DCIT 6(2), MUMBAI V. CREATIVE GARMENTS P.LTD, MUMBAI

ITA 6907/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75287 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.6907/M/2012 ( / ASSESSMENT YEAR: 2008 - 2009 ) DCIT - 6(2), R.NO.563, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI - 400 020. / VS. M/S. CREATIVE GARMENTS PVT. LTD., 103, CAMA INDUSTRIAL ESTATE, SUN MILL COMPOUND, LOWER PAREL, MUMBAI 400 020. ./ PAN : AADCP 6520 C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI RAVI PRAKASH / RESPONDENT BY : SHRI DHARMESH SHAH / DATE OF HEARING : 16.1.2014 / DATE OF PRONOUNCEMENT : 24 .1.201 4 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 12.11.2012 IS AGAINST THE ORDER OF THE CIT (A) - 12, MUMBAI FOR THE ASSESSMENT YEAR 2008 - 2009. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE DEDUCTION OTHER THAN WHAT IS CLAIMED IN THE RETURN OF INCOME AT THE STAGE OF ASSESSMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING INDEXED COST FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL LOSS WHEN THE SAME WAS NOT CONSIDERED BY THE ASSESSEE WHILE FILING THE RETURN OF INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING THE LONG TERM CAPITAL LOSS FOR CARRYING FORWARD TO SUBSEQUENT YEARS , EVEN WHEN REVISED RETURN FILED WAS BEYOND THE PRESCRIBED TIME. 3. AT THE OUTSET, SHRI DHARMESH SHAH, LD COUNSEL FOR THE ASSESSE BROUGHT OUR ATTENTION TO THE GROUNDS AND MENTIONED THAT THE REVENUE FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT (A), WHO ENTERTAINED THE ISSUE OF GRANTING INDEXATION ON 2 THE COST OF ACQUISITION OF THE ASSETS FOR THE PURP OSE OF COMPUTING CA PITAL LOSS WHEN . THE SAID CLAIM WAS MADE BY WAY OF A LETTER BEFORE THE AO AND THE SAME WAS REJECTED FOR REASON OF NOT CLAIMING THE SAME BY FILING THE REVISED RETURN OF INCOME IN ACCORDANCE WITH THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE C ASE OF GOETZ INDIA LTD , 157 TAXMANN 1. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, THE CIT (A) ADMITTED THE SAID CLAIM OF THE ASSESSEE AND ALLOWED THE INDEXATION BENEFIT WHICH WAS WRONGLY NOT CLAIMED BY THE ASSESSEE ORIGINALLY. BY VIRTUE OF SUCH INDEXATION, ASSESSEE GOT THE BENEFIT OF DEDUCTION OTHER THAN WHAT IS CLAIMED IN THE ORIGINAL RETURN AND OTHER CONSEQUENTIAL BENEFITS BY WAY OF CARRY FORWARD OF THE CAPITAL LOSSES. IN SUPPORT OF THE CORRECTNESS OF ADMITTING THE ADDITIONAL GROUNDS BEFORE THE APPELLATE AUTHORITY, THE ASSESSEE RELIED ON THE ABOVE CITED JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA (SUPRA) AS WELL AS MANY OTHER DECISIONS WHICH ARE DISCUSSED IN DETAIL BY THE CIT (A) IN PARA 3 AND 3.1 OF THE IM PUGNED ORDER. 4. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT (A), REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, LD DR RELIED ON THE ORDER OF THE AO. 6. ON THE OTHER HAND , LD COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE ORDER OF THE CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE ORDER OF THE CIT (A) IN GENERAL, PARA 3 AND 3.1 IN PARTICULAR, WE FIND THAT THE SAME ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 3 & 3.1 OF THE CIT (A)S ORDER ARE REPRODUCED HERE UNDER: 3. I HAVE CAREFULLY CONSIDERED THE ORDER OF THE A O AND THE SUBMISSIONS OF THE APPELLANT. I FIND THAT THIS IS A CASE WHERE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLATE REALIZED THAT IT HAD NOT CLAIMED RELIEF THAT WAS DUE TO IT BY WAY OF INDEXATION REQUIRED TO BE DONE FOR CALCULATING OF CAPI TAL GAINS. THE APPELLANT IMMEDIATELY SOUGHT THE SAID RELIEF BY WAY OF LETTER FILED BEFORE THE ASSESSING OFFICER AS THE TIME FOR FILING OF REVISED RETURN HAD ALREADY EXPIRED. THE AO APPLYING THE RATIO OF THE DECISION OF THE HONBLE SUPREME COURT MENTIONED ABOVE REJECTED THE CLAIM OF THE APPELLANT STATING THAT THE SAME COULD NOT BE ALLOWED AS NO REVISED RETURN HAD BEEN FILED BY THE APPELLATE WITHIN THE DUE PERIOD TO THIS EFFECT. IT WAS STATED BY THE AO THAT THE RATIO OF DECISION OF THE HONBLE SUPREME COURT QUOTED ABOVE IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE BECAUSE AS PER LAW THE ONUS LIES ON THE ASSESSEE TO MAKE THE RIGHT CLAIM AND SUCH CLAIM MUST BE MADE WITHIN THE FRAMEWORK OF LAW AND PROVISIONS OF THE INCOME TAX ACT. I FIND TO THIS EXTENT THE APPELLANT HAS NOT ARGUED THE OBSERVATION OF THE AO AND HELD IT TO BE CORRECT AND AS 3 PER THE PROVISIONS OF THE LAW AND THE ACT. THEREFORE, THE ACTION OF THE AO IN REJECTING THE CLAIM OF THE APPELLANT REGARDING THE CAPITAL LOSS CLAIM CANNOT BE HELD TO BE IN CORRECT AND IS UPHELD AND CONFIRMED. 3.1. THE APPELLANT HAS FURTHER CLAIMED THAT AS A REQUEST WAS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH WAS REJECTED BY THE AO IT WAS NOW OPEN FOR THE CIT (A) TO LOOK INTO IT AND ALLOW THE CLAIM OF THE APPEL LANT SO AS TO ARRIVE AT THE CORRECT COMPUTATION OF INCOME OF THE APPELLANT. FOR THIS THE APPELLANT HAS RELIED UPON THE CASE LAWS MENTIONED ABOVE WHEREIN THE HONBLE COURTS HAVE HELD THAT THE APPELLATE AUTHORITIES INCLUDING THE CIT (A) SHOULD ENTERTAIN THE CLAIM OF THE APPELLANT AND ALLOW THE CLAIM SO MADE IF OTHER CONDITIONS OF THE PROVISIONS OF LAW WERE SATISFIED. IT HAS BEEN FURTHER STATED BY THE HONBLE MUMBAI TRIBUNAL THAT THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD. HAS NOT BARRED THE APP ELLANT FROM RAISING A LEGAL CLAIM BEFORE THE APPELLATE AUTHORITIES. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE CASE LAWS ON WHICH THE APPELLANT HAS RELIED UPON. BARRING THE CASE OF CHICAGO PNEUMATIC, I FIND IN THE OTHERS THE APPELLATE AUTHORITIES REFERRED TO ARE THE HONBLE INCOME TAX TRIBUNALS. THERE IS NO MENTION OF THE OFFICE OF CIT (A) IN ANY OF THESE CASES. THEREFORE, FACTS IN THE OTHER CASES MENTIONED ABOVE NOT BEING SIMILAR TO THE INSTANT CASE IN SO MUCH AS THE AP PELLATE AUTHORITY IN THIS