BINA SUDHIRKUMAR DOSHI, MUMBAI V. ASST CIT 24(1), MUMBAI

ITA 76/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5449 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 04-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Share purchase agreement; Opportunity of being heard; Additional evidence; Reasonable cause; Revised return
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN , JM ITA NO. 76 /MUM/ 2017 (ASSESSMENT YEAR: 2012 - 13 ) MS. BINA SUDHIRKUMAR DOSHI B - 601, GANGA VIHAR, JUHU LANE, ANDHERI (W), MUMBAI - 400 058 VS. ASST. CIT - 24(1), MUMBAI PAN/GIR NO. AAJPD 0267 B ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI RAHUL SARDA AND SHRI SASHANK DUNDU RESPONDENT BY : MS. N. HEMALATHA DATE OF HEARING : 26.11.2018 DATE OF PRONOUNCEMENT : 04.02 .2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 36, MUMBAI (LD.CIT(A) FOR SHORT) DATED 12.08.2016 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2012 - 13. 2. THE GROUNDS OF APPEAL READ AS UNDER: I. DENIAL OF EXEMPTION UNDER SECTION 54/54F OF THE INCOME TAX ACT, 1961 1 . THE CIT (A) FAILED TO APPRECIATE THAT THE APPELLANT SATISFIED ALL CONDITIONS MENTIONED IN SECTION 54 OF THE ACT, AND HENCE, WAS ENTITLED TO EXEMPTION UNDER SECTION 54 OF THE ACT. 2. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE, THE CIT (A) FAILED TO APPRECIATE THAT THE APPELLANT WAS ENTITLED TO EXEMPTION UNDER SECTION 54F OF THE ACT. THEREFORE, THE CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AU I N TAXING LONG TERM CAPITAL GAINS OF RS. 53,96,820/ - . 3. THE CIT (A) FAILED TO APPRECIATE THAT THE AU DID NOT ALLOW THE BENEFIT OF INDEXATION DESPITE ASSESSING INCOME AS LONG TERM CAPITAL GAINS. II. TAXING NOTIONAL RENTAL INCOME OF RS.2,09,389/ - 4. THE CIT (A) FAILED TO APPRECIATE THAT THE PROPERTY AT SAI ENTERPRISES AND THE SATELLITE FLAT WERE UNDER CONSTRUCTION DURING THE YEAR AND THE APPELLANT DID NOT HAVE POSSESSION OF THE SAME, AND HENCE, NO NOTIONAL RENTAL INCOME COULD BE CHARGED THEREON. 5. WITHOUT P REJUDICE TO THE ABOVE, EVEN IF SOME NOTIONAL RENTAL INCOME CAN BE CHARGED ON THE UNDER - CONSTRUCTION PROPERTIES, THE NOTIONAL RENTAL INCOME OF RS. 2,09,389/ - IS HIGHLY EXCESSIVE AND UNREASONABLE. 2 ITA NO. 76/MUM/2017 3. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 70 DAY S IN FILING THE APPEAL. IN REASONABLE CAUSE FOR CONDONATION OF THE DELAY, IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS 65 YEARS OLD WIDOW AND WAS SUFFERING FROM SEVERAL AILMENTS. 4. UPON HEARING BOTH THE COUNSEL AND PERUSING BOTH THE COUNSEL, WE CONDONE THE DELAY IN FILING OF THE APPEAL. 5. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING GROUND NOS. 1, 3 AND 6 ABOVE, HENCE, THEY ARE DISMISSED AS NOT PRESSED. 6. THE ASSESSEE HAS ALSO FILED THE PETITION FOR ADMISSION OF ADDITIONAL EVIDENCES. THE PETITION FOR FILING THE ADDITIONAL EVIDENCE READS AS UNDER: 1. THE ABOVE REFERRED APPELLANT IS MOVING THIS APPLICATION UNDER RULE 29 OF THE INCOME TAX RULES, 1962 TO ADMIT THE ADDITIONAL EVIDENCE CONTAINED IN PAPER BOOK II BEING PRODUCED FOR THE FIRST TIME BEFORE THE HONORABLE BENCH. THE APPELLANT COULD NOT PRODUCE THE DOCUMENTS CONTAINED IN PAPER BOOK II DUE TO THE REASONS MENTIONED IN THE AFFIDAVIT ENCLOSED HEREWITH WHICH SHOW THAT NO REASONABLE OPPORTUNITY WAS PROVIDED TO THE APPELLANT BEFORE THE CIT(A), THUS N OT GIVING A REASONABLE OPPORTUNITY OF BEING HEARD. 2. THE ADDITIONAL EVIDENCE HAVE DIRECT BEARING ON THE ISSUES INVOLVED IN THE PRESENT APPEAL RELATING TO THE ADDITION OF RS.53,96,829/ - . ACCORDING TO THE ASSESSEE, SAID AMOUNT REPRESENTS THE DEDUCTION DEN IED ON THE LONG TERM CAPITAL GAIN. 3. THE REASON FOR NOT BEING ABLE TO PROVIDE THE NECESSARY DOCUMENTS BEFORE THE AO, WAS PRIMARILY BECAUSE THE ASSESSEE'S HEALTH WAS NOT IN A GOOD CONDITION AND HENCE THE ASSESSEE WAS UNABLE TO PROVIDE COMPLETE DETAILS WIT H RESPECT TO THE ISSUE INVOLVED IN THE APPEAL. THE ASSESSEE HAS BEEN SUFFERING FROM UNCONTROLLED DIABETES WHICH HAS LED TO THE ASSESSEE FACING MULTIPLE HEALTH PROBLEMS. THE ASSESSEE IS A 65 YEAR OLD WIDOW AND DOES NOT HAVE ANYONE IN THE FAMILY LIVING WITH HER TO SUPPORT HER IN PURSUING THE ASSESSMENT OR THE APPEAL BEFORE THE CIT (A). THE ASSESSE COULD NOT PROVIDE THESE DOCUMENTS TO THE AUTHORISED REPRESENTATIVE AT THE TIME OF HEARING BEFORE THE AO AND THE CIT (A). THEREFORE, THE AUTHORISED REPRESENTATIVES W HO APPEARED BEFORE THE LOWER AUTHORITIES COULD NOT BE PROVIDED WITH THE NECESSARY DETAILS. 4. THE DOCUMENTS IN QUESTION ARE ESSENTIAL TO SUPPORT THE CLAIM OF THE ASSESSEE AND GO TO THE ROOT OF THE MATTER AND ARE GERMANE IN DECIDING THE ISSUES IN THE PRES ENT APPEAL. THE PURCHASE AGREEMENT IN RESPECT OF SAI ENTERPRISES FLAT SHOWS THAT AS ON DATE OF ENTERING INTO THE MOU, THE ASSESSEE WAS NOT THE OWNER OF THE SAI ENTERPRISES FLAT, AND HENCE, THIS FLAT CANNOT BE CONSIDERED FOR THE PURPOSE OF PROVISO TO SECTIO N 54F. THE ASSESSEE HAS ALSO ATTACHED PHOTOGRAPHS OF SATELLITE TOWER IN WHICH ASSESSEE'S MOTHER - IN - 3 ITA NO. 76/MUM/2017 LAW BOOKED A FLAT. THE SAID PHOTOGRAPHS SHOW THAT THE BUILDING IS STILL UNDER CONSTRUCTION, AND HENCE, THIS FLAT ALSO CANNOT BE CONSIDERED FOR THE PURPOSE OF PROVISO TO SECTION 54F. THE ASSESSEE ALSO ATTACHED THE SHARE CERTIFICATE FOR MAHAVIR NAGAR DHRUSHTI CO - OP HSG. SOC. LTD. THESE EVIDENCES GO TO THE ROOT OF THE MATTER AND IF ADMITTED BY THIS HON'BLE TRIBUNAL WOULD ENABLE THIS HON'BLE TRIBUNAL TO EFFECTIVEL Y ADJUDICATE THE APPEAL AND DETERMINE THE CORRECT TAX LIABILITY OF THE ASSESSEE. 5. IF THE ADDITIONAL EVIDENCE IS NOT SO ADMITTED, IT MAY HAVE THE EFFECT OF ASSESSING INCOME OF THE ASSESSE IN EXCESS BY APPROXIMATELY RS. 53 LAKHS. THE ASSESSE DOES NOT HAVE ANY ACTIVE SOURCE OF INCOME AND HENCE IS NOT IN A SOUND FINANCIAL POSITION. THEREFORE, THE ADDITIONAL EVIDENCE MAY BE ADMITTED IN THE INTEREST OF JUSTICE. 6. THE APPELLANT SUBMITS THAT THE HON'BLE BENCH HAS BEEN VESTED WITH THE DISCRETION TO ADM IT THE ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME TAX RULES, 1962. 7. THE APPELLANT PRAYS THAT YOUR HONORS MAY BE PLEASED TO ADMIT THE ADDITIONAL EVIDENCE AS EVIDENCE GOES TO THE ROOT OF THE ISSUES. IT IS THEREFORE, RESPECTFULLY SUBMITTED THAT TH E AFORESAID ADDITIONAL EVIDENCE MAY KINDLY BE ADMITTED IN THE INTEREST OF JUSTICE AND FAIR PLAY. THE APPELLANT RELIES ON THE RATIO LAID BY BOMBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI SHAH V. CIT 231 ITR 1 (BORN) AND PATNA TRIBUNAL IN THE CASE OF ABHAY KUMAR 63 I TD 144 (PAT.) (TM) FOR THE ADMISSION OF ADDITIONAL EVIDENCE. 7. IN THE COMP ILATION IN PAPER BOOK, THE ADDITIONAL EVIDENCE SUBMITTED IS AS UNDER: SR. NO. PARTICULARS PAGE NOS. 20. PURCHASE AGREEMENT DATED 30 TH MAY, 2012 OF FLAT AT SAI ENTERPRISE 173 - 209 21. PHOTOGRAPHS SHOWING PRESENT STAGE OF CONSTRUCTION OF SATELLITE TOWER FLAT 210 - 213 22. SHARE CERTIFICATE FOR MAHAVIR NAGAR DHRUSHTI CO - OP HSG. SOC. LTD. 214 8. IN THE GROUND RELATING TO DENIAL OF EXEMPTION U/S.54/54F, THE GROUND PRESSED IS THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S. 54F OF THE ACT. THEREFORE, THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE A.O. IN TAXING LONG TERM CAPITAL GAINS. ON THIS ISSU E, WE NOTE THAT THE A.O. WHILE CONSIDERING THE ALTERNATE CLAIM OF THE ASSESSEE U/S. 54F H A S QU OT ED FROM THE HONBLE APEX COURT DECISION IN THE CASE OF GOETZE (INDIA) LTD. V. CIT [2006] 284 ITR 323 (SC) FOR THE PROPOSITION THAT IN ABSENCE OF REVISED RETURN, THE ASSESSEE CANNOT MAKE A FRESH CLAIM. THIS HAS BEEN UPHELD BY THE LD. CIT(A). ANOTHER REASON GIVEN FOR THE DENIAL OF 4 ITA NO. 76/MUM/2017 EXEMPTION U/S. 54F IS THAT THE ASSESSEE O WNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET AS FO UND IN THE BALANCE SHEET. IN THIS REGARD, WE NOTE THAT THE DENIAL OF EXEMPTION ON THE TOUCH STONE OF THE HONBLE APEX COURT DECISION IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) I S NOT SUSTAINABLE , AS THE HONBLE APEX COURT IN THE SAID CASE HAS HELD THAT THE SAID DECISION WOULD NOT IMPINGE UPON THE INCOME TAX APPELLATE TRIBUNALS JURISDICTION TO ADMIT ADDITIONAL/FRESH CLAIMS/GROUNDS. ACCORDINGLY, WE DIRECT THAT THIS CLAIM OF THE ASSESSEE SHOULD BE CONSIDERED. 9. FURTHERMORE, WE NOTE THAT WHILE CANVASSING THIS APPEAL, THE ASSESSEE HAS FILED THE ADDITIONAL EVIDENCES TO COUNTER THE A.O.S FINDING THAT THE ASSESSEE IS OWNED MORE THAN ONE FLAT. THESE ADDITIONAL EVIDENCES WERE NOT SUBMITTED BEFORE THE A UTHORITIES BELOW. AS A MATTER OF FACT, IT IS THE PLEA OF THE ASSESSEE THAT NO OPPORTUNITY IN THIS REGARD WAS GRANTED BY THE A.O. 10. UPON CAREFUL CONSIDERATION , IN THE INTEREST OF JUSTICE, WE REMIT THIS GROUND AS WELL AS ADDITIONAL EVIDENCES TO THE FILE O F THE A.O. TO CONSIDER THE CLAIM OF THE ASSESSEE U/S. 54F. NEEDLESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 11. BOTH THE COUNSEL FAIRLY AGREED TO THE ABOVE PROPOSITION. 12. ANOTHER GROUND RAISED RELATES TO TA X ING NOTIONAL RENTAL INCOME ON FLATS . IN THIS REGARD, THE ASSESSEES CONTENTION IS THAT THESE FLATS WERE UNDER CONSTRUCTION. SINCE WE HAVE ALREADY REMITTED THE ABOVE SAID GROUND AND THE ADDITIONAL EVIDENCE WHICH ALSO HAVE A BEARING ON THIS ISSUE, THIS ISSUE IS ALSO REMITTED TO THE FILE OF THE A.O. TO CONSIDER THE SAME AFRESH. 5 ITA NO. 76/MUM/2017 13. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 . 0 2 . 2 0 1 9 S D / - S D / - ( SANDEEP GOSAIN) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 0 4 . 0 2 . 2 0 1 9 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI