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER PASSED BY THE LD. CIT (A). 4 . T HE AS SESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A ) ON THE FOLLOWING EFFECTIVE GROUNDS: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING A.OS ACTION OF TAXING CAPITAL GAIN ON SALE OF PLOTS A T NASIK IN A.Y. 2011 - 12, THOUGH TRANSFER WITHIN THE MEANING OF SECT. 2(47) OF THE INCOME ACT HAS TAKEN PLACE ON 31 ST MARCH 2010 WHICH PERTAINS TO A.Y. 2010 - 11. 2. REASONS GIVEN BY THE LEARNED CIT (A) ERRED IN CONFIRMING A.OS ACTION OF TAXING CAPITAL GAIN ON SALE OF PLOTS AT NASIK IN A.Y. 2011 - 12 THOUGH TRANSFER WITHIN THE MEANING OF SECT 2(470 OF THE INCOME ACT HAS TAKEN PLACE ON 31 ST MARCH 2010 WHICH PERTAINS TO A.Y. 2010 - 11, ARE WRONG, INSUFFICIENT AND CONTRARY TO THE FACTS AND EVIDENCE ON RECORD. 3. WI THOUT PREJUDICE TO ABOVE GROUNDS IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE ACTION OF THE A.O. OF NOT REFERRING THE MATTER UNDER SECTION 50C(2) OF THE I TAX ACT TO THE VALUATION OFFICER. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT (A) HAS WRONGLY CONFIRMED THE ACTION OF AO BECAUSE THE TRANSFER OF SAID PROPERTY 3 ITA NO. 2981/MUM/2016 ASSESSMENT YEAR: 2011 - 12 HAS BEEN TAKEN PLACE ON 31 ST OF MARCH, 2010 WITHIN THE MEANING OF SECTION 2(47) OF THE ACT , I.E. DURING T HE YEAR RELEVANT TO THE ASSESSMENT YEAR 2010 - 11 AND NOT DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. COUNSEL INVITED OUR ATTENTION TO THE COPY OF DEED OF CONVEYANCE FOR PERMANENT SALE DATED 31.03.2010 IN WHICH IT HAS BEEN ME NTIONED IN CLAUSE 4 THAT PHYSICAL AND VACANT POSIT I ON OF THE PLOTS HAVE BEEN HANDED OVER TO THE PURCHASER IN PRESENCE OF THE WITNESSES AND IN CLAUSE 15 IN WHICH IT IS MENTIONED THAT THE PURCHASED HAS PAID RS. 19,00,000/ - VIDE CHEQUE DATED 25.03.2010 AND TH E REMAINING AMOUNT TO BE PAID WITHIN THREE MONTHS. THE LD. COUNSEL FURTHER SUBMITTED THAT THOUGH THE SALE DEED WAS REGISTERED ON 01.04.2010 , BUT THE TRANSFER WITHIN THE MEANING OF SECTION 2 (47) OF THE ACT HAD TAKEN PLACE ON 31.03.2010. THEREFORE, THE CAPITAL GAIN IS NOT TAXABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. COUNSEL FURTHER CONTENDED THAT THE ASSESSEE HAD ALREADY REFLECTED THE SAID INCOME IN ITS RETURN FOR THE ASSESSMENT YEAR 2010 - 11. THE LD. COUNSEL SUBMITTED THE CO PY OF INCOME TAX RETURN FOR THE ASSESSMENT YEAR 2010 - 11 FILED ON 12.03.2014 . FURTHER, T HE LD. COUNSEL RELYING ON THE JUDGMENT OF ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF GURBAX SINGH VS. KARTAR SINGH AND OTHERS 254 ITR 112 (SC) , SUBMITTED THAT WHE N TWO DOCUMENTS ARE EXECUTED ON THE SAME DAY, THE TIME OF THEIR EXECUTION WOULD DETERMINED THE PRIORITY IRRESPECTIVE OF TIME OF THEIR REGISTRATION. THE ONE WHICH IS EXECUTED EARLIER IN TIME WILL PREVAIL OVER THE OTHER EXECUTED SUBSEQUENTLY. THEREFORE, THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION MADE BY THE AO IN THE ASSESSMENT YEAR UNDER CONSIDERATION . 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE FINDINGS OF THE LD. CIT (A) SUBMITTED THAT SINCE THE SALE DEED WAS RE GISTERED ON 1 ST APRIL, 2010 I.E. IN THE FINANCIAL YEAR 2010 - 11, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE MATERIAL ON RECORD. THE CONTENTION O F THE ASSESSEE IS THAT SINCE, THE CAPITAL GAIN PERTAINS TO THE ASSESSMENT YEAR 2010 - 11 AND THE SAME HAS REFLECTED IN THE COMPUTATION 4 ITA NO. 2981/MUM/2016 ASSESSMENT YEAR: 2011 - 12 OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION MADE BY THE AO. WE NOTICE THA T THE AO HAS PASSED THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 18.03.2014 AND AS PER THE COPY OF RETURN FILED BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR 2010 - 11, RETURN FOR THE SAID YEAR WAS FILED ON 12.03.2014. HOWEVER, TH E AO IN ITS ORDER HAS SPECIFICALLY MENTIONED THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11. WE FURTHER NOTICE THAT THE ASSESSEE HAS REFLECTED THE PROFIT ON SALE OF PLOT AMOUNTING TO RS. 70,00,000/ - IN COMPUTATION OF INCOM E FOR THE ASSESSMENT YEAR 2010 - 11 . ON THE OTHER HAND, T HE LD. CIT(A) HAS CONFIRMED THE ASSESSMENT ORDER HOLDING THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE A.Y. 2010 - 11. SINCE, THE AUTHORITIES BELOW HAVE NOT MENTION ED ABOUT THE FATE OF THE RET URN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010 - 11, THE CONTENTION OF THE ASSESSEE CANNOT BE REJECTED . IF THE DEPARTMENT HAS ALREADY ACCEPTED THE PLEA OF THE ASSESSEE IN THE ASSESSMENT ORDER FOR THE A.Y. 2010 - 11 , THE CAPITAL GAIN CANNOT BE TAXED IN THE A.Y . 2011 - 12. UNDER THESE CIRCUMSTANCES THE ENTIRE ISSUE REQUIRES FRESH EXAMINATION BY THE AO.WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER PASSED BY T HE LD. CIT (A) AND REMIT THE ISSUES TO THE FILE OF AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AF TER HEARING THE ASSESSEE IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE. IN THE RESULT, APPEAL FILED BY THE A SSESSEE FOR ASSESSMENT YEAR 2011 - 12 IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER , 2018. SD/ - SD/ - ( B.R. BASKARAN ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 10 / 10 / 2018 ALINDRA, PS 5 ITA NO. 2981/MUM/2016 ASSESSMENT YEAR: 2011 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT .REGISTRAR) , / ITAT, MUMBAI