Amarsinh Jyotyajirao Jadhavrao, Pune V. Commissioner of Income-tax - II,

ITA 569/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7124 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-11-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Opportunity of being heard; Additional evidence; Condonation of delay
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO. 569/PUN/2015 / ASSESSMENT YEAR : 2009-10 AMARSINH JYOTYAJIRAO JADHAVRAO, 727-A, SADASHIV PETH, KUMTHEKAR ROAD, PUNE 411 030 PAN :AAXPJ1872E . /APPELLANT VS. CIT-II, PUNE . / RESPONDENT . / ITA NO. 1372/PUN/2016 / ASSESSMENT YEAR : 2009-10 AMARSINH JYOTYAJIRAO JADHAVRAO, 727-A, SADASHIV PETH, KUMTHEKAR ROAD, PUNE 411 030 PAN :AAXPJ1872E . /APPELLANT VS. ITO, WARD-12(3), PUNE . / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : SMT. NIRUPAMA KOTRU / DATE OF HEARING : 28.11.2017 / DATE OF PRONOUNCEMENT: 08.12.2017 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 2 APPEALS FILED BY THE ASSESSEE INVOLVING ASSESSMENT YEAR 2009-10. THE APPEAL ITA NO.569/PUN/ 2015 ARISES FROM A REVISION ORDER OF THE CIT-II, PUNE PA SSED U/S.263 OF THE ACT. FURTHER, THE APPEAL ITA NO.1372/PUN/2016 IS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A)-5, PUNE DATED 18-03-2016 ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 2 WHICH HAS GENESIS IN THE FRESH ASSESSMENT ORDER PAS SED BY THE AO ON 20-03-2015 U/S.143(3) R.W.S. 263 OF THE ACT. ITA NO.569/PUN/2015 (BY ASSESSEE) 2. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THERE IS DELAY OF 334 DAYS IN FILING OF THIS APPEAL BEFORE THE TRIBUNAL. HE BROUGHT OUR ATTENTION TO A N AFFIDAVIT DATED 23-04-2015 AND ALSO AN APPLICATION REQUESTING FOR C ONDONATION OF THE SAID DELAY OF 334 DAYS. 3. ON HEARING BOTH THE PARTIES ON THE PRELIMINARY I SSUE OF CONDONATION OF DELAY IN FILING OF THIS APPEAL, WE F IND IT RELEVANT TO EXTRACT THE REASONS AS NARRATED IN THE SAID AFFIDAV IT FOR DISCUSSION AND ANALYSIS : 1. PROCEEDINGS U/S.143(3) OF ITA, 1961 FOR A.Y. 20 09-10 WAS COMPLETED BY THE LD. ITO, WARD-3(2), PUNE AND ORDER U/S.143(3) OF ITA, 1961 WAS PASSED ON 26-12-2011 ASSESSING TOTAL INCOME AT RS.47,21,960/-. 2. THEREAFTER, PROCEEDINGS U/S.263 OF ITA, 1961 WAS INITIATED BY LD. CIT-II, PUNE RAISING SOME OBJECTIONS. ON 28-03 -2014, ORDER U/S.263 OF ITA, 1961 WAS PASSED BY LD.CIT-II, PUNE. THE SAID ORDER WAS RECEIVED BY ME ON 01-04-2014. 3. I WAS UNDER IMPRESSION THAT APPEAL AGAINST THE O RDER OF LD.CIT-II, PUNE U/S.263 OF ITA, 1961 CAN BE FILED O NLY AFTER ORDER U/S.143(3) R.W.S. 263 OF ITA, 1961 IS PASSED BY LD. AO, AS LD. CIT-II, PUNE IN ITS ORDER, DIRECTED LD. AO TO COMPUTE CAPIT AL GAIN ON THE TRANSFER OF 34.15 ACRE OF ANCESTRAL AGRICULTURAL LA ND. 4. THEREAFTER ORDER OF LD. ITO, WARD-12(3), PUNE PA SSED U/S.143(3) R.W.S.263 OF ITA, 1961 DATED 20-03-2015 WAS RECEIVED ON 31-03-2015. WHILE FILING APPEAL TO CIT(A) AGAINST ORDER U/S.143(3) R.W.S. 263 OF ITA, 1961, I CAME TO KNOW FROM MY COU NSEL THAT APPEAL AGAINST THE ORDER OF LD.CIT-II, PUNE PASSED U/S.263 OF ITA, 1961 DATED 28-03-2014 CAN ALSO BE FILED WITH HONBLE ITA T. 4. FROM THE ABOVE REASONS GIVEN BY THE ASSESSEE, WE FIND THE REASONS MENTIONED IN THE AFFIDAVIT ARE EITHER GENER AL IN NATURE AND THEY FALL SHORT OF THE LEGAL REQUIREMENT OF EXPLAIN ING EACH DAY OF THE APPEAL OF 334. THEREFORE, WE REJECT THE ASSESSEES REQUEST FOR ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 3 CONDONATION OF DELAY IN FILING THE APPEAL OF THE AS SESSEE. WE ORDER ACCORDINGLY. 5. IN THE RESULT, ON THE PRELIMINARY ISSUE, THE APP EAL OF THE ASSESSEE IS DISMISSED AS NOT ADMITTED. ITA NO.1372/PUN/2016 (BY ASSESSEE) 6. BRIEF FACTS OF THIS ASSESSEE INCLUDE THAT THE AS SESSEE IS A HUF AND THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S.143 (3) OF THE ACT ON 26-12-2011 DETERMINING THE TOTAL INCOME AT RS.47 ,21,960/-. THIS ORDER WAS REVISED BY THE CIT-II, PUNE VIDE ABO VE SAID REVISION ORDER DATED 28-03-2014. THE SUBJECT MATTER OF THE REVISION BY THE CIT RELATES TO TAXABILITY OF THE LONG TERM CAPITAL GAINS THAT ARISES IN CONNECTION WITH A DEVELOPMENT AGREEMENT WITH M/S. N IRMAL LIFESTYLE ON 04-11-2008. IN THE SAID REVISION ORDE R, THE CIT HELD THAT THE ORIGINAL ASSESSMENT ORDER IS ERRONEOUS IN SOFAR IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDING TO THE CIT, THE LONG TERM CAPITAL GAINS WERE GENERATED IN CONNECTIO N WITH THE DEVELOPMENT AGREEMENT INVOLVING THE TRANSFER OF THE SAID PROPERTY AND THE SAME WAS NOT BROUGHT TO TAX BY THE AO IN TH E ORIGINAL ASSESSMENT MAKING THE SAID ORDER ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. IN COMPLIANCE WITH THE DI RECTIONS OF THE CIT, THE AO TAXED THE LONG TERM CAPITAL GAINS AS PE R THE DISCUSSION GIVEN IN PARA 9 OF THE ASSESSMENT ORDER. RS.5,72,0 9,465/- IS THE LONG TERM CAPITAL GAINS THAT IS BROUGHT TO TAX IN T HE PRESENT FRESH ASSESSMENT ORDER DATED 20-03-2015. THE CIT(A) CONF IRMED THE SAME. 7. AGGRIEVED WITH THE ABOVE ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 4 8. IN THE GROUNDS, ASSESSEE RAISED VARIOUS ISSUES, I.E. (1) PROPERTY IN QUESTION WAS NEVER A HUF PROPERTY, (2) THE LAND IN QUESTION IS OWNED BY THE ASSESSEE AS AN INDIVIDUAL AND IT IS AN AGRICULTURAL LAND AND IS AN EXEMPT ASSET U/S.2(14) OF THE ACT, (3) THE GAIN ARISING OUT OF TRANSFER OF THE SAID LAND IS EX EMPT AND (4) THE TRANSACTION WITH NIRMAL LIFESTYLE DID NOT FRUCTIFY ETC. IN THIS CONNECTION, LD. COUNSEL FOR THE ASSESSEE FILED CHRO NOLOGY OF EVENTS TO DEMONSTRATE THE HISTORY OF THE LAND. FURTHER, HE FILED A LETTER DATED 10-06-2017 WITH A REQUEST TO ADMIT THE ADDITI ONAL EVIDENCES AND EXPLAINED THE REASONS FOR NOT FILING THE SAME B EFORE THE LOWER AUTHORITIES. FOR THE SAKE OF COMPLETENESS, RELEVAN T PARTS ARE EXTRACTED HEREUNDER : 1. DOCUMENTS IN PAPER-BOOK - I - DURING THE COURSE OF 263 PROCEEDINGS, APPELLANT COULD NOT PRODUCE DOCUMENTS AT SR. NO. 4 TO 6 OF THE PAPER BOOK-L. THESE DOCUMENTS COULD NOT BE SUBM ITTED EVEN AT THE TIME OF PROCEEDINGS OF 143(3) R.W.S. 263 OF ITA, 19 61, THEREAFTER, THESE DOCUMENTS WERE SUBMITTED BEFORE HON. CIT(A) AT THE TIME OF APPELLATE PROCEEDINGS. THE SAID DOCUMENTS WERE SENT TO THE LE ARNED AO UNDER RULE 46A OF THE IT RULES, 1962. THE LEARNED AO HAS OFFER ED HER COMMENTS VIDE REMAND REPORT, AND THE SAME WERE SUITABLY CONSIDERE D BY THE HON. CIT(A) IN DECIDING THE APPEAL. 2. DOCUMENTS IN PAPER-BOOK - II - THE DOCUMENTS AT SR. NO. 7 TO 11 OF PAPER-BOOK- 11 WERE NOT PRODUCED AT THE TIME OF ANY OF THE EARLIER PROCEEDINGS. THE SAID DOCUMENTS HAVE COME INTO EXISTENCE ONLY RECENTLY AND AS SUCH COULD NOT BE PRODUCED EARLIER. 3. DOCUMENTS IN PAPER-BOOK III - DURING THE COURSE OF 263 PROCEEDINGS, APPELLANT COULD NOT PRODUCE DOCUMENT A T SR. NO. 12 OF THE PAPER BOOK-ILL I.E. THE MOU ENTERED INTO BETWEEN TH E PARTIES. THE SAME COULD NOT BE SUBMITTED EVEN AT THE TIME OF PROCEEDI NGS OF 143(3) R.W.S. 263 OF ITA, 1961. THEREAFTER, THIS WAS SUBMITTED BE FORE HON. CIT(A) AT THE TIME OF APPELLATE PROCEEDINGS. THE SAME WAS SEN T TO THE LEARNED AO UNDER RULE 46A OF THE IT RULES, 1962. THE LEARNED A O HAS OFFERED HER COMMENTS VIDE REMAND REPORT, AND THE SAME WERE SUITA BLY CONSIDERED BY THE HON. CIT(A) IN DECIDING THE APPEAL. 4. DOCUMENTS IN PAPER-BOOK IV - THE DOCUMENT AT SR. NO. 13 OF PAPER-BOOK- IV I.E. THE SUIT FILED BY M/S. NIRMAL LIFESTYLE LIMITED AGAINST MR. AMARSINH J. JADHAVRAO IN THE COURT OF CIVIL JUD GE, SENIOR DIVISION, PUNE, WAS NOT PRODUCED AT THE TIME OF ANY OF THE EA RLIER PROCEEDINGS. THE SAID SUIT WAS FILED ONLY RECENTLY IN MARCH, 2016, AND AS SUCH HAS COME INTO EXISTENCE ONLY RECENTLY. HENCE, THE SAME COULD NOT BE PRODUCED EARLIER. ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 5 9. ELABORATING THE ABOVE, LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THIS ENTIRE GAMUT OF ISSUES MAY BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION AND DECISION ON ISSUES RA ISED BY THE ASSESSEE IN THE GROUNDS. 10. FURTHER, LD. COUNSEL FOR THE ASSESSEE FILED A L ETTER DATED 22-11-2017 AND MADE A PRAYER FOR TAXING THE GAINS I F ANY IN AN INDIVIDUAL CAPACITY AS THE PROPERTY IS NO LONGER A HUF PROPERTY. HE ALSO MENTIONED IN WRITING FOR NOT RAISING ANY LITIG ATION IF IT IS TAXED ACCORDINGLY. 11. LD. DR FOR THE REVENUE DUTIFULLY OPPOSED THE RE QUEST FOR ADMISSION OF ADDITIONAL EVIDENCES AS WELL AS CONSID ERING THE REQUEST FOR REMANDING THE ADDITIONAL EVIDENCES TO THE FILE OF THE AO. 12. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDER S OF THE REVENUE AS WELL AS THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEES COUNSEL IN THE FORM OF AFFIDAVIT. THESE DOCUMENTS SUGGEST NUMBER OF DEVELOPMENTS WITH REGARD TO THE NATURE OF THE LA ND IN QUESTION. IT IS THE CLAIM OF THE ASSESSEE THAT THE PROPERTY O RIGINALLY OWNED BY HIS FATHER LATE SHRI JYOTYAJIRAO JADHAVRAO IN THE Y EAR 1971. THE PROPERTY DEVOLVED ON HIS MOTHER SMT. LAXMIBAI JADHA VRAO. ALL THE SIBLINGS HAVE GIVEN THEIR CONSENT AND CONFIRMATIONS IN FAVOUR OF SUCH DEVOLVEMENT OF PROPERTY ON HIS MOTHER. THERE IS REQUISITE MUTATION TOOK PLACE IN THE RECORDS O THE REVENUE CO NFIRMING THE OWNERSHIP OF THE PROPERTY BY HIS MOTHER IN THE YEAR 1992. AFTER THE DEMISE OF HIS MOTHER, THE ASSESSEE HAS BECOME THE O WNER OF THE SAID LAND THROUGH HER WILL. REVENUE RECORDS ALSO C ONFIRM THE SAME. THUS, IT IS THE CLAIM OF THE ASSESSEE THAT T HE PROPERTY IS OWNED BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AN D NOT IN THE ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 6 CAPACITY OF THE HUF. IN SUCH A CASE, MAKING ASSESS MENT ON THIS INCOME OF CAPITAL GAINS IN THE NAME OF THE HUF IS N OT PROPER LEGALLY. THIS ASPECT REQUIRED DETAILED ANALYSIS AND FRESH AS SESSMENT BY THE AO AFTER EXAMINING THE CLAIMS OF THE ASSESSEE. AO IS REQUIRED TO GO INTO THE RECORDS OF THE REVENUE AND OTHER RELEVANT DEEDS OF REGISTRATION/DEVELOPMENT AGREEMENTS DURING THE REMA ND PROCEEDINGS FOR ESTABLISHING THE CORRECT NATURE AND OWNERSHIP OF THE PROPERTY. WE HAVE ALSO CONSIDERED THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE THAT HE WILL BE CONTENT IF THE PRO PERTY IN QUESTION IS SUBJECT TO TAX AT THE INDIVIDUAL HANDS. THIS ASPEC T OF THE REQUEST OF THE ASSESSEES COUNSEL NEEDS TO BE EXAMINED BY THE AO AS PER THE LAW IN THE REMAND PROCEEDINGS. IN FACT, ASSESSEE H AS GIVEN UNDERTAKING IN THE AFFIDAVIT DATED 22-11-2017 STATI NG THAT HE WILL NOT RAISE ANY OBJECTION ON ANY ISSUE IF THE PROPERT Y IN QUESTION AND INCOME THEREON IS SUBJECT TO TAX IN INDIVIDUAL CAPA CITY. (SL.NO.7 OF THE AFFIDAVIT IS RELEVANT). AO IS DIRECTED TO EXAM INE EACH AND EVERY CLAIM MADE BY THE ASSESSEE IN THE AFFIDAVIT AND GRA NT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE MA KING FRESH ASSESSMENT. FOR THE SAKE OF COMPLETENESS, WE PROCE ED TO THE CONTENTS OF SL.NO.7 TO 9 OF THE AFFIDAVIT AND THE S AME READS AS UNDER: 7. IN CASE, THE INCOME-TAX ASSESSMENT W.R.T. THE S AID TRANSACTION OF DEVELOPMENT AGREEMENT OF LAND AT GAT NO. 61, ADMEAS URING 34 . 15 ACRES, WITH M/S NIRMAL IS UNDERTAKEN IN MY INDIVIDUAL CASE/ CAPACITY (INSTEAD OF IN THE HUF CASE /CAPACITY), I WILL NOT RAISE ANY OB JECTION W.R.T. THE SAME ON THE ASPECT OF TIME LIMITATION UNDER VARIOUS PROVI SIONS OF THE IT ACT, 1961. MY ONLY SUBMISSION IS THAT THE I - T ASSESSMENT OUGHT TO TAKE PLACE IN THE CORRECT STATUS CORRECT HANDS, AND AFTER CONSIDERING ALL THE INVOLV ED FACTS AND POSITION OF LAW , I.E . CONSIDERING MERITS OF THE CASE. I RECONFIRM THAT I HAVE NO OBJECTION IF THE MATTER PENDING BEFORE HON. ITAT, PUNE IS DIRECTED TO BE CONSIDERED AND DELIBER ATED IN MY INDIVIDUAL CAPACITY, ALONG WITH THE MERITS OF THE CASE. NO ANY OBJECTION W.R.T. THE TIME LIMITATION PROVISIONS IN THE IT ACT, 1961 WILL BE RAISED FROM MY SIDE. I ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 7 FURTHER RELY ON THE FOLLOWING DECISIONS, WHEREIN, O WING TO THE COURT FINDINGS, THE ASSESSMENT WAS TAKEN UP IN SOME OTHER PERSON'S CASE , AND FOR WHICH, TIME LIMITATION WAS HELD TO BE NOT APPLIC ABLE- A. CIT V. AMY COLABAWALA 243 ITR 19 (KERALA HC) B. MUKUND BAJIRAO KOTE (HUF) V. ITO ITA.NO.899/PN/20 13 (PUNE ITAT) 13. FROM THE AFORESAID DISCUSSION AND THE WRITTEN S UBMISSIONS OF THE ASSESSEE, WE ARE OF THE VIEW THAT IT WOULD BE A PPROPRIATE TO REMAND ALL THE ISSUES TO THE FILE OF THE AO FOR FRE SH ADJUDICATION. THEREFORE, ALL THE ISSUES ARE KEPT OPEN FOR A FRESH DECISION OF THE AO. AO IS DIRECTED TO EXAMINE THE EXACT NATURE OF THE PROPERTY WHICH IS THE SUBJECT MATTER OF THE DEVELOPMENT AGRE EMENT AND CONSIDER ALL THE DEVELOPMENTS THAT HAPPENED SUBSEQU ENT TO SIGNING OF THE SAID DEVELOPMENT AGREEMENT. IF NEEDED, AO M AY ADMIT FURTHER EVIDENCES IF ANY AS REQUIRED FOR ADJUDICATI ON OF ALL THE INTRINSIC ISSUES. ACCORDINGLY, ALL THE GROUNDS RAI SED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 15. TO SUM UP, THE APPEAL ITA NO.569/PUN/2015 FILED BY THE ASSESSEE IS DISMISSED AND THE APPEAL ITA NO.1372/PU N/2016 FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH DAY OF DECEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 08 TH DECEMBER, 2017. ITA NO.569/PUN/2015 & ITA NO.1372/PUN/2016 AMARSINH J. JADHAVRAO 8 / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - 5, PUNE CIT - 5, PUNE % , , B BENCH PUNE; / GUARD FILE.