BHAWANJI NARSEY, MUMBAI V. ITO 21(1)(1), MUMBAI

ITA 5843/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9231 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 18-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH MUNI LD
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Wrong claim; Reassessment proceedings
• Section: 143(3); 50C; 147; 148; 54

Judgement Text

ITA NOS. 5842-43/M/2014 KALYANJI NARESY & BHAWANI NARSEY ASSESSMENT YEAR 2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 5842 /MUM/2014 ( / ASSESSMENT YEAR: 2007-08) KALYANJI NARSEY 8 TH , PAAVAN VITHAL NAGAR N.S.ROAD NO.11, CHS JVPD SCHEME VILE PARLE(W) MUMBAI 400 049 / VS. INCOME TAX OFFICER 21(1)(2) 6 TH FLOOR, ROOM NO.604, C-10 PRATYAKSHKAR BHAVAN BKC, MUMBAI -400 051 ! ./ ./PAN/GIR NO. AABPN-4472-G ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) & ./I.T.A. NO. 5843 /MUM/2014 ( / ASSESSMENT YEAR: 2007-08) BHAWANJI NARSEY 8 TH , PAAVAN VITHAL NAGAR N.S.ROAD NO.11, CHS JVPD SCHEME VILE PARLE(W) MUMBAI 400 049 / VS. INCOME TAX OFFICER 21(1)(1) 6 TH FLOOR, ROOM NO.604, C-10 PRATYAKSHKAR BHAVAN BKC, MUMBAI -400 051 ! ./ ./PAN/GIR NO. AABPN-4471-F ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : PRAKASH MUNI, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR ITA NOS. 5842-43/M/2014 KALYANJI NARESY & BHAWANI NARSEY ASSESSMENT YEAR 2007-08 2 / DATE OF HEARING : 16/08/2017 / DATE OF PRONOUNCEMENT : 04 /10/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEALS BY SEPARATE ASSESSEE FOR ASSESSMENT YEAR [AY] 2007-08 CONTEST SEPARATE ORDERS OF FIRST APPEL LATE AUTHORITY. SINCE, COMMON ISSUE IS INVOLVED IN BOTH THE APPEALS, WE DI SPOSE-OFF THE SAME BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE & BREVITY. FIRST WE TAKE UP ITA NO. 5842/MUM/2014 WHICH CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-32 [CIT(A)], M UMBAI DATED 25/07/2014. THE ISSUE IS RELATED WITH QUANTUM OF CAPITAL GAINS EARNED BY THE ASSESSEE. 2. BRIEFLY STATED, THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS SUBJECTED TO AN ASSESSMENT U/S 143(3) READ WITH SECTION 147 FOR IMPUGNED AY ON 28/03/2013 AT RS.98,00,100/- AS AGAI NST RETURNED INCOME OF RS.1,83,092/- FILED BY THE ASSESSEE ON 17 /07/2008. THE REASSESSMENT PROCEEDINGS WERE INITIATED VIDE NOTICE U/S 148 DATED 27/03/2012 CONSEQUENT TO ASSESSMENT PROCEEDINGS ON ONE HIREN NARSEY FOR AY 2007-08 WHERE IT WAS OBSERVED THAT THE ASSE SSEE, BEING JOINT OWNER, MADE WRONG CLAIM OF CAPITAL GAINS ON S ALE OF CERTAIN PROPERTY IN AY 2009-10, WHICH IN FACT WAS CHARGEABL E TO TAX IN AY 2007- ITA NOS. 5842-43/M/2014 KALYANJI NARESY & BHAWANI NARSEY ASSESSMENT YEAR 2007-08 3 08. THE PROPERTY WAS JOINTLY HELD BY 4 FAMILY MEMBE RS, EACH HAVING 1/4 TH SHARE. THE DEVELOPMENT RIGHTS OF THE PROPERTY WERE SOLD VIDE AGREEMENT DATED 09/06/2006 FOR A SUM OF RS.440 LACS, HOWEVER, THE STAMP DUTY VALUE OF THE SAME WAS RS.4,58,44,500/- AND HENCE TH E PROVISIONS OF SECTION 50C WERE APPLICABLE. THE ASSESSEE, IN RETUR N OF INCOME PURSUANT TO NOTICE U/S 148, REFLECTED LONG TERM CAPITAL GAINS [LTCG] AGAINST THE SAME AT RS.14.15 LACS. HOWEVER, LD. AO NOTICED THAT THE ASSESSEE WAS ENTITLED FOR ADDITIONAL SUM OF RS.35,4 3,500/- BY VIRTUE OF AMENDMENT DEED DATED 29/12/2010 AND THEREFORE, THE SALE VALUE OF THE PROPERTY WAS REQUIRED TO BE ENHANCED BY THAT VALUE. ACCORDINGLY, THE DEEMED SALE CONSIDERATION OF THE PROPERTY AS PER SE CTION 50C WAS TAKEN TO BE RS.493.88 LACS. THE ASSESSEE CLAIMED CO NSTRUCTION COST AT RS.32.50 LACS, HOWEVER, THE SAME WAS TAKEN TO BE RS .27.30 LACS SINCE IT WAS NOTED THAT THE ASSESSEE WAS ENTITLED FOR SMA LLER FLAT IN COMPARISON TO OTHER CO-OWNERS. FURTHER, THE ASSESSEE CLAIMED A N AMOUNT OF RS.4.95 LACS AS RENTAL EXPENSES FOR ALTERNATE ACCOMMODATION , WHICH IN THE OPINION OF LD. AO, WERE NOT AVAILABLE TO THE ASSESS EE. THE ASSESSEES ANOTHER CLAIM OF RS. 62.04 LACS U/S 54 TOWARDS RE-I NVESTMENT IN NEW FLAT WAS REJECTED ON THE PREMISES THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION AGAINST ONE HOUSE PROPERTY ONLY. FINALLY, AFTER ALL ADJUSTMENTS, THE LTCG WAS WORKED OUT TO BE RS.96.17 LACS AS AGAINST RS.14 .15 LACS REFLECTED BY THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 25/07/2 014. BEFORE LD. CIT(A), THE ASSESSEE DID NOT CONTEST THE CLAIM OF R ENT PAID FOR RS.4.95 LACS & STAMP DUTY PAID FOR RS.4.04 LACS. THE ONLY A DDITION CONTESTED BY ITA NOS. 5842-43/M/2014 KALYANJI NARESY & BHAWANI NARSEY ASSESSMENT YEAR 2007-08 4 THE ASSESSEE WAS DEDUCTION U/S 54 FOR RS.58 LACS, W HICH WAS DISMISSED BY LD. CIT(A) AFTER CONSIDERING ASSESSEES SUBMISSI ONS AND JUDICIAL PRONOUNCEMENTS. 4. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEF ORE US. IN THE GROUNDS OF APPEAL, THE ASSESSEE, BY WAY OF GROUND N UMBERS 1 & 3, HAS CONTESTED THE QUANTUM OF SALE CONSIDERATION ADOPTED BY THE LD. AO AND DENIAL OF DEDUCTION U/S 54 FOR RS.62.04 LACS. GROUN D NO. 2 CONTEST DENIAL OF RENT PAID FOR RS.4.95 LACS TOWARDS ALTERN ATIVE ACCOMMODATION. 5. THE LD. COUNSEL FOR ASSESSEE [AR], AT THE OUTSE T, DREW OUR ATTENTION TO THE FACT THAT SIMILAR CLAIMS HAVE BEEN ALLOWED BY THE REVENUE IN THE CASE OF OTHER CO-OWNERS AND THEREFOR E, THE SAME SHOULD BE ALLOWED TO THE ASSESSEE ALSO AND HENCE, THE MATT ER MAY BE RESTORED BACK TO THE FILE OF LD. CIT(A). PER CONTRA, LD. DR CONTENDED THAT THE ASSESSEE NEVER CONTESTED THE QUANTUM OF SALE CONSID ERATION ADOPTED BY LD. AO BEFORE FIRST APPELLATE AUTHORITY AND THIS IS ALTOGETHER A NEW CLAIM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. WE HAVE PERUSED THE ORDER OF THIS TRIBUN AL ITA NO. 6023/MUM/2010 ORDER DATED 19/12/2012 RENDERED IN TH E CASE OF OTHER CO-OWNER NAMELY CHITTU B.NARSEY AND CONSEQUENTIAL ORDER PASSED BY LD. AO U/S 254 WHERE WE, PRIMA FACIE, FIND THAT DEDUCTION U/S 54 HAS BEEN GRANTED TO THE CO-OWNER. SIMILARLY, THE LD. CI T(A), IN THE APPELLATE ORDER OF HIREN K.NARSEY ORDER DATED 15/06/2012 HAS ALLOWED SIMILAR DEDUCTION. THE ASSESSEE HAS CONTESTED THE SALE CONS IDERATION ADOPTED BY THE LD. AO WHICH IS ALTOGETHER A NEW CLAIM. THER EFORE, WITHOUT DELVING MUCH DEEPER INTO THE ISSUE, WE RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) TO RE-ADJUDICATE THE ISSUES RAISED BY THE ASSESSEE IN THIS ITA NOS. 5842-43/M/2014 KALYANJI NARESY & BHAWANI NARSEY ASSESSMENT YEAR 2007-08 5 APPEAL. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBST ANTIATE HIS CLAIM IN THIS REGARD WITH DOCUMENTARY EVIDENCES. NEEDLESS TO SAY THAT ADEQUATE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED TO THE ASSESSEE. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWED F OR STATISTICAL PURPOSES. 7. THE GROUNDS OF APPEAL RAISED IN ITA NO. 5843/MUM /2014 ARE IDENTICAL IN ALL RESPECT. THE IMPUGNED ORDER HAS BE EN PASSED BY SAME LD. CIT(A) AND THE ASSESSEE HAS BEEN SADDLED WITH S IMILAR ADDITIONS / ADJUSTMENTS. THEREFORE, TAKING THE SAME STAND, THE MATTER IS RESTORED BACK TO THE FILE OF LD. CIT(A) ON SIMILAR LINES. RE SULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. IN NUTSHELL, BOTH THE APPEALS FILED BY THE ASSES SEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04. 10.2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI