BHAWANA ADWANI, Jaipur V. ITO, Jaipur

ITA 939/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2021 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 26-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONUM RAI DCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Period of limitation; Cost of acquisition; Reason to believe
• Section: 50C; 147; 148; 37; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 939/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. BHAWANA ADWANI GALI NO. 4, CHOUDHARY COLONY, VAISHALI NAGAR, AJMER. CUKE VS. INCOME TAX OFFICER, WARD 2(1), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAXPA 9143 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P. C. PARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONUM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/12/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 05/03/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 09.08.2016 OF CIT(A), AJMER FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF THE O RDER PASSED BY AO U/S 147 OF THE IT ACT BY HOLDING THAT AO IS EMPOWER ED TO REOPEN THE ASSESSMENT U/S 147 EVEN WHEN THERE IS A SPECIFI C PROVISION U/S 155(15) OF THE IT ACT WHICH SPECIFICALLY EMPOWERS T HE AO TO AMEND ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 2 THE ASSESSMENT ORDER WHERE THE VALUE ADOPTED BY THE STAMP AUTHORITY IS SUBSEQUENTLY REVISED IN ANY APPEAL OR REVISION OR REFERENCE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT DIRECTING THE AO TO REFER T HE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER U/S 50C(2)(B ) BY HOLDING THAT AS PER THE ASSESSEE HAS DISPUTED THE VALUE ADOPTED/ASS ESSED BY THE STAMP VALUATION AUTHORITIES IN APPEAL OR REVISION, NO REFERENCE CAN BE MADE BY THE AO FOR VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 50,000/- BY TREATING THE CASH DEPOSITED IN THE BANK ACCOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE BY NOT ACCEPTING THE CONTENT ION OF ASSESSEE THAT THE CASH SO DEPOSITED WAS OUT OF OPENING CASH BALANCE AVAILABLE WITH HER. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN NOT ALLOWING THE DEDUCTION OF RS. 25,000/- BEING THE PURCHASE COST A ND RS. 38,420/- BEING THE DEVELOPMENT COST, BROKERAGE EXPENSES AND NOC CHARGES WHILE COMPUTING THE CAPITAL GAIN ON SALE OF PROPERT Y AT HARIBHU UPADHYAY NAGAR, AJMER. 5. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 6. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. GROUND NO. 1 IS REGARDING VALIDITY OF REOPENING. THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN OF INCOME ON 21.06. 2010 DECLARING INCOME OF RS. 2,80,628/- CONSISTING OF SHORT TERM CAPITAL GAI N OF RS. 61,750/- ON SALE ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 3 OF LAND AT VILLAGE BORAJ AND RS. 1,97,875/-ON SA LE OF PLOT AT HARIBAHU UPADHYAY NAGAR. THE LAND AT VILLAGE BORAJ WAS SOLD BY THE ASSESSEE FOR CONSIDERATION OF RS. 4 LACS ON 03.09.2009 WHERE AS THE STAMP DUTY VALUATION ADOPTED BY THE AUTHORITY AT RS. 4,08,250/ -. ACCORDINGLY THE ASSESSEE COMPUTED ITS CAPITAL GAIN BY CONSIDERING T HE SALE CONSIDERATION U/S 50C OF THE ACT AT RS. 4,08,250/-. THEREAFTER TH E AO RECEIVED INFORMATION THAT THE COLLECTOR (STAMP), CIRCULAR, A JMER ENHANCED THE VALUE OF SALE OF LAND TO RS. 52,52,550/- VIDE ORDER DATED 28.02.2012. ACCORDINGLY, AO ISSUED PROPOSED TO OPEN THE ASSESSM ENT BY ISSUING NOTICE U/S 148 OF THE ACT ON 25.07.2013. THE ASSESSEE RAIS ED THE OBJECTIONS AGAINST THE REOPENING OF THE ASSESSMENT BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 3. BEFORE US, LD. AR OF THE ASSESSEE HAS SUBMITTED THAT SECTION 155(15) OF THE ACT SPECIFICALLY PROVIDES THAT WHERE THE VAL UE ADOPTED BY STAMP DUTY AUTHORITY FOR THE PURPOSE OF STAMP DUTY IS SUB SEQUENTLY REVISED IN AN APPEAL OR REVISION OR REFERENCE THEN, THE AO IS EMP OWERED TO TAKE SUCH VALUE BY AMENDING THE ORDER U/S 154 OF THE INCOME T AX ACT. THUS, WHEN THERE IS SPECIFIC PROVISION UNDER THE ACT TO DEAL W ITH A PARTICULAR SITUATION THEN, THE ACTION TAKEN BY THE AO TO REOPEN THE ASSE SSMENT U/S 147 IS INVALID AND BAD IN LAW. IN SUPPORT OF HIS CONTENTIO N HE HAS RELIED UPON THE ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 4 DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF HINDUSTAN UNILEVER LTD. VS. DCIT & ANR. 325 ITR 102 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHERE THE POWER TO RECTIFY AN ORDER OF ASSESSMENT U/S 154(1) IS ADEQUATE TO MEET A MISTAKE OR ERROR IN TH E ORDER OF ASSESSMENT, THE AO MUST TAKE RECOURSE TO THAT POWER AS OPPOSED TO THE WIDER POWER TO REOPEN THE ASSESSMENT. THE ASSESSEE CANNOT BE P ENALIZED FOR A FAULT OF THE AO. THE LD. AR HAS ALSO RELIED UPON THE DECISIO N OF CHENNAI BENCHES OF THE TRIBUNAL IN CASE OF SAKTHI FINANCE LTD. VS. ACIT 2 ITR 523 . THUS, THE LD. AR HAS SUBMITTED THAT THE ASSESSMENT CAN BE REOPENED ONLY WHEN THE AO AS REASON TO BELIEVE THAT INCOME HAS ESCAPE D ASSESSMENT. HE HAS ALSO RELIED UPON THE DECISION OF COORDINATE BENCHES OF THIS TRIBUNAL DATED 08.09.2016 IN CASE OF ARUN KUMAR CHOUDHAR VS. ITO IN ITA NO. 268/JP/2015 AS WELL AS DECISION DATED 21.10.2016 IN CASE OF ACIT VS. SHRI SATYENDRA KUMAR AGARWAL IN ITA NO. 572/JP/2015 . 4. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT SEC TION 155(15) OF THE ACT IS APPLICABLE ONLY WHEN THE VALUATION ADOPTED B Y THE AO SUBSEQUENTLY, REVISED IN ANY APPEAL OR REVISION OR REFERENCE. THE N THE ASSESSING OFFICER HAS TO ACCORDINGLY RECTIFY THE ASSESSMENT ORDER U/S 154 OF THE ACT. IN THE CASE IN HAND THE ASSESSEE HAS NOT DISPUTED THE FULL VALUE CONSIDERATION AS ADOPTED BY THE STAMP AUTHORITY WHEREAS SUBSEQUENTLY THE FULL STAMP VALUE ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 5 AUTHORITY HAS REVISED THE VALUATION AND THE AO IS B OUND TO ADOPT THE SAME. THUS, THE ASSESSING OFFICER HAS NO DISCRETION TO TAKE ITS OWN VALUE THEN THE VALUE ADOPTED BY THE STAMP AUTHORITY EXCEP T IN CASE WHERE THE ASSESSEE OBJECTED TO THE ADOPTION OF THE FULL CONSI DERATION AND THE MATTER IS REFERRED TO THE DVO. HE HAS RELIED UPON THE ORDE R OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE OBJECTIONS OF THE ASESSEE AGAINST TH E REOPENING OF THE ASSESSMENT IS THAT THERE IS A SPECIFIC PROVISION U/ S 155(15) OF THE ACT FOR AMENDMENT OF THE ASSESSMENT U/S 154 IF THE VALUE AD OPTED BY THE AO U/S 50C OF THE ACT IS SUBSEQUENTLY REVISED IN ANY APPEA L OR REVISION OR REFERENCE. IT IS PERTINENT TO NOTE THAT THE PROVIS ION OF SECTION 155(15) ARE APPLICABLE IN A CASE WHERE THE VALUE ADOPTED BY THE AO U/S 50C WAS SUBSEQUENTLY REVISED IN ANY APPEAL OR REVISION OR R EFERENCE THEN, THE AO SHALL AMEND THE ORDER OF THE ASSESSMENT SO AS TO CO MPUTE THE CAPITAL GAIN BY TAKING THE FULL VALUE CONSIDERATION TO BE THE VA LUE AS REVISED IN SUCH APPEAL OR REVISION OR REFERENCE. FOR READY REFERENC E THE PROVISIONS OF SECTION 155(15) ARE QUOTED AS UNDER:- (15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A CAPITA L GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE CONSIDERAT ION RECEIVED OR ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 6 ACCRUING AS A RESULT OF THE TRANSFER TO BE THE VALU E ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN ACCORDANCE WITH SUB-SECTIO N (1) OF SECTION 50C , AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APP EAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE (B) OF SUB-SECTION (2) OF THAT SECTION, THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSESSMENT SO AS TO COMPUTE THE CAPITAL GAIN BY TAK ING THE FULL VALUE OF THE CONSIDERATION TO BE THE VALUE AS SO RE VISED IN SUCH APPEAL OR REVISION OR REFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PE RIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOU S YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN THAT APP EAL OR REVISION OR REFERENCE. THUS, IT IS CLEAR FROM THE PROVISION OF SECTION 155 (15) OF THE ACT THAT IF THE CAPITAL GAIN IS COMPUTED BY TAKING FULL VALUE CONSI DERATION TO BE THE VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY AUTHORITY IN ACCORDANCE WITH SECTION 50C(1) OF THE ACT AND SUBSEQUENTLY SUCH VAL UE IS REVISED IN ANY APPEAL OR REVISION OR REFERENCE IN TERMS OF SECTION 50C(2)(B) OF THE ACT THE AO HAS TO GIVE EFFECT SUCH REVISION BY MAKING NECES SARY AMENDMENT IN THE ASSESSMENT ORDER. FOR READY REFERENCE THE PROVISION S OF SECTION 50C(2)(B) ARE QUOTED AS UNDER:- B ) THE VALUE SO ADOPTED OR ASSESSED 59 [O R ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB- SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND ( 6) OF SECTION 16A, ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 7 CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, S ECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957) , SHALL, WITH NECESSARY MODI-FICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 60 [EXPLANATION 1].FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). 61 [EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, T HE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUAT ION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRAR Y CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.] THUS, IF THE VALUE SO ADOPTED OR ASSESSED BY THE ST AMP DUTY VALUATION AUTHORITY HAS BEEN DISPUTED IN ANY APPEAL OR REVISI ON OR REFERENCE AND IN CONSEQUENCE THEREOF THE SAID VALUE HAS BEEN REVISED THEN THE ASSESSING OFFICER SHALL AMEND THE ASSESSMENT ORDER BY ADOPTIN G THE FULL VALUE CONSIDERATION AS REVISED IN ANY APPEAL OR REVISION OR REFERENCE. IN THE CASE IN HAND UNDISPUTEDLY THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY WAS SUBSEQUENTLY REVISED BY THE REVISION AUTHORITY AND THEREFORE, THE APPROPRIATE AND PROPER REMEDY TO GIVE EFFECT TO THE REVISED VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY THE AO OUGHT TO HA VE AMENDED THE ASSESSMENT ORDER U/S 154 OF THE ACT INSTEAD OF RESO RTING TO THE PROVISIONS ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 8 OF SECTION 147/148 OF THE ACT WHICH GIVES WIDER POW ER AND JURISDICTION TO THE AO TO DISTURB THE OTHER INCOME OF THE ASSESSEE. THE HONBLE BOMBAY HIGH COURT IN CASE OF HINDUSTAN UNILEVER LTD. VS. D CIT & ANR (SUPRA) HAS HELD IN PARA 15 TO 20 AS UNDER:- 15. IN THE PRESENT CASE, THE ASSESSING OFFICER, WHILE ISSUING A NOTICE FOR RE-OPENING THE ASSESSMENT OBSERVED THAT THE PROVISIONS OF RULE 8 ARE APPLICABLE 'ONLY IN THE CASE OF INCOME' AND THE CLAIM OF THE ASSESSEE TO SET OFF 40 PER CENT OF LOSSES AGAIN ST NORMAL BUSINESS PROFITS COULD NOT BE ALLOWED. ON THIS BASIS, THE AS SESSING OFFICER HAS FORMED THE OPINION THAT THE LOSS OF RS. 10.84 CRORE S ATTRIBUTABLE TO THE BUSINESS ACTIVITY OF THE ASSESSEE INVOLVING THE MANUFACTURE AND SALE OF TEA WAS LIABLE TO BE DISALLOWED. IT MUST BE NOTED HERE THAT IT IS NOT THE CONTENTION OF THE ASSESSING OFFICER THAT THE LOSS WHICH HAS BEEN COMPUTED BY THE ASSESSEE BY APPLYING THE PROPO RTION OF 40 PER CENT IS NOT A FAIR ESTIMATE OF THE ACTUAL LOSS SUST AINED, BY THE ASSESSEE IN ITS BUSINESS OPERATIONS. ON THE CONTRAR Y, IT IS ON THE BASIS OF RULE 8 THAT THE ASSESSING OFFICER SEEKS TO POSTULATE THAT THE LOSS ATTRIBUTABLE TO THE BUSINESS ACTIVITY OF THE A SSESSEE WOULD HAVE TO BE DISREGARDED ON THE GROUND THAT IT IS NOT ALLO WABLE EXPENDITURE. THIS INFERENCE WHICH IS SOUGHT TO BE DRAWN BY THE A SSESSING OFFICER IS CONTRARY TO THE PLAIN MEANING OF THE CHARGING PR OVISIONS OF THE ACT; AND TO RULE 8, BESIDES BEING CONTRARY TO THE P OSITION IN LAW LAID DOWN BY THE SUPREME COURT. THE ASSESSEE WAS LAWFULL Y ENTITLED TO ADJUST THE LOSS WHICH AROSE AS A RESULT OF THE BUSI NESS ACTIVITY UNDER RULE 8. (II)COMPUTATIONAL ERROR IN THE ASSESSMENT ORDER : 16. THE SECOND GROUND ON WHICH THE ASSESSMENT IS SOUGH T TO BE RE- OPENED IS A COMPUTATIONAL ERROR IN THE ASSESSMENT O RDER. IN ORDER TO APPRECIATE THE GROUND FOR RE-OPENING, IT WOULD BE A PPROPRIATE TO REFER TO THE STATEMENT SHOWING THE COMPUTATION OF T OTAL INCOME, AS APPENDED TO THE RETURN FOR ASSESSMENT YEAR 2004-05. ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 9 THE ASSESSEE RETURNED A BUSINESS INCOME OF RS. 1,82 6.43 CRORES. THE LOSS OF RS. 10.84 CRORES ARISING OUT OF THE PLA NTATION DIVISION AND ATTRIBUTABLE TO THE BUSINESS ACTIVITY WAS DEDUCTED FROM THE BUSINESS INCOME SO AS TO RESULT IN A PROFIT OF RS. 1,815.59 CRORES FROM BUSINESS OPERATIONS. CONSEQUENTLY, IN ITS COMPUTATI ON OF INCOME, THE ASSESSEE DISCLOSED THE ADJUSTMENT OF THE LOSS ARISI NG FROM THE PLANTATION DIVISION AS BEING MADE IN ORDER TO DETER MINE THE BUSINESS PROFIT. THE ASSESSING OFFICER WHILE PASSING HIS ORDER OF AS SESSMENT DATED 27-12-2006 ADOPTED THE BUSINESS INCOME OF RS. 1,815 .59 CRORES WHICH WAS IN TERMS OF THE COMPUTATION MADE BY THE A SSESSEE. WHILE MAKING DEDUCTIONS FROM THE BUSINESS INCOME, THE ASS ESSING OFFICER DEDUCTED AN AMOUNT OF RS. 10.84 CRORES AS A LOSS AR ISING FROM THE PLANTATION DIVISION. THIS WAS A PLAIN COMPUTATIONAL ERROR ON THE PART OF THE ASSESSING OFFICER BECAUSE THE FIGURE OF RS. 1,815.59 CRORES DISCLOSED AS BUSINESS INCOME BY THE ASSESSEE IN THE COMPUTATION OF INCOME WAS AFTER THE ADJUSTMENT OF THE LOSS FROM TH E PLANTATION DIVISION OF RS. 10.84 CRORES. THE ASSESSING OFFICER , THEREFORE, PLAINLY MADE A COMPUTATIONAL ERROR IN ONCE AGAIN DEDUCTING AN AMOUNT OF RS. 10.84 CRORES WHICH HAD ALREADY BEEN ACCOUNTED F OR IN THE COMPUTATION OF BUSINESS INCOME AT RS. 1,815.59 CROR ES. 17. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMIT TED THAT THE ERROR WHICH TOOK PLACE IN THE COMPUTATION OF INCOME BY THE ASSESSING OFFICER CAN AND OUGHT TO BE RECTIFIED UND ER SECTION 154. THE SUBMISSION WHICH WAS URGED BEFORE THE COURT IS THAT IF THE ASSESSING OFFICER WOULD PROCEED TO RECTIFY THE ERRO R, WHICH IS OBVIOUS, THE ASSESSEE WOULD HAVE NO OBJECTION. FURT HER IT WAS URGED THAT UPON A MISTAKE IN THE ORDER OF THE ASSESSING O FFICER, THREE REMEDIES MAY POSSIBLY BE AVAILABLE UNDER THE ACT, N AMELY (I) A RECTIFICATION UNDER SECTION 154; (II) A REVISION UN DER SECTION 263; AND (III) A REASSESSMENT UNDER SECTION 147. EACH OF THE SE REMEDIES IS EXERCISABLE BY DIFFERENT AUTHORITIES WITHIN DIFFERE NT PERIODS OF LIMITATION. THE SUBMISSION WHICH HAS BEEN URGED BEF ORE THE COURT IS THAT THE REVENUE MUST CHOOSE THE MOST APPROPRIATE R EMEDY, THAT LEAVES THE ASSESSEE WITH THE LEAST DETRIMENT. IN TH E EVENT THAT THE ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 10 ASSESSING OFFICER WAS TO EXERCISE THE POWER OF RECT IFICATION UNDER SECTION 154, THE ORDER WOULD HAVE TO BE CORRECTED T O THE EXTENT OF THE COMPUTATIONAL ERROR. EXERCISING THE POWER OF RE -OPENING THE ASSESSMENT ON THAT GROUND OF A SIMPLE COMPUTATIONAL ERROR IS A MATTER OF SERIOUS PREJUDICE TO THE ASSESSEE SINCE, IN SUCH AN EVENT, THE ENTIRE ASSESSMENT WOULD BE LIABLE TO BE RE-OPEN ED INCLUDING ALL OTHER ISSUES WHICH COME TO THE NOTICE OF THE ASSESS ING OFFICER IN THE COURSE OF PROCEEDINGS UNDER SECTION 147. 18. WE FIND THAT THERE IS MERIT IN THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF OF THE ASSESSEE. SECTION 154 EMPOWE RS THE INCOME- TAX AUTHORITIES, INCLUDING AN ASSESSING OFFICER, TO AMEND ANY ORDER PASSED BY THEM WITH A VIEW TO RECTIFY ANY MISTAKE A PPARENT FROM THE RECORD. THE LIMITATION FOR THE EXERCISE OF THE POWER IS UNDER SUB- SECTION (7) OF SECTION 154, FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE AMENDED WAS PA SSED. THERE CAN BE NO DISPUTE ABOUT THE POSITION THAT THE COMPU TATIONAL ERROR THAT HAS BEEN MADE BY THE ASSESSING OFFICER IN THE PRESENT CASE IS CAPABLE OF BEING RECTIFIED UNDER SECTION 154(1). TH E ASSESSING OFFICER IS WITHIN THE PERIOD OF LIMITATION PRESCRIB ED BY SUB-SECTION (7) OF SECTION 154. MOREOVER, THE COMPUTATIONAL ERROR C ANNOT BE ATTRIBUTED TO ANY ACT OR OMISSION ON THE PART OF TH E ASSESSEE, AS THE ASSESSEE IN THE COURSE OF ITS STATEMENT OF COMPUTAT ION OF TOTAL INCOME HAD CLEARLY DISCLOSED THAT THE BUSINESS PROF ITS WERE ARRIVED AT AFTER ADJUSTING THE LOSSES SUSTAINED BY THE PLAN TATION DIVISION (ATTRIBUTABLE TO THE BUSINESS ACTIVITY) FROM THE BU SINESS INCOME. 19. EXPLANATION (2) TO SECTION 147 PROVIDES A DEEMING FICTION, FOR THE PURPOSES OF THE SECTION, OF CASES WHERE INCOME CHARGEABLE TO TAX WOULD BE REGARDED AS HAVING ESCAPED ASSESSMENT. CLAUSE (C) OF EXPLANATION (2) INCORPORATES A SITUATION WHERE A N ASSESSMENT HAS BEEN MADE, BUT INCOME CHARGEABLE TO TAX HAS BEEN UN DER ASSESSED; OR ASSESSED AT TOO LOW A RATE; OR WHERE SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THE ACT. WHER E THE POWER TO RECTIFY AN ORDER OF ASSESSMENT UNDER SECTION 154(1) IS ADEQUATE TO MEET A MISTAKE OR ERROR IN THE ORDER OF ASSESSMENT, THE ASSESSING OFFICER MUST TAKE RECOURSE TO THAT POWER AS OPPOSED TO THE WIDER ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 11 POWER TO RE-OPEN THE ASSESSMENT. THE ASSESSEE CANNO T BE PENALIZED FOR A FAULT OF THE ASSESSING OFFICER. WE MUST EMPHA SIZE THAT WE ARE NOT DEALING WITH A CASE WHERE THE ERROR IN THE ORDE R OF ASSESSMENT IS ATTRIBUTABLE TO A LAPSE OR OMISSION ON THE PART OF THE ASSESSEE. THE PROVISIONS OF THE STATUTE LAY DOWN OVER-LAPPING REMEDIES WHICH ARE AVAILABLE TO THE REVENUE BUT THE EXERCISE OF TH ESE REMEDIES MUST BE COMMENSURATE WITH THE PURPOSE THAT IS SOUGHT TO BE ACHIEVED BY THE LEGISLATURE. THE RE-OPENING OF AN ASSESSMENT UN DER SECTION 147 HAS SERIOUS RAMIFICATIONS. EXPLANATION (3) TO SECTI ON 147 PROVIDES THAT FOR THE PURPOSES OF ASSESSMENT OR RE-ASSESSMEN T, THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPEC T OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND WHERE SUCH ISSUE C OMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDING S UNDER THE SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB-SEC TION (2) OF SECTION 148. IN OTHER WORDS, ONCE AN ASSESSMENT IS VALIDLY RE- OPENED IN EXERCISE OF POWERS CONFERRED BY SECTION 1 47, THE ASSESSING OFFICER IS EMPOWERED TO REASSESS THE INCO ME IN RESPECT OF ANY OTHER ISSUE WHICH COMES TO HIS NOTICE IN THE CO URSE OF THE PROCEEDINGS, THOUGH SUCH REASONS HAVE NOT BEEN SET OUT IN THE NOTICE UNDER SECTION 148. THERE IS, THEREFORE, MERI T IN THE SUBMISSION THAT IS URGED ON BEHALF OF THE ASSESSEE THAT BEFORE RECOURSE CAN BE TAKEN TO THE WIDER POWER TO RE-OPEN THE ASSESSMENT ON THE GROUND THAT THERE IS A COMPUTATIO N ERROR, AS IN THE PRESENT CASE THE ASSESSING OFFICER OUGHT TO HAV E RECTIFIED THE MISTAKE BY ADOPTING THE REMEDY AVAILABLE UNDER SECT ION 154 OF THE ACT. ALL STATUTORY POWERS HAVE TO BE EXERCISED REAS ONABLY. WHERE A STATUTE CONFERS AN AREA OF DISCRETION, THE EXERCISE OF THAT DISCRETION IS STRUCTURED BY THE REQUIREMENT THAT DISCRETIONARY POWERS MUST BE EXERCISED REASONABLY. INDIAN LAW IS GOVERNED BY THE PRESCRIPTIONS OF A WRITTEN CONSTITUTION. FAIRNESS AND FAIR TREATMENT ARE NORMS WHICH EMANATE FROM THE GUARANTEE OF EQUALITY AND NON-DISC RIMINATION UNDER ARTICLE 14, CONSTITUTIONAL NORMS, INCLUDING N ON-DISCRIMINATORY APPLICATION OF LAW, MUST GUIDE THE INTERPRETATION O F STATUTES. STATUTORY ENACTMENTS MUST BE READ TO BE IN CONFORMI TY WITH CONSTITUTIONAL NORMS. THE EXERCISE OF POWERS VESTED BY A STATUTE ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 12 MUST EQUALLY BE CONSISTENT WITH CONSTITUTIONAL NORM S. THE REMEDIES WHICH THE LAW PROVIDES ARE TAILORED TO BE PROPORTIO NAL TO THE SITUATION WHICH THE REMEDY RESOLVES. WHERE THE STAT UTE PROVIDES FOR SEVERAL REMEDIES, THE CHOICE OF THE REMEDY MUST BE APPROPRIATE TO THE UNDERLYING BASIS AND OBJECT OF THE CONFERMENT O F THE REMEDY. A SIMPLE COMPUTATIONAL ERROR CAN BE RESOLVED BY RECTI FYING AN ORDER OF ASSESSMENT UNDER SECTION 154(1). IT WOULD BE ENTIRE LY ARBITRARY FOR THE ASSESSING OFFICER TO RE-OPEN THE ENTIRE ASSESSM ENT UNDER SECTION 147 TO RECTIFY AN ERROR OR MISTAKE WHICH CAN BE REC TIFIED UNDER SECTION 154. AN ARBITRARY EXERCISE OF POWER IS CERT AINLY NOT A CONSEQUENCE WHICH PARLIAMENT CONTEMPLATES. 20. THE VIEW WHICH WE ARE INCLINED TO TAKE WOULD FIND SUPPORT FROM A JUDGMENT OF CHIEF JUSTICE M.C. CHAGLA, SPEAKING FOR A DIVISION BENCH OF THE COURT IN J.C. THAKKAR V. CIT [1955] 27 ITR 658 (BOM.) . THE PRINCIPLE WHICH WAS LAID DOWN BY THE DIVISION BENCH IS THAT WHEN ONE OR MORE MODES OF ASSESSMENT OR REMEDIES ARE AVAILAB LE TO THE TAXING AUTHORITY, THE AUTHORITY MUST ADOPT THAT REMEDY WHI CH IS A MATTER OF THE LEAST PREJUDICE TO THE ASSESSEE. THE PRINCIPLE HAS BEEN PUT IN THE FELICITOUS WORDS OF THE LEARNED CHIEF JUSTICE, WHIC H ARE AS FOLLOWS : '.....IT WOULD STILL BE OPEN TO THE ASSESSEE TO CON TEND THAT BY ADOPTING ONE MODE OF ASSESSMENT RATHER THAN ANOTHER A PREJUD ICE HAS BEEN CAUSED TO HIM OR THAT HE HAS BEEN DEPRIVED OF SOME RIGHT TO WHICH HE WOULD HAVE BEEN ENTITLED IF THE UNREGISTERED FIRM H AD BEEN ASSESSED FIRST OR THAT THE BURDEN OF TAXATION HAS BEEN INCRE ASED BECAUSE HE HAS BEEN ASSESSED WITHOUT THE UNREGISTERED FIRM BEING A SSESSED. IT IS NEEDLESS TO SAY THAT IF ONE OR MORE MODES OF ASSESS MENT ARE OPEN TO THE TAXING AUTHORITIES, THE TAXING AUTHORITIES MUST ADOPT THAT MODE WHICH IS MORE BENEFICIAL TO THE ASSESSEE. THE INDIA N INCOME-TAX ACT IS A TAXING STATUTE AND, THEREFORE, THE COURTS MUST BE ZEALOUS TO SEE THAT NO RIGHT WHICH AN ASSESSEE HAS UNDER THE ACT HAS BE EN TAKEN AWAY BY ANY ACTION ON THE PART OF THE DEPARTMENT. EVEN THOU GH IT MAY NOT BE OBLIGATORY UPON THE DEPARTMENT TO FOLLOW A PARTICUL AR PROCEDURE THE COURT WILL INSIST UPON THE DEPARTMENT FOLLOWING THE PROCEDURE IF THAT PROCEDURE LEADS TO A BENEFICIAL RESULT AS FAR AS TH E ASSESSEE IS ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 13 CONCERNED AND THE PROCEDURE FOLLOWED BY THE DEPARTM ENT IS PREJUDICIAL TO THE ASSESSEE....' WE ARE IN RESPECTFUL AGREEMENT WITH THE PRINCIPLE L AID DOWN BY THE DIVISION BENCH, IN THE FACTS OF THE PRESENT CASE. W E, THEREFORE, HOLD THAT IN THIS CASE THE REVENUE HAS AN EFFICACIOUS RE MEDY OPEN TO IT IN THE FORM OF A RECTIFICATION UNDER SECTION 154 FOR C ORRECTING THE COMPUTATIONAL ERROR AND THAT CONSEQUENTLY RECOURSE TO THE PROVISIONS OF SECTION 147 WAS NOT WARRANTED. (III)THE INVESTMENT UNDER SECTION 54EC : THE AO CAN AMEND ANY ORDER PASSED BY HIM WITH A VIE W TO RECTIFY ANY MISTAKE APPARENT FROM RECORD. WHERE THE POWER TO RE CTIFY THE ORDER OF ASSESSMENT U/S 154(1) OF THE ACT IS ADEQUATE TO MEE T A MISTAKE OR ERROR IN THE ORDER OF ASSESSMENT, THE AO MUST TAKE RECOURSE TO THAT POWER AS OPPOSED TO THE WIDER POWER TO REOPEN THE ASSESSMENT . THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF ACIT VS. SHI SAT YENDRA KUMAR AGARWAL (SUPRA) WHILE CONSIDERING AN IDENTICAL ISSUE AS HEL D IN PARA 2.5 AS UNDER:- 2.5 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ENHANCEMEN T MADE BY THE DIG, STAMPS, KOTA IN THE VALUE DETERMINED BY SUB RE GISTRAR-II, KOTA HAS NOT BEEN ACCEPTED AND CHALLENGED BEFORE THE COM PETENT AUTHORITY WHERE THE DECISION IS STILL PENDING. FOR THIS KIND OF SITUATION SPECIFIC PROVISION HAS BEEN PROVIDED IN T HE INCOME TAX ACT U/S 155(15) WHICH READ AS UNDER: 155(15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A C APITAL GAIN ARISING FROM THE TRANSFER OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE C ONSIDERATION ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 14 RECEIVED OR ACCRUING AS A RESULT OF THE ITA NO. 572 /JP/2015 THE ACIT, CIRCLE-,2 KOTA VS. SHRI SATYENDRA KUMAR AGARW AL, BARAN . 12 TRANSFER TO BE THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAM P DUTY IN ACCORDANCE WITH SUB-SECTION (1) OFSECTION 50C, AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APPEAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE (B) OF SUB-SECTION (2) OF THAT SECTION , THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSESSMENT SO AS T O COMPUTE THE CAPITAL GAIN BY TAKING THE FULL VALUE OF THE CONSID ERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR R EFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YEARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN THAT APPEAL OR REVISION OR REFERENCE. IT IS NOTED THAT THE LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE ALSO MADE SPECIFIC REMARK THAT THE AO CAN REVISE THE ORDER U/S 155(15) OF THE I.T. ACT, 1961 AFTER THE DECISIO N OF RAJASTHAN TAX BOARD, AJMER. HENCE, IN VIEW OF THE FACTS AND CIRCU MSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF LD. CIT( A) WHICH IS SUSTAINED. THEREFORE THE DEPARTMENTAL APPEAL IS DIS MISSED MORE PARTICULARLY WHEN THE AO HAS POWER TO MAKE RECTIFIC ATION OF THE ORDER IN TERMS OF THE PROVISIONS AS ENVISAGED U/S 1 55(15) OF THE ACT. THUS THE APPEAL OF THE REVENUE IS DISMISSED. FOLLOWING THE DECISIONS OF THE HONBLE HIGH COURT AS WELL AS COORDINATE BENCHES OF THIS TRIBUNAL AND IN VIEW OF FACT THAT T HE REMEDY TO AMEND THE ORDER IS SPECIFICALLY PROVIDED U/S 155(150 R.W.S. 1 54 OF THE ACT THE REOPENING U/S 147/148 OF THE ACT IS NOT VALID AND A CCORDINGLY THE SAME IS SET ASIDE. SINCE, THE REOPENING IS OF THE ASSESSMEN T IS SET ASIDE THEREFORE, OTHER GROUNDS BECOME INFRUCTUOUS. ITA 939/JP/16_ SMT. BHAWANA ADWANI VS. ITO 15 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/03/2018. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/03/2018 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. BHAWANA ADWANI, AJMER. 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD 2(1), AJMER. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 939/JP/16) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR