ACIT 20(3), MUMBAI V. SALES INDIA, MUMBAI

ITA 8264/MUM/2010

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8608 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Sale consideration of property below Jantri Value; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E,MUM BAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.8264/MUM/2010 (ASSESSMENT YEAR- 2006-07) ACIT 20(3), ROOM NO. 506, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 VS. M/S. SALES INDIA, 161, OXFORD TOWER, OAKLAND PARK, OSHIWARA, NEW LINK ROAD, ANDHERI (W) MUMBAI-400053 PAN: AACFS4878G (APPELLANT) (RESPONDENT) ITA NO.8958/MUM/2010 (ASSESSMENT YEAR- 2006-07) M/S. SALES INDIA, 161, OXFORD TOWER, OAKLAND PARK, OSHIWARA, NEW LINK ROAD, ANDHERI (W) MUMBAI-400053 PAN: AACFS4878G VS. ACIT 20(3), ROOM NO. 506, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B.S. BIST (DR) ASSESSEE BY : SHRI ASHOK PATIL (AR) DATE OF HEARING : 02.02.2017 DATE OF PRONOUNCEMENT : 08.02.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THESE TWO CROSS APPEAL U/S 253 OF THE INCOME-TAX AC T (THE ACT) ARE FILED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) [ FOR SHORT THE CIT(A)] 31 MUMBAI DATED 15.09.2010 FOR ASSESSMENT YEAR (AY) 20 06-07. 2. THE REVENUE HAS FILED ITS APPEAL ON THE FOLLOWIN G GROUNDS: (I) THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW AND I N THE CIRCUMSTANCES OF THE CASE IN ALLOWING THE RELIEF TO THE ASSESSEE IN RESP ECT OF APPLICATION OF PROVISION OF SECTION 50C. WHILE ALLOWING RELIEF TO THE ASSESS EE THE LD. CIT(A) CONSIDERED 2 ITA NOS.8264 & 8958/M/2010 M/ S. SALES INDIA THE FACT THAT THE PREMISES SOLD BY THE ASSESSEE IS NOT REGISTERED WITH THE CONCERNED AUTHORITY OF THE STATE GOVERNMENT. (II) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: (I) COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING THE DEDUCTION FOR THE VALUE OF FURNITURE AND FIXTURES A IR CONDITIONER ETC. AMOUNTING TO RS. 4,35,795/- (W.D.V.) FROM SALE CONSIDERATION OF RS. 2,08,20,000/- (II) COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT GRANTING INDEXATION COST FROM THE DATE OF PURCHASE OF PROPERTY I.E. FINANCIAL YEAR 1982-83. (III) ALTERNATIVELY THE COMMISSIONER OF INCOME TAX (APPEA LS) SHOULD HAVE GRANTED THE INDEXATION FROM THE YEAR OF CONSTRUCTIO N OF BUILDING I.E. 1987. (IV) COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING NON OWNER OCCUPANCY CHARGES OF RS. 22,381/- AS DEDUCTIO N FROM GROSS RENT RECEIVED AS THE SAID CHARGES ARE PAYABLE ONLY WHEN PROPERTY IS LET OUT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 27.10.2006 DECLARING TOTAL INCOME OF RS. 5,51,520/- . THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 28.11.2008. THE ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT ORDER DISALLOWED THE EXPENSES OF RS. 22, 381/- AGAINST THE RENTAL INCOME. THE AO FURTHER WORKED OUT A CAPITAL GAIN OF RS. 2, 22,49,284/- AGAINST THE CAPITAL GAIN DECLARED BY ASSESSEE ON SALE OF PROPERTY AT RS . 1,58,39,265/-. THUS, THE AO ADDED A DIFFERENCE OF RS. 64,12,019/- IN THE TOTAL INCOME OF THE ASSESSEE AND DISALLOWED THE SET OFF OF LONG TERM CAPITAL LOSS ( LTCL) ON SALE OF MUTUAL FUND WHILE DETERMINING THE LONG TERM CAPITAL GAIN (LTCG) . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSING OFFICER (AO) WAS DIRECTED THE AO TO CONSIDER THE SALE CONSIDERATION SHOWN BY THE ASSESSEE AS FULL VALUE O F CONSIDERATION FOR THE PURPOSE OF LTCG OF THE PROPERTY AND REJECTED THE CLAIM OF SETT ING OF LTCL ON SALE OF MUTUAL FUND. THE DISALLOWANCE OF EXPENSES AGAINST THE RENT AL INCOME WAS SUSTAINED HOLDING THAT THE GROUND WAS WITHDRAWN BY LD. AUTHORIZED REP RESENTATIVE (AR) AS PER HIS LETTER DATED 16.01.2002. THUS BEING AGGRIEVED BY TH E ORDER OF LD. CIT(A) BOTH THE PARTIES FILED THEIR CROSS APPEAL. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. AT THE OUTSET OF THE PR OCEEDING, LD. AR OF THE ASSESSEE SUBMITTED THAT ASSESSEE HAS FILED AN APPLICATION FO R FILING OF ADDITIONAL EVIDENCE UNDER RULE 29 OF INCOME-TAX (APPELLATE TRIBUNALS) RULES, 1963. THE LD. AR OF THE ASSESSEE IN SUPPORT OF HIS APPLICATION ARGUED THAT THE ASSES SEE SEEKS THE LEAVE OF THE COURT TO 3 ITA NOS.8264 & 8958/M/2010 M/ S. SALES INDIA FILE THE FRESH EVIDENCE, WHICH CONSIST OF AGREEMENT TO SALE DATED 6 TH MAY 1982 AND OTHER DOCUMENTS. THESE DOCUMENT COULD NOT BE PRODU CED BEFORE THE LOWER AUTHORITIES, AS THE DOCUMENT ARE VERY OLD AND WERE NOT TRACEABLE DURING THE PROCEEDING BEFORE THE LOWER AUTHORITIES. THE RELEVANCY OF THE DOCUMENT GOES TO THE ROOT OF THE CLAIM OF THE ASSESSEE FOR CLAIMING BENEFIT OF INDEX ATION FROM FINANCIAL YEAR (FY) 1982-83 FOR THE PURPOSE OF CALCULATING CAPITAL GAIN . ON THE OTHER HAND, LD. DR FOR THE REVENUE OBJECTED FOR FILING OF FRESH AND ADDITIONAL EVIDENCE WHICH WAS NOT PLACED BEFORE THE LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND CONSIDERED THE RELEVANCY OF THE DOCUMENT WHICH ARE THE DOCUMENTS BY VIRTUE OF WHICH THE ASSESSEE ACQUIRED THE PROPERTY IN 1982. CONSIDERING THE RELEVANCY AGR EEMENT AND THE OTHER DOCUMENT FILED IN SUPPORT OF ASSESSEES CONTENTION IS ADMITT ED AS ADDITIONAL EVIDENCE. SINCE THE EVIDENCE IS FILED FOR THE FIRST TIME BEFORE THE TRI BUNAL, HENCE, WE DEEM IT APPROPRIATE TO RESTORE THE GROUND NO. 1 TO 2 OF ASSESSEES APPE AL AND THE GROUND OF APPEAL RAISED BY THE REVENUE IN ITS APPEAL TO THE FILE OF AO TO E XAMINE THE DOCUMENTS AND PASS ORDER IN ACCORDANCE WITH LAW WITH REGARDS TO THE IS SUE/ CLAIMS RAISED BEFORE TRIBUNAL. NEEDLESS, TO SAY THE AO SHALL PROVIDE SUFFICIENT OP PORTUNITY BEFORE CONSIDERING THE CLAIM OF THE ASSESSEE IN VIEW OF THE FRESH ADDITION AL EVIDENCE PLACED BEFORE THE TRIBUNAL. THUS, THE GROUND NO. 1 TO 2 IN ASSESSEES APPEAL AND GROUND NOS. 1 & 2 RAISED BY REVENUE ARE ALLOWED FOR STATISTICAL PURPO SE. 6. GROUND NO3 WAS RAISED BY ASSESSEE IN ALTERNATIVE TO GROUND NO.1 AND 2. AS WE HAVE ALREADY RESTORED THE GROUND NO. 1&2 TO THE FILE OF AO, HENCE, THIS GROUND NEEDS NO ADJUDICATION. 7. GROUND NO.4 OF ASSESSEES APPEAL RELATES TO CONFIRM ING THE OCCUPANCY CHARGES AGAINST THE RENTAL INCOME. WE HAVE PERUSED THE ORDER OF LD. CIT(A). THE LD. CIT(A) IN PARAGRAPH 6 OF ITS ORDER HAS SPECIFICALLY MENTIONED THAT GROUND NO.6 IS NOT PRESSED WHICH IS WITHDRAWN BY THE AR AS PER LETTER DATED 16 .01.2010 AND THEREFORE, SAME IS NOT SEPARATELY ADJUDICATED. THE LD. AR OF THE ASSES SEE NEITHER ARGUED ANYTHING NOR SHOWN ANY EVIDENCE THAT THE GROUND WAS NOT WITHDRAW N/NOT PRESSED BEFORE THE LD. CIT (A). THUS, THIS GROUND OF APPEAL IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED AND THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 4 ITA NOS.8264 & 8958/M/2010 M/ S. SALES INDIA ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH FEBRUARY, 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 08/02/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/