ACIT 24(1), MUMBAI V. M/S.GANGA ENTERPRISE, MUMBAI

ITA 6580/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3590 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 19-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR SR
• Keywords: Capital asset; Revised return; Set aside; Capital Gains
• Section: 143(3); 2(14); 139(5); 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , G BENCH , MUMBAI BEFORE SHRI S AKTIJIT DEY , J UDICIAL MEMBER & SHRI M.BALAGANESH, A CCOUNTANT MEMBER ITA NO. 6580 / MUM/ 20 1 8 ( ASSE SSMENT YEAR : 20 1 3 - 14 ) ACIT - 24(1) ROOM NO.603, PIRAMAL CHAMBERS, JEEJEEBHOY LANE LALBAUG, PAREL MUMBAI - 400 012 VS. M/S. GANGA ENTERPRISE FLAT NO.25, 2 ND FLOOR LOKHANDWALA SARANGA CHSL, 3 RD CROS LANE, LOKHANDWALA COMPLEX ANDHERI(W) MUMBAI - 400 053 PAN/GIR NO. AA GFF4250L (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY NONE REVENUE BY S HRI V.VINOD KUMAR, SR.AR DATE OF HEARING 2 9 /10/2020 DATE OF PRONOUNCEMENT 11 /1 1 /2020 / O R D E R PER M. BALAGANESH ( A .M ) : THIS APPEAL FILED BY REVENUE IN ITA N O.6580/MUM/2018 FOR ASSESSMENT YEAR 2013 - 14 ARISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 36 , MUMBAI IN APPEAL NO.CIT(A) - 36/IT - 118/ACIT - 24(1)/2016 - 17, DATED 30/08/2018 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/ S.143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 2 3/03/2016 BY THE LD. ASSISTANT COMMI SSIONER OF INCOME TAX - 24(1) , MUMBAI (HEREINAFTER REFERRED TO AS LD. AO) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - ITA NO . 6580 /MUM/201 8 GANGA ENTERPRISE 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE VIDE REVISED COMPUTATION OF INCOME, STATING THAT NO CAPITAL GAINS ARISE FROM SALE OF THE IMPUGNED LAND WHICH WAS CLAIMED TO BE AGRICULTURAL LAND. 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS JUSTIFIED IN NOT GIVING THE AO AN OPPORTUNITY TO EXAMINE THE REVISED CLAIM OF THE ASSESSEE, IN VIOLATION TO RULE 46A OF THE INCOME TAX RULES, 1962. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND FILED ITS ORIGINAL RETURN OF INCOME 30/03/2015 FOR THE AY 2013 - 14 DECLARING TOTAL INCOME OF RS. 4,77,77,170/ - , WHICH WAS DULY PROCESSED U/S 143(1) OF THE ACT. W E FIND THAT THE ASSESEE FIRM IS ENGAGED IN THE BUSINES S OF INVESTING ACTIVITY IN REAL - ESTATE. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME AS TIME LIMIT FOR FILED REVISED RETURN U/S 139(5) OF THE ACT HAD ALREADY EXPIRED. IN THE SAID REVISED COMPUTATION OF INCOME FILED BEFORE THE LD .AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE CLA IMED THAT IT HAD ERRONEO USLY OFFERED C APITAL GAINS ARISING FROM THE SALE OF AGRICULTURAL LAND TO TAX, WHICH IS ACTUALLY EXEMPT FROM TAX. THE LD. AO DID NOT EVEN W HISP ER ABOUT THE FILING OF THIS REVISED COMPUTATION IN THE ASSESSMENT ORDER AND ACCEPTED TH E RETURN ED INCOME AT RS. 4 , 77 , 77 , 170/ - AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT DATED 23/03/2016 . THE ASSESEE ACCORDINGLY BEFORE THE LD. CIT(A) MADE A CLAIM OF EXEMPTION FROM CAPITAL GAIN S ON SALE OF AGRICULTURAL LAND BY PLACING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL ITA NO . 6580 /MUM/201 8 GANGA ENTERPRISE 3 HIGH COURT IN THE CASE OF CIT VS PRUTHVI BROKERS AND SHAREHOLDERS PVT.LTD REPORTED IN 349 ITR 336, WHEREIN IT WAS HELD THAT ALTHOUGH , THE LD. AO IS ENTITLED TO GRANT DEDUCTION ONLY ON THE BASIS OF A REVISED RETURN AND NO T ON THE BASIS OF A LETTER REQUESTING AN AMENDMENT TO THE RETURN FILED, THE APPELLATE AUTHORITIES ARE ENTITLED TO CONSIDER THE CLAIM AND TO ADJUDICATE THE SAME. IT IS NOT NECESSARY THAT THE DEDUCTION BE ALLOWED , ONLY IF A REVISED RETURN INCOME WOULD HA VE BEEN FILED. ACCORDINGLY , THE ASSESSEE PLEADED THAT THERE IS NO PROHIBITION ON THE POWERS OF THE APPELLATE AUTHORITIES TO ENTERTAIN ANY ADDITIONAL CLAIM , WHICH ACCORDING TO THEM ARISES IN THE COURSE OF PROCEEDINGS AND IS RELEVANT FOR THE DECISION OF THE MATTER. ACCORDINGLY , THE ASSESSEE PL EADED THAT ITS CLAIM TO CARRY FORWARD SHORT TERM CAPITAL LOSS OF RS. 2 , 09,09,645/ - INSTEAD OF RS. 49,09,645/ - BY FILING REVISED COMPUTATION OF INCOME SHALL BE SUSTAINED. THE ASSESSEE ALSO PLACED RELIANCE ON YET ANOTHER D ECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BALMUKUND ACHA R Y A VS DCIT REPORTED IN 310 ITR 310 (BOM) . THE ASSESSEE ALSO PLACED RELIANCE ON THE CBDT CIRCULAR N O . 14 (XL - 35) , DATED 11/04/1955, WHEREIN THE BOARD HAS DIRECTED ALL THE AOS TO GIVE ELIGIBLE DEDUCTIONS /EXEMPTIONS TO THE ASSESSEE AS PER PROVISIONS OF LAW AND DO NOT TAKE ADVANTAGE OF IGNORANCE OF ASSESSEE. THE ASSESS E E VIRTUALLY PLEADED THAT THE CAPITAL GAINS E RRONEOUSL Y OFFERED FROM SALE OF AGRICULTURAL LAND OF RS. 2 , 36 , 89 , 342/ - IN THE ORIGINAL RETURN OF INCOME FILED REQUIRES TO BE EXCLUDED FROM THE TAXABLE INCOME. 4 . WE FIND THAT THE ASSESSEE HAD SOLD AGRICULTURAL LAND SITUATED AT BALYAKHEDA, INDO RE D IST RICT FOR RS. 2 , 93 , 35 , 000/ - DURING THE YEAR UNDER CONSIDERATION A ND THE SAID L AND WAS PURCHASED BY THE ITA NO . 6580 /MUM/201 8 GANGA ENTERPRISE 4 ASSESSEE DURING THE FINANCIAL YEAR 2009 - 10 FOR RS. 41 , 87 , 859/ - . WE FIND THAT THE ASSESEE HAD FURNISHED THE COPY OF PANCHAYAT CERTIFICATE AND THE PURCHASE AGREEMENT OF THE LAND UNDER CONSIDERATION BEFORE THE LOWER AUTHORITIES. WE FIND THAT THE ASSESSE E HAD PLEADED THAT THE AGRICULTURAL LAND SITUATED AT BALYAKHEDA, INDO RE DIST RICT IS MO RE THAN 8 KILOMETERS AWAY FROM THE LIMITS OF INDO RE MUNICIPAL CORPORATION . IN SUPPORT OF HIS CONTENTION, THE ASSESSEE PROVIDED THE LOCAL PANCHAYAT CO PY TO PROVE THAT THE SAID LAND IS AN AGRICULTURAL LAND AND THAT THE SAME IS SITUAT ED BEYOND 8 KILOMETERS FROM THE MUNICIPAL LIMITS. ACCORDINGLY , THE ASSESSEE HAD PLEADED THAT THE TRANSFER OF SAID LAND WOULD BE OUTSIDE THE AMBIT OF DEFINITION OF CAPITAL ASS ET U/S 2(14) OF THE ACT. 5 . WE FIND THAT THE LD. CIT(A) HAD DULY GONE THROUGH THE ENTIRE RECORDS OF THE ASSESSEE TOGETHER WITH THE DOCUMENTARY EVIDENCES SUBMITTED WITH RE GARD TO THE SALE OF THE SAID LAND , WHICH WAS ALREADY ON RECORD BEFORE THE LD. AO AND CATEGORICALLY HELD THAT THE LAND SOLD WAS ACTUALLY AN AGRICULTURAL LAND AND THAT TH E SAME WAS SITUATED OUTSIDE THE PRESCRIBED LIMITS OF THE MUNICIPAL CORPORATION. ACCORDI NGLY , HE HELD THAT THE SAID LAND IS ELIGIBLE TO BE TREATED AS AN AGRICULTURAL LAND AND WOULD BE OUTSIDE THE DEFINITION OF CAPITAL ASSET U/S . 2(14) OF THE ACT A ND CORRESPONDINGLY HELD THAT THE TRANSFER OF THE SAID LAND WOULD NOT BE LIABLE FOR CAPITAL GAINS. THE SAID CATEGORICAL FINDING OF FACT MADE BY THE LD. CIT(A) HAS NOT BEEN CONTROV ERTE D BY THE LD. DR BEFORE US. HENCE, WE DO NOT DEEM IT FI T TO INTERFERE IN THE ORDER OF THE LD. CIT(A) IN THIS REGARD. ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. ITA NO . 6580 /MUM/201 8 GANGA ENTERPRISE 5 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 / 11 /2020 SD/ - ( SAKTIJIT DEY ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 11 / 11 / 2020 THIRUMALESH , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REG ISTRAR) ITAT, MUMBAI 1. THE APPELL ANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//