MANGAL S. DAKI, MUMBAI V. CIT (A)-II, THANE

ITA 5609/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9524 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 27-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KISHORE K PODDAR
• Keywords: Cost of acquisition; Fair market value; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI F BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI RAJENDRA SINGH, AM & SHRI VIJAY PAL RA O, JM ITA NO. 5608/MUM/2009 (ASST YEAR 2005-06 ) SHRI PARAG S DAKI WAGHBIL, KASARVADAVALI THANE (W) 400 601 PAN NO. ANJOD4508L VS THE INCOME TAX OFFICEDR(HQ)CIB) PUNE (APPELLANT) (RESPONDENT) & ITA NO. 5609/MUM/2009 (ASST YEAR 2005-06 ) SHRI MANGAL S DAKI WAGHBIL, KASARVADAVALI THANE (W) 400 601 PAN NO. ABAPD7970K VS THE INCOME TAX OFFICEDR(HQ)CIB) PUNE (APPELLANT) (RESPONDENT) ASSESSEE BY SH KISHORE K PODDAR REVENUE BY SH MANOJ KUMAR DT.OF HEARING 27 TH NOV 2012 DT OF PRONOUNCEMENT 30 TH ,NOV 2012 ORDER PER VIJAY PAL RAO, JM THESE TWO APPEALS BY TWO SEPARATE ASSESSEES ARE DI RECTED AGAINST TWO SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX ( APPEALS) 31.12.2008 AND 23.1.2009 FOR THE ASSESSMENT YEAR 2005-06 RESPECTIV ELY. SINCE THE ASSESSEES IN THESE APPEALS ARE FAMILY MEMBERS AND CO-OWNERS OF THE PRO PERTY IN QUESTION; THEREFORE, THESE TWO APPEALS ARE CONSOLIDATED, HEARD TOGETHER AND DISPOSED OFF BY THIS COMPOSITE ORDER. 2 IN ITA NO. 5608/MUM/2009 , THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: ITA NO. 5608& 5609/MUM/2009 . 2 THE LD ASSESSING OFFICER ERRED IN ASSESSING THE CO ST OF ACQUISITION OF PROPERTY BY NOT CONSIDERING THE FAIR MARKET VALUE AS ON 1.4.1 981 AND LD COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN UPHOLDING THE ORDER PA SSED BY THE ASSESSING OFFICER. 3 WHILE SCRUTINIZING THE ANNUAL INFORMATION RETURN (AIR) FURNISHED U/S 285BA OF THE I T ACT, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SOLD PROPERTY FOR A CONSIDERATION OF ` 31,86,855/- DURING THE FINANCIAL YEAR 2004-05 RELE VANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. SINCE THE DET AILS OF THE PROPERTY TRANSACTION WAS NOT BEFORE THE ASSESSING OFFICER DESPITE SEVER AL OPPORTUNITIES WERE GIVEN, THE ASSESSING OFFICER ASSESSED THE TOTAL SALE CONSIDERA TION IN THE HANDS OF THE ASSESSEE AS LONG TERM CAPITAL GAINS BY TAKING THE COST OF AC QUISITION OF PROPERTY AS NIL. 3.1 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). S INCE THE APPEAL WAS BELATED BY 6 MONTHS, THE COMMISSIONER OF INCOME TAX(APPEALS ) DECLINED TO CONDONE THE DELAY IN FILING THE APPEAL AND ACCORDINGLY, THE APP EAL OF THE ASSESSEE WAS DISMISSED IN LIMINE. 4 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEES ARE FARMERS AND CO-OWNERS OF THE PROPERTY IN QUESTION. SINCE THE ASSESSEE ARE ILLITERATE PERSONS AND THEREFORE, THE APPEAL CO ULD NOT BE FILED IN TIME. FURTHER, THE ASSESSING OFFICER TREATED THE 100% SALES PROCEEDS O F THE LAND IN QUESTION AS CAPITAL GAIN WITHOUT ALLOWING THE COST OF ACQUISITION AND E VEN FAIR MARKET VALUE OF THE LAND AS ON 1.4.1981 AS PER THE PROVISIONS OF SEC 55(2)(B )(I) OF THE I T ACT. THE LD AR HAS FURTHER POINTED OUT THAT THE ASSESSEES ARE HAVING 5 0% EACH SHARE IN THE PROPERTY IN QUESTION WHEREAS THE ASSESSING OFFICER HAS ASSESSED 100% SALE PROCEEDS IN THE ITA NO. 5608& 5609/MUM/2009 . 3 HANDS OF BOTH THE ASSESSEES, WHICH IS OTHERWISE NOT JUSTIFIED. THUS, THE LD AR HAS PLEADED THAT IN THE INTEREST OF JUSTICE, THE DELAY IN FILING OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS) MAY BE CONDONED AND THE MATTER MAY BE RESTOREND TO THE RECORD OF THE COMMISSIONER OF INC OME TAX(APPEALS) FOR DECIDING THE SAME ON MERITS AFTER CONSIDERING ALL THE RELEVA NT FACTS OF THE CASE. 4.1 ON THE OTHER HAND, THE LD DR HAS OBJECTED TO TH E PRAYER OF THE ASSESSEE ON THE CONDONATION OF DELAY. 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THIS IS THE CASE OF ASSESSMENT OF THE TOTA L SALE PROCEEDS OF THE LAND IN QUESTION AND THAT TOO IN THE CASE OF BOTH THE CO-OW NERS OF THE PROPERTY, WHO ARE THE ASSESSES BEFORE US. FURTHER, WHEN THE ASSESSIN G OFFICER HAS ASSESSED THE ENTIRE SALE PROCEEDS AS CAPITAL GAIN IN THE HANDS OF EACH OF THE CO-OWNERS WITHOUT GIVING THE BENEFIT OF COST OF ACQUISITION OR FAIR MARKET V ALUE AS ON 1.4.1981, THEN THE ACTION OF THE ASSESSING OFFICER IS NOT JUSTIFIED AND ACCOR DINGLY IS NOT SUSTAINABLE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE APPEAL OF THE ASSESSEE INLIMINE WITHOUT GOING INTO THE MERITS OF THE CASE. HAVING REGARD TO THE FACTS THAT THE ASSESSEES ARE FARMERS AND ILLITERATE PERSONS, A LENIENT VIEW ON THE MATTER ON CONDONATION OF DELAY SHOULD HAVE BEEN TAKEN. IT I S SETTLED PROPOSITION OF LAW THAT WHENEVER SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDER ATION ARE OPPOSED TO EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE HAS TO BE PREFE RRED. WHEN THE FILING OF BELATED APPEAL IS NOT FOUND AS MALAFIDE OR A DEVICE TO COVE R UP ULTERIOR PURPOSES THEN, A LIBERAL APPROACH HAS TO BE TAKEN FOR CONSIDERING TH E CONDONATION OF DELAY. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND IN TH E INTEREST OF JUSTICE, WE ITA NO. 5608& 5609/MUM/2009 . 4 CONDONE THE DELAY OF 6 MONTHS IN FILING THE APPEAL BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS). 5.1 SINCE THE COMMISSIONER OF INCOME TAX(APPEALS) H AS NOT ADJUDICATED THE APPEAL OF THE ASSESSEE ON MERITS; THEREFORE, THE WE REMAND THE MATTER TO THE RECORD OF THE COMMISSIONER OF INCOME TAX(APPEALS) FOR ADJU DICATION ON MERITS AS PER LAW. 6 IN ITA NO.5609/MUM/2009 , THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: THE LD ASSESSING OFFICER ERRED IN ASSESSING THE CO ST OF ACQUISITION OF PROPERTY BY NOT CONSIDERING THE FAIR MARKET VALUE AS ON 1.4.1 981 AND LD COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN UPHOLDING THE ORDER PA SSED BY THE ASSESSING OFFICER. 6.1 THE FACTS ARE IDENTICAL IN THE CASE OF THE CO-O WNER RECORDED ABOVE. THE COMMISSIONER OF INCOME TAX(APPEALS) DISMISSED THE A PPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY EVID ENCE IN SUPPORT OF COST OF ACQUISITION OF THE PROPERTY SOLD AND ALSO DETAILS O F THE EXPENSE IN CONNECTION WITH TRANSFER. 7 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR HAS POIN TED OUT THAT DUE TO LACK OF KNOWLEDGE OF PROCEDURAL REQUIREMENT, THE ASSESSEE C OULD NOT FURNISH THE RELEVANT RECORD. HE HAS FURTHER SUBMITTED THAT EVEN OTHERWI SE, THE ORDER OF THE ASSESSING OFFICER IS NOT SUSTAINABLE BECAUSE THE ASSESSING OF FICER ASSESSED THE ENTIRE SALE PROCEEDS IN THE HANDS OF IN EACH OF THE CO-OWNER OF THE LAND IN QUESTION; WHEREAS THE ASSESSEES ARE HAVING 50% OF THE SHARES EACH IN THE LAND IN QUESTION. HE HAS FURTHER SUBMITTED THAT SINCE THE ASSESSING OFFICER HAS NOT ALLOWED THE FAIR MARKET VALUE OF THE LAND IN QUESTION AS ON 1.4.1981; THERE FORE, THE MATTER IS REQUIRED TO BE ITA NO. 5608& 5609/MUM/2009 . 5 EXAMINED AFRESH. THERE IS NO DISPUTE THAT THE ASS ESSING OFFICER HAS ASSESSED THE TOTAL SALE PROCEEDS OF THE LAND IN QUESTION IN THE HANDS OF BOTH THE CO-OWNERS INSTEAD OF THEIR RESPECTIVE SHARES IN THE LAND IN Q UESTION. THEREFORE, THE ORDER OF THE ASSESSING OFFICER IS NOT SUSTAINABLE. 7.1 THE ASSESSEE HAS FILED THE REPORT OF THE VALUA TION OF THE GOVERNMENT APPROVED VALUER, WHICH REQUIRES TO BE CONSIDERED BY THE ASSESSING OFFICER FOR THE PURPOSE OF DETERMINING THE FAIR MARKET VALUE AS ON 1.4.1981. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSID ERED OPINION THAT THE MATTER REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER AS THE ASSESSEE HAS NOW FILED THE MATERIAL IN SUPPORT OF ITS CLAIM. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND REMIT THE MATTER TO THE RECOR D OF THE ASSESSING OFFICER FOR EXAMINATION AND VERIFICATION OF THE RELEVANT MATERI AL TO BE FILED BY THE ASSESSEE AND THEN DECIDE THE ISSUE AS PER LAW. 8 IN THE RESULT, APPEALS FILED BY BOTH THE ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH , DAY OF NOV 2012. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 30 TH , NOV 2012 RAJ* ITA NO. 5608& 5609/MUM/2009 . 6 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI