CHARLOTTE G. YADAV, MUMBAI V. ITO 22(1)(3), MUMBAI

ITA 477/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93327 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2015
• Court: TRIBUNAL
• Department Lawyers: S K JANGRE
• Assessee Lawyers: A K GHOSH
• Keywords: Capital asset; Opportunity of being heard; Principle of natural justice; Application of stay; Additional evidence; Cost of acquisition
• Section: 80C; 143(3); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO. 477/M/2015 (AY:2011 - 2012 ) CHARLOTTE G. YADAV, PLOT NO.346 B, 2 ND FLOOR, AMEYA BUILDING, BANDRA KHAR LINKING ROAD, KHAR (W), MUMBAI 400 052. / VS. INCOME TAX OFFICER 22(1)(3), 3 RD FLOOR, PIRAMAL CHAMBERS, MUMBAI 400 052. ./ PAN : ABQPC5445A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A/.K. GHOSH, AR / RESPONDENT BY : SHRI S.K. JANGRE, DR / DATE OF HEARING : 21.07.2015 / DATE OF PRONOUNCEMENT :29 .07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 20.1.2015 IS AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 8.12.2014 FOR THE ASSESSMENT YEAR 2011 - 2012. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT (A) ERRED IN PASSING THE IMPUGNED ORDER, WHICH IS ILLEGAL, BAD IN LAW OR OTHERWISE VOID FOR WANT OF JURISDICTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF DISALLOWING COST OF ACQUISITION OF RS. 62,500/ - TOWARDS TRANSFER FEES PAID TO THE COOPERATIVE HOUSING SOCIETY IN THE FORM OF CONTRIBUTION TOWARDS REPAIR FUND FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAIN. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF DISALLOWING COST OF IMPROVEMENT OF RS. 68,000/ - INCURRED DURING THE FINANCIAL YEAR 2003 - 2004 FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAIN. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF DISALLOWING COST OF IMPROVEMENT OF RS. 8,80,000/ - INCURRED DURING THE FINANCIAL YEAR 2005 - 06 FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GA IN. 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF DISALLOWING COST OF TRANSFER OF RS. 2,65,000/ - TOWARDS TRANSFER FEES PAID TO THE COOPERATIVE HOUSING SOCIETY IN THE FORM OF CONTRIBUT ION TOWARDS REPAIR FUND FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAIN. 2 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) ERRED IN CONFIRMING THE AOS ACTION OF NOT ALLOWING THE INDEXATION BENEFIT TO REGISTRATION FEES OF RS. 30,400/ - AND BROKERAGE OF RS. 93,000/ - WHICH FORM PART OF COST OF ACQUISITION OF CAPITAL ASSET. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED TO HOLD THAT THE APPELLANT IS NOT ENTITLED TO GET EXEMPTION U/S 54 OF THE ACT. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN NOT ALLOWING THE DEDUCTION IN RESPECT OF INTEREST PAID ON HOUSING LOAN (RELATING TO RY 2003 - 04 TO 2010 - 2011) WHICH IS OTHERWISE ALLOWABLE AS DEDUCTION IN COM PUTING THE LONG TERM CAPITAL GAIN. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 50,941/ - AFTER CLAIMING DEDUCTION OF RS. 1,11,477/ - U/S 80C OF THE ACT. AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 28,54,921/ - . IN THE ASSESSMENT, AO MADE CERTAIN DISALLOWANCES / ADDITIONS NAMELY; (I) DISALLOWANCE ON ACCOUNT OF COST OF IMPROVEMENT RS. 62,500/ - ; (II) RS. 68,000/ - WAS DISALLOWED ON ACCOUNT OF REPAIRS FOR THE FY 2003 - 2004; (III) DISALLOWANCE ON ACCOUNT OF COST OF IMPROVEMENT IN FY 2004 - 05 RS. 8,80,000/ - ; (IV) DISALLOWANCE ON ACCOUNT OF TRANSFER EXPENSES OF RS. 2,65,000/ - ; (V) DEDUCTION U/S 54 AMOUNTING TO RS. 25 LAKHS; (VI) DISALLOWANCE ON ACCOUNT OF TRANSFER FEES OF RS. 25,000/ - AND (VII) DISALLOWANCE OF RS. 1 LAKH U/S 80C ON ACCOUNT OF REPAYMENT OF HOUSING LOAN PRINCIPAL AMOUNT. AGGRIEVED WITH THE SAID ADDITIONS, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) PARTLY ALLOWED THE A LLOWED THE APPEAL. AGGRIEVED AND DISSATISFIED WITH THE DECISION OF THE CI T (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THIS IS A CASE WHERE THE STAY APPLICATION WAS REJ ECTED AND EARL Y HEARING WAS GRANTED BY THE TRIBUNAL . THEREFORE, THE APPEAL IS KEPT FOR HEARING TODAY. IN THE ASSESSMENT, AO DID NOT ALLOW THE COST OF ACQUISITION / IMPROVEMENT ON ONE SIDE AND BENEFIT OF INDEXATION AND CLAIM OF DEDUCTION U/S 54 OF THE ACT ON THE OTHER SIDE. FURTHER, LD COUNSEL FOR THE ASSES SEE BROUGHT OUR ATTENTION TO 2 PAPER BOOKS FILED BEFORE US AND DEMONSTRATED THAT THESE PAPER BOOKS CONTAIN THE ADDITIONAL EVIDENCES . HE READ OUT THE RELEVANT PRAYER FOR ADMITTING OF THE SAID 3 ADDITIONAL EVIDENCES AN D REMAND THE MATTER TO THE AO. LD COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT T HE ASSESSEE WAS PREVENTED BY A S UFFICIENT CAUSE IN NOT FILING THE RELEVANT BILLS / VOUCHERS BEFORE THE LOWER AUTHORITIES. THEREFORE, LD COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ADDITIONAL EVIDENCES MAY BE ADMITTED AND THE ISSUES MAY BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. REFERRING TO EACH OF THE SAID EVIDENCES, LD COUNSEL FOR THE ASSESSEE SUBMITTED THEY CONSIST OF SUPPORTING BILLS TO STRENGTHEN THE CLAI M OF EXPENDITURE ON COST OF IMPROVEMENT OF THE ASSET. IN THE ASSESSMENT, AO DENIED THE SAID CLAIM AND MADE ADDITION. 5. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND OPPOSED DUTIFULLY THE LD ARS PRAYER FOR ADMITTING SAID DOCUMENTS AND REMANDING THE MATTER TO THE FILE OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE SAID 2 PAPER BOOKS , WE FIND THE DOCUMENTS PLACED AT PAGES 62 TO 231 OF THE PAPER BOOK CONSTITUTE THE ADDITIONAL EVIDENCES . THESE EVIDENCES DIRECTLY RELATE TO THE COST OF IMPROVEMENT AND OTHERS AND THEY ARE RELEVANT FOR VARIOUS GROUNDS RAISED IN THE APPEAL . IN OUR OPINION, ADMITTIN G THESE EVIDENCES SHALL BE IN THE INTEREST OF ADMINISTRATION OF JUSTICE. FURTHER, WE FIND THAT THE SAID EVIDENCES ARE REQUIRED TO BE FAVOURABLY CONSIDERED BY THE AO AFTER DUE PROCESS OF LAW. CONSIDERING THE SAME, WE ARE OF THE OPINION THE ADDITIONAL EVID ENCES SHOULD BE ADMITTED. THE ISSUES RAISED IN THE APPEAL ARE CONNECTED. ACCORDINGLY, CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE, WE REMAND THE MATTER TO THE FILE OF THE AO FOR ADJUDICATING THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION THE SAID ADDITIONAL EVIDENCES. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, ALL THE GROUNDS RAISED BY THE ASSESSEE , SINCE INTERCONNECTED, ARE ALLOWED FOR STATISTICAL PURPO SES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 29 TH JULY, 2015. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKRA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 29 .7 .2015 4 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI