CANARY HOSPITALITY P.. LTD, MUMBAI V. PR CIT 9, MUMBAI

ITA 3064/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9240 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 28-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H N SINGH LD DR
• Assessee Lawyers: VIRAG SHAH LD
• Keywords: Corroborative evidences; Assessment record
• Section: 143(3); 263

Judgement Text

ITA NO 3064/MUM/2017 CANARY HOSPITALITY PRIVATE LIMITED ASSESSMENT YEAR 2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 3064/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) CANARY HOSPITALITY PRIVATE LIMITED C/O THAR & CO., CAS 2 ND FLOOR, CAPRI BUILDING ANANT KANEKAR MARG, BANDRA (EAST) MUMBAI-400 051 / VS. PRINCIPAL COMMISSIONER OF INCOME TAX-9 214, 2 ND FLOOR AAYKAR BHAVAN M.K.ROAD MUMBAI 400 020 ! ./ ./PAN/GIR NO. AADCC-3072-G ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : VIRAG SHAH, LD. AR REVENUE BY : H.N.SINGH, LD. DR (CIT) / DATE OF HEARING : 27/09/2017 / DATE OF PRONOUNCEMENT : 04/10/2017 ITA NO 3064/MUM/2017 CANARY HOSPITALITY PRIVATE LIMITED ASSESSMENT YEAR 2012-13 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2012-13 CONTESTS INVOCATION OF REVISIONAL JURISDICT ION U/S 263 BY LD. PRINCIPAL COMMISSIONER OF INCOME-TAX-9, MUMBAI [PCI T], VIDE ORDER NO. CIT-9/263/CANARY 2016-17 DATED 29/03/2017. THE ASSESSMENT U/S 143(3) WAS FRAMED BY LD. INCOME TAX OFFICER-9(2)(2), MUMBAI ON 19/03/2015. 2. THE FACTS LEADING TO THE SAME ARE THAT THE A SSESSEE, BEING RESIDENT CORPORATE ASSESSEE DERIVING INTEREST INCOME WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 19/03/2015 AT RS.1,75,840/- AS A GAINST RETURNED LOSS OF RS.16,97,207/- FILED BY THE ASSESSEE ON 28/ 09/2012. 3.1 SUBSEQUENTLY, THE SAID ASSESSMENT WAS SUBJECTE D TO EXERCISE OF REVISIONAL JURISDICTION U/S 263 BY LD. PCIT VIDE SHOW CAUSE NOTICE DATED 23/02/2017 ON THE PREMISES THAT THE ASSESSEE SOLD A FLAT NO. 11 AT NEW TWILIGHT COOPERATIVE HOUSING SOCIETY LIMITED, 15 TH ROAD, BANDRA WEST, MUMBAI-400052 VIDE AGREEMENT DATED 15/11/2011 WHICH WAS ACQUIRED BY THE ASSESSEE VIDE OF DEED OF TRANSFER DATED 18/0 6/2009. HOWEVER, THE RESULTANT CAPITAL GAIN OF RS.40,34,797/- WAS NOT REFLECTED BY THE ASSESSEE IN THE RETURN OF INCOME AND HENCE THE QUAN TUM ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE WITHIN THE MEANING OF SECTION 263 OF THE INCOME TAX ACT, 1961. 3.2 THE ASSESSEE PLEADED THAT THE RESULTANT CAPITAL GAIN WAS NIL DUE TO INTEREST COST PAID BY THE ASSESSEE AGAINST THE S AME AND THEREFORE, THE ITA NO 3064/MUM/2017 CANARY HOSPITALITY PRIVATE LIMITED ASSESSMENT YEAR 2012-13 3 SAME WAS NOT REFLECTED IN THE COMPUTATION OF INCOME . IT WAS FURTHER CONTENDED THAT THE DETAILS OF INTEREST CLAIMED WERE DISCUSSED ORALLY WITH LD. AO DURING QUANTUM ASSESSMENT PROCEEDINGS WHICH WAS ALLOWED AFTER DUE VERIFICATION BY LD. AO AND THEREFORE, REV ISION OF ORDER U/S. 263 WAS NOT WARRANTED FOR. 3.3 HOWEVER, LD. PCIT NOTED THAT THE RELEVANT DETAI LS THEREOF WERE NOT AVAILABLE IN THE ASSESSMENT RECORDS AND THE ISSUE W AS NOWHERE DISCUSSED BY LD. AO IN THE ASSESSMENT ORDER. IT WAS FURTHER NOTED THAT THE EVIDENCES OF PAYMENT OF INTEREST WERE NOWHERE F URNISHED BY THE ASSESSEE. FINALLY, NOT CONVINCED WITH ASSESSEES SU BMISSIONS, LD. PCIT SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO REFRAME THE SAME AFRESH. AGGRIEVED BY THE SAID ACTION U/S 263, THE A SSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR] REITERATING TH E CONTENTIONS AS RAISED BEFORE LD. PCIT, SUBMITTED THAT THE RELEVANT DETAILS WERE FURNISHED DURING ASSESSMENT PROCEEDINGS AND THE CLA IM WAS ALLOWED BY LD. AO AFTER DUE VERIFICATION AND THEREFORE, EXERCI SE OF REVISIONAL JURISDICTION WAS BAD IN LAW. 5. PER CONTRA , LD. DR PLACED RELIANCE ON THE STAND OF LD. PCIT A ND CONTENDED THAT RELEVANT DETAILS WERE NOWHERE PRODUC ED BY THE ASSESSEE AND THE LD. AO FAILED TO ASSESS THE CAPITAL GAIN EA RNED BY THE ASSESSEE AND THEREFORE, THE ONLY COURSE AVAILABLE TO THE REV ENUE WAS REVISIONAL JURISDICTION U/S 263 AN THEREFORE, THE EXERCISE OF POWER WAS PERFECTLY VALID. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND PERUSED RELEVANT MATERIAL ON RECORD. FIRST OF ALL, A PERUSA L OF QUANTUM ITA NO 3064/MUM/2017 CANARY HOSPITALITY PRIVATE LIMITED ASSESSMENT YEAR 2012-13 4 ASSESSMENT ORDER DATED 19/03/2015 REVEALS THAT THE ISSUE OF CAPITAL GAINS EARNED BY ASSESSEE IS NOWHERE DISCUSSED BY LD. AO I N THE SAID ORDER. THE LD. AR, HIMSELF, HAS ADMITTED THAT CAPITAL GAIN WAS NOT REFLECTED EITHER IN THE RETURN OF INCOME OR COMPUTA TION OF INCOME. EVEN OTHERWISE, WE HAVE OBSERVED THE SAME UPON PERUSAL O F DOCUMENTS PLACED BEFORE US. THE LD. AR HAS PRODUCED A LETTER DATED 17/12/2014 TO CONTEND THAT COMPLETE DETAIL OF COMPUTATION OF CAPI TAL GAIN AND INTEREST COST WAS PROVIDED DURING ASSESSMENT PROCEEDINGS. HO WEVER, UPON COMPARISON WITH ORIGINAL ASSESSMENT RECORDS PRODUCE D BEFORE US BY THE REVENUE, WE FIND DIFFERENCE IN THE LETTER PRODUCED BEFORE US BY LD. AR AND THE LETTER FOUND IN THE ASSESSMENT RECORDS AND THEREFORE, NO RELIANCE COULD BE PLACED ON THE SAME. PRIMA FACIE , THE ONLY DOCUMENTS PRODUCED BY THE ASSESSEE QUA THE TRANSACTION ARE AGREEMENT OF PURCHASE AND SALE VIDE LETTER DATED 10/11/2014. HOWEVER, THE DETAILS OF INTEREST AND SUPPORTING EVIDENCES ARE NOWHERE FURNISHED BY THE A SSESSEE. THEREFORE, ON THE TOTALITY OF ABOVE FACTS, WE CONCU R WITH THE STAND OF REVENUE THAT LD. AO COMPLETELY MISSED OUT THE SAID ISSUE DURING QUANTUM ASSESSMENT PROCEEDINGS AND RIGHTLY BEEN SUB JECTED TO REVISIONAL JURISDICTION U/S. 263. 7. AT THIS STAGE, WE ARE REQUIRED TO EXAMINE WHETHE R THE TWIN CONDITIONS VIZ. ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE FULFILLED OR NOT AND THE SAME, IN THE PRESENT C ASE, HAS PRIMA FACIE BEEN FULFILLED AND THEREFORE, WE UPHELD THE INVOCAT ION OF REVISIONAL JURISDICTION U/S 263 BY LD. PCIT AND HENCE, NO HESI TATION IN DISMISSING ASSESSEES APPEAL. 8. RESULTANTLY, THE ASSESSEES APPEAL STANDS DISMIS SED. ITA NO 3064/MUM/2017 CANARY HOSPITALITY PRIVATE LIMITED ASSESSMENT YEAR 2012-13 5 ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04.10.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. $- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI