Rajesh Talwar, Ambala City V. ITO, Ambala

ITA 757/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0032 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Additional evidence; Cost of acquisition; Tax effect; Revised return
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.757/CHD/2015 (ASSESSMENT YEAR : 2009-10) RAJESH TALWAR, VS. THE INCOME TAX OFFICER, 59, TALWAR TRANSPORT, WARD III, HARYANA MOTOR MARKET, AAYAKAR BHAWAN, AMBALA CITY. AMBALA. PAN: ABLPT4908J AND ITA NO.758/CHD/2015 (ASSESSMENT YEAR : 2009-10) THE INCOME TAX OFFICER, VS. RAJESH TALWAR, WARD III, 59, TALWAR TRANSPORT, AAYAKAR BHAWAN, HARYANA MOTOR MARKET, AMBALA CITY. AMBALA CITY. PAN: ABLPT4908J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ROHIT GOEL DEPARTMENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 27.04.2016 DATE OF PRONOUNCEMENT : 29.04.2016 O R D E R PER RANO JAIN, A.M . : BOTH THE CROSS APPEALS ARE DIRECTED AGAINST THE ORD ER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PANCH KULA DATED 23.6.2015 FOR ASSESSMENT YEAR 2009-10. 2 2. WE WILL FIRST TAKE UP THE APPEAL OF THE ASSESSE E IN ITA NO.757/CHD2015 ITA NO.757/CHD/2015 (ASSESSEES APPEAL) : 3. BRIEFLY, THE FACTS RELEVANT TO THE EXTENT OF ADJUDICATING THE PRESENT APPEAL ARE THAT THE ASSESS EE HAVING INCOME FROM RENT AND PLYING OF TRUCKS, FILED ITS RE TURN OF INCOME ON 31.3.2010 DECLARING INCOME OF RS.2,77,709 /-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER NOTED THAT THE ASSESSEE HAS SOLD HALF SHARE IN PLOT NO.66, SECTOR 10, HUDA, AMBALA CITY FOR RS.10,56,000/-. A CAPITAL GAIN OF RS.7,86,512/- WAS MADE ON SALE OF SAID PLOT . THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON THE GROUND TH AT THE ENTIRE SALES PROCEEDS WERE INVESTED IN THE CONSTRUCTION OF NEW HOUSE NO.58B, MODEL TOWN, AMBALA CITY. THE ASSESSING OFF ICER FOUND THAT THE ASSESSEE WAS ALREADY IN POSSESSION O F TWO RESIDENTIAL HOUSES ON THE DATE OF SALE. AFTER CONS IDERING THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER DENIED THE EXEMPTION UNDER SECTION 54F OF THE ACT CLAIMED BY T HE ASSESSEE. 4. BEFORE THE LEARNED CIT (APPEALS) BESIDES MAKING SUBMISSIONS WITH REGARD TO THE MERITS OF THE CASE, THE ASSESSEE ALSO FILED CERTAIN ADDITIONAL EVIDENCES U NDER RULE 46A OF THE INCOME TAX RULES ON THE GROUND THAT THESE EVIDENCES GO TO THE ROOT OF THE MATTER A ND INVOLVE A 3 SUBSTANTIAL CAUSE FOR DETERMINING THE CORRECT INCOM E AND TAX LIABILITY OF THE ASSESSEE. THE LEARNED CIT (APPEAL S) FORWARDED THE ADDITIONAL EVIDENCES TO THE ASSESSING OFFICER. IN A REPORT DATED 5.3.2014, THE ASSESSING OFFICER SUBMITTED THA T THE DOCUMENTS PRODUCED AS ADDITIONAL EVIDENCES APPEAR T O BE GENUINE BUT AT THE TIME OF ASSESSMENT PROCEEDINGS, ADEQUATE OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO EXPLAIN THE ISSUE IN QUESTION. THEREFORE, HE OBJECTED TO THE ADMISSI ON OF ADDITIONAL EVIDENCES AS THE SAME WERE NOT PRODUCED AT THE TIME OF ASSESSMENT PROCEEDINGS. 5. IN THE REJOINDER TO THE REMAND REPORT, THE ASSE SSEE BESIDES MAKING SUBMISSIONS AGAINST THE ACT OF THE A SSESSING OFFICER IN DISALLOWING HIM THE EXEMPTION UNDER SECT ION 54F OF THE ACT STATED THAT SINCE PROPER OPPORTUNITY WAS NO T GIVEN TO HIM DURING THE ASSESSMENT PROCEEDINGS, AFTER THE AS SESSMENT ORDER WAS PASSED THE DETAILS OF PAYMENTS OF PLOT SO LD WERE PREPARED BY HIM AND FOUND THAT NO CAPITAL GAIN ARIS ES AS THE PAYMENTS MADE FOR PURCHASE OF HOUSE ARE NOT FULLY C OVERED IN THE STATEMENT OF AFFAIRS GIVEN TO THE ASSESSING OFF ICER DURING THE ASSESSMENT PROCEEDINGS DUE TO NON-MAINTENANCE O F BOOKS OF ACCOUNT AND SINCE THE SAME WAS PURCHASED ABOUT S EVEN YEARS BACK AND NO SUFFICIENT TIME WAS PROVIDED BY T HE ASSESSING OFFICER. 4 6. AFTER CONSIDERING ALL THIS, THE LEARNED CIT (AP PEALS) HELD THAT THE RETURN OF INCOME WAS FILED AS ON 31.3 .2010 AND THE ASSESSEE DID NOT FILE ANY REVISED RETURN TO RE CTIFY ANY MISTAKE OCCURRED ON HIS PART IN INCORRECT COMPUTATI ON OF INCOME. THE COMPUTATION OF CAPITAL GAIN WAS DONE B Y THE ASSESSING OFFICER CONSIDERING THE FACTS AND FIGURES AS PROVIDED IN THE RETURN OF INCOME BY THE ASSESSEE HI MSELF. THERE WAS NO REVISED RETURN AND NO EVIDENCE WAS EV ER SUBMITTED BEFORE THE ASSESSING OFFICER ABOUT ANY WR ONG COMPUTATION OF CAPITAL GAIN. THE ASSESSING OFFICER IN HIS REMAND REPORT HAS NOT COMMENTED ON THE COMPUTATION OF CAPITAL GAIN AT THIS STAGE AND HAS OBJECTED TO THE ADMISSION OF SUCH PAPERS, WHICH WERE NOT PRODUCED DURING THE ASS ESSMENT PROCEEDINGS. WITHOUT COMMENTING ON WHETHER THE ADD ITIONAL EVIDENCES WERE ADMITTED BY HIM OR NOT, THE LEARNED CIT (APPEALS) DISMISSED THE GROUND OF THE ASSESSEE. 7. AGGRIEVED BY THIS THE ASSESSEE HAS COME UP IN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. THAT LEARNED CIT(A) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ADDITION OF RS. 7,86,512/- AS LONG TERM CAPITAL GAI N ON SALE OF PLOT WITHOUT ALLOWING THE BENEFIT OF CORRECT INDEXE D COST OF ACQUISITION FURNISHED AS ADDITIONAL EVIDENCE U/R 46 A OF INCOME TAX RULES DURING APPELLATE PROCEEDINGS BEFORE CIT(A). 2. THAT LEARNED CIT(A) HAS ERRED IN LAW AND FACTS I N NOT ALLOWING RS. 10,60,922/- BEING 50% VALUE OF INDEXED COST OF ACQU ISITION OF PLOT SOLD FOR RS. 10,56,000/- DESPITE THE FACT THAT ASSE SSING OFFICER HAS ACCEPTED THE CALCULATIONS AS GENUINE DURING REMAND REPORT. 5 3. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR TO SUBSTITUTE THE ABOVE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF CASE. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT DUE TO SOME INADVERTENT ERROR ON HIS PART AS WELL NOT GETTING THE PROPER OPPORTUNITY BEFORE THE ASSESSING OFFICER, THE COMPUTATION OF COST OF ACQUISITION OF THE PROPERTY SOLD WAS GIVEN WRONGLY TO THE ASSESSING OFFICER. I T WAS STATED THAT SINCE THE ASSESSEE IS NOT MAINTAINING REGULAR BOOKS OF ACCOUNT, THE ASSESSEE COULD NOT POINT OUT INVESTMEN T DURING THE ASSESSMENT PROCEEDINGS. SINCE AFTERWARDS HE PR OCURED THE DETAILS OF PAYMENTS MADE TO HUDA AND CALCULATED THE CAPITAL GAIN AT RS.1,39,725/- AS AGAINST CAPITAL GA IN OF RS.7,85,712/- AS REFLECTED IN THE RETURN OF INCOME. THE EVIDENCES IN THIS REGARD WERE FILED WITH THE APPLIC ATION FOR ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 46A BE FORE THE LEARNED CIT (APPEALS) IN THE FORM OF A STATEMENTS O F PAYMENTS MADE TO HUDA, THE DETAILS OF PAYMENTS MADE BY THE A SSESSEE AND HIS WIFE AND A REVISED COMPUTATION OF LONG TERM CAPITAL GAIN TOGETHER WITH COPIES OF CHEQUES ISSUED TO HUDA AND CERTIFICATES FROM HUDA WITH REGARD TO THESE PAYMENT S. IT WAS PRAYED THAT SINCE THESE EVIDENCES GO TO THE ROOT OF THE ISSUE, THE LEARNED CIT (APPEALS) SHOULD HAVE CONSIDERED TH E SAME AND GIVE DUE RELIEF TO THE ASSESSEE. OUR ATTENTION WAS ALSO INVITED TO THE COPY OF REMAND REPORT FILED BY THE A SSESSING OFFICER, WHEREBY HE HAS CATEGORICALLY STATED THAT REVISED 6 COMPUTATION OF INCOME AS PROVIDED BY THE ASSESSEE S EEMS TO BE GENUINE. THE ONLY OBJECTION RAISED BY THE ASSES SING OFFICER WAS WITH RESPECT TO ADMISSION OF ADDITIONAL EVIDENC ES. FOR THE PROPOSITION THAT SUCH CLAIMS CAN BE AVAILED BY THE ASSESSEE BY WAY OF APPLICATION ALSO AND THERE IS NO REQUIREMENT FOR FILING ANY REVISED RETURN, RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAMCO INTERNATIO NAL (2011) 332 ITR 306, ON THE JUDGMENT OF HON'BLE SUPREME COU RT IN THE CASE OF TEK RAM (DEAD) THROUGH LRS VS. CIT (20 13) 357 ITR 133 (SC) AND ALSO ON AN OLD CIRCULAR OF CBDT NO .14(CL- 35) DATED 11.4.1955, WHEREBY ALL THE OFFICERS OF TH E DEPARTMENT WERE INSTRUCTED TO GIVEN ADVICE TO THE A SSESSEE FOR COMPUTATION OF TRUE INCOME ONLY. 9. THE LEARNED D.R. RELIED ON THE ORDER OF THE ASS ESSING OFFICER AS WELL AS THAT OF THE LEARNED CIT (APPEALS ) AND FURTHER SUBMITTED THAT IN VIEW OF THE FACT THAT THE ASSESSE E DID NOT FILE ANY REVISED RETURN EVEN BEFORE THE ASSESSING OFFICER AND THE CLAIM WAS MADE FOR THE FIRST TIME BEFORE THE LE ARNED CIT (APPEALS), THE SAME SHOULD NOT BE GIVEN TO HIM. RE LIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LIMITED VS. CIT 284 ITR 323, WHI CH PROVIDES THAT NO NEW CLAIM IS TO BE ENTERTAINED WITHOUT FILI NG OF REVISED RETURN BY THE ASSESSEE. 7 10. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF B OTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. THE U NDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE BEFORE THE ASSESSING OFFICER IN HIS COMPUTATION OF INCOME UNDER THE HEAD CAPITAL GAIN SHOWED HIS COST OF ACQUISITION TO BE RS.2,69, 488/-, WHILE AFTER THE PASSING OF THE ASSESSMENT ORDER, HE CAME TO UNDERSTAND THAT ACTUALLY THE COST OF ACQUISITION IS RS.10,60,922/-. IT IS A FACT ON RECORD THAT ALL TH E EVIDENCES WITH REGARD TO THE ADDITIONAL COST OF ACQUISITION S HOWN TO THE LEARNED CIT (APPEALS) WERE FILED BEFORE HIM AS ADDI TIONAL EVIDENCES WHICH WERE SENT BY THE CIT (APPEALS) TO T HE ASSESSING OFFICER IN REMAND ALSO. THE ASSESSING OF FICER IN HIS REMAND REPORT HAS STATED THAT THE DOCUMENTS AND THE COMPUTATION OF REVISED CAPITAL GAIN SEEM TO BE GENU INE TO HIM. HOWEVER, HE OBJECTED TO THE ADMISSION OF ADDI TIONAL EVIDENCES. FROM THE PERUSAL OF THE ORDER OF THE LE ARNED CIT (APPEALS), WE OBSERVE THAT THE CIT (APPEALS) HAS PR EFERRED NOT TO MENTION WHETHER HE HAD ADMITTED THE ADDITIONAL E VIDENCES OR NOT. HOWEVER, IT IS COMING OUT FROM THE READING OF HIS ORDER THAT HE HAS NOT ADMITTED THESE EVIDENCES. IN VIEW OF THE FACT THAT THE ASSESSING OFFICER FOUND THE ADDITIONA L EVIDENCES AS WELL AS THE CLAIM OF THE ASSESSEE TO BE IN ORDER , WE DO NOT FIND THE ACTION OF THE CIT (APPEALS) NOT TO ADMIT T HE ADDITIONAL EVIDENCES AS CORRECT SINCE THESE GO TO THE ROOT OF THE ISSUE IN QUESTION. IN THIS VIEW, WE INTEND TO SEND THE MATT ER BACK TO THE FILE OF THE LEARNED CIT (APPEALS) AND DIRECT HI M TO ADMIT THE ADDITIONAL EVIDENCES AND DECIDE THE MATTER AS P ER LAW. 8 11. BEFORE PARTING, WE WOULD LIKE TO DEAL WITH THE JUDGMENT OF THE HON'BLE SUPREME COURT RELIED ON BY THE LEARNED D.R. DURING THE COURSE OF HEARING BEFORE US IN THE CASE OF GOETZE (INDIA) LIMITED (SUPRA). THE FACTS IN THAT CASE WERE THAT THE ASSESSEE CLAIMED DEDUCTION BY WAY OF A LETTER BEFORE THE ASSESSING OFFICER FOR THE FIRST TIME. T HE DEDUCTION WAS NOT ALLOWED BY THE ASSESSING OFFICER ON THE REA SON THAT THERE WAS NO PROVISION UNDER THE INCOME TAX ACT TO MAKE AMENDMENT IN THE RETURN OF INCOME BY MODIFYING THE SAME THROUGH AN APPLICATION AT THE ASSESSMENT STAGE WITH OUT REVISING THE RETURN. THE HON'BLE SUPREME COURT IN THE SAID CASE HELD THAT THE ASSESSEE CANNOT MAKE A NEW CLAIM WITHOUT REVISING THE RETURN AND JUST BY FILING THE APPLICAT ION BEFORE THE ASSESSING OFFICER. HOWEVER, IN THE PRESENT CA SE, THIS IS NOT A NEW CLAIM MADE BY THE ASSESSEE BEFORE THE ASS ESSING OFFICER. IN FACT, THIS IS A CASE OF WRONG COMPUTAT ION FILED BEFORE THE ASSESSING OFFICER INITIALLY WHICH THE AS SESSEE SOUGHT TO RECTIFY BEFORE THE LEARNED CIT (APPEALS) BY FILING A REVISED COMPUTATION TOGETHER WITH THE RELEVANT EVID ENCES. THE CASE OF HON'BLE SUPREME COURT IN GOETZE (INDIA) LIM ITED (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESE NT CASE SINCE NO NEW CLAIM HAS BEEN MADE BY THE ASSESSEE. IN FAC T, THE QUESTION BEFORE THE HON'BLE SUPREME COURT IN THAT C ASE WAS WITH REGARD TO THE POWERS OF THE ASSESSING OFFICER TO ENTERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A RE VISED RETURN, WHICH IS NOT THE FACT IN THE PRESENT APPEAL . THIS IS NOT A CASE OF FRESH CLAIM. THE ONLY QUESTION IS T HE RECOMPUTATION OF CAPITAL GAIN. 9 12. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO.758/CHD/2015 (REVENUES APPEAL) : 13. IT IS STATED THAT IN THE PRESENT APPEAL THE T AX EFFECT IS LESS THAN THE PRESCRIBED LIMIT PROVIDED BY THE R ECENT CBDT CIRCULAR. 14. ACCORDING TO CIRCULAR NO.21/2015 DATED 10.12.2 015, THE CBDT IN SUPERCESSION OF EARLIER INSTRUCTIONS HA S DIRECTED THAT DEPARTMENTS APPEALS BEFORE ITAT SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONE TARY LIMIT OF RS.10 LACS. THE TAX WILL NOT INCLUDE ANY INTERE ST THEREON. IT IS FURTHER CLARIFIED THAT IF IN THE CASE OF AN A SSESSEE, DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT Y EAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT Y EAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF DISPUTE D ISSUES EXCEEDS THE MONETARY LIMIT SO SPECIFIED. THIS INST RUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEAL S TO BE FILED HENCEFORTH BEFORE THE TRIBUNAL. THE PENDING A PPEALS BELOW THE SPECIFIED TAX LIMIT MAY BE WITHDRAWN/NOT PRESSED. 15. ADMITTEDLY, IN THE DEPARTMENTAL APPEAL, THE TA X EFFECT IS LESS THAN RS.10 LACS, THEREFORE, DEPARTME NTAL APPEAL IS NOT MAINTAINABLE. THE LEARNED CIT (APPEALS) DEC IDED THE ISSUE IN DEPARTMENTAL APPEAL ON FACTS AND THE CASE OF THE REVENUE WOULD NOT FALL IN THE EXCEPTIONS PROVIDED I N THE ABOVE CIRCULAR. 10 16. IN VIEW OF THE ABOVE, LEARNED D.R. STATED THAT SINCE DEPARTMENTAL APPEAL IS FILED AGAINST THE CBDT INSTR UCTIONS, THEREFORE, HE WOULD NOT BE PRESSING DEPARTMENTAL AP PEAL. THEREFORE, THE ABOVE DEPARTMENTAL APPEAL IS DISMISS ED BEING NOT PRESSED. 17. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISM ISSED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO.757/CHD/2015 IS ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IN ITA NO.758/CHD/2015 IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF APRIL, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACOUNTANT MEMBER DATED : 29 TH APRIL, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH