I.T.O. WD 3(1), THANE V. NEVILLE JAMES PAREIRA, THANE

ITA 4876/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71197 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 26-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SRI H.L. KARWA, PRESIDENT, AND SHRI N.K.BILL AIYA, AM ./ I.T.A. NO. 4876/MUM/2012 ( / ASSESSMENT YEAR : 2004-05) INCOME TAX OFFICER, WARD3(1),ROOM NO.3, B- WING, ASHAR IT PARK, WAGLE INDL. ESTATE THANE.400604 / VS. SHRI NEVILLE J.PAREIRA, B-103/104, IMPERIAL ASHAR RESIDENCY GLADRYSS ALVARES ROAD, OFF POKHARAN ROAD NO.2 THANE(W) !' $ ./ PAN : ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( ) / APPELLANT BY : SHRI MANVENDRA GOYAL &''% ( ) / RESPONDENT BY : NONE ( *$ / DATE OF HEARING : 10-09-2013 +, ( *$ / DATE OF PRONOUNCEMENT : 10 -09-2013 -. / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)- 1, THANE, DATED 09.05.2012, PERTAINING TO A.Y.2004-0 5. REVENUE HAS RAISED TWO SUBSTANTIVE GROUNDS OF APPEAL IS AS UNDER:- GROUND OF APPEAL 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, THANE ERRED IN HOLDING THAT THE UNUTILIZED FSI OF THE PROPERTY U NDER SALE NEEDS TO BE CONSIDERED WHILE WORKING FAIR MARKET VALUE OF THE PRO PERTY, IGNORING THE FACT THAT FSI HAS NO ACQUISITION COST AND THERE IS N O DISPUTE ON THIS ISSUE. 2 ITA NO.4876/MUM/2012 SHRI NEVILLE JAMES PAREIRA 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, THANE ERRED IN DELETING THE ADDITION OF RS.25,07,230/- MADE BY P ASSING ORDER U/S154 OF THE I.T. ACT, 1961. 2. IN THIS CASE, THE ASSESSMENT WAS FRAMED U/S 143( 3) OF THE ACT VIDE ORDER DATED 30.1.2006. THE AO SUO MOTO ISSUED NOTICE U/S 154 OF THE ACT STATING THAT THERE IS MISTAKE APPARENT FROM THE REC ORD WHICH NEEDS TO BE RECTIFIED. ACCORDING TO THE AO TWO MISTAKES CREPT UP WHILE FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT. I. THE ASSESSEE HAS ADOPTED COST INFLATION INDEX FOR A .Y. 03-04 AS 475 AS AGAINST 463. II. IN THE VALUATION REPORT DATED 08/04/2003, THE VALUA TION WAS DONE. WHICH INCLUDED VALUATION OF PERMISSIBLE FSI, WHICH A CCORDING TO THE AO IS NOT CORRECT. THE AO WENT ON TO RECTIFY THE MISTAKE S. 3. AGGRIEVED BY THIS ORDER U/S154 ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A). IT WAS STRONGLY CONTENDED THAT ORDER U/S15 4 IS BAD IN LAW. CONSIDERING THE FACT THAT THE ISSUE INVOLVED IS A D EBATABLE ISSUE SUBJECT TO LONG DRAWN PROCESS OF REASONING WHICH CANNOT BE TER MED AS A MISTAKE APPARENT FROM RECORD. AFTER CONSIDERING THE FACTS AND SUBMISSIONS OF THE ASSESSEE, THE CIT(A) GAVE HIS FINDING AT PARA 4 ON PAGE 7 OF ITS ORDER. THE CIT(A) THUS HELD AS UNDER:- I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AN D SUBMISSION OF THE AR. IT IS NOTICE THAT THE REGISTERED VALUER VIDE HIS REPORT D T. 08/04/2003 HAS VALUED THE PROPERTY UNDER CONSIDERATION AS ON 01/04/1981 AT RS.19,44,650/- AND ON THE BASIS OF THIS VALUATION, THE APPELLANT HAD WORK ED OUT THE LONG TERM CAPITAL GAINS AS PER COMPUTATION OF INCOME ENCLOSED ALONGWITH THE RETURN OF INCOME. THE AO WHILE COMPLETING THE ASSESSMENT U/S .143(3) DT.30/102006 HAD CONSIDERED THE LONG TERM CAPITAL GAINS AT RS.76 ,60,162/-AS COMPUTED BY THE APPELLANT WITHOUT DISPUTING THE COST OF ASSET S OLD AS ON 01/04/1981. SINCE THE AO HAD NEITHER EXAMINED NOR DISPUTED THE COST OF ACQUISITION OF THE ASSET SOLD ON FACTS AND LAW DURING THE ASSESSMENT P ROCEEDINGS U/S 143(3), I AM OF THE CONSIDERED OPINION THAT THE VALUATION OF CAPITAL ASSET I.E. THE COST OF ACQUISITION CANNOT BE DISPUTED U/S. 154 OF THE ACT BECAUSE UNDER THIS SECTION PRIMA FACIE MISTAKES CAN ONLY BE RECTIFIED. UNDER SECTION 154 OF THE ACT, THE AO CAN NOT ADJUDICATE UPON THE ISSUES INVOLVING LON G TERM DRAWN RELIED UPON BY THE APPELLANT I.E. T.S. BALARM, ITO VS. VOLKART BROTHERS, 82ITR 50(SC) AND CIT VS. HERO CYCLES PVT. LTD, 228 ITR 463(SC). 3 ITA NO.4876/MUM/2012 SHRI NEVILLE JAMES PAREIRA AGGRIEVED BY THIS FINDING, THE REVENUE IS BEFORE US . THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE AO. IT IS THE SAY OF THE DR THAT THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 154 AS TH ERE WAS MISTAKE APPARENT FROM THE RECORD. PER CONTRA COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE CIT(A). 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES. IT IS NOT IN DISPUTE THAT THE ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT. WHEREIN THE CLAIM OF THE COMPUTATION OF LONG TERM C APITAL GAIN HAS BEEN ACCEPTED BY THE AO BASED ON THE VALUATION REPORT SU BMITTED BY THE ASSESSEE. INVOKING THE PROVISIONS U/S 154 ONLY MEANT CHANGE O F OPINION, THE CIT(A) HAS VERY CORRECTLY GIVEN A FINDING ON FACTS THAT TH E COST OF ACQUISITION CANNOT BE DISPUTED U/S154 OF THE ACT BECAUSE IT DOES NOT A MOUNT TO PRIMA FACIE MISTAKE WHICH CAN BE RECTIFIED. IT IS A SETTLED PR OPOSITIONS OF LAW THAT U/S 154 OF THE ACT, THE AO CANNOT ADJUDICATE UPON THE I SSUES INVOLVING LONG DRAWN PROCESS OF REASONING AND INFERENCES. WE THER EFORE, DO NOT FIND ANY REASON TO INFERENCES WITH THE FINDINGS OF THE CIT(A ). THE APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AC CORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/09/2013 -. ( +, $ /- 10/09/2013 , , ( 0 SD/- (H.L.KARWA) SD/- (N.K.BILLAIYA) HONBLE PRESIDENT ACCOUNTANT MEMBER MUMBAI; /- /DATED : 10 TH SEPTEMBER, 2013. SHEKHAR. P.S. 4 ITA NO.4876/MUM/2012 SHRI NEVILLE JAMES PAREIRA -. -. -. -. ( (( ( &*12 &*12 &*12 &*12 32 * 32 * 32 * 32 * / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 4 ( ) / THE CIT- , MUMBAI. 4. 4 / CIT(A)- , MUMBAI 5. 250 &* , , / DR, ITAT, MUMBAI 6. 06 7 / GUARD FILE. -. -. -. -. / BY ORDER, '2* &* //TRUE COPY// 8 88 8 / 9 9 9 9 : : : : (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI