ADAM A SORATHIA, MUMBAI V. ITO 20(1)(1), MUMBAI

ITA 6699/MUM/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0924 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 18-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: ISHWER RATHI
• Keywords: Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 6699/MUM/2013 : A.Y : TO 2009 - 10 SHRI ADAM A. SORATHIA SHOP NO. 7, 338, CHUNAWALA CHAWL, S.V. ROAD, ANDHERI (W), MUMBAI 400 058. (APPELLANT) PAN : AADPS5760J VS. ITO - 20(1)(1), MUMBAI (RESPONDENT) APPELLANT BY : SHRI ISHWER RATHI RESPONDENT BY : SHRI RAJESH KUMAR YADAV DATE OF HEARING : 12/10/2017 DATE OF PRONOUNCEMENT : 05 /01/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 31 , MUMBAI DATED 30 .08.201 3 , PERTAINING TO THE ASSESSMENT YEAR 2009 - 10 , WHICH IN TURN HA S ARISEN FROM ORDER DATED 2 3 . 12 .2011 PASSED BY THE ASSESSING OFFICER, MUMBAI U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL , THE SOLE DISPUTE ARISES FROM THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE LONG TERM CAPITAL GAIN OF RS.51,76,870/ - ON SALE OF 2 ITA NO. 6699/MUM/2013 SHRI ADAM A. SORATHIA LAND SITUATED AT VILLAGE KAUSA (MUMBRA), TAL. THANE, DIST. THANE IN THE HANDS OF THE ASSESSEE. 3. IN ORDER TO APPRECIAT E THE CONTROVERSY, THE FOLLOWING DISCUSSION IS RELEVANT. THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN BUILDING MATERIAL MAINLY IN CEMENT. ASSESSEE FILED RETURN OF INCOME ON 17.09.2009 DECLARING AN INCOME OF RS.2,73,160/ - . IN THE C OURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED FROM THE AIR DETAILS THAT ASSESSEE HAD ENTERED INTO TRANSACTION WITH REGARD TO SALE OF LAND AT VILLAGE KAUSA, DIST. THANE AND THAT THE SAME WAS NOT DECLARED IN THE RETURN OF INCOME. THE ASSESSIN G OFFICER FURTHER NOTED THAT THE STATED CONSIDERATION IN THE AGREEMENT WAS RS.47,50,000/ - AS AGAINST ITS MARKET VALUE OF RS.1,02,50,000/ - . THE ASSESSEE WAS SHOW - CAUSED AND AFTER CONSIDERING THE REPLIES, THE ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN OF RS.51,76,870/ - . THE SAID ADDITION HAS SINCE BEEN UPHELD BY THE CIT(A) ALSO, AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT FOLLOWING A DDITIONAL GROUN D OF APPEAL HAS BEEN RAISED BY THE ASSESSEE, WHICH GOES TO THE ROOT OF THE MATTER : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE PROVISION OF LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN COMPUTING THE TAX LIABILITY ON THE SALE OF IMMOVEABLE PROPERTY [BEING LAND SITUATED AT SR. NO. 143, H. NO. 1 (PT.), VILLAGE KAUSA (MUMBRA), TALUKA THANE, DISTRICT THANE] WITHOUT APPRECIATING THAT THE APPELLANT IS NOT THE OWNER OF SUCH PROPERTY AND IS MERELY THE HOLDER OF A POWER OF ATTORNEY. 3 ITA NO. 6699/MUM/2013 SHRI ADAM A. SORATHIA 5. I N TERMS OF THE SAID A DDITIONAL GROUND OF APPEAL, IT IS SOUGHT TO BE CANVASSED THAT THE INCOME FROM SALE OF THE IMPUGNED PROPERTY IS NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE INASMUCH AS HE IS NOT THE OWNER OF THE SAID PROPERTY AND WAS MERELY A POWER OF A TTORNERY - HOLDER. THE LEARNED REPRESENTATIVE POINTED OUT THAT THE SAID PLEA INADVERTENTLY WAS NOT RAISED BEFORE THE LOWER AUTHORITIES, BUT SINCE IT GOES TO THE ROOT OF THE MATTER, SAME MAY BE ADMITTED. FURTHER JUSTIFYING THE ADMISSION OF SUCH NEW PLEA, TH E LEARNED REPRESENTATIVE REFERRED TO THE PAPER BOOK, WHEREIN IS PLACED A COPY OF THE IRREVOCABLE GENERAL POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE WITH REGARD TO THE IMPUGNED LAND GIVEN BY THE OWNERS. IT IS SOUGHT TO BE POINTED OUT THAT THOUGH IT WAS NO T SPECIFICALLY PLEADED BEFORE THE ASSESSING OFFICER, YET THE PAPERS ON RECORD SHOW THAT ASSESSEE WAS ONLY THE POWER OF ATTORNEY - HOLDER FOR ENABLING HIM TO SELL THE IMMOVEABLE PROPERTY IN QUESTION ON BEHALF OF THE OWNERS. IT HAS ALSO BEEN POINTED OUT THAT WHEN THE MATTER WAS REFERRED BY THE ASSESSING OFFICER TO THE VALUATION OFFICER, EVEN THE PRELIMINARY VALUATION REPORT DATED 05.12.2011 SHOWS THAT ASSESSEE WAS ONLY THE HOLDER OF POWER OF ATTORNEY ON BEHALF OF THE NINE CO - OWNERS WHO HAD DIRECTED THE ASSESSE E TO SELL THE IMMOVEABLE PROPERTY OWNED BY THEM. IN THIS CONTEXT, THE LEARNED REPRESENTATIVE ALSO REFERRED TO AN AFFIDAVIT BY THE NINE CO - OWNERS TO SAY THAT ASSESSEE WAS ONLY THE POWER OF ATTORNEY - HOLDER AND NOT THE OWNER OF THE PROPERTY. 6. THE LD. DR H AS OPPOSED THE PLEA OF THE ASSESSEE FOR ADMISSION OF THE SAID ADDITIONAL GROUND OF APPEAL. 7. HAVING HEARD THE RIVAL SUBMISSIONS, WE FIND NO JUSTIFIABLE REASON TO DISENTITLE THE ASSESSEE FROM RAISING THE SAID ADDITIONAL GROUND OF APPEAL 4 ITA NO. 6699/MUM/2013 SHRI ADAM A. SORATHIA SINCE IT GOES TO T HE ROOT OF THE MATTER REGARDING ASSESSABILITY OF THE GAINS IN THE HANDS OF THE ASSESSEE. THIS PLEA WAS HITHERTO NOT RAISED BEFORE THE LOWER AUTHORITIES, BUT IT IS QUITE EVIDENT FROM THE PRIMARY DOCUMENTS IN CONNECTION WITH THE SAID PLEA, WHICH ARE ALREADY ON RECORD BEFORE THE ASSESSING OFFICER. ON LY THE AFFIDAVIT DATED 09.10.2017 BY THE NINE CO - OWNERS IS A NEW PIECE OF EVIDENCE WHICH WAS NOT BEFORE THE LOWER AUTHORITIES. IT IS A TRITE LAW THAT INCOME IS LIABLE TO BE ASSESSED IN THE CORRECT HANDS. THE PL EA OF THE ASSESSEE IS THAT THE INCOME IS NOT ASSESSABLE IN HIS HANDS SINCE HE WAS NOT THE OWNER OF THE PROPERTY, BUT WAS ONLY ACTING AS A POWER OF ATTORNEY - HOLDER. BE THAT AS IT MAY, IN OUR VIEW, HAVING REGARD TO THE PRINCIPLES OF JUSTICE AND FAIR PLAY IT WOULD BE APPROPRIATE THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE PLEA RAISED BY THE ASSESSEE AND THEREAFTER ADJUDICATE THE CONTROVERSY RELATING TO ASSESSABILITY OF CAPITAL GAINS ON SALE OF PROPERTY AT VILLAG E KAUSA, DIST. THANE IN THE HANDS OF THE ASSESSEE. THEREFORE, WITHOUT GOING INTO THE MERITS OF THE CONTROVERSY, THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AFRESH. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY, 2018. SD/ - SD/ - ( SAKTIJIT DEY ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 5 TH JANUARY, 2018 *SSL* 5 ITA NO. 6699/MUM/2013 SHRI ADAM A. SORATHIA COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI