ACIT 15(2), MUMBAI V. SURESH P BALKRISHNAN, MUMBAI

ITA 8650/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71893 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: SUNIL MOHAN SUCKSHEE
• Keywords: Revised return
• Section: 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E B ENCH, MUMBAI . . , , , ! ' BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY AROR A, AM ./ I.T.A. NO. 8650/MUM/2011 ( # # # # $ $ $ $ / ASSESSMENT YEAR : 2008-09 THE ACIT, 15(2), MUMBAI SHRI SURESH P. BALAKRISHNAN, 1202, SOUMYA TOWERS, TILAKWADI CHS, 4 TH CROSS ROAD, CHEMBUR, MUMBAI-400 071 % ! ./ & ./PAN/GIR NO. : AFHPB 6890D ( %' /APPELLANT ) .. ( ()%' / RESPONDENT ) %' * / APPELLANT BY : ` SHRI ASHOK SURI ()%' + * /RESPONDENT BY : SHRI SUNIL MOHAN SUCKSHEE # + ,-! / DATE OF HEARING :10.12.2013 .$ + ,-! / DATE OF PRONOUNCEMENT : 10.12.2013 / / O R D E R PER I.P. BANSAL, JM: THIS APPEAL IS FILED BY THE REVENUE. IT IS DIRECTE D AGAINST THE ORDER OF THE LD. CIT(A)-26, MUMBAI DT.18.10.2011 PERTAINI NG TO A.Y. 2008-09. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: ITA NO.8650/M/2011 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF EXEMPTION TO THE ASSESSEE U/S. 54 OF THE I.T. ACT, 1961 FOR RS. 42,08,000/- WITHOUT APPRECIATING THE FACT T HAT THE ASSESSEE HAS WILLFULLY AVOIDED THE DISCLOSURE O F SALE OF SAID PROPERTY AND HAS NOT CLAIMED DEDUCTION U/S. 54 EITHER IN HIS RETURN OF INCOME OR BY FILING A REVISED RETURN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM WHICH IS AGAINST THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF GOETZE INDIA LTD. VS CIT 284 ITR 323 (SC). 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SOLD AN IMMOVEABL E PROPERTY FOR A SUM OF RS. 72,00,000/- FROM WHERE NO CAPITAL GAIN WAS D ECLARED. HE ASKED THE ASSESSEE TO EXPLAIN THE SAME. ON THE BASIS OF THE FACT GIVEN BY THE ASSESSEE, LD. AO COMPUTED LONG TERM CAPITAL GAIN ON SALE OF IMMOVEABLE PROPERTY AT RS. 35,11,875/-. 4. BEFORE THE LD. CIT(A) THE ASSESSEE CLAIMED THAT THE AO DID NOT ALLOW EXEMPTION U/S. 54 OF THE ACT WHICH WAS TO BE ALLOWED AGAINST SALE OF IMMOVEABLE PROPERTY. IT WAS SUBMITTED THAT DURI NG THE COURSE OF THE ASSESSMENT PROCEEDINGS, SUCH CLAIM WAS MADE BEFORE THE AO WHO FAILED TO CONSIDER THE SAME. ON THESE SUBMISSIONS OF THE ASSESSEE, LD. CIT(A) HAS COME TO A CONCLUSION THAT ASSESSEE HAS FULFILLE D THE CONDITION OF CLAIMING DEDUCTION U/S. 54 OF THE ACT. THE ONLY OM ISSION AND ERROR ON THE PART OF THE ASSESSEE WAS THAT HE DID NOT MAKE PROPE R CLAIM IN THE ORIGINAL RETURN OR REVISED RETURN. THE LD. CIT(A) FURTHER O BSERVED CONSIDERING THE FACT THAT IT IS A CASE OF AN INDIVIDUAL WHO M AY NOT BE MUCH CONVERSANT ABOUT THE FORMALITIES FOR CLAIMING A DE DUCTION ON PROPER FORMAT IN THE COMPUTATION OF INCOME AT THE TIME OF FILING OF THE RETURN, ITA NO.8650/M/2011 3 SIMPLY BECAUSE OF SUCH TECHNICAL ERROR, THE ASSESSE E SHOULD NOT BE DEBARRED FROM GETTING LEGITIMATE DUE U/S. 54 OF THE I.T. ACT PARTICULARLY WHEN ASSESSEE HAS FULFILLED ALL THE CONDITIONS TO A VAIL BENEFIT U/S. 54 OF THE ACT. RELYING UPON THE DECISION OF ITAT IN THE CA SE OF CHICAGO PNEUMATIC INDIA LTD 15 SOT 252 AND EMERSON NET WORK POWER INDIA PVT. LTD. 19 DTR 441, HE ALLOWED THE CLAIM OF THE ASSESS EE BY HOLDING THAT EVEN IF THE ASSESSEE HAS NOT CLAIMED THE LEGITIMATE DUE IN ORIGINAL RETURN OR BY WAY OF VALID REVISED RETURN, SUCH COURSE COUL D BE AVAILED BY THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEE DINGS AND CLAIM OF THE ASSESSEE COULD NOT BE REJECTED ON TECHNICAL GROUNDS . 5. THE DEPARTMENT IS AGGRIEVED BY SUCH FINDINGS OF THE LD. CIT(A) AND HAS RAISED THE AFOREMENTIONED GROUNDS. THE DEP ARTMENT IS ALSO RELYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD VS CIT (SUPRA) TO CONTEND THAT WITHOUT RE SORTING TO FILE REVISED RETURN DURING THE COURSE OF THE ASSESSMENT PROCEEDI NGS SUCH RELIEF CANNOT BE GIVEN TO THE ASSESSEE. 6. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. T HE LD. AR RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. 349 ITR 3 36 TO CONTEND THAT TO AVAIL SUCH EXEMPTION DURING THE COURSE OF ASSESSME NT PROCEEDINGS, THE ASSESSEE NEED NOT TO FILE REVISED RETURN AND CIT(A )/TRIBUNAL BOTH WILL BE WITHIN THEIR POWER TO DIRECT THE AO TO ALLOW SUCH C LAIM. 7. ON THE OTHER HAND IT WAS THE CASE OF THE LD. DEP ARTMENTAL REPRESENTATIVE THAT EVEN IF SUCH COURSE OF ACTION I S AVAILABLE TO THE ASSESSEE BUT LD. CIT(A) HAS COMMITTED AN ERROR IN DIRECTLY ALLOWING SUCH ITA NO.8650/M/2011 4 CLAIM TO THE ASSESSEE AS THE ASSESSING OFFICER, AT NO POINT OF TIME, HAS VERIFIED THE CLAIM OF THE ASSESSEE ON MERITS. 8. AFTER HEARING BOTH THE PARTIES AND AFTER CONSIDE RING THEIR SUBMISSIONS, WE ARE OF THE OPINION THAT LD. AR IS R IGHT IN CONTENDING THAT EVEN THOUGH AO MAY NOT BE ENTITLED TO GRANT DEDUC TION ON THE BASIS OF A LETTER REQUESTING AN AMENDMENT TO THE RETURN FILED BUT THE APPELLATE AUTHORITIES ARE ENTITLED TO CONSIDER THE CLAIM AND TO ADJUDICATE THE SAME. IT IS NOT NECESSARY THAT THE DEDUCTION CAN BE ALLOW ED ONLY IF THE REVISED RETURN OF INCOME WOULD HAVE BEEN FILED. SUCH CONTE NTION IS SUPPORTED BY THE AFOREMENTIONED DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS PRUTHVI BROKERS & SHAREHOLDERS (SUPRA). WHILE DELI VERING THE DECISION THEIR LORDSHIPS OF BOMBAY HIGH COURT HAVE CONSIDERE D THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZ INDIA LT D (SUPRA). THEREFORE, WE HOLD THAT THE DEDUCTION U/S. 54 CAN B E ALLOWED TO THE ASSESSEE EVEN WITHOUT FILING THE REVISED RETURN TO CLAIM THE SAME. HOWEVER, WE HAVE FOUND THAT AO DID NOT EXAMINE THE FACT THAT WHETHER OR NOT THE ASSESSEE HAS FULFILLED CONDITIONS TO AV AIL DEDUCTION U/S. 54 OF THE ACT. THOUGH LD. CIT(A) HAS HELD THAT THE ASSESS EE HAS FULFILLED THE CONDITIONS LAID DOWN IN SEC. 54 BUT HE HAS NOT ELAB ORATED AS TO HOW THE ASSESSEE HAS FULFILLED THOSE CONDITIONS. THEREFORE , WE CONSIDER IT NECESSARY THAT THE MATTER MAY BE RESTORED BACK TO T HE AO TO VERIFY THE CONTENTION OF THE ASSESSEE THAT HE HAS FULFILLED TH E CONDITIONS TO AVAIL EXEMPTION U/S. 54 OF THE ACT. ONLY FOR THIS LIMITE D PURPOSE, THE MATTER IS RESTORED BACK TO THE FILE OF THE AO. IF ASSESSEE I S ABLE TO ESTABLISH THAT ALL THE CONDITIONS LAID DOWN TO AVAIL BENEFIT U/S. 54 O F THE ACT ARE FULFILLED, THEN HE WILL ALLOW THE NECESSARY RELIEF TO THE ASSE SSEE. WE DIRECT ACCORDINGLY. ITA NO.8650/M/2011 5 9. FOR STATISTICAL PURPOSES, THE APPEAL FILED BY TH E REVENUE IS CONSIDERED TO BE PARTLY ALLOWED IN THE MANNER AFORE SAID. ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.2013 / + $ ! 0 1#2 10.12.2013 + 3 SD/- SD/- (SANJAY ARORA) (I.P. BANSAL ) ! / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; 1# DATED 10.12.2013 . # . ./ RJ , SR. PS / / / / + ++ + (,4 (,4 (,4 (,4 5 4$, 5 4$, 5 4$, 5 4$, / COPY OF THE ORDER FORWARDED TO : 1. %' / THE APPELLANT 2. ()%' / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 473 (,# , , / DR, ITAT, MUMBAI 6. 38 9 / GUARD FILE. /# /# /# /# / BY ORDER, )4, (, //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI