ITO WD 21(3)(5), MUMBAI V. YOGESH ARUN GAWLI, MUMBAI

ITA 4748/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KUMAR SINGH
• Assessee Lawyers: D K SHIVARAM
• Keywords: Audit objection; Tax effect
• Section: 54; 143(3)

Judgement Text

AAYAK AAYAK AAYAK AAYAKR APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQ R APILAIYA AIQAKRNA N AKRNA N AKRNA N AKRNA NYAAYAPIZ YAAYAPIZ YAAYAPIZ YAAYAPIZ MAMUBA[ MAMUBA[ MAMUBA[ MAMUBA[- -- - MAO MAOMAO MAO. .. . IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUM BAI BEFORE SRI MAHAVIR SINGH, JM AND SRI M BALAGENSH, AM AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SA AAYAKR APILA SAM MM M . / ITA NO.4756/MUM/2017 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2012-13) INCOME TAX OFFICER-21(1)(4), MUMBAI. VS. GEETA AJAY GAWLI, FLAT NO.601, LOKHANDWALA GALAXY, N.M.JOSHI MARG, KABUTARPADA, BYCULLA, MUMBAI ( APILAAQA APILAAQA APILAAQA APILAAQAI II I - -- - / APPELLANT) .. ( P` P`P` P`%YAQAA %YAQAA %YAQAA %YAQAAI II I- -- - / RESPONDENT) PAN NO. AJAPG 8518 L AAYAKR APILA SAM AAYAKR APILA SAM AAYAKR APILA SAM AAYAKR APILA SAM . / ITA NO.4748/MUM/2017 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2012-13) INCOME TAX OFFICER-21(3)(5), MUMBAI. VS. SHRI YOGESH ARUN GAWLI, C.H.S LTD., B.J.MARG, BYCULLA(W), MUMBAI ( APILAAQAI APILAAQAI APILAAQAI APILAAQAI - -- - / APPELLANT) .. ( P`%YAQAAI P`%YAQAAI P`%YAQAAI P`%YAQAAI- -- - / RESPONDENT) PAN NO. AMUPG 2658 L AAYAKR APILA SAM AAYAKR APILA SAM AAYAKR APILA SAM AAYAKR APILA SAM . / ITA NO.4219/MUM/2017 ( INAQA-ARNA BAYA- / ASSESSMENT YEAR 2012-13) SHRI YOGESH ARUN GAWLI, C.H.S LTD., B.J.MARG, BYCULLA(W), MUMBAI VS. INCOME TAX OFFICER- 21(3)(5), MUMBAI. ( APILAAQAI APILAAQAI APILAAQAI APILAAQAI - -- - / APPELLANT) .. ( P`%YAQAAI P`%YAQAAI P`%YAQAAI P`%YAQAAI- -- - / RESPONDENT) PAN NO. AMUPG 2658 L REVENUE BY : SHRI CHAUDHURY ARUN KUMAR SINGH, DR ASSESSEE BY : DR. K.SHIVRAM, SR. ADV. 2 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 DATE OF HEARING: 7..3.2019 DATE OF PRONOUNCEMENT : 7.03- 2019 AADOSA AADOSA AADOSA AADOSA / O R D E R PER MAHAVIR SINGH, JM: ITA NO.4748/MUM/2017 AND ITA NO.4219/MUM/2017 ARE A RISING OUT OF THE SEPARATE ORDERS OF COMMISSIONER OF INCOME TA X (APPEALS)-33, MUMBAI [IN SHORT CIT(A)], IN APPEAL NO. CIT(A)-33/R G.21/248/2015-16 BOTH DATED 12.4..2017. THE ASSESSMENT WAS FRAMED BY THE ITO 21(1)(2) FOR THE A.Y. 2012-13 VIDE ORDER DATED 30.3.2015 UND ER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. ITA NO.4756/MUM/2017 IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI [IN SHORT CIT(A)], IN APPEAL NO. CIT(A)-33/RG.21/250/2015-16 DATED 12.4. .2017. THE ASSESSMENT WAS FRAMED BY THE ITO 21(1)(2) FOR THE A.Y. 2012-13 VIDE ORDER DATED 23.3.2015 UNDER SECTION 143(3) OF THE I NCOME TAX ACT, 1961 (HEREINAFTER THE ACT. ITA NO.4748/MUM/2017 & 4756/MUM/2017: 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE STATE D THAT IN BOTH THE APPEALS FILED BY THE REVENUE, THE TAX EFFECT IS BEL OW THE PRESCRIBED LIMIT OF FILING APPEAL BEFORE THE TRIBUNAL I.E. 20 LACS AS PER CBDT CIRCULAR NO. 3 OF 2018. HE HAS ALSO FILED A COMPUTATION OF TAX W ORKING BEFORE US IN BOTH THE APPEALS, HENCE, HE REQUESTED THAT SINCE THE TAX EFFECT IS BELOW THE LIMIT PRESCRIBED BY THE CBDT, BOTH THE APPEALS BE D ISMISSED AS NOT MAINTAINABLE 4. AFTER HEARING BOTH THE SIDES AND HAVING GONE THR OUGH THE COMPUTATION OF TAX WORKING FILED BY THE LD COUNSEL FOR THE ASSESSEE, WE 3 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 FIND THAT IN ITA NO.4748/MUM/2017, THE TAX EFFECT I S 18,54,478/- AND IN ITA NO.,4656/MUM/2017, THE TAX EFFECT IS 15,37,196/-. WE HAVE GONE THROUGH THE CIRCULAR AND NOTICED THAT THIS CIRCULAR WILL APPLY TO PENDING APPEALS ALSO & FOR THIS REFERENCE IS MADE TO PARA 1 3 OF THE CIRCULAR, WHICH READS AS UNDER: - 13. THIS CIRCULAR WILL APPLY TO SLPS/APPEALS/ CROS S OBJECTIONS/ REFERENCES TO BE FILED HENCEFORTH IN SC/HCS/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIVELY TO PENDING SLPS/ APPEALS/CROSS OBJECTIONS/ REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED . 5. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT TH E REVENUES APPEALS ARE FULLY COVERED BY CBDT CIRCULAR NO. 3 OF 2018 AND THERE IS NO EXCEPTION BROUGHT OUT BY THE REVENUE THAT THESE APPEALS FALLS UNDER ANY OF THE EXCEPTION AS PROVIDED IN PARA 10 W HICH READS AS UNDER: - 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISSUES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LES S THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT: (A) WHERE THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF AN ACT OR RULE IS UNDER CHALLENGE, OR (B) WHERE BOARD'S ORDER, NOTIFICATION, INSTRUCTION OR CIRCULAR HAS BEEN HELD TO BE ILLEGAL OR ULTRA VIRES, OR 4 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 (C) WHERE REVENUE AUDIT OBJECTION M THE CASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR (D) WHERE THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/ BANK ACCOUNTS. 6. WHEN THIS WAS CONFRONTED TO THE LEARNED SR. DEPA RTMENTAL REPRESENTATIVE, HE COULD NOT POINT OUT THAT THESE A PPEALS FALL UNDER ANY OF THE EXCEPTION AS PROVIDED IN CIRCULAR NO. 3 OF 2018. ADMITTEDLY, THE TAX EFFECT IN BOTH THE APPEALS OF REVENUE ARE M UCH BELOW THE PRESCRIBED LIMIT OF FILING APPEAL BEFORE THE TRIBUN AL I.E. 20 LACS AS PER CBDT CIRCULAR NO. 3 OF 2018. IN VIEW OF THE ABOVE, BOTH THE APPEALS OF REVENUE ARE DISMISSED AS WITHDRAWN IN VIEW OF CIRCU LAR NO 3 OF 2018. 7. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ITA NO.4219/MUM/2017: A.Y. 2012-13 8. IN THIS APPEAL, THE ONLY ISSUE IS AGAINST THE OR DER OF THE CIT(A) CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U NDER SECTION.54 OF THE ACT FOR AN AMOUNT OF 10 LAKHS DEPOSITED UNDER THE CAPITAL GAIN SCHEME IN S.B. ACCOUNT MAINTAINED WITH BANK OF MAHA RASHTRA, JACOB CIRCLE BRANCH, MUMBAI. FOR THIS, THE ASSESSEE HAS RAISED FOLLOWING THRE E GROUNDS: . 1. THE LEARNED COMMISSIONER OF INCOME TAX APPEAL HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE APPELLANT CLAIM U/S.54 OF RS. 10,00,000/- DEPOSITED UNDER CAPITAL GAIN SCHEME IN SAVING BANK ACCOUNT MAINTAINED WITH BANK OF MAHARASHTRA, JACOB CIRCLE BRANCH, MUMBAI 2. THE LEARNED COMMISSIONER OF INCOME TAX CONFIRM ED THE DISALLOWANCE OF RS. 10,00,000/- DEPOSITED UNDER CAP ITAL GAIN SCHEME IN SAVING BANK ACCOUNT MAINTAINED WITH BANK OF MAHARAS HTRA, JACOB CIRCLE BRANCH. MUMBAI ON THE GROUND THAT THE SAME H AS NOT BEEN KEPT UNDER CAPITAL GAIN SCHEME L 5 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 3. THE BANK HAS DULY CERTIFIED THAT THE AMOUNT OF 10,00,000/-- HAS BEEN DEPOSITED UNDER CAPITAL GAIN SCHEME IN SAVING BANK ACCOUNT BY ISSUING A CERTIFICATE AND KEEPING BALANCE OF RS.10, 00,000/- IN THE SAVING BANK ACCOUNT. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS AR E THE ASSESSING OFFICER NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAS SOLD LAND AT PISOLI, PUNE FOR A TOTAL CONSIDERA TION OF 6 CRORES ON 31.10.2011 AND THE ASSESSEE WAS 1/5 TH CO-OWNER OF THE LAND. ACCORDINGLY, THE ASSESSEE RECEIVED 1.20 CRORES OF THE TOTAL CONSIDERATION AND THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION.54 EC FOR AN AMOUNT OF 1.10 CRORES OUT OF LONG TERM CAPITAL GAIN OF 1,18,48502/-. THE ASSESSEE CLAIMED THAT HE HAS INVESTED LONG TERM CAPITAL GAIN OF 50,00,000/-IN REC BOND ON 31.5.2012 AND FURTHER SUM OF 50,00,000/- IN CAPITAL GAIN SCHEME IN THE ACCOUNT OPENED WITH BANK OF MAHARASHTRA, JAC OB CIRCLE BRANCH, MUMBAI. IT WAS ALSO CLAIMED THAT BALANCE 10 LAKHS WAS KEPT IN S.B. ACCOUNT MAINTAINED WITH BANK OF MAHARASHTRA, JACOB CIRCLE BRANCH, MUMBAI ON 30.7.2012. THE ASSESSEE CLAIMED DEDUCTI ON UNDER SECTION.54 OF THE ACT IN RESPECT TO AMOUNT INVESTED IN CAPITAL GAIN SCHEME AND AMOUNT DEPOSITED IN S.B.0 ACCOUNT MAINTAINED W ITH BANK OF MAHARASHTRA, JACOB CIRCLE BRANCH, MUMBAI. THE ASSE SSING OFFICER ALLOWED THE CLAIM OF DEDUCTION IN RESPECT TO LONG T ERM CAPITAL GAIN INVESTED IN REC BOND OF 50 LAKHS AND FURTHER 50 LAKHS KEPT IN CAPITAL GAIN ACCOUNT SCHEME. HOWEVER, THE ASSESSING OFFICE R DISALLOWED BALANCE 10 LAKHS KEPT IN S.B. A/C WITH BANK OF MAHARASHTRA, JACOB CIRCLE BRANCH, MUMBAI. ACCORDING TO THE ASSESSING OFFICER , THE ASSESSEE HAS KEPT THIS AMOUNT OF 10 LAKHS IN S.B. ACCOUNT INSTEAD OF CAPITAL GAIN SCHEME ACCOUNT AND HENCE, DENIED CLAIM OF DEDUCTION UNDER SECTION.54 OF THE ACT OF 10 LAKHS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEF ORE THE TRIBUNAL. 6 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 10. BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER BUT THE CIT(A) CONFIRM ED THE ACTION OF THE ASSESSING OFFICER. 11. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BE FORE THE TRIBUNAL. 12. DURING THE COURSE OF HEARING, LD SR. COUNSEL FO R THE ASSESSEE, DR. SHIVRAM ONLY ARGUED THAT THE ASSESSEE HAS SUBSTANTI ALLY COMPLIED WITH THE PROVISIONS OF SECTION 54 OF THE ACT BY KEEPING THE AMOUNT OF 10 LAKHS IN BANK OF MAHARASHTRA, JACOB CIRCLE BRANCH, MUMBA I., LD COUNSEL DREW OUR ATTENTION TO PAGES 19-21 OF ASSESSEES PAPER BO OK, WHEREIN, THIS AMOUNT OF 10 LAKHS WAS KEPT IN S.B. ACCOUNT NO.20023376229 MAINTAINED WITH BANK OF MAHARASHTRA, JACOB CIRCLE B RANCH, MUMBAI. HE ALSO REFERRED TO BANK RECEIPT ISSUED VIDE LETTER DA TED 27.6.2013 AND ALSO COPY OF BANK ACCOUNT, WHICH IS OPENED UNDER CAPITAL GAIN ACCOUNT SCHEME ON 30.7.2012. LD COUNSEL STATED THAT THIS AMOUNT O F 10 LAKHS KEPT IN S.B. ACCOUNT ALTHOUGH NOT UNDER THE CAPITAL GAIN ACCOUNT SCHEME BUT SUBSTANTIAL COMPLIANCE OF PROVISIONS OF SECTION 54 HAS BEEN MADE FOR MAKING INVESTMENT IN RESIDENTIAL HOUSE BY THE ASSES SEE BY WITHDRAWING THE SALE PROCEEDS AND HENCE, THE ASSESSEE SHOULD BE ALLOWED THE BENEFIT UNDER THIS PROVISION. WHEN THIS WAS POINTED OUT TO SR. DEPARTMENTAL REPRESENTATIVE HE STATED THAT THIS ISSUE CAN BE VER IFIED BY THE ASSESSING OFFICER AND MATTER CAN BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 13. WE NOTED THAT THE ASSESSEE HAS NOT MADE DEPOSIT WITH CAPITAL GAIN DEPOSIT ACCOUNT SCHEME FOR THIS AMOUNT OF 10 LAKHS BUT CLAIM MADE BEFORE US IS THAT HE HAS MADE INVESTMENT FOR THIS A MOUNT IN PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSE WITHIN T HE TIME LIMIT PRESCRIBED UNDER SECTION.54 OF THE ACT. AS THIS NEEDS VERIFIC ATION AT THE END OF THE ASSESSING OFFICER, WE RESTORE BACK THIS ISSUE BACK TO HIS FILE FOR LIMITED PURPOSE OF VERIFICATION, WHO WILL CONSIDER THE CLAI M AFTER TAKING EVIDENCE 7 ITA NO.4756/4748/4219/MUM/2017 ASSESSMENT YEAR 2012-13 FROM THE ASSESSEE AND THEN DECIDE THE ISSUE ACCORDI NGLY. HENCE, THIS APPEAL IS RESTORED BACK TO THE FILE OF THE AO . 14. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED AND APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7- - 03- 2019. A AA AADOSA KI ADOSA KI ADOSA KI ADOSA KI GAAO GAAOGAAO GAAOYANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK YANAA KULAO MAO IDNAMK 15. 03.2019 KAO KI KAO KI KAO KI KAO KI GA GAGA GA SD/- SD/- (M BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 7-03- 2019 BKP/SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//