G IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 5592/ MUM/2016 ( / ASSESSMENT YEAR : 2010-11) GLOBEX TRAVELS & EXCHANGE LTD., B-105, PRANAV COMMERCIAL COMPLEX, M G ROAD, MULUND (W), MUMBAI 400080. / V. D.C.I.T. CIRCLE 9(3)(2), 418, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCG4727C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI PARESAH SHA H ,CA REVENUE BY : SHRI V. VIDHYADHAR (DR) / DATE OF HEARING : 05.07.2017 / DATE OF PRONOUNCEMENT : 18.08.2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 5592/MUM/2016, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 28.01.20 16 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 16, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2010-11, APPELLATE PR OCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM THE ASSESSMENT ORDER DATED 2 9.01.2015 PASSED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 147 R.W.S. 143((3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED TH E ACT). ITA 5592/MUM/2016 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN IGNORING MATERIAL AVAILABLE WITH HIM AND DISALLOWED EXPENSES IGNORING THE NATURE THEREOF, AUDIT REPORT, BOOKS OF ACCOUNTS AND SUBMIS SIONS FILED. 2. 0N THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER AND LEARNED CIT(A ) ERRED IN TREATING SALES CONSIDERATION OF PROPERTY AT ARBITRA RY HIGHER VALUE BY 33 %. 3. 0N THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN ADDING S AME INCOME TWICE - INTEREST INCOME FIRST BY TREATING BUSINESS LOSS AS NIL (WHEREIN INTEREST INCOME IS REFLECTED) AND THEN BY CONSIDERING UNDER THE HEAD 'INCOME FROM OTHER SOURCES' . 4. 0N THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN DENYING CLAIM OF CARRY FORWARD OF UNABSORBED BUSINESS LOSS OF PRIOR YEAR ( AY 2009-10) OF RS. 8,76,014/-. 3. AT THE OUTSET, WE FIND THAT THIS APPEAL IS FILED LATE BY 146 DAYS BY THE ASSESSEE, BEYOND THE TIME PERIOD STIPULATED FOR FIL ING OF APPEAL U/S 253(3) OF THE 1961 ACT . THE ASSESSEE HAS DULY FILED THREE AF FIDAVITS ALL DATED 19.06.2017, ONE BY SH. SANJAY N. HAMLAI, DIRECTOR O F THE ASSESSEE COMPANY AND OTHER TWO FROM THE EMPLOYEES OF THE ASSESSEE CO MPANY I.E. SHRI ANIL KADAM, MANAGER AND MRS. SHIVANI SUNIL SAWANT , CHI EF/ SENIOR ACCOUNTANT OF THE ASSESSEE COMPANY , WHEREBY THE ASSESSEE HAS EXPLAINED THE REASONS FOR DELAY IN FILING OF APPEAL LATE BY 146 DAYS AND PRAY ING FOR CONDONATION OF DELAY IN FILING APPEAL LATE BY 146 DAYS. IT IS AVERRED IN THE AFORE-STATED AFFIDAVIT(S) FILED BY THE ASSESSEE THAT THE DELAY IN FILING APPE AL LATE BY 146 DAYS HAD MAINLY OCCURRED DUE TO FAILURE ON THE PART OF THE A DVOCATE, SH KIRAN SAVAR AND CA SH. RATNAPARKHI TO WHOM THE ASSESSEE ENTRUST ED THE ASSIGNMENT OF ITA 5592/MUM/2016 3 FILING THIS APPEAL WITH THE TRIBUNAL AND IT IS CLAI MED THAT THE ASSESSEE BONAFIDELY TRUSTED AND RELIED UPON THEM THAT THEY B EING PROFESSIONAL WILL DISCHARGE THEIR DUTIES DILIGENTLY AFTER ACCEPTING P ROFESSIONAL ASSIGNMENT. THE ASSESSEE HAS PLACED LARGE NUMBER OF EMAIL COMMUNICA TIONS RUNNING INTO 144 PAGES TO MAKE ITS POINT THAT THE FAULT WAS ON ACCO UNT OF THESE ERRING PROFESSIONALS AND THE ASSESSEE WAS NOT AT FAULT FOR THIS DELAY. IT IS ALSO BROUGHT ON RECORD THAT ULTIMATELY THE ASSESSEE DISP ENSED WITH THE SERVICES OF THESE PROFESSIONALS AND A NEW PROFESSIONALS HAVE NO W TAKEN OVER TASK OF FULFILLING AND DISCHARGING THE PROFESSIONAL OBLIGAT IONS OF COMPLYING WITH AUDITS AND TAXATION MATTER. THUS, THE ASSESSEE PRAYED FOR CONDONATION OF DELAY OF 146 DAYS IN FILING OF THIS APPEAL WITH THE TRIBUNAL BEYOND TIME STIPULATED U/S 253(3) OF 1961 ACT. THE SAID THREE AFFIDAVITS AND L ARGE NUMBER OF EMAIL COMMUNICATIONS RUNNING INTO 144 PAGES ARE PLACED ON RECORD IN FILE.THE ASSESSEE HAS ALSO RELIED UPON DECISION OF HONBLE S UPREME COURT IN THE CASE OF T. ASHOK PAI V. CIT (2007) 292 ITR 11(SC) AND AL SO DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SOMANY EVERGREEN K NITS LIMITED IN APPEAL NO. 1332 OF 2011. THUS, IN NUTSHELL IT IS PRAYED TH AT THE ASSESSEE CANNOT BE PENALIZED FOR THE FAULT OF LEGAL EXPERTS WHO WERE E NTRUSTED WITH PROFESSIONAL ASSIGNMENTS AND ON WHOM THE ASSESSEE TRUSTED AND AC TED ON THEIR ADVISE. ON THE OTHER HAND, LD DR OPPOSED THE PRAYER OF CONDONA TION OF DELAY BY THE ASSESSEE AND SUBMITTED THAT THIS APPEAL IS FILED LA TE BY 146 DAYS AND THE SAME MAY NOT BE ADMITTED IN THE INTEREST OF JUSTICE . AFTER HEARING BOTH THE PARTIES AND CONSIDERING MATERIAL ON RECORD WE HAVE NO REASON TO DOUBT AND SUSPECT THE CLAIM, INTENTION AND BONAFIDE OF THE AS SESSEE WHICH IS MANIFEST WRIT LARGE FROM THE LARGE NUMBER OF EVIDENCES PLAC ED ON RECORD , WHICH IN OUR CONSIDERED VIEW IN THE INSTANT CASE BASED ON FACTUA L MATRIX AS IS EMERGING FROM RECORDS IS A SUFFICIENT CAUSE WHICH PREVENTED THE ASSESSEE FROM FILING THIS APPEAL IN TIME BEFORE THE TRIBUNAL AS STIPULAT ED AND MANDATED U/S 253(3) OF 1961 ACT AND UNDER THESE CIRCUMSTANCES KEEPING I N VIEW SUBSTANTIAL INTEREST OF JUSTICE VIS--VIS TECHNICALITIES, WE AR E INCLINED TO CONDONE DELAY OF ITA 5592/MUM/2016 4 146 DAYS IN FILING THIS APPEAL BY THE ASSESSEE BEYO ND THE TIME STIPULATED U/S 253(3) OF 1961 ACT, MORE-SO THE REVENUE HAS NOT BRO UGHT ANY MATERIAL ON RECORD TO CONTROVERT STAND AND CLAIMS OF THE ASSESS EE. THUS, WE ADMIT THIS APPEAL AND PROCEED TO DECIDE THIS APPEAL ON MERITS. WE ORDER ACCORDINGLY. 4. AT THE TIME OF OPENING OF THE ARGUMENT ITSELF BY LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE BENCH, IT WAS MADE CLEAR BY LEA RNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE DOES NOT WISH TO PERSUE GROUND NO 3 AND 4 RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TR IBUNAL WHICH MAY BE DISMISSED AS NOT PRESSED. THE LEARNED DR SUBMITTED THAT REVENUE HAS NO OBJECTION IF GROUND NO 3 AND 4 RAISED BY THE ASSESS EE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL IS DISMISSED AS NOT PRESSED. AFTE R HEARING BOTH THE PARTIES, WE DISMISS GROUND NO 3 AND 4 RAISED BY THE ASSESSEE IN MEMO OF APPEAL FILED WITH THE TRIBUNAL AS NOT BEING PRESSED. WE ORDER AC CORDINGLY. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DID NOT FILE RETURN OF INCOME FOR THE A.Y. 2010-11 RELEVANT TO PREVIOUS YE AR 2009-10 UNDER CONSIDERATION. IT WAS NOTICED BY THE AO FROM THE A IR, CIB AND 26AS THAT THE ASSESSEE HAS ENTERED INTO CERTAIN FINANCIAL TRANSAC TION TO THE TUNE OF RS. 1,95,87,192/- DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR, DETAILED AS HEREUNDER:- SR NO FIN. YEAR INFORMATION CODE AMOUNT (RS) INFORMATION DESCRIPTION 1 2009-10 CIB-403 50,00,000 TIME DEPOSIT EXCEEDING R S. 2,00,000/- WITH BANKING COMPANY 2 2009-10 AIR-007 1,44,40,147 SOLD IMMOVABLE PROPER TY VALUED RS. 30,00,000/- OR MORE 3 2009-10 TDS-94A 47,045 TDS RETURN INTEREST OTHER THAN SECURITIES (SECTION 194A) ITA 5592/MUM/2016 5 4 2009-10 TDS-94I 1,00,000 TDS RETURN RENT (SECTIO N 194I) TOTAL 1,95,87,192 THE ASSESSEE WAS CONFRONTED WITH THE ABOVE INFORMAT ION BY THE AO VIDE LETTER DATED 23-07-2013 AND THE ASSESSEE WAS ASKED BY THE AO TO FURNISH RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 BUT THE ASSE SSEE DID NOT RESPONDED TO SAID NOTICE. THESE INFORMATION LED TO FORMATION OF BELIEF BY THE AO THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT WITHI N THE MEANING OF SECTION 147 OF THE 1961 ACT. THE AO ISSUED STATUTOR Y NOTICE U/S 148 OF THE 1961 ACT TO THE ASSESSEE AFTER RECORDING REASONS AN D THE NOTICE U/S 148 OF THE 1961 ACT WAS DULY SERVED ON THE ASSESSEE. THE A SSESSEE IN RESPONSE THEREOF VIDE LETTER DATED 18.03.2014 FILED COPIES O F RETURN OF INCOME FILED ON 03-12-2013 ALONG WITH COMPUTATION OF INCOME AND FIN ANCIALS. THE ASSESSEE REQUESTED AO TO SUPPLY REASONS FOR REOPENING OF THE ASSESSMENT , WHICH WAS PROVIDED TO THE ASSESSEE BY THE AO ON 22.04.2014. T HE REOPENING OF THE ASSESSMENT WAS DONE BY THE AO IN THE INSTANT CASE W ITHIN FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. BEFORE PROCEEDINGS FURTHER, WE WOULD LIKE TO CLARIF Y THAT SINCE THE ASSESSEE HAS NOT PRESSED GROUND NO 3 AND 4 WHICH STOOD DISMI SSED BY US VIDE THIS ORDER IN PRECEDING PARAS , WE WILL RESTRICT AND CO NFINE OUR DISCUSSIONS IN THIS ORDER IN SUBSEQUENT PARAS TO THE DISPUTED ISSUE ON LY WHICH THE ASSESSEE HAS RAISED DURING THE HEARING BEFORE THE BENCH. IT IS N OW ALSO AGREED BY BOTH THE PARTIES THAT REVENUE HAS NOT COME IN APPEAL BEFORE THE TRIBUNAL AGAINST THE PART RELIEF GRANTED BY LEARNED CIT(A) VIDE HIS APPE LLATE ORDERS DATED 28.01.2016. IT WAS OBSERVED BY THE A.O. DURING THE COURSE OF RE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE COMPANY IS STATED TO BE ENGAGED I N THE BUSINESS OF PURCHASE AND SALE OF FOREIGN EXCHANGE AND ALSO IN T HE BUSINESS OF TOURS AND TRAVELS BOOKING ETC. FROM THEIR BRANCHES AT SAHAR , PUNE, HYDERABAD, SURAT, ITA 5592/MUM/2016 6 MULUND ETC. IT WAS OBSERVED BY THE AO THAT ALL THE BUSINESSES OF THE ASSESSEE HAD BEEN CLOSED AROUND JUNE-JULY OF 2007 ITSELF. T HE ASSESSEE CLAIMED CERTAIN EXPENSES UNDER THE HEAD ADMINISTRATIVE EXPE NSES TO THE TUNE OF RS. 9,90,825/-, WHICH IS PRESENTLY IN DISPUTE BEFORE U S TO THE LIMITED EXTENT OF UPHOLDING OF DISALLOWANCE OF REPAIR AND MAINTENANCE EXPENSES TO THE TUNE OF RS. 2,50,000/- BY THE LEARNED CIT(A). THE A.O. DIS ALLOWED THE SAID EXPENSES AS THE ASSESSEE HAS NOT CONDUCTED ANY BUSINESS ACTI VITY AS IT IS ADMITTED BY THE ASSESSEE THAT THE ASSESSEES BUSINESS WAS CLOSE D ON OR AFTER AROUND JUNE/JULY 2007. THUS, KEEPING IN VIEW THE FACT THA T THE BUSINESS OF THE ASSESSEE WAS LYING CLOSED, THE A.O. DISALLOWED THE AMOUNT OF RS. 12,81,775/- CLAIMED BY THE ASSESSEE AS BUSINESS LOSS FOR THE YEAR UNDER CONSIDERATION UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION . THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS SHO WN SHORT TERM CAPITAL GAIN OF RS. 89,10,079/-. THE ASSESSEE HAS SHOWN NE T CONSIDERATION OF RS. 1,14,89,260/- AGAINST WHICH THE ASSESSEE HAD CLAIME D PURCHASE COST OF RS. 25,79,181/-. THE A.O. OBSERVED THAT THE ASSESSEE H AS SOLD THE PROPERTY FOR RS. 1,30,56,550/- , WHEREAS THE READY RECKONER RATE OF THE SAID PROPERTY AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF THE STATE GOVERNMENT FOR THE SAID PROPERTY WAS RS. 1,44,40,147/-. THE A.O. WHIL E COMPUTING CAPITAL GAINS, ADOPTED THE READY RECKONER VALUE OF RS. 1,44,40,147 /- AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF THE STATE GOVERNMENT AS FULL VALUE OF CONSIDERATION (MARKET RATE OF THE PROPERTY AS REFER RED BY THE AO ) AS MANDATED U/S 50C OF THE 1961 ACT ( AS ACTUAL SALE C ONSIDERATION WAS LOWER THAN READY RECKONER RATE) AND COMPUTED THE SHORT TE RM CAPITAL GAIN AT RS. 1,18,60,966/- , AS AGAINST SHORT TERM CAPITAL GAIN OF RS. 89,10,079/- OFFERED FOR TAXATION BY THE ASSESSEE IN RETURN OF INCOME FI LED WITH THE REVENUE. THE AO OBSERVED THAT THE ASSESSEE HAS NOT BROUGHT ANY M ATERIAL ON RECORD TO PROVE AS TO WHY THE PROPERTY WAS SOLD FOR A VALUE L ESS THAN PREVAILING MARKET VALUE OF THE PROPERTY. THE AO PASSED THE ASSESSMENT ORDER DATED 29-01-2015 ITA 5592/MUM/2016 7 U/S 143(3) R.W.S. 147 OF THE 1961 ACT, WHEREIN, INT ER-ALIA, ABOVE TWO ADDITIONS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE FOR T HE IMPUGNED ASSESSMENT YEAR. 6. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29-01-20 15 PASSED BY THE A.O. U/S 143(3) R.W.S. 147 OF THE 1961 ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) . WITH RESPECT TO THE DISALLOWANCE BY THE AO OF BUSINESS LOSS OF RS.12,81,775/- CLAIMED BY THE ASSESSEE , THE LD. CIT(A) ALLOWED THE STATUTORY EXPENSES BEING PROFESSIONAL FEES TO THE T UNE OF RS. 2,35,000/- AND PROPERTY TAXES TO THE TUNE OF RS. 2,90,698/- SINCE THESE WERE CONSIDERED NECESSARY TO MAINTAIN THE ESTABLISHMENT. THUS AN A MOUNT OF RS. 2,90,698/- AND RS. 2,35,000/- ON ACCOUNT OF PROPERTY TAX AND P ROFESSIONAL FEES RESPECTIVELY PAID BY THE ASSESSEE WERE TREATED AS C OMPULSORY STATUTORY EXPENSES BY LEARNED CIT(A) AND THE ADDITION MADE BY THE A.O. WERE DELETED BY LEARNED CIT(A) TO THAT EXTENT . AS ADMITTED BY BOTH THE RIVAL PARTIES , REVENUE HAS NOT FILED AN APPEAL WITH THE TRIBUNAL AGAINST T HE RELIEF GRANTED BY LEARNED CIT(A). THE EXPENDITURE INCURRED ON ACCOUNT OF DONA TIONS, DEPRECIATIONS, REPAIR AND MAINTENANCE AMOUNTING TO RS. 5,95,531/- (RS. 65,000/- + RS. 2,80,531/- + RS.2,50,000/- ) WERE NOT ALLOWED BY TH E LD. CIT(A). WHILE DISALLOWING REPAIRS AND MAINTENANCE EXPENSES TO THE TUNE OF RS.2,50,000/- , LEARNED CIT(A) HELD THAT THESE ARE CAPITAL EXPENDIT URE INCURRED BY THE ASSESSEE AS ALSO NO DETAILS AS TO NATURE OF WORK AN D MODE OF PAYMENT WERE FURNISHED BY THE ASSESSEE. THE ASSESSEE HAD SUBMITT ED ONE RECEIPT ISSUED BY MR B K SHAH FOR AN AMOUNT OF RS.2,50,000/- WHICH DI D NOT HAD ANY PROPER DETAILS AS IT WAS ONLY MENTIONED IN THE INVOICE WO RK DONE AT YOUR PREMISES TILING WORK, WRITING WORK , FLOORING WORK- RS.2,50, 000/- . THE ASSESSEE HAD SUBMITTED THAT IT ONLY WANT TO AGITATE THE DISALLOW ANCE OF RS.2,50,000/- BY LEARNED CIT(A) CLAIMED TO BE INCURRED TOWARDS REPAI RS AND MAINTENANCE AND REST OF DISALLOWANCE CONFIRMED BY LEARNED CIT(A) IS ACCEPTED . ITA 5592/MUM/2016 8 SIMILARLY, WITH RESPECT TO THE SHORT TERM CAPITAL G AIN ON SALE OF PREMISES, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O. BY INVOKING PROVISIONS OF SECTION 50C OF THE 1961 ACT WHEREIN READY RECKONER RATE ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF STATE GOVERNMENT WAS ADOPTED BY THE AO AS FULL VALUE OF CONSIDERATION FOR COMPUTING SHORT TERM CAP ITAL GAINS , AS READY RECKONER RATE AS ADOPTED BY STAMP DUTY VALUATION AU THORITIES WAS HIGHER THAN ACTUAL SALES CONSIDERATION . THE ASSESSEE PLEADED BEFORE LEARNED CIT(A) THAT THE MATTER CONCERNING THE VALUATION OF PROPERTY MAY BE REFERRED TO DVO AS MANDATED U/S 50C(2) OF THE 1961 ACT AS THE AUTHORIT IES HAVE ADOPTED THE STAMP DUTY VALUE WHICH WAS HIGHER THAN THE FAIR MA RKET VALUE OF THE PROPERTY. IT WAS PLEADED BEFORE LEARNED CIT(A) THAT STAMP DUTY VALUATION AUTHORITIES ERRED IN DETERMINING READY RECKONER RAT E AS THEY ADOPTED SAME RATE FOR GROUND FLOOR AND BASEMENT WHICH LED TO HIG HER READY RECKONER RATE BEING ADOPTED FOR STAMP DUTY PURPOSES. THE LEARNED CIT(A) REJECTED THE REQUEST OF THE ASSESSEE TO REFER THE MATTER OF VALU ATION OF PROPERTY TO DVO AS CONTEMPLATED U/S 50C(2) OF THE 1961 ACT BECAUSE THE ASSESSEE NEVER REQUESTED THE AO TO REFER THE MATTER OF VALUATION T O DVO AND SUCH REQUEST AT APPELLATE STAGE FOR THE FIRST TIME CANNOT BE ALLOWE D, VIDE APPELLATE ORDER DATED 28.01.2016 PASSED BY LEARNED CIT(A). 7. AGGRIEVED BY THE APPELLATE ORDER DATED 28.01.201 6 PASSED BY LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. COUNSEL FOR THE ASSESSEE ARGUED BEFORE U S THAT THE VOUCHERS WERE FILED BEFORE THE LD. CIT(A) AS AN ADDITIONAL E VIDENCE TO SUBSTANTIATE THE REPAIRS AND MAINTENANCE EXPENSES OF RS. 2,50,000/- CLAIMED BY THE ASSESSEE. IT IS SUBMITTED THAT THE REMAND REPORT WAS NOT CALL ED BY LEARNED CIT(A) FROM A.O. AS REQUIRED UNDER RULE 46A OF THE INCOME-TAX R ULES, 1962 BEFORE DISALLOWING THE REPAIR AND MAINTENANCE EXPENDITURE OF RS. 2.50 LACS . THUS, THE LD. COUNSEL FOR THE ASSESSEE PRAYED THAT THE IS SUE WITH RESPECT TO ITA 5592/MUM/2016 9 DISALLOWANCE OF REPAIR AND MAINTENANCE EXPENSES OF RS 2,50,000/- MAY BE SET ASIDE AND RESTORED FOR DE-NOVO DETERMINATION OF THE ISSUE AND THE ASSESSEE WILL PRODUCE ALL THE NECESSARY DETAILS FOR DECIDING THE ISSUES AFRESH WHICH CAN BE ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW. T HE SECOND GROUND WHICH THE ASSESSEE WISH TO AGITATE RELATES TO ADOPTION O F READY RECKONER RATE AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF THE STATE GOVERNMENT AS FULL VALUE OF CONSIDERATION BY THE AUTHORITIES BELOW FOR COMPUTING SHORT TERM CAPITAL GAINS BY INVOKING PROVISIONS OF SECTION 50C OF THE 1961 ACT, WHEREIN IT WAS SUBMITTED BEFORE US THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY FOR AN AMOUNT OF RS. 1.30 CRORES , WHILE THE READY RECK ONER RATE AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF THE STATE GOVER NMENT WAS RS. 1,44,40,147/- WHICH WAS ADOPTED BY THE A.O. AS FU LL VALUE OF THE CONSIDERATION OF THE SAID PROPERTY FOR COMPUTING C APITAL GAINS BY INVOKING PROVISIONS OF SECTION 50C OF THE 1961 ACT, AS PROP ERTY WAS SOLD FOR RS. 1.30 CRORES WHICH WAS LOWER THAN READY RECKONER RATE OF RS. 1.44 CRORES. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSSEE HAS MADE REQUEST BEFORE LEARNED CIT(A) TO REFER THE MATTER T O DVO FOR VALUATION OF THE PROPERTY BY INVOKING PROVISIONS OF SECTION 50C(2) O F THE 1961 ACT BUT THE SAID REQUEST WAS REJECTED BY LEARNED CIT(A) ON THE GROUN DS THAT THE ASSESSEE DID NOT MADE THE REQUEST BEFORE THE AO DURING ASSESSMEN T PROCEEDINGS AND SUCH REQUEST CANNOT BE MADE AT APPELLATE STAGE. IT WAS PRAYED THAT THE MATTER MAY BE SET ASIDE AND RESTORED FOR DE-NOVO DETERMINATION OF THE ISSUE ON MERITS IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2) WHEREI N REFERENCE BE ALLOWED TO BE MADE TO DVO. 9. THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) HAD A LLOWED THE STATUTORY EXPENSES INCURRED BY THE ASSESSEE. THE OTHER BUSIN ESS EXPENDITURE WERE DISALLOWED BY THE LD. CIT(A). NO VOUCHERS WERE FUR NISHED BY THE ASSESSEE BEFORE LEARNED CIT(A) FOR VERIFICATION W.R.T. DISAL LOWANCE OF REPAIR AND MAINTENANCE EXPENSES . IT WAS SUBMITTED THAT IN AN Y CASE THE ASSESSEE WAS ITA 5592/MUM/2016 10 NOT CARRYING ON ANY BUSINESS SINCE JUNE/JULY 2007 A ND THESE EXPENSES CANNOT BE ALLOWED. IT WAS ALSO SUBMITTED THAT THE REVENUE IS NOT IN APPEAL AGAINST THE RELIEF GRANTED BY THE LD. CIT(A). THE L EARNED DR FAIRLY STATED THAT THE MATTER W.R.T. ADOPTION OF FULL VALUE OF CONSIDE RATION OF THE PROPERTY SOLD MAY BE SET ASIDE AND RESTORED TO THE AO FOR MAKING REFERENCE TO DVO FOR COMPUTING FAIR MARKET VALUE OF THE PROPERTY , AS IS CONTEMPLATED U/S 50C(2) OF THE 1961 ACT. 10. IN THE REJOINDER, THE LD. COUNSEL SUBMITTED THA T THE ASSESSEE HAD SUBMITTED VOUCHERS BEFORE LEARNED CIT(A) AS AN ADD ITIONAL EVIDENCES TO SUBSTANTIATE REPAIR AND MAINTENANCE EXPENSES OF RS. 2,50,000/- , HENCE, THE MATTER NEEDS TO BE RESTORED TO THE FILE OF THE A.O. FOR VERIFICATION AS LEARNED CIT(A) DID NOT FOLLOWED RULE 46A OF THE 1962 RULES BY NOT FORWARDING THE SAME TO THE AO FOR HIS VERIFICATION AND EXAMINATION OF THE ADDITIONAL EVIDENCES AND SUBMISSION OF REMAND REPORT. 11. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE REA SSESSMENT PROCEEDINGS WERE INITIATED BY REVENUE IN THE CASE OF THE ASSESS EE AND THE ASSESSMENT WAS RE-OPENED BASED ON THE INFORMATION WHICH THE A.O. OBSERVED FROM THE AIR, CIB AND 26AS THAT THE ASSESSEE HAD UNDERTAKEN FINA NCIAL TRANSACTIONS TO THE TUNE OF RS. 1,95,87,192/- WHICH ARE DETAILED IN PRE CEDING PARAS OF THIS ORDER. THE SAID RE-OPENING OF THE ASSESSMENT WAS DONE BY R EVENUE WITHIN FOUR YEARS FROM THE END OF ASSESSMENT YEAR. THE ASSESSEE HAS C LAIMED CERTAIN EXPENSES UNDER THE HEAD ADMINISTRATIVE AND OTHER EXPENSES , WHICH INCLUDED REPAIRS AND MAINTENANCE EXPENSES TO THE TUNE OF RS. 2,50,00 0/- AND THE SAME WAS DISALLOWED BY THE AO AS THE ASSESSEES BUSINESS STO OD CLOSED SINCE JUNE/JULY 2007 AND ALSO NO DETAILS WERE FURNISHED BY THE ASSE SSEE. THE LEARNED CIT(A) ALSO DISALLOWED REPAIR AND MAINTENANCE EXPENSES TO THE TUNE OF RS. 2,50,000/- BY HOLDING THAT THESE ARE CAPITAL EXPEND ITURE INCURRED BY THE ITA 5592/MUM/2016 11 ASSESSEE AS ALSO NO DETAILS AS TO NATURE OF WORK AN D MODE OF PAYMENT WERE FURNISHED BY THE ASSESSEE. THE LEARNED CIT(A) OBSER VED THAT THE ASSESSEE HAD SUBMITTED ONE RECEIPT ISSUED BY MR B K SHAH FOR AN AMOUNT OF RS.2,50,000/- WHICH DID NOT HAD ANY PROPER DETAILS AS IT WAS ONLY MENTIONED IN THE INVOICE WORK DONE AT YOUR PREMISES TILING WORK, WRITING WORK , FLOORING WORK- RS.2,50,000/- .THE ASSESSEE HAD CLAIMED TO HAVE FI LED ADDITIONAL EVIDENCES BEFORE LEARNED CIT(A) WHICH WERE NOT FORWARDED BY L EARNED CIT(A) TO THE AO FOR EXAMINATION AND VERIFICATION BEFORE ADJUDICATIN G APPEAL AND NO REMAND REPORT WAS CALLED BY LEARNED CIT(A) FROM AO AS REQU IRED U/R 46A OF THE 1962 RULES. IN THE INTEREST OF JUSTICE AND FAIR PLAY, W E DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR DE NOVO DET ERMINATION OF THE ISSUE ON MERITS AFTER CONSIDERING THE ADDITIONAL EVIDENCES A ND SUBMISSIONS OF THE ASSESSEE IN ACCORDANCE WITH LAW. THE ASSESSEE IS D IRECTED TO PRODUCE ALL RELEVANT EVIDENCES/ EXPLANATIONS BEFORE THE AO TO S UPPORT ITS CONTENTIONS , WHICH SHALL BE ADMITTED BY THE AO IN THE INTEREST O F JUSTICE AND ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO SAY T HAT THE AO SHALL PROVIDE SUFFICIENT AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN AC CORDANCE WITH LAW. WE ORDER ACCORDINGLY. WITH RESPECT TO THE SHORT TERM CAPITAL GAIN EARNED BY THE ASSESSEE ON SALE OF PROPERTY, THE A.O. HAD ADOPTED READY RECKONER RATE AS ADOPTED BY THE STAMP DUTY VALUATION AUTHORITIES OF THE STATE GOVERNMENT AS FULL VALUE OF THE CONSIDERATION OF THE PROPERTY SOLD FOR COMPUTING CA PITAL GAINS AS THE READY RECKONER RATE OF RS. 1,44,40,147/- WAS HIGHER THAN ACTUAL SALE CONSIDERATION OF RS. 1,30,56,550/- BY INVOKING PROVISIONS OF SECT ION 50C OF THE 1961 ACT. THE ASSESSEE HAS DISPUTED THE READY RECKONER RATE A S ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF STATE GOVERNMENT BECAUSE T HE SAID AUTHORITIES ADOPTED THE SAME RATE FOR BASEMENT AND GROUND FLOOR WHICH LED TO HIGHER READY RECKONER RATE. THE ASSESSEE INVOKED PROVISION S OF SECTION 50C(2) OF THE ITA 5592/MUM/2016 12 1961 ACT FOR MAKING REFERENCE TO DVO BUT THE SAID C LAIM WAS MADE BEFORE LEARNED CIT(A) FOR THE FIRST TIME WHICH THE LEARNED CIT(A) REJECTED AS THE ASSESSEE DID NOT RAISE THE SAID CLAIM BEFORE THE AO . IN OUR CONSIDERED VIEW CLAIM OF THE ASSESSEE TO MAKE REFERENCE TO DVO FOR DETERMINING FAIR MARKET VALUE OF THE PROPERTY AS CONTEMPLATED U/S 50C(2) OF THE 1961 ACT CAN BE RAISED AT AN APPELLATE STAGE AS TAXES ARE REQUIRED TO BE COMPUTED IN ACCORDANCE WITH AND AUTHORITY OF LAW. SECTION 50C(2 ) AND 50C(3) OF THE 1961 ACT CLEARLY ALLOWS THE REFERENCE TO DVO IF THE ASSE SSEE DISPUTE READY RECKONER AS ADOPTED BY STAMP DUTY VALUATION AUTHORITIES OF T HE STATE GOVERNMENT , THE ASSESSEE HAS CHALLENGED THE READY RECKONER RATES BY GIVING COGENT REASONS DETAILED ABOVE. IN OUR CONSIDERED VIEW, THIS ISSUE ALSO NEEDS TO BE SET ASIDE AND RESTORED BACK TO THE FILE OF A.O. FOR DE-NOVO D ETERMINATION OF THE ISSUE ON MERITS , THE AO SHALL REFER THE MATTER TO THE DVO F OR DETERMINING FAIR VALUE OF MARKET AS CONTEMPLATED U/S 50C(2) AND 50C(3) OF THE 1961 ACT , WHEREIN THE AO SHALL COMPUTE SHORT TERM CAPITAL GAINS ARISING F ROM SALE OF PROPERTY AFTER CONSIDERING VALUATION REPORT OF DVO. THE ASSESSEE I S DIRECTED TO PRODUCE ALL RELEVANT EVIDENCES/ EXPLANATIONS BEFORE THE AO AS W ELL BEFORE DVO TO SUPPORT ITS CONTENTIONS , WHICH SHALL BE ADMITTED BY THE AO /DVO IN THE INTEREST OF JUSTICE AND ADJUDICATED ON MERITS IN ACCORDANCE WIT H LAW. NEEDLESS TO SAY THAT THE AO/DVO SHALL PROVIDE SUFFICIENT AND ADEQUA TE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 5592/MUM/2016 FOR ASSESSMENT YEAR 2010-11 IS ALLOWED FOR STATISTICAL PURPOSE. ITA 5592/MUM/2016 13 ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST 2017. # $% &' 18.08.2017 ( ) SD/- SD/- (C N PRASAD) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 18.08.2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI C BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI