DCIT, Faridabad V. Sh. Kamal Khandelwal, Faridabad

ITA 318/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2285 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 14-12-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 28-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Cost of acquisition
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI RAJPAL YADAV, JM AND SHRI R.C.SHARMA, A M ITA NO.318/DEL/2009 ASSESSMENT YEAR : 2000-01 INCOME TAX OFFICER, WARD-1(1), FARIDABAD. VS. SHRI KAMAL KHANDELWAL, H.NO.747, SECTOR-15A, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K.GUPTA, SR.DR. RESPONDENT BY : NONE. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 28.11.2008 FOR THE AY 2000-01, IN THE MATTER OF ORD ER PASSED BY THE AO U/S 144 OF THE IT ACT. 2. THE GRIEVANCE OF THE REVENUE PERTAINS TO THE FIN DINGS RECORDED BY THE CIT(A) WHICH WERE ALLEGED TO BE PERVERSE AND CONTRA RY TO THE EVIDENCE AVAILABLE ON RECORD IN RESPECT OF ENHANCED COMPENSATION AND I NTEREST THEREON. 3. THE REVENUE IS ALSO AGGRIEVED FOR DELETING THE A DDITION MADE BY THE AO IN RESPECT OF AMOUNT RECEIVED AS ENHANCED COMPENSATION AND INTEREST THEREON. 4. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSPIT E OF GIVING THE NOTICE, THE BENCH DECIDED TO DISPOSE THE APPEAL AFTER HEARING T HE LEARNED DR AND CONSIDERING MATERIAL PLACED ON RECORD. IN THE ASSESSMENT FRAME D U/S 144, THE AO OBSERVED THAT AS PER INFORMATION RECEIVED FROM HUDA, THE ASSESSEE WAS IN RECEIPT OF ENHANCED COMPENSATION OF RS.21.87 LAKHS. AS THE INCOME WAS NOT DISCLOSED TO THE DEPARTMENT, A NOTICE U/S 148 WAS SENT AFTER TAKING PRIOR APPROVAL OF JOINT ITA-318/D/2009 2 COMMISSIONER. AS NOBODY APPEARED AFTER ISSUE OF NO TICE U/S 148, THE NOTICE WAS SERVED BY AFFIXTURE U/S 282. KEEPING INTO VIEW THE NON-COMPLIANCE OF NOTICE AND NON-COOPERATION FROM THE ASSESSEES SIDE TO COMPLY WITH THE REQUIREMENT OF NOTICE ISSUED U/S 142(1), THE AO FRAMED ASSESSMENT U/S 144 ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. IN THE ASSESSMENT SO FRAMED, THE AMOUNT OF ENHANCED COMPENSATION WAS ADDED AS LONG TERM CAPITAL GAIN AN D INTEREST RECEIVED ON ENHANCED COMPENSATION WAS ALSO ADDED AS INCOME FROM OTHER SOURCES. IN AN APPEAL FILED BY THE ASSESSEE, THE GROUND RAISED WIT H REGARD TO PASSING OF ORDER U/S 144 WITHOUT GIVING OPPORTUNITY WAS NOT PRESSED BY T HE LEARNED AR, THEREFORE THE CIT(A) DECIDED THE ISSUE ON MERITS. IN HIS APPELLA TE ORDER, HE OBSERVED THAT ASSESSEE WAS NOT IN RECEIPT OF ENHANCED COMPENSATIO N OF RS.18.94 LAKHS AND INTEREST OF RS.1.19 LAKHS, BUT THE ACTUAL AMOUNT RE CEIVED BY THE ASSESSEE WAS ONLY RS.1,34,331/-. THE CIT(A) FURTHER STATED THAT THE TAX ON THIS AMOUNT OF RS.1,34,331/-, AS PER LEARNED AR WORKS OUT TO BE RS .76,910/- AND AFTER DEDUCTING COST OF ACQUISITION AT RS.57,421/- FROM THE AMOUNT OF COMPENSATION RECEIVED AT RS.1,34,331/-, THE NET CAPITAL GAIN WORKS AT RS.76, 910/-. BY RECORDING THESE FINDINGS, THE CIT(A) DELETED THE ADDITION MADE BY T HE AO. THERE IS A CLEAR CONTRADICTION BETWEEN THE FINDINGS RECORDED BY THE AO WHICH IS AS PER THE INFORMATION RECEIVED BY THE AO FROM LAND ACQUISITIO N OFFICER, HUDA, FARIDABAD VIDE LIC NO.697/97. THE CIT(A) HAS NOWHERE DISCUSS ED THIS LETTER OF THE LAND ACQUISITION OFFICER, AND BY RELYING ON THE LETTER D ATED 21.5.2003 ISSUED BY THE LAO, HE FOUND THAT ASSESSEE WAS ONLY IN RECEIPT OF RS.1,34,331/-. NEITHER ANY COMMENTS NOR ANY REMAND REPORT WAS CALLED FROM THE AO, IN RESPECT OF DOCUMENTS RELIED ON BY CIT(A) WHICH WERE NOT AVAILABLE BEFORE THE AO. THERE IS CLEAR CONTRADICTION BETWEEN THE AMOUNT OF COMPENSATION AL LEGED TO BE RECEIVED. THE ASSESSEE HAS NOT APPEARED BEFORE THE AO, NOR THE CI T(A) HAS DISCUSSED ABOUT THE INFORMATION RECEIVED BY THE AO ON THE BASIS OF WHIC H ADDITION WAS MADE. 5. THE ISSUE WITH REGARD TO TAXABILITY OF ENHANCED COMPENSATION AND INTEREST THEREON HAS BEEN ELABORATELY DEALT WITH BY THE HON' BLE SUPREME COURT IN THE CASE ITA-318/D/2009 3 OF GHANSHYAM, HUF 2009 TIOL-84-SC-IT, WHEREIN IT WAS HELD THAT ENHANCED COMPENSATION (INCLUDING INTEREST) RECEIVED BY THE A SSESSEE IS LIABLE TO BE TAXED IN THE YEAR OF RECEIPT. BROAD PROPOSITIONS WERE ALSO LAID DOWN WITH REGARD TO TAXABILITY OF SOLATIUM AND INTEREST ON COMPENSATION , ENHANCED COMPENSATION ETC. SUBJECT TO ADJUSTMENT U/S 155(16) LATER ON. 6. IN VIEW OF THE ABOVE, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH IN THE LIGHT OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GHANSHYAM, HUF, DISCUSSED HEREINABOVE. NEE DLESS TO SAY THAT ASSESSEE SHOULD BE GIVEN FULL OPPORTUNITY OF HEARING BEFORE DECIDING THE ACTUAL AMOUNT OF ENHANCED COMPENSATION ALLEGED TO BE RECEIVED BY THE ASSESSEE ALONGWITH THE AMOUNT OF INTEREST THEREON. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 14 TH DECEMBER, 2009. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14.12.2009. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-318/D/2009 4