S.P. INVESTRADE (INDIA) LTD, MUMBAI V. DCIT 7(2), MUMBAI

ITA 567/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7929 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 31-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Depreciation; Rectification of order; Principle of natural justice; Revised return
• Section: 32; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.567/M/2018 ASSESSMENT YEAR: 2012-13 M/S. S.P. INVESTRADE (INDIA) LTD., C-14, TRADE WORLD, KAMALA MILLS COMPOUND, S.B. MARG, LOWER PAREL, MUMBAI 400 013 PAN: AAACW 0429J VS. ASST. COMM. OF INCOME TAX-CPC, POST BAG NO.2, ELECTRONIC CITY POST OFFICE, BANGALORE 560 100 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SHRI S.K. BEPARI, D.R. DATE OF HEARING : 06.09.2018 DATE OF PRONOUNCEMENT : 17.09.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 27.11.2017 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2012-13. 2. THE VARIOUS GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER: GROUND 1: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.6,96,760/- BY IGNORING THE RECTIFICATION U/S 154 FILED BY THE ASSESSEE, REASONING THAT ASSESSEE DID NOT FILE THE REVISED RETURN. 2. THE LD. CIT (A) FAILED TO APPRECIATE THE FACTS T HAT: A) THE ASSESSEE HAD E-FILED RECTIFICATION U/S 154 OF T HE ACT. B) THE ISSUES WERE APPARENT MISTAKE WHILE EFILING WHIC H DOES NOT WARRANT ANY REVISION OF RETURN. ITA NO.567/M/2018 M/S. S.P. INVESTRADE (INDIA) LTD. 2 3. THE APPELLANT THEREFORE PRAYS THAT THE ADDITION OF RS.40,00,000/- MAY KINDLY BE DELETED. GROUND 2 (WITHOUT PREJUDICE TO GROUND NO.1): 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.40,00,000/- BY WAY OF NOT ALLOWING DEDUCTION U/S 54EC OF THE ACT. 2. THE LD. CIT (A) FAILED TO APPRECIATE THE FACTS T HAT: A) THE ASSESSEE WAS ELIGIBLE FOR CLAIMING DEDUCTION U/ S 54EC OF THE ACT. B) THE CIT(A) CONFIRMED THE ADDITION BASED ON TECHNICA L MISTAKE MADE THE ASSESSEE WHILE FILING THE RETURN O F INCOME. C) THE CIT (A) CONFIRMED THE ADDITION DISREGARDING THE LEGAL MERITS OF THE CASE. D) THE CIT (A) CONFIRMING THE ADDITION IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE NOT IN CONFORMITY WITH THE PRINCIPLE OF SUB STANCE OVER FORM. 3. THE APPELLANT THEREFORE PRAYS THAT THE ADDITION OF RS.40,00.000/- MAY KINDLY BE DELETED. 4. THE APPELLANT THEREFORE PRAYS THAT THE ADDITION OF RS.40,00,000/- MAY KINDLY BE DELETED. 3. WE WOULD LIKE TO MENTION THAT NEITHER ASSESSEE N OR ITS AUTHORISED REPRESENTATIVE APPEARED TO ATTEND THE HE ARING NOR ANY APPLICATION SEEKING ADJOURNMENT WAS FILED BEFOR E US DESPITE SERVICE OF NOTICE. WE ARE THEREFORE PROCEEDING TO DISPOSE OF THE APPEAL AFTER CONSIDERING THE MERITS OF THE CASE AND HEARING THE LD. D.R. 4. THE ISSUE RAISED IN FIRST GROUND OF APPEAL IS AG AINST THE CONFIRMATION OF ADDITION OF RS.6,96,760/- BY THE LD . CIT(A) AS MADE BY THE AO. 5. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF NON BANKING FINANCE COMPANY AND DURING THE YEAR EARNED DEEMED CAPITAL GAIN UNDER SECTION 50 OF THE ACT ON SALE OF RESIDENTIAL PROPERTY AND CLAIMED EXEMPTION UNDER SECTION 54EC OF RS.40,00,000/- BY FILING RETURN OF INCOME E LECTRONICALLY ON 30.09.2012 AFTER DECLARING AN INCOME OF RS.4,01 ,087/-. THE ITA NO.567/M/2018 M/S. S.P. INVESTRADE (INDIA) LTD. 3 ASSESSEE HAD SOLD THE FLAT FOR A CONSIDERATION OF R S.48 LAKHS WHICH WAS PURCHASED ON 14.05.1992 AND WAS SHOWN IN THE SCHEDULE OF FIXED ASSETS CLAIMING DEPRECIATION THE REON UNDER SECTION 32 OF THE ACT. THE WDV OF THE SAID FLAT AS ON 01.04.2011 WAS RS.2,28,718/- AND THE SALE HAS RESUL TED INTO CAPITAL GAIN UNDER SECTION 50 OF RS.45,58,782/- AGA INST WHICH A DEDUCTION UNDER SECTION 54EC WAS CLAIMED AT RS.40 L AKHS ON ACCOUNT OF INVESTMENT IN BONDS OF RURAL ELECTRIFICA TION CORPORATION LIMITED (REC BONDS) ON 19.03.2012. AT THE TIME OF FILING THE RETURN, THE ASSESSEE DID NOT FILL UP THE COLUMN QUA THE CLAIM OF EXEMPTION U/S 54EC OF THE ACT PROPERLY, HO WEVER, THE TRANSACTION WAS DULY SHOWN IN THE RETURN FILED BY T HE ASSESSEE. THEREAFTER, THE ASSESSEE MOVED RECTIFICATION WHICH WAS NOT CONSIDERED AND A DEMAND OF RS.6,96,760/- WAS RAISED BY THE AO BY IGNORING THE RECTIFICATION APPLICATION UNDER SEC TION 154 OF THE ACT. THE ACIT CPC RAISED A DEMAND OF RS.6,96,760/- VIDE RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE ACT DATED 22.02.2013 WITHOUT CONSIDERING THE APPLICATION OF T HE ASSESSEE FILED UNDER SECTION 154. 6. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DIS MISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT IN ORDER TO CLAIM UNDER SECTION 54EC OF THE ACT, THE ASSESSEE HAS TO FILL UP VARIOUS COLUMNS IN THE RETURN OF INCOME WHICH HAS N OT BEEN FILLED AND THEREFORE AO CPC RIGHTLY REJECTED THE AP PLICATION FILED BY THE ASSESSEE SEEKING DEDUCTION OF RS.40 LAKHS UN DER SECTION 54EC OF THE ACT AND THUS DISMISSED THE APPEAL. 7. AFTER HEARING THE LD. D.R. AND PERUSING THE MATE RIAL ON RECORD, WE FIND THAT THE ASSESSEE FACTUALLY ERRED I N FILLING THE ITA NO.567/M/2018 M/S. S.P. INVESTRADE (INDIA) LTD. 4 VARIOUS COLUMNS IN THE RETURN OF INCOME QUA THE CLA IM OF EXEMPTION UNDER SECTION 54EC OF THE ACT TO THE TUNE OF RS.40 LAKHS WHICH RESULTED INTO CREATION OF DEMAND OF RS. 6,96,760/-. THE RECTIFICATION APPLICATION MOVED BY THE ASSESSEE IS ALSO REJECTED AND IT IS AGAINST THIS REJECTION OF APPLIC ATION, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 8. THERE IS NO DISPUTE AS TO THE EXEMPTION ALLOWABL E TO THE ASSESSEE UNDER SECTION 54EC OF THE ACT IN RESPECT OF DEPRECIABLE ASSETS WHICH HAS HELD FOR A PERIOD OF MORE THAN SIX MONTHS BY THE ASSESSEE AS HAS BEEN HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF ITO VS. ACE BUILDERS PVT. LTD. 281 I TR 210 (BOM) AND VARIOUS OTHER DECISIONS BY VARIOUS JUDICIAL FOR UMS. NOW THE QUESTION BEFORE US WHETHER THE ASSESSEE IS ENTITLED A CLAIM OF RS.40 LAKHS WHICH WAS NOT CORRECTLY CLAIMED AS THE ASSESSEE HAS WRONGLY AND INADVERTENTLY FILLED SOME COLUMNS WHICH RESULTED INTO NON GRANTING/REJECTION OF EXEMPTION UNDER SECT ION 54EC OF THE ACT. THEREAFTER, THE ASSESSEE HAS MADE THIS CL AIM BY WAY OF RECTIFICATION WHICH WAS ALSO NOT ACCEPTED ACIT CPC AND APPEAL WAS ALSO DISMISSED BY THE LD. CIT(A). NOW THE ISS UE BEFORE US IS WHETHER A CLAIM WHICH IS LEGALLY AND LAWFULLY AD MISSIBLE TO THE ASSESSEE UNDER THE ACT COULD BE DENIED ON THE SOLE ISSUE THAT THE RETURN OF INCOME WAS NOT CORRECTLY FILED NEVERT HELESS THE CLAIM WAS MADE BY WAY OF RECTIFICATION APPLICATION BY THE ASSESSEE. IN OUR OPINION, THERE IS NO BAR IN ADMIT TING SUCH CLAIMS WHICH ARE INADVERTENTLY LEFT OUT WHILE FILLI NG UP THE INCOME TAX RETURN FORM BUT THEREAFTER CLAIMED BY WA Y RECTIFICATION APPLICATION. WE ARE OF THE CONSIDERED VIEW THAT N DUE TO SOME TECHNICALITY SOME COLUMNS WERE LEFT BLA NK AND THUS THE ASSESSEE CAN NOT BE DENIED THE BENEFIT OF BENEF ICIAL PROVISION ITA NO.567/M/2018 M/S. S.P. INVESTRADE (INDIA) LTD. 5 AS PROVIDED UNDER SECTION 54EC OF THE ACT. UNDER T HESE CIRCUMSTANCES ARE INCLINED GRANT RELIEF TO THE ASS ESSEE REVERSING THE ORDER OF LD. CIT(A) AND THE AO IS DIRECTED ACC ORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.09.2018. SD/- SD/- (JOGINDER SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED:17.09.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.