Ambika Pillai, New Delhi V. ACIT, Circle-61(1), New Delhi

ITA 8151/DEL/2018

AI Insights

The case involves Ms. Ambika Pillai, a hair stylist and beautician, who appealed against the order of the Commissioner of Income Tax (Appeals) -18, New Delhi, which partly upheld the AO's order adding Rs.1,11,58,000 as unaccounted capital gain to her income for the assessment year 2012-13. The addition was based on the discrepancy between the long-term capital gains reported in her return and the sale consideration of a property she sold. The assessee contended that she was entitled to an exemption under Section 54 of the Income Tax Act, having reinvested the sale proceeds in a new residential property, which she claimed was not considered by the CIT (A). The Tribunal found that the assessee's claim was not properly appreciated and remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 113658 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-11-2022
• Assessment Year: misc
• Appeal Filed On: 23-08-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Revised return; Capital Gains
• Section: 54; 271(1)(c); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘A’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.8151/Del./2018 (ASSESSMENT YEAR : 2012-13) Ms. Ambika Pillai, vs. ACIT, Circle 61 (1), E-186, Basement, Greater Kailash I, New Delhi. New Delhi – 110 048. (PAN : AAOPP7101R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ajay Mankotia, Advocate REVENUE BY : Shri Kanav Bali, CIT DR Date of Hearing : 22.11.2022 Date of Order : 02.12.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-18, New Delhi dated 26.10.2018 for the assessment year 2012-13. 2. The grounds of appeal taken by the assessee read as under :- “1. That on the facts and circumstances of the case, the order dated 26th October, 2018 passed by the learned Commissioner of Income Tax (Appeals) ['CIT(A)'] is without judicious appreciation of the facts and position in law, and thus, erroneous insofar as the same partly upholds the order dated 29.03.2015 passed by the Assessing Officer ['AO']. 2. That the Ld. CIT(A) grossly erred in upholding the addition of Rs.1,11,58,000 under the head" Long Term Capital Gains' without ITA No.8151/Del./2018 2 appreciating the fact that the appellant had inadvertently shown the Long Term Capital Gains of Rs.35 lakhs in the Return of Income when in fact the appellant was not liable to Long Term Capital Gains in view of the exemption provided in Section 54 of the Income Tax Act. 3. That the Ld. CIT(A) erred on facts and in law in not appreciating that the details regarding sale of the house property and purchase of the new property were furnished to the AO during the course of assessment proceedings. 4. That the Ld. CIT(A) erred on facts and in law in not allowing the claim for exemption u/s 54 of the Income Tax Act in spite of the fact that during the course of assessment proceedings an appellant is entitled to raise claims not made in the Return of Income filed by it. 5. That the Ld. CIT(A) erred on facts and ill law in not considering the claim for exemption u/s 54 of the Income Tax Act in spite of the fact that an appellant is entitled to raise before the Ld. CIT (A) additional grounds not merely in terms of legal submissions but also additional claims not made in the Return of Income filed by it. 6. The above grounds are independent and without prejudice to one other.” 3. Brief facts of the case are that assessee had filed return of income on 23.03.2013 declaring income of Rs.99,78,790/-. The assessee is a Hair Stylist and Beautician by profession and derived income from business of profession, income from house property, income from capital gain and income from other sources. In the assessment order, the Assessing Officer noted that there was an AIR information that assessee had sold immovable property valued at Rs.1,46,58,000/-. Assessee’s counsel was asked to produce sale deed, purchase deed and details of reinvestment of sale proceeds. AO further noted that in response to the same, the AR for the assessee produced sale deed of the said property on 26.03.2015. On perusal of sale deed, it was seen that the sale ITA No.8151/Del./2018 3 cosnideration of the said property is Rs.1,46,58,000/-. However, as per return of income dated 23.03.2013 filed by the assessee, the assessee had shown Rs.35,00,000/- as Long Term Capital Gain and no deduction had been claimed on the same. Thus, the difference of the two i.e. Rs.1,11,58,000/- (Rs.1,46,58,000 - Rs.35,00,000) was treated as unaccounted capital gain of the assessee. Hence, the same was added back to the income of the assessee as Long Term Capital Gain (to be fixed at 20%). Penalty proceedings u/s 271(1)(c) of the Income-tax Act, 1961 (for short 'the Act') were also initiated separately for concealing the particulars of income and furnishing of inaccurate particulars of income. 4. Before the ld. CIT (A), assessee submitted that assessee had invested the sale proceeds in new residential property in Delhi, therefore, the same is entitled for exemption. Since assessee has not made any such claim in the return of income, ld. CIT (A) opined that assessee had the opportunity to file the revised return of income u/s 139 (5) of the Act till the expiry of one year from the end of the assessment year, in order to rectify any mistake in the ITR. However, assessee has not availed that opportunity. Ld. CIT (A) opined that assessee cannot use scrutiny proceedings to rectify a mistake committed by the assessee herself. Hence, he declined to accept the revised computation. ITA No.8151/Del./2018 4 5. Against this order, assessee is in appeal before us. We have heard both the parties and perused the records. 6. Ld. Counsel of the assessee pleaded that assessee has duly submitted even before the AO that assessee has purchased house property at E-184, GK-1, New Delhi and was entitled to exemption u/s 54 of the Act. However, the submission was wrongly considered. 7. Upon careful consideration, we find that assessee’s claim made during the course of assessment proceedings and that before the ld. CIT (A) has not been property appreciated. Revenue authorities have declined to entertain the same on the ground that revised return has not been field. In our considered opinion, interest of justice will be served if the issue is remitted to the file of AO. AO is directed to consider the assessee’s revised claim and pass an order in accordance with law. Both the parties fairly agreed to the above proposition. Needless to add, assessee shall be provided adequate opportunity of being heard. 8. In the result, this appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on this 2 nd day of December, 2022. Sd/- sd/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 2 nd day of December, 2022 TS ITA No.8151/Del./2018 5 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-18, New Delhi.. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.