CASE IS THE CIT (A) AND NOT THE HONBLE TRIBUNAL, I FIND ONLY THE PRINCIPLES OF THE SAME CAN BE CONSIDERED IN THE INSTANT CASE. HOWEVER, IN THE CASE OF CHICAGO PNEUMATIC QUOTED ABOVE THE HONBLE TRIBUNAL HAS CLEARLY STATED THAT W HERE THE STATUTORY RELIEFS ARE CONCERNED, THE CIT (A) HAVING POWER CO - TERMINUS WITH THAT OF THE ASSESSING OFFICER SHOULD CONSIDER THE SAME AND ALLOW THE SAID RELIEF IF ALL PROVISIONS OF INCOME TAX ACT, 1961 ARE SATISFIED SO AS TO ARRIVE AT THE CORRECT INCO ME OF THE APPELLANT FOR TAXATION. IN THE CASE UNDER DISCUSSION THE QUESTION IS REGARDING THE INDEXATION THAT IS TO BE APPLIED FOR CALCULATING OF CAPITAL GAIN / LOSS. THE INCOME TAX ACT, 1961 STATUTORILY ALLOWS INDEXATION TO THE APPELLANT. AS LONG AS THE RE IS CAPITAL GAIN OR LOSS DECLARED BY THE APPELLANT AND ALL THE DETAILS HAVE BEEN FILED BEFORE THE ASSESSING OFFICER IN THE RETURN OF INCOME FILED, THE INDEXATION IS TO BE ALLOWED TO THE APPELLANT. THEREFORE, RESPECTFULLY RELYING ON THE ORDER OF THE HON BLE MUMBAI TRIBUNAL THAT IS THE JURISDICTIONAL TRIBUNAL IN THE CASE OF CHICAGO PNEUMATIC QUOTED ABOVE, I FIND THAT THE BENEFIT CLAIMED BY THE APPELLANT IS TO BE ALLOWED TO THE APPELLANT. IN THE CASE OF CIT VS. PRUTHVI BROTHERS AND SHAREHOLDERS PVT. LTD TH E HONBLE BOMBAY HIGH COURT HAS CLEARLY SAID THAT THE JURISDICTION OF THE APPELLATE AUTHORITIES TO ENTERTAIN CLAIM MADE (EVEN IF NOT MADE BY THE APPELLANT IN THE RETURN OF INCOME FILED) HAS NOT BEEN NEGATED BY THE HONBLE SUPREME COURT EVEN THOUGH IT HAS C LEARLY STATED THAT THE AO CANNOT ENTERTAIN ANY CLAIM MADE OTHER THAN THAT MADE BY FILING REVISED RETURN. RESPECTFULLY FOLLOWING THE JUDGMENTS OF THE HONBLE JURISDICTIONAL COURTS WHICH HAVE CLEARLY STATED THAT THE HONBLE SUPREME COURT HAS NOT NEGATED THE JURISDICTION OF THE APPELLATE AUTHORITIES INCLUDING THE CIT (A)S THE AO IS DIRECTED TO TAKE INTO CONSIDERATION THE DETAILS BEFORE HIM AND AFTER VERIFYING IT, IF FOUND THAT THE APPELLANT HAS INDEED SUBMITTED ALL THE DETAILS REGARDING THE INDEXATION CLAIME D, DETAILS OF SHARES ETC CALCULATE THE CAPITAL GAIN / LOSS OF THE APPELLANT ACCORDINGLY. THE GROUND OF APPEAL IS, THEREFORE, ALLOWED TO THIS EXTENT SUBJECT TO VERIFICATION. 8. FROM THE ABOVE IT IS EVIDENT THAT THE CIT (A), BEING AN APPELLATE AUTHORITY, ADMITTED THE GROUND AS PER THE POWERS VESTED ON HER, AND ADJUDICATED THE SAME WITH DUE PROCESS OF LAW. THEREFORE, THE DECISION OF THE CIT (A) IS FAIR AND COMPLETE IN ALL RESPECTS AND THE DECISION WAS TAKEN IN ACCORDANCE WITH THE SETTLED LEGAL PROPOSITION AT THE LEVEL OF THE HONBLE SUPREME COURT AND MANY OTHER ORDERS OF THE ITAT. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) 4 DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRON OUNCED IN THE OPEN COURT ON 2 4 T H JANUARY, 2014. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 24 .1 .2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI