Shri Nitinkumar M. Thaker, Ahmedabad V. The Income Tax Officer, Ward-14(1), Ahmedabad

ITA 3561/AHD/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0732 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: BHAVIK J SHAH
• Keywords: Rectification of order
• Section: 154

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 3561/AHD/2015 ( ASSESSMENT YEAR : 2008-09) NITINKUMAR M THAKER. B-1/10, PARAGI APARTMENT, P&T COLONY ROAD, VASNA, AHMEDABAD / VS. INCOME TAX OFFICER WARD 14(1), AHMEDABAD ./ ./ PAN/GIR NO. : AGIPT4831E ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BHAVIK J. SHAH, A.R. / RESPONDENT BY : SHRI ALBINUS TIRKEY, SR. D.R. DATE OF HEARING 25/09/2018 !'# / DATE OF PRONOUNCEMENT 04/10/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-5, AHMEDABAD (CIT(A) IN SHORT), DATED 0 8.10.2015 ARISING IN THE RECTIFICATION ORDER DATED 07.04.2014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 154 OF THE INCOME TAX ACT, 19 61 (THE ACT) ITA NO. 3561/AHD/15 [NITINKUMAR M THAKER VS. ITO] AY 2008-09 - 2 - CONCERNING RECTIFICATION OF INTIMATION UNDER S.143( 1) OF THE ACT DATED 23.09.2010 RELATING TO ASSESSMENT YEAR 2008-09. 2. BY WAY OF ITS GROUNDS OF APPEAL, THE ASSESSEE HAS IMPUGNED THE ACTION OF THE REVENUE FOR DENIAL OF RELIEF ON ACCOU NT OF TAXABILITY OF INTEREST ON BELATED COMPENSATION RECEIVED FROM LAND ACQUISITION BY THE GOVERNMENT AND CONSEQUENT DENIAL OF REFUND OF TDS D EDUCTED ON INTEREST SO RECEIVED. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE RECEIVED CERTA IN COMPENSATION IN A LAND ACQUISITION MATTER VIDE COURT ORDER DATED 13 TH MAY, 2005. PURSUANT TO THE AFORESAID COURT ORDER, THE ASSESSEE RECEIVED INTEREST ON THE COMPENSATION RECEIVED BELATEDLY. THE LUMPSUM I NTEREST RECEIVED OF RS.3,21,278/- PERTAINED TO 18 YEARS BEGINNING FR OM 14.12.1991 TO 31.12.2007. THE LEARNED AR SUBMITTED THAT INTEREST OF RS.15,363/- ONLY RELATES TO THE YEAR UNDER QUESTION AND THE RES T OF THE INTEREST BELONGS TO THE EARLIER YEAR WHERE THE INCOME OF THE ASSESSEE WAS BELOW TAXABLE LIMIT. THE LEARNED AR POINTED OUT THAT THE ASSESSEE HAS WRONGLY INCLUDED THE ENTIRE INTEREST OF 18 YEARS IN THE RETURN OF INCOME FILED BY IT, WHICH WAS PROCESSED UNDER S.143 (1) OF THE ACT AND A TAX DEMAND OF RS.97,100/- WAS RAISED ON THE ASSES SEE INCLUDING INTEREST OF RS.24,468/-. AS OPPOSED TO THIS, WHEN THE INTEREST ACCRUED OF RS.15,363/- ONLY IS TAKEN INTO CONSIDERATION AGA INST RS.3,21,278/-, THE ASSESSEE WILL BE ENTITLED TO SUBSTANTIAL REFUND OF TAX AS AGAINST THE DEMAND ON THE ASSESSEE. THE LEARNED AR SUBMITTED T HAT AS PER SECTION 45 OF THE ACT, THE INTEREST ON LAND ACQUISITION IS REQUIRED TO BE ASSESSED ON ACCRUAL BASIS AND NOT ON RECEIPT BASIS IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F K.S. KRISHNA RAO VS. CIT 181 ITR 408 (SC). THE LEARNED AR THERE AFTER REFERRED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ITA NO. 3561/AHD/15 [NITINKUMAR M THAKER VS. ITO] AY 2008-09 - 3 - SATISH KUMAR AGARWAL JUDGMENT DATED 08.11.2011 FOR THE PROPOSITION THAT RECTIFICATION UNDER S.154 OF THE ACT IS PERMIS SIBLE IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT WHICH IS BINDING ON EVERY COURT AND AUTHORITY BELOW. THE LEARNED AR ACCORDI NGLY CONTENDED THAT THE ORDER PASSED UNDER S.154 OF THE ACT AND TH E CONSEQUENT APPELLATE ORDER THEREON, NOT BEING IN TUNE WITH THE BINDING DECISION OF THE HONBLE SUPREME COURT SUFFERS FROM MANIFEST ERR OR AND THUS REQUIRES TO BE REVERSED. 4. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE CIT(A) AND SUBMITTED THAT THERE IS NO ERROR APPAREN T FROM RECORD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CONTROVERSY RELATES TO CORRECTION OF MISTAKE UNDER S.154 OF THE ACT ON ACCOUNT OF WRONG DECLARATION OF INTEREST INCOME OF THE EARLIER YEARS DURING THE YEAR FOR TAXATION. IT IS THE CASE OF TH E ASSESSEE THAT IT HAS WRONGLY OFFERED TOTAL INTEREST OF RS.3,21,278/- PER MEATING OVER 18 YEARS IN THIS YEAR AS AGAINST THE CORRECT ACCRUAL C ONCERNING ASSESSMENT YEAR AMOUNTING TO RS.15,363/-. THIS HAS RESULTED I N EXCESS BURDEN OF TAX IN CONTRAVENTION OF THE MANDATE OF THE HONBLE SUPREME COURT IN THE CASE OF K.S. KRISHNA RAO (SUPRA). A PERUSAL OF THE DECISION OF THE HONBLE SUPREME COURT SHOWS THAT INTEREST ON COMPEN SATION AWARDED UNDER LAND ACQUISITION ACT CANNOT BE TAXED ALL IN A LUMP-SUM ON THE DATE ON WHICH THE COURT PASSES AN ORDER. IT HAS TO BE SPREAD OVER ON AN ANNUAL BASIS RIGHT FROM THE DATE OF DELIVERY OF POS SESSION. THIS BEING SO, AN INCORRECT ADMISSION OR ACQUIESCENCE CANNOT B E THE FOUNDATION FOR AN ASSESSMENT WHERE THE INCOME IS RETURNED UNDE R AN ERRONEOUS IMPRESSION OR MISCONCEPTION OF LAW. THUS, THE INCO ME ASSESSED AND TAX LIABILITY DETERMINED THEREON SUFFERS FROM APPAR ENT ERROR IN CONTRADICTION WITH LAW LAID DOWN BY THE HONBLE SUP REME COURT. THE AFORESAID ERROR THUS IS SUSCEPTIBLE TO RECTIFICATIO N UNDER S.154 OF THE ITA NO. 3561/AHD/15 [NITINKUMAR M THAKER VS. ITO] AY 2008-09 - 4 - ACT. THEREFORE, THE ORDER OF THE CIT(A) AND THE AO UNDER S.154 OF THE ACT IS SET ASIDE AND CANCELLED. THE AO IS CONSEQUE NTLY DIRECTED TO GRANT RELIEF IN RESPECT OF INTEREST PERTAINING TO E ARLIER YEARS AND INCLUDE ONLY THE INTEREST RECEIVED ON COMPENSATION PERTAINING TO ASSESSMENT YEAR IN QUESTION. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 04/10/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 04/10/2018