ELECTRONIC & ENGINEERING CO., MUMBAI V. ACIT 24(1),ERSTWHILE JCIT-20(3), MUMBAI

ITA 6010/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1474 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 07-10-2016
• Court: TRIBUNAL
• Department Lawyers: VISHWAS MARDHE
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.6010 & 6011/MUM/2016 (ASSESSMENT YEARS: 2010-11 & 2011-12) ELECTRONIC & ENGINEERING CO EEC, HOUSE PLOT NO.C-7 DALAI INDUSTRIAL ESTATE, NEW LINK ROAD, ANDHERI (W), MUMBAI-53 VS THE ACIT 24(1), MUMBAI (ERSTWHILE JCIT 20(3) PAN : AAAFE0594M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MAYUR KISNADWALA RESPONDENT BY SHRI VISHWAS MARDHE DATE OF HEARING : 08-12-2016 DATE OF ORDER : 23 -12-2016 O R D E R PER ASHWANI TANEJA, AM: THESE APPEALS HAVE BEEN FILED BY THE SAME ASSESSEE INVOLVING IDENTICAL ISSUES. 2. FIRST, WE SHALL TAKE UP APPEAL FOR A.Y.2010-11 WHICH IS FILED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)- 36, MUMBAI [(CIT(A), IN SHORT HEREINAFTER] VIDE ORD ER DATED 22-08-2016 PASSED AGAINST THE ASSESSMENT ORDER U/S 143(3) R.W. S. 147 DATED 21-03- 2014 ON THE FOLLOWING GROUNDS:- 2 I.T.A. NO.6010 & 6011/MUM/2016 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER (A. O) AS CONFIRMED BY COMMISSIONER OF INCOME TAX (APPEALS) [ CIT(A)], YOUR APPELLANT PREFERS AN APPEAL AGAINST THE SAME O N FOLLOWING GROUNDS, WHICH IT IS PRAYED MAY BE CONSIDERED WITHO UT PREJUDICE TO ONE ANOTHER: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN PASSING AN EX PARTE ORDER WITHOUT G RANTING PROPER OPPORTUNITY OF HEARING. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN CONFIRMING THE REOPENING OF THE ASS ESSMENT U/S 148 OF THE ACT WHICH IS BAD IN LAW. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A), CONTRARY TO THE BINDING DECISION OF THE SUP ERIOR APPELLATE AUTHORITIES IN THE ASSESSEE'S OWN CASE, ERRED IN CO NFIRMING THE ASSESSMENT OF BUSINESS CENTER RECEIPTS UNDER THE HE AD 'INCOME FROM HOUSE PROPERTY' AND NOT 'INCOME FROM BUSINESS' AS RETURNED BY THE ASSESSEE. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN CONFIRMING THE ASSESSMENT OF COMPEN SATION RECEIVED UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AND NOT 'INCOME FROM BUSINESS' AS RETURNED BY THE ASSESSEE. 3.1 WITHOUT PREJUDICE, ON THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING NON ALLOWANCE OF VARIOUS EXPENSES CLAIMED AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A), ERRED IN CONFIRMING THE ASSESSMENT OF COMMI SSION RECEIVED AS 'INCOME FROM OTHER SOURCES' AND NOT 'IN COME FROM BUSINESS' AS RETURNED BY THE ASSESSEE. 4.1 WITHOUT PREJUDICE, ON THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE NON ALLOWANCE OF VARIOUS EXPENSES CLAIMED AS DEDUCTION IN THE PRO FIT AND LOSS ACCOUNT. 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN CONFIRMING THAT THE CONSIDERATION R ECEIVED ON TRANSFER OF TENANCY RIGHTS IS INCOME CHARGEABLE TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES. 7) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, HAVING CONFIRMING THAT THE CONSIDERATION RECEIVED ON TRANS FER OF TENANCY RIGHTS IS INCOME CHARGEABLE TO TAX UNDER TH E HEAD 3 I.T.A. NO.6010 & 6011/MUM/2016 'INCOME FROM OTHER SOURCES', THE CIT(A) ERRED IN CO NFIRMING THE APPLICABILITY OF SECTION 50C OF THE ACT. 8) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN HOLDING THAT THE LEVY OF INTEREST U /S 2348 AND 234C IS CONSEQUENTIAL IN NATURE. 9) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN HOLDING THAT THE GROUND PERTAINING TO INITIATION OF PENALTY U/S 271 (1 )(C) IS PREMATURE IN NATURE. 3. DURING THE COURSE OF HEARING IT WAS STATED AT THE O UTSET BY THE LD. COUNSEL OF THE ASSESSEE THAT ASSESSEE THAT ASSESSEE HAD BEEN REGULARLY ATTENDING THE HEARINGS BEFORE THE LD.CIT(A) AND REQ UEST FOR ADJOURNMENTS WERE MADE BECAUSE CASE COULD NOT PREPARED FOR WANT OF COMPLETE DETAILS AND EVIDENCES. PRAYER FOR ADJOURNMENT WAS REJECTED AND APPEALS HAVE BEEN DISPOSED OF EX PARTE AND THE APPEALS WERE DISM ISSED IN-LIMINE AND THE APPEALS WERE NOT DISPOSED OF OR DECIDED ON MERI TS. FURTHER, THE MAIN ISSUE INVOLVED IN THIS APPEAL WAS WITH REGARD TO CH ARACTERIZATION OF INCOME AS INCOME FROM HOUSE PROPERTY OR INCOME FROM BUS INESS AND ON THIS ISSUE THERE HAS BEEN SIGNIFICANT LEGAL DEVELOPMENT BECAUSE OF TWO SUPREME COURT JUDGMENTS IN THE CASE OF CHENNAI PROP ERTIES & INVESTMENTS LTD VS CIT 373 ITR 673 (SC) AND RAYALA CORPORATION PVT LTD VS ACIT 386 ITR 500 (SC). IN VIEW OF THESE FACTS, IT WAS REQUESTED THAT THESE APPEALS SHOULD BE SENT BACK TO THE FILE OF THE CIT( A) TO BE DECIDED ON MERITS, THAT TOO, AFTER CONSIDERING THE AFORESAID J UDGMENTS OF THE HON'BLE SUPREME COURT WHICH HAVE DIRECT BEARING ON THE ISSU ES INVOLVED. IT WAS ALSO SUBMITTED BY THE LD. COUNSEL THAT FULL CO-OPER ATION SHALL BE EXTENDED BY THE ASSESSEE TO THE LD. CIT(A) FOR DISPOSAL OF T HESE APPEALS. 4. PER CONTRA, THE LD. DR FAIRLY SUBMITTED THAT THESE APPEALS MAY BE SENT BACK TO THE FILE OF THE LD. CIT(A) IN VIEW OF LEGAL DEVELOPMENTS AS DISCUSSED ABOVE. 4 I.T.A. NO.6010 & 6011/MUM/2016 5. WE HAVE GONE THROUGH THE FACTS OF THE CASE. IT IS NOTED BY US THAT ASSESSEE HAVE BEEN SEEKING ADJOURNMENTS IN THIS CAS E FROM 16-02-2015 TO 08-08-2016. UNDOUBTEDLY, IT WAS NOT PRACTICALLY FE ASIBLE TO ADJOURN THE APPEALS FOR INFINITE TIME. HOWEVER, IT IS ALSO NOT ED THAT THE LD. CIT(A) HAS NOT DISPOSED OF THE APPEALS ON MERITS. THESE APPEA LS HAVE BEEN DISMISSED BY LD. CIT(A) IN-LIMINE WHICH IS NOT PERM ISSIBLE UNDER THE LAW. FURTHER, IT IS ALSO NOTICED BY US THAT BECAUSE OF T HE JUDGMENTS OF THE HON'BLE SUPREME COURT AS DISCUSSED ABOVE, THERE MAY BE SUBSTANTIAL BEARING ON THE ISSUES RAISED BY THE ASSESSEE. UNDE R THESE CIRCUMSTANCES, WE FIND IT APPROPRIATE TO SEND BOTH THESE APPEALS B ACK TO THE FILE OF THE LD. CIT(A) TO BE DECIDED ON MERITS, AFTER CONSIDERI NG AFORESAID JUDGEMENTS. THE ASSESSEE SHALL ALSO BE FREE TO RAI SE ANY FURTHER LEGAL AND FACTUAL ISSUE AND OPPORTUNITY SHALL BE GRANTED BY T HE LD. CIT(A) TO FURNISH REQUISITE DETAILS AND EVIDENCES. NO ADJOURNMENT SH ALL BE TAKEN BY THE ASSESSEE EXCEPT FOR THE REASONS BEYOND THE CONTROL OF THE ASSESSEE. THE ASSESSEE IS DIRECTED TO APPEAR SUO MOTO BEFORE THE L D. CIT(A) ON 15-02- 2017. THE ASSESSEE SHALL CARRY COPY OF OUR ORDER. THE ASSESSEE SHALL ALSO PREPARE WRITTEN SUBMISSIONS AND PAPER BOOK WELL IN TIME SO THAT PRECIOUS TIME OF LD. CIT(A) IS NOT WASTED IN GRANTING ADJOUR NMENTS WITHOUT ANY PROPER REASONS. 6. AS A RESULT, BOTH THE APPEALS ARE SENT BACK TO THE FILE OF THE LD. CIT(A) WITH OUR AFORESAID DIRECTIONS. 5 I.T.A. NO.6010 & 6011/MUM/2016 7. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLO WED, FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING. SD/- SD/- (MAHAVIR SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 23 RD DECEMBER, 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , E-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES