ITO 16(2)(4), MUMBAI V. KARSANBHAI K. PATEL, MUMBAI

ITA 6051/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71509 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 28-10-2013
• Assessment Year: misc
• Appeal Filed On: 30-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S C TIWARI; NATASHA MANGAT
• Assessee Lawyers: SURINDER JIT SINGH
• Keywords: Capital asset; Principle of natural justice; Source of fund

Judgement Text

, , ,, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. . .. . , ,, , / !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RAJENDR A, ACCOUNTANT MEMBER /. ITA NO.6051/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-1996-97 ITO 16(2)(4) MATRU MANDIR, TARDEO ROAD, MUMBAI-400007 VS SHRI KARSANBHAI K. PATEL, ALTVIEW CO-OP. HSG. SOCIETY, ALTAMOUNT ROAD, MUMBAI- 400026 PAN: AMFPP1088C ( &' / APPELLANT ) ( ()&' / RESPONDENT ) /. ITA NO.6385/MUM/2011, $ $ $ $ % % % % / ASSESSMENT YEAR-1996-97 SHRI KARSANBHAI K. PATEL, 3-A , 7, ALTAMOUNT ROAD, MUMBAI- 400026 VS ITO 16(2)(4) MATRU MANDIR, TARDEO ROAD, MUMBAI-400007 PAN: AMFPP1088C ( &' / APPELLANT ) ( ()&' / RESPONDENT ) $*+ $*+ $*+ $*+ , , , , ' '' ' / ASSESSEE BY : SHRI SURINDER J IT SINGH ! - , ' / REVENUE BY : SHRI S.C. TIWARI & NATASHA MAN GAT $ $ $ $ - -- - +. +. +. +. / DATE OF HEARING : 28-10-2013 /0% - +. / DATE OF PRONOUNCEMENT : 01-11-2013 $ $ $ $ , 1961 - -- - 254 (1) ' '' ' +1+ +1+ +1+ +1+ '2 '2 '2 '2 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM: CHALLENGING THE ORDER DATED 26.05.2011 OF THE CIT(A )-27,MUMBAI,ASSESSING OFFICER (AO)AND THE ASSESSEE HAVE FILED CROSS-APPEALS.FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY THE ASSESSEE: ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, I.A. THE LD.COMM. OF INCOME TAX (APPEALS) ERRED IN CONSIDERING RS.6,28,50,000/-AS SALE CONSIDERATION IN RESPECT OF SALE OF FLAT AT RAJ NIK ETAN CO-OP.HSG, SOCIETY, 24-B, B. U. KHER MARG, MUMBAI-400 006 AS AGAINST RS.5,00,00,000/- B.THE LD. COMM. OF INCOME TAX (APPEALS) ERRED IN CO NFIRMING THE ORDER OF ASSESSING OFFICER NOT CONSIDERING IN PROPER PERSPECTIVE THE FOLLOWINGS: THE SALE AGREEMENT DATED 18/03/96 REFERRED TO THE S ALE CONSIDERATION OF RS.5 CRORES. THE SAID AGREEMENT REFERRED TO NOC DATED 25/11/94 I SSUED TO THE APPELLANT U/S 269UL OF THE ACT. CLAUSE 1 OF THE SALE AGREEMENT INDICATED PART PAYME NT RECEIVED AND THE BALANCE PAYMENT OF RS. 1,28,50,000/- WAS REFUNDED TO THE PURCHASE OF THE F LAT. THE VACANT AND PEACEFUL POSSESSION OF PREMISES WAS HANDED OVER ON 18/10/95 AS REFERRED TO IN CLAUSE 3 OF THE SALE AGREEMENT. C.THE LD.COMM. OF INCOME TAX (APPEALS) ERRED IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER IN DENYING EXEMPTION U/S54 OF THE ACT IGNORING THE FAC T THAT THE TRANSFER OF THE FLAT WAS COMPLETED AS 2 ITA NOS. 6051 & 6385/MUM/2011 SHRI KARSANBHAI K. PATE L ENVISAGED U/S 2(47)(V) R.W.S. 53A OF THE ACT AS THE POSSESSION WAS GIVEN ON 18/10/95. II.THE LD. COMM. OF INCOME TAX (APPEALS) ERRED IN C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN REGARD TO ADDITION OF ! 1, 00,000/- ON ACCOUNT O F LOW HOUSEHOLD WITHDRAWALS. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AME ND OR DELETE ANY OF THE ABOVE GROUNDS WITH PERMISSION OF THE HONBLE TRIBUNAL. GROUNDS OF APPEAL FILED BY THE AO READ AS UNDER: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A ) ERRED IN FAILING TO ENHANCE THE ASSESSMENT BY TAXING THE WIFES SHARE OF 50% BY INVOKING THE PROVISIONS OF SECTION 64(1)(IV) OF THE INCOME TAX ACT, 1961,AS THE ASSESSEE HAS NOT DI SCHARGED THE ONUS OF SOURCES OF INCOME IN RESPECT OF PURCHASE OF PROPERTY. 2.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD GROUND/S WHICH MAY BE NECESSARY. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NO.6385/MUM/2011 2. ASSESSEE,AN INDIVIDUAL,HAD FILED HIS RETURN OF INCO ME ON 31.3.1999 DECLARING TOTAL INCOME OF RS.40,000/-.ASSESSING OFFICER (AO) FINALISED THE AS SESSMENT ORDER U/S.143(3) OF THE ACT, DETERMI - NING HIS TOTAL INCOME AT RS.6.03 CRORES.MATTER TRA VELLED UP TO TRIBUNAL AND WAS RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION.ASSESSEE DID NOT APPEAR BEFORE THE AO,SO HE PASSED AN ORDER U/S.144 R.W.S. 254 OF THE ACT.ASSESSEE AGAIN PREFERRED AN APPEAL BEFORE THE FIRST APPEAL AUTHORITY (FAA).VIDE HIS LETTER DATED 30.03.2011,HE REQUESTED THE FAA TO ALLOW HIM TO RELY UPON THE PAPER BOOK(PB)CONTAINING 161 PAGES. 2.1 .DURING THE COURSE OF HEARING,BEFORE US,AUTHORISED REPRESENTATIVE(AR)SUBMITTED THAT THE DUE TO CERTAIN REASONS ASSESSEE COULD NOT APPEAR BEFORE THE AO,THAT THE PB SUBMITTED BEFORE THE FAA CONTAINED VITAL DOCUMENTS,THAT FAA DID NOT CONSIDER THE DOCUMENTS SUBMITTED BY THE ASSESSEE WHILE FINALISING THE APPEAL.DEPARTMENTAL REPRESENTA TIVE (DR)SUBMITTED THAT ASSESSEE WAS TOTALLY NON CO-OPERATIVE,THAT HE DID NOT APPEAR BEFORE THE AO. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL.IT IS A FACT THAT ASSESSEE HAD NOT COOPERATED WITH THE AO DURING THE ORIGINAL AS WELL AS THE REMANDED HEARING.BUT HIS OMISSION DOES NOT DEPRIVE HIM OF THE RIGHT OF PROPER HEARING BY T HE FAA.WE FIND THAT WHILE DECIDING THE APPEAL,FAA HAD CALLED FOR A REMAND REPORT FROM THE AO WITH REGARD TO THE PB FILED BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS.BUT HE DID NOT CALL FOR ANY REPORT FROM THE AO ABOUT THE PAPER THAT WERE SUBMITTED BY THE ASSESSEE ON 30.03.2011.FAA HAD PASSED HIS ORDER ON 26.05.2011,THUS HE HAD THE DOCUMENTS WITH HIM FOR ABOUT 45 DAYS.FROM HIS ORDER IT IS NOT CLEAR AS WHY HE DID NOT CONSIDER THE PAPERS SUBMITTED BY THE ASSESSEE ON30.03.2011.WE ARE AWARE THAT FAA HAS POWERS TO REJECTS OR ACCEPT ANY PAPER/DOCUM ENTS,BUT HE IS SUPPOSED TO MENTION THE REASONS FOR SUCH REJECTION/ACCEPTANCE.A NON SPEAKIN G ORDER IS AS GOOD AS NO ORDER.AS STATED EARLIER,ASSESSEE HAD MENTIONED THAT HE WOULD LIKE T O RELY ON THE DOCUMENTS OF THE PB DURING THE COURSE OF APPELLATE PROCEEDINGS.THEREFORE, FAA WAS SUPPOSED TO TAKE A DECISION ABOUT THE PB AND FINALISE THE APPEAL ACCORDINGLY.BY COMPLETELY I GNORING THE PB,FAA HAS CONTRAVENED THE BASIC PRINCIPLES OF NATURAL JUSTICE.CONSIDERING THE PECUL IAR FACTS OF THE MATTER WE ARE OF THE OPINION ,THAT IN THE INTEREST OF JUSTICE MATTER SHOULD BE RESTORE D BACK TO THE FILE OF THE FAA.HE IS DIRECTED TO ADJUDICATED THE APPEAL AFTER CONSIDERING THE PB FIL ED BY THE ASSESSEE ON .ASSESSEE IS DIRECTED TO EXTEND FULL COOPERATION TO THE FAA AND ENSURE THAT MATTER IS REPRESENTED BEFORE HIM IN A PROPER MANNER.APPEAL FILED BY THE ASSESSEE IS ALLOWED IN P ART. ITA NO. 6051/MUM/2011 EFFECTIVE GROUND OF APPEAL IN THE APPEAL FILED BY T HE AO IS ABOUT THE FAILURE OF THE FAA IN NOT ENHANCING THE ASSESSMENT OF THE ASSESSEE BY INVOKIN G THE PROVISIONS OF SECTION 64(1)(IV) OF THE 3 ITA NOS. 6051 & 6385/MUM/2011 SHRI KARSANBHAI K. PATE L ACT.WE ARE OF THE OPINION THAT THE GROUND OF APPEAL FILED BY THE AO CANNOT BE ADJUDICATED TILL APPEAL IS DECIDED BY THE FAA AFRESH.AS MATTER HAS B EEN RESTORED BACK TO THE FILE OF THE FAA,SO, WE ARE OF THE OPINION THAT ISSUE RAISED BY THE AO C ANNOT BE ADJUDICATED AT THIS STAGE.APPEAL FILED BY THE AO IS ALLOWED FOR STATISTICAL PURPOSES. AS A RESULT APPEALS FILED BY THE ASSES SEE AND THE AO STAND ALLOWED,IN PART. * +3 $*+ 4 $ -. 6 7 - 18 9 2 : ' !; - !+ <=. ORDER PRONOUNCED IN TH E OPEN COURT ON 1 ST NOVEMBER,2013 . '2 - /0% ' 9 >$ 1 UOA UOAUOA UOA , 2013 0 - 1 ? SD/- SD/- (B.R.MITTAL/ . .. . @ @ @ @ . .. . ) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, >$ /DATE: 01 .1 1 . 2013 SK '2 - (+B C'B%+ '2 - (+B C'B%+ '2 - (+B C'B%+ '2 - (+B C'B%+/ COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ D E , 4. THE CONCERNED CIT/ D E 5. DR A BENCH, ITAT, MUMBAI / BF1 (+$ ,.... . 6. GUARD FILE/ 1 G )B+ (+ )B+ (+ )B+ (+ )B+ (+ //TRUE COPY// '2$ / BY ORDER, H / < ! DY./ASST. REGISTRAR , /ITAT, MUMBAI