SANJAY B. PAYMASTER, MUMBAI V. CIT 21, MUMBAI

ITA 3211/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8710 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: HITESH P SHAH
• Keywords: Cost of acquisition
• Section: 143(3); 142(1); 263; 63

Judgement Text

1 ITA NO.3211/MUM/2014 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.3211/MUM/2014 (ASSESSMENT YEAR 2009-10) SHRI SANJAY B PAYMASTER 148-A, 3 RD FLOOR, JAIN SOCIETY SION (W), MUMBAI-22 PAN : AGJPP4603K VS COMMISSIONER OF INCOME-TAX-21, MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI HITESH P SHAH RESPONDENT BY SHRI RAM TIWARI DATE OF HEARING 25-10-2017 DATE OF PRONOUNCEMENT 25-10-2017 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE RAISES THE FOLL OWING GROUNDS OF APPEAL:- I. INVOKING SECTION 263 OF THE ACT, 1961 .1 THE HON. COMMISSIONER ERRED IN INVOKING PROVISIO N OF SECTION 263 OF THE ACT AND HOLDING ORDER US. 143(3) OF THE ACT DATED 31.10.2011 ASSESSED BY JCIT 21(2), MUMBAI AS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE I SSUE OF ALLOWABILITY OF RS. 5,64,165/- WHILE WORKING OUT TAXABLE SHORT T ERM CAPITAL GAIN. 1.2 THE HON. COMMISSIONER ERRED IN INVOKING THE PRO VISION OF SECTION 263OF THE ACT IGNORING THE FACT THAT THE ASSESSEE H AD FILED RELEVANT DETAILS AND SUBMITTED EXPLANATIONS DURING THE COURS E OF ASSESSMENT PROCEEDINGS IN PURSUANCE OF THE NOTICES ISSUED US. 142(1) AS WELL AS U/S.143(2) OF THE ACT AND AFTER C ONSIDERING THE 2 ITA NO.3211/MUM/2014 MATERIALS AND EXPLANATIONS. THE LD. JCIT HAD COME T O DEFINITE CONCLUSION AND ALLOWED THE DEDUCTION OF RS. 5,64,16 5/-. 1.3 RELIANCE IS PLACE ON THE FOLLOWING JUDICIAL PRO NOUNCEMENT. A] CIT V. GABRIAL INDIA LTD., 203 ITR 108 (1993) (BOM). THE ASSESSEE HAD OFFERED THE EXPLANATION THAT THE I SSUE WAS EXAMINED IN DETAILS BY THE ITO. THE ORDER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER BECAUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. THE COUR T OBSERVED THAT WHEN ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VES TED IN HIM IN ACCORDANCE WITH THE LAW AND ARRIVED AT A CONCLUSION , SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOESN'T FEEL SATISFIED WITH THE CONCLU SION. THE COURT HELD THAT IN ORDER TO EXERCISE POWER ULS.263, THE O RDER MUST BE PRESENTED IN MATERIAL BEFORE THE CIT AND IF THAT OR DER WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. B] CIT V . ARVIND .JEWELLER, 259 ITR 502(GUJ.) THE COURT HELD THAT THE ASSESSEE HAD PRODUCED RELEV ANT MATERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICE S ISSUED U/S. 142 (1) AS WELL AS U/S. 143(2) OF THE ACT AND AFTER CON SIDERING THE MATERIALS AND EXPLANATIONS, THE INCOME TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. MERELY BECAUSE THE INCOME-TAX OFFICER HAD TAKEN A PARTICULAR VIEW WITH WHICH THE COMMISSIONER DID N OT AGREE CANNOT FORM THE BASIS FOR AN ACTION U/S. 263 OF THE ACT AN D AS SUCH ORDER OF REVISION WAS NOT JUSTIFIED. THE GUJARAT HIGH COURT APPLIED THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CA SE OF MALABAR INDUSTRIAL CO. LTD. 'S CASE MENTIONED ABOVE AND DEC IDED THE CASE IN FAVOUR OF THE ASSESSEE. CI ANTALA SARI JAYKUNIAR RAVJIBHAI V. CLI 120121 13 5 LTD 506 (RAJKOT) (TRIB.), ROSHAN LAL VEGETABLE PRODUCTS (P) LTD. V. ITO [2012 ] 51 SOT 1 (URO)(ASR.)(TRIB.) FINE JEWELLERY(LNDIA)LTD. V. ACIT [2012] 19 ITR 746 (MUM.)(TRIB.) HELD THAT THE ASSESSING OFFICER MADE PROPER ENQUIRY AND EXAMINED ACCOUNTS, IT COULD NOT BE SAID THAT THERE WAS NON- APPLICATION OF MIND BY HIM. HENCE, THE ACTION U/S 2 63 WAS INVALID. 3 ITA NO.3211/MUM/2014 D] CIT V. DESIGN & AUTOMATION ENGINEERS ( BOMBAY) (P) LTD. 120081 323 LTR 632 (BORN.) ([IC). MANISH KUMAR V. CIT 120121 134 LTD 27 ( INDORE ) (TRIB.) HELD WHERE THE ASSESSING OFFICER EXAMINED ALL THE DETAIL S WITH RESPECT TO ASSESSEE'S CLAIM OF DEDUCTION, THE ORDER COULD NOT BE SAID TO BE ERRONEOUS OR WAS PASSED WITHOUT APPLICATION O F MIND MERELY BECAUSE THE SAME WAS NOT ELABORATE ORDER. E] CIT V . ASHISH RAJPAL 12009 1320 ITR 674 (DELHI) (HC) CIT V. VIKASH POLYMERS 120101194 TAXMAN 57 (DELHI) (HC) WHERE THE ASSESSING OFFICER DURING THE SCRUTINY ASS ESSMENT PROCEEDINGS RAISED A QUERY WHICH WAS ANSWERED BY TH E ASSESSEE TO THE SATISFACTION OF THE ASSESSING OFFICER BUT THE S AME WAS NOT REFLECTED IN THE ASSESSMENT ORDER BY HIM, A CONCLUS ION CANNOT HE DRAWN BY THE COMMISSIONER THAT NO PROPER ENQUIRY WI TH RESPECT TO THE ISSUE WAS MADE BY THE ASSESSING OFFICER, AND EN ABLE HIM TO ASSUME JURISDICTION UNDER SECTION 263 OF THE ACT. F ANIL SHAH V. ACIT 120071 162 TAXMAN 39 (MUM.) (TRIB.) IF THE ASSESSING OFFICER ALLOWS THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF ASSESSEE, ON AN ENQUIRY MADE DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DECISION OF ASSESSIN G OFFICER CANNOT BE HELD TO BE ERRONEOUS, ON GROUND THAT THERE IS NO ELABORATE DISCUSSION IN THAT REGARD IN THE ORDER. IT IS THE P RACTICE THAT WHENEVER ANY CLAIM OF THE ASSESSEE IS ACCEPTED, ASS ESSING OFFICER MAY NOT DISCUSS THE SAME IN HIS ORDER. 2. HOLDING THAT A. 0. FAILED TO ASCERTAIN WHETHER THE DEPOSIT OF RS. 5,64,165/- IS AN ELIGIBLE DEDUCTION WITHIN THE MEANING OF SECTION 48 OF THE ACT. 2.1 WITHOUT PREJUDICE TO WHAT HAS BEEN STATED HEREI NABOVE, THE HON'BLE COMMISSIONER ERRED IN HOLDING THAT RS. 5,64 ,165/- IS NOT AN ELIGIBLE DEDUCTION U/S. 48 OF THE ACT AND CONSEQUEN TLY ORDER U/S. 143(3) OF THE ACT PASSED BY JCIT, 21(2), MUMBAI IS HELD TO ' ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE ON THE ISSUE. 2.2 THE APPELLANT HAS PAID THE SAID AMOUNT OF RS. 5 ,64,165/- AT TIME OF ACQUISITION OF THE PROPERTY FROM THE BUILDER. TH E SAID PAYMENT IS DIRECTLY ATTRIBUTABLE TO THE COST OF ACQUISITION BE ING PART OF THE AGREEMENT AND ADDITIONAL AMOUNT PAYABLE UNDER THE A GREEMENT. 4 ITA NO.3211/MUM/2014 HENCE , THE SAID PAYMENT OF RS. 5,64,165/- IS INSEP ARABLE TO COST OF PROPERTY. IN VIEW THEREOF, IT SQUARELY FALLS UNDER SUB CLAUSE (I) OF SECTION 48 OF THE ACT. FURTHER, THE BENEFIT OF THE SAID PAYMENT HAS BEEN SPECIFICALLY TRANSFERRED UNDER THE SALE AGREEM ENT AND SAME FORMS PART OF THE SALE CONSIDERATION OF THE PROPERT Y. 2.3 THE APPELLANT MADE SUBMISSION ALONGWITH RELEVAN T EVIDENCE IN RESPONSE TO SHOW CAUSE NOTICE ISSUED U/S. 263 DT. 2 7.02.2014. THE HON'BLE COMMISSIONER ERRED IN HOLDING THAT RS. 5,64 ,165/- IS NOT AN ELIGIBLE DEDUCTION U/S. 48 OF THE ACT IGNORING SUBM ISSIONS MADE MATERIALS ON RECORD. 2. WHEN THE MATTER WAS CALLED UP FOR HEARING, THE LD.R EPRESENTATIVE OF THE ASSESSEE SOUGHT PERMISSION TO WITHDRAW THE APPE AL FILED BY THE ASSESSEE. THE LD.DR DID NOT RAISE ANY OBJECTION. THEREFORE, THE PERMISSION SOUGHT FOR TO WITHDRAW THE APPEAL IS HER EBY GRANTED AND THE APPEAL DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2017. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 25TH OCTOBER , 2017 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI