Mr Ashwin Kr. Tulsidas & Jayant Kr. Tulsidas, Kolkata V. THE ITO, WD-43(1), KOLKATA, Kolkata

ITA 678/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2961 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOKE NAG
• Assessee Lawyers: P J BHIDE
• Keywords: Capital asset; Cost of acquisition; Assessment record; Reassessment proceedings
• Section: 143(3); 292BB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C, KOLKATA BEFORE SH. J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SH. S.S. GODARA, JUDICIAL MEMBER ITA NOS. 678, 1817 & 1818/KOL/2016 [ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10] MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS EXECUTOR TO THE ESTATE OF LATE TULSIDAS KHATAU, C/O JETHABHAI KHATAU & CO., 176, JAMNALAL BAJAJ STREET, KOLKATA- 700 007. PAN- AAABA 0406 G VS INCOME TAX OFFICER WARD-43(1), KOLKATA. (APPELLANT) (RESPONDENT) APPELLANT BY SH. P.J. BHIDE, FCA RESPONDENT BY SH. ALOKE NAG, ADDL. CIT(DR) DATE OF HEARING 05.08 .201 9 DATE OF PRONOUNCEMENT 21 .08.2019 ORDER PER SH. S.S.GODARA, JUDICIAL MEMBER THESE THREE ASSESSEES APPEALS ARISE AGAINST THE CIT(A)-13, KOLKATAS SEPARATE ORDERS DATED 30.12.2015 IN AY 2007-08 AND 28.06.2016 IN AYS 2008-09 AND 2009-10 IN CASE NOS. 518/CIT(A)-13/W-43(1)/2014-15 AND 523/CIT(A)-13/W- 43(1)/2014-15; RESPECTIVELY INVOLVING PROCEEDINGS U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSEES FIRST APPEAL ITA NO. 678/KOL/2016 SUFFERS FROM EIGHT DAYS DELAY STATED TO BE ATTRIBUTABLE COMMUNICATION GAP DURING FILING PROCESS AS PER CONDONATION PETITION DATED 12.04.2016. THE REVENUE IS FAIR ENOUGH IN NOT DISPUTING ALL THESE CONDONATION AVERMENTS. WE TREAT THE IMPUGNED DELAY TO BE ON ACCOUNT OF CIRCUMSTANCES BEYOND ASSESSEES CONTROL. THE SAME STANDS CONDONED. THIS APPEAL ITA NO. 678/KOL/2016 IS TAKEN UP FOR ADJUDICATION ON MERITS. 3. A COMBINED PERUSAL OF ALL THREE CASE FILES REVEALS THAT THE ISSUE(S) PLEADED AT THE ASSESSEES BEHEST ARE IDENTICAL IN NATURE. THESE TWO ASSESSEES NAMELY M/S ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS HAVE BEEN ASSESSED AS AN ASSOCIATION OF PERSONS (AOP) IN THE CAPACITY OF EXECUTORS OF THE DECEASED SH. TULSIDAS KHATAU ITA NOS. 678, 1817 & 1818/KOL/2016 [ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10] MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS PAGE | 2 WHO OWNED THE CAPITAL ASSET I.E. 10% SHARE IN A LARGE PIECE OF LAND AT VILLAGE-MIRA, TALUKA & DISTRICT-THANE, MAHARASHTRA. THE SAID ESTATE HOLDER EXECUTED HIS WILL BEQUESTING ALL ASSETS TO FOUR LEGATEES AND APPOINTED THESE TWO APPELLANTS AS EXECUTORS. THERE IS FURTHER NO DISPUTE THAT THESE EXECUTORS HAVE ACTED AS VENDORS IN THE CORRESPONDING SALE DEED(S) EXECUTED IN THE THREE ASSESSMENT YEARS. THE ASSESSING OFFICER FORMED REASONS TO BELIEVE THAT THE ESTATE OF SH. TULSIDAS KHATAU TAXABLE INCOME HAD ESCAPED ASSESSMENT. HE THEREFORE RECORDED REASONS TO THIS EFFECT AND ISSUED SECTION 148 NOTICE(S) TO THESE TWO EXECUTORS. ALL THIS CULMINATED THE IMPUGNED THREE REASSESSMENTS GIVING RISE TO LONG TERM CAPITAL GAINS ADDITIONS OF RS. 30,74,930/-, 13,12,893/- AND 6,84,810/-; ASSESSMENT YEAR WISE, RESPECTIVELY. HE DETERMINED THE COST OF ACQUISITION OF THE ABOVE STATED CAPITAL ASSET AS ON 01.04.1981 TO BE RS. 85/SQYD THAN THAT CLAIMED OF RS. 110/SQYD TO COMPUTE THE IMPUGNED CAPITAL GAINS. THE CIT(A) HAS UPHELD THE SAME IN HIS LOWER APPELLATE PROCEEDINGS. 4. IT IS IN THIS BACKDROP OF FACTS THAT THE ASSESSEES AOP IS RAISING TWO SUBSTANTIVE GROUNDS EACH IN FORMER AS MANY ASSESSMENT YEARS 2007-08 AND 2008- 09 CHALLENGING VALIDITY OF THE IMPUGNED REOPENING/REASSESSMENT ON ACCOUNT OF THE ASSESSING OFFICER HAVING RECORDED REASONS IN THE NAME OF THE ESTATE THAN TWO EXECUTORS OR THE AOP. THEIR NEXT GRIEVANCE IS THAT THE LOWER AUTHORITIES HAVE NOT GRANTED STATUTORY BENEFITS PROVIDED IN SECTION 168(4) OF THE ACT IS APPLICABLE IN CASE OF EXECUTORS. THE ASSESSEES THIRD SUBSTANTIVE GROUND IN LAST ASSESSMENT YEAR 2009-10 SEEKS TO CLAIM COST OF ACQUISITION OF THE ABOVE STATED CAPITAL ASSET AT RS. 110/SQYD THAN RS. 85/SQYD TAKEN IN BOTH THE LOWER PROCEEDINGS. 5. WE PROCEED FURTHER TO NOTICE THAT THE ASSESSEES HAVE ALSO RAISED AN ADDITIONAL GROUND IN ASSESSMENT YEARS 2007-08 AND 2008-09 THAT BOTH THE LOWER AUTHORITIES OUGHT TO HAVE ADOPTED COST OF ACQUISITION AS RS. 110/SQYD AND NOT RS. 85/8SQYD (SUPRA). THE REVENUE VEHEMENTLY OPPOSES ADMISSION OF THIS ADDITIONAL GROUND AT THIS BELATED STAGE. WE FIND NO MERIT IN THE REVENUES OBJECTIONS SINCE ALL THE RELEVANT FACTS REGARDING VALUATION OF ASSESSEES CAPITAL ASSET ARE ALREADY ON RECORD. THE TRIBUNALS SPECIAL BENCH DECISION IN M/S ALL CARGO GLOBAL LOGISTICS VS. DCIT [2012]137 ITD 287 (MUM.)(SB) TAKES INTO CONSIDERATION HONBLE APEX COURTS DECISION IN NATIONAL THERMAL POWER CORPORATION VS. CIT 229 ITR 383 (SC) TO HOLD THAT WE CAN VERY WELL ENTERTAIN SUCH AN ADDITIONAL GROUND IN ORDER TO DETERMINE CORRECT TAX LIABILITY OF AN ASSESSEE IN CASE. WE ADMIT THE ASSESSEES ADDITIONAL ITA NOS. 678, 1817 & 1818/KOL/2016 [ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10] MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS PAGE | 3 GROUND IN THE ABOVE STATED FORMER TWO ASSESSMENT YEARS REGARDING COST OF ACQUISITION AS OF 01.04.1981. 6. COMING TO THE FORMER TWO ISSUES OF VALIDITY OF IMPUGNED REOPENING/REASSESSMENT AND DENIAL OF COMPUTATION AS PROVIDED U/S 168(4) OF THE ACT IN CASE OF EXECUTORS, MR. BHIDE INVITES OUR ATTENTION TO THE CIT(A)S IDENTICAL DETAILED DISCUSSION IN ALL CASES AS UNDER: 4. DECISION:- I HAVE GONE THROUGH THE CONTENTION OF THE ASSESSES, THE ORDER PASSED BY THE AO AND THE SUBMISSIONS MADE BV THE APPELLANT, THE DECISION OF THIS APPEAL IS GIVEN AS UNDER:- GROUND NUMBER 1 RELATES TO THE ISSUANCE TO THE STATE OF LATE. SRI TULSIDAS KHTAU. WHEREAS IT SHOULD HAVE BEEN ISSUED IN THE NAME OF THE EXECUTORS. IN THIS REGARD IT IS TO POINT OUT THAT THE ASSESSING OFFICER HAD ISSUED NOTICE UNDER SECTION 148 IN THE NAME OF STATE OF SRI TULSIDAS KHATAU-13 RATHER THAN MENTIONING NAME OF ALL THE FOUR EXECUTORS. IT IS ALSO A MATTER OF FACT THAT PRIOR TO ISSUANCE OF NOTICE U/S 148 NO RETURN WAS FILLED BY EXECUTOR AT THE ESTATE OF LATE SRI TULSIDASH KHATAU FOR ASSESSMENT YEAR 2007-08. THE AO HAD RECEIVED INFORMATION THAT ON 11-12-2006 THE ESTATE OF LATE SRI TULSIDASH KHATAU HAS INFORMATION THAT CO-OWNERS LATE SRI TULSIDAS KHTAU SOLD LAND PROPERTY AT VILLAGE MIRA, TALUKA & DISTRICT- THANE, MAHARASHTRA TO M/S NETWORK CONSTRUCTION COMPANY WHERE HE HAS HAVING 100/O OF HIS SHARE. ON RECEIPT OF THIS INFORMATION THE AO RIGHTLY ISSUED NOTICE UNDER SECTION 148 TO THE ESTATE OF LATE SRI TULSIDAS KHATAU. AS PER ASSESSMENT RECORD THE APPELLANT HAS COMPLIED THROUGH SHRI ASHWIN KUMAR TULSIDAS WHO CLAIMED HIMSELF AS A EXECUTOR OF THE STATE.THIS FACT IS DULY MENTIONED IN THE ASSESSMENT ORDER. SECTION 292B STATES THAT NO NOTICE ASSESSMENT OR OTHER PROCEEDING CAN BE INVALID IF THE SAME IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT OF THE PURPOSE. SIMILARLY AS PER SECTION 292BB ANY NOTICE ISSUED WILL BE DEEMED TO BE VALID IF ALL HAS COMPLIED WITH THE SAME AND NO OBJECTION WAS RAISED DURING THE ASSESSMENT. CONSIDERING THE ABOVE POSITION OF LAW COMPLIANCE OF THE ASSESSEE MADE DURING THE COURSE OF ASSESSMENT AS AN REPRESENTATIVE EXECUTOR OF SRI LATE TULSIDAS KHATAU. IT IS ALSO MATTER OF RECORD THAT SRI ASHWIN KUMAR TULSIDAS AS AN EXECUTOR TO THE ESTATE AS APPEARED IN THE ENTIRE PROCEEDING AND NO OBJECTION WAS FILED THEREFORE, THE NOTICE ISSUED IS IN CONFORMITY WITH ACCORDING TO THE INTENT OF PURPOSE OF THIS ACT. THE AO HAS RIGHTLY PASSED ORDER IN THE NAME OF ASHWINN KUMAR TULSIDAS AND JAYANT KUMAR TULSIDAS TOO AS EXECUTOR TO THE ESTATE OF LATE SRI TULSIDAS KHATAU. THE GROUND OF APPEAL HAS NO SUBSTANCE AND THE SAME IS DISMISSED. GROUND NUMBER 3 RELATES TO THE ISSUE OF ASSESSING INCOME OF LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF LAND IN THE HANDS OF NAMELY SRI JAYANT TULSIDAS & ASHWIN KUMAR TULSIDAS ON THE GROUND THAT ON THE DATE OF SALE THE SAID PIECE OF LAND WAS NOT DISTRIBUTED AMONG THE FOUR BENEFICIARIES MENTIONED IN THE BILL. AS SRI JAYANT TULSIDAS AND SRI ASHWIN TULSIDAS ONLY THESE TWO PERSONS THE COURSE OF REGISTRY OR IS THERE ANY MENTION IN THE SALE DEED ABOUT REGISTRATION OF SHARES OF OTHER TWO CO OWNERS WHICH MAY SHOW ITA NOS. 678, 1817 & 1818/KOL/2016 [ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10] MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS PAGE | 4 THAT THE DECLARATION IN THE WILL WAS TAKEN INTO ACCOUNT WHILE SELLING THE LAND. IF AS PER WILL THERE ARE FOUR CO OWNERS THEN HOW ONLY TWO PERSONS WERE COMPETENT TO MAKE REGISTRY OF ENTIRE LAND. I DO NOT FIND ANY SCOPE OF INFIRMITY WITH THE ADDITION MADE BY THE AO. THEREFORE, THE ADDITION MADE BY THE AO IS UPHELD AND THE APPEAL IS DISMISSED. 7. LEARNED COUNSEL THEN REFERS TO THE ASSESSING OFFICERS REOPENING REASONS RECORDED IN THE NAME OF ESTATE OF THE DECEASED SH. TULSIDAS KHATAU AND NOTICES ISSUES TO THE ASSESSEES U/S 148 OF THE ACT. HIS CASE IS THAT THE ASSESSING OFFICER HAS NOWHERE RECORDED ANY REASON IN CASE OF THE ASSESSEES EXECUTORS BUT PROCEEDINGS HAVE BEEN WRONGLY INITIATED AGAINST THEM WHICH ARE NOT SUSTAINABLE IN THE EYES OF LAW. WE FIND NO MERIT IN ASSESSEES INSTANT ARGUMENT. THE FACT REMAINS THAT THE ESTATE HEREINABOVE DID NOT HAVE ANY PAN AND THESE TWO ASSESSEES HAVE RECEIVED NOTICES, PARTICIPATED IN REASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER WITHOUT RAISING ANY OBJECTION TO THIS EFFECT AND THEY HAVE THROUGHOUT BEEN REPRESENTING THE ESTATE; FORMS SUFFICIENT REASON FOR US TO AFFIRM THE CIT(A)S FINDINGS QUOTING SECTION 292B OF THE ACT IN THESE FACTS AND CIRCUMSTANCES. WE ACCORDINGLY GO BY THE VERY REASONING TO REJECT THE ASSESSEES FIRST LEGAL GROUND. 8. NEXT COMES THE SECOND ISSUE CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION DENYING SECTION 168(4) BENEFIT IN COMPUTATION OF THE ABOVE STATED CAPITAL GAINS. THERE CAN HARDLY BE ANY DISPUTE THAT ANY INCOME OF THE ESTATE DISTRIBUTED OR APPLIED TO THE BENEFIT OF ANY SPECIFIC LEGATEE THEREOF HAS TO BE EXCLUDED IN THE PREVIOUS YEAR BUT THE SAME HAS TO BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF SUCH SPECIFIC LEGATEE. MR. NAG EMPHASISES THAT THE CIT(A) HAS RIGHTLY HELD THAT ALTHOUGH THERE ARE FOUR BENEFICIARIES OF THE ESTATE TRANSFERRED, ONLY TWO OF THEM HAVE EXECUTED THE DIFFERENT AGREEMENT(S) OF SALE. WE FIND NO MERIT IN THE INSTANT ARGUMENT SINCE THESE TWO ASSESSEES HAD ONLY ACTED AS EXECUTORS AS PER THE ESTATE HOLDERS WILL (SUPRA). WE THEREFORE ACCEPT THE ASSESSEES GRIEVANCE FOR STATISTICAL PURPOSES AND DIRECT THE ASSESSING OFFICER TO FINALIZE CONSEQUENTIAL COMPUTATION U/S 168(4) OF THE ACT AFRESH AFTER CARRYING ON THE NECESSARY FACTUAL VERIFICATION. 9. LASTLY COMES THE COMMON ISSUE OF COST OF ACQUISITION OF THE CAPITAL ASSET IN ISSUE AS ON 01.04.1981. SUFFICE TO SAY, THIS TRIBUNALS COORDINATE BENCH DECISION IN TWO OF OTHER CO-OWNERS I.E. ESTATE(S) OF KRISHNA KR. J. KHATAU AND DHARMSHI KHATAU VS. ITO ITA NOS. 4223 AND 4224/MUM/2014 DECIDED ON 01.12.2014 HAS ACCEPTED THE COST OF ACQUISITION OF THE VERY CAPITAL ASSET AT THE RATE OF RS. 110/SQYD AS ON 01.04.1981. THIS CLINCHING EFFECT HAS GONE REBUTTED FROM THE REVENUE SIDE. WE THEREFORE DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE ASSESSEES LONG TERM ITA NOS. 678, 1817 & 1818/KOL/2016 [ASSESSMENT YEARS: 2007-08, 2008-09 & 2009-10] MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS PAGE | 5 CAPITAL GAINS AFRESH GOING BY THE TRIBUNALS SAID COORDINATE BENCH DECISION(S). THIS THIRD SUBSTANTIVE GROUND IS DECIDED IN ASSESSEES FAVOUR IN FOREGOING PARAS IN ALL CASES. 10. THESE THREE ASSESSEES APPEALS ARE PARTLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 21.08.2019. SD/- SD/- (J. SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:- 21.08.2019 BIDHAN COPY FORWARDED TO: 1. APPELLANT- MR. ASHWIN KR. TULSIDAS & JAYANT KR. TULSIDAS, EXECUTOR TO THE ESTATE OF LATE TULSIDAS KHATAU, C/O JETHABHAI KHATAU & CO., 176, JAMNALAL BAJAJ STREET, KOLKATA- 700 007. 2. RESPONDENT- INCOME TAX OFFICER, WARD-43(1), KOLKATA. 3. CIT-KOLKATA 4. CIT(APPEALS)-13, KOLKATA (SENT THROUGH MAIL) 5. DR: ITAT-KOLKATA BENCHES (SENT THROUGH MAIL) AR/H.O.O ITAT, KOLKATA