MANOJKUMAR MADANGOPAL MAHESHWARI ,MUMBAI V. ACIT 19(2), MUMBAI

ITA 1105/MUM/2024

AI Insights

The case involves Manojkumar Madangopal Maheshwari, the appellant, contesting the order of the National Faceless Appeal Centre (NFAC), Delhi, which partly allowed his appeal against the Assessment Order for the year 2013-14. The primary issues revolved around the appellant's residency status, the consideration of additional evidence and grounds, and the computation of capital gains on the sale of shares. The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) had not adequately addressed the additional evidence and grounds raised by the appellant, leading to the decision to set aside the CIT(A)'s order and remand the case for further consideration.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 32729 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 11-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE; WAY
• Keywords: Set aside; Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition; Gift; Capital Gains; Residential status
• Section: 143(3); 250; 48; 6

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL \"E\" BENCH, MUMBAI SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 1105/MUM/2024 (Assessment Year: 2013-14) Manojkumar Madangopal Maheshwari B-47, Ahuja Towers, Rajabhau Anatdesai Marg, Prabhadevi, Mumbai – 400025 Maharashtra. [PAN: AACPM9762F] …………. Appellant Assistant Commissioner of Income Tax 19(2), Mumbai Matru Mandir, Room No.207, Tardeo Road, Mumbai – 400007, Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Gautam Thacker Shri Biswanath Das Date Conclusion of hearing Pronouncement of order : : 21.08.2024 29.10.2024 O R D E R Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 11/01/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 31/03/2016, passed under Section 143(3) of the Act for the Assessment Year 2013-14. ITA No. 1105/MUM/2024 Assessment Year: 2013-14 2 2. The following grounds have been raised in the present appeal: “1. The Learned Commissioner of income tax (Appeals) (the 'CIT (AY) erred on fects and in law in not passing a speaking order and has dismissed the grounds raised by the Appellent without providing adequate reasons. 2. The Learned CIT(A) erred on facts and in law in ignoring the additional ground raised by the Appellant. 3. The Learned CIT(A) erred in fact and in law in not considering the additional evidence filed by the Appellant and the Learned CIT(A) ought to have considered the documents produced before him. 4. The Learned CIT(A) erred in fact and in law in upholding the findings of the AD that the Appellent was a resident of India under section 6 of the Act. The learned CITIA) ought to have appreciated that the provisions of section 6(1)(c) along with Explanation (s) were applicable as the Assessee had taken up employment with ignite Consulting, FZC, a UAE based company during the year and had not stayed in India for a period exceeding 182 days in the year under consideration. 5. The Learned CIT(A) erred in fact and in law in not allowing the cost of the previous owner as the cost of acquisition under section 48 while computing the capital gains assessable on the sale of shares in Gopal Traders Private Limited (GTPL). On the facts and in the circumstances of the case, the Learned CIT(A) erred upholding the findings of the AO in relation to the partition of the Manojkumar Maheshwari HUF (hereinafter referred to as the 'HUP'). The CIT(A) grossly erred in holding that that the will of Madangopal Maheshwari was an oral will and that No probate had been obtained. The Learned CIT(A) ought to have appreciated that it was not the will of Madangopal Maheshwari that was made orally, but the partition of the HUF that was orally made. Accordingly, the Learned CIIT(A) erred in not allowing the cost of the previous owner as the cost of acquisition while computing the capital gains arising to the Assessee from the sale of share of Gopal Traders Private Limited. 6. The Learned CIT(A) ought to have appreciated that the shares of GTPL were partly acquired by the Appellant by way ITA No. 1105/MUM/2024 Assessment Year: 2013-14 3 of a gift from his mother and partly through the partition of the HUF, who had acquired the shares prior to 1-4-1981. Accordingly, the Assessee was eligible to adopt the fair value of the shares as the cost of acquisition of the shares. 7. The CIT(A) erred in not appreciating that the rate of tax applicable to the transfer of shares of GTPL was 10% under section 112(1) (c) (iii). 8. Without prejudice to the above, if the Appellant is held to be a resident, the indexation benefit ought to be granted to the Assessee in respect of the long term capital assets transferred by the Appellant 9. The CIT(A) erred in upholding the order of the AD with respect to the disallowance of set off and carry forward of the short term loss incurred by the Appellant arising from the sale of debentures of Aurovision Solutions Pvt. Ltd., Aurovision Pvt. Ltd., Tujan enterprises Pvt. Ltd., Tukar Enterprises Pvt. Ltd. and Karjan Enterprises Pvt. LTd. int eh instant case as the transactions were not a genuine. The CIT(A) ought to have appreciated the issue of debendtures could not have been held to be non-genuine as the same were issued by independent parties and based on independent third-party valuation.” 3. When the appeal was taken up for hearing the Learned Authorised representative for the Appellant pressed into service Ground No. 2 & 3 raised in the present appeal and submitted that the Appellant had raised additional ground as well as filed application for admission of additional evidence before the CIT(A). However, the CIT(A) has failed to take the same into consideration. It was submitted that the additional evidence goes to the root of the matter and therefore, order passed by the CIT(A) be set aside with the directions to the CIT(A) to decide the appeal after taking into consideration additional evidence as well as the additional ground raised by the Appellant. 4. The Learned Departmental Representative could not controvert ITA No. 1105/MUM/2024 Assessment Year: 2013-14 4 the submissions made by the Learned Authorized Representative for the Appellant regarding non-consideration of additional grounds and additional evidence. 5. On perusal of record we find that the Appellant had filed return of income for the Assessment Year 2013-2014 on 03/08/2013, declaring total income of INR.42,56,65,840/-. The case of the Appellant was selected for scrutiny. The assessment under Section 143(3) of the Act was framed on the Appellant vide Assessment Order, dated 31/03/2013. The Appellant had filed return of income under the status of a ‘non-resident’. However, the Assessing Officer concluded that Appellant was ‘resident’ in India and brought to tax global income of the Appellant. The assessing officer also disallowed Appellant’s claim for set off and carry forward of losses. Being aggrieved, Appellant filed appeal before the CIT(A). Vide a letter, dated 10/07/2018, the Appellant raised additional ground (placed at page 760 to 764 of the paper book) and also filed an application seeking admission of additional evidence under Rule 46A of the Income Tax Rules, 1962, vide a letter dated 10/07/2018, (placed at page 765 to 781 of the paper book) in relation to Ground No. 10 (Additional Ground, Ground No. 10, Ground No. 5, Ground No. 3 to 6 and Ground No 2. On perusal of order impugned passed by the CIT(A) we find that the CIT(A) has not taken into consideration either the additional evidence or the additional ground. In paragraph 3 and 4 (at page 7 & 8) of the order impugned, we find that CIT(A) has recorded that no additional grounds or additional evidence has been filed by the Appellant. The Appellant is placed before us (as part of the paper-book - at pages 760 to 781) copy of the application seeking admission evidence filed as well as Additional ground raised before the CIT(A). We further note that impugned order passed by the CIT(A) does not contains any discussion on ITA No. 1105/MUM/2024 Assessment Year: 2013-14 5 the additional evidence and additional ground. In view of the aforesaid, the order, dated 11/01/2024, passed by the CIT(A) is set aside with the directions to decide the application afresh after granting the Appellant a reasonable opportunity of being heard. It is clarified that in case the Appellant fails to enter appearance before the CIT(A) or fails to file relevant documents/details to support his claim, the CIT(A) would be at liberty to dispose off the appeal on the basis of material on record. In terms of the aforesaid the Ground No. 2 & 3 raised by the Appellant are allowed for statistical purposes and therefore, all the other grounds raised in the present appeal are dismissed as being infructuous. 6. In result the present appeal preferred by the Appellant is allowed for statistical purposes. Order pronounced on 29.10.2024. Sd/- Sd/- (Prashant Maharishi) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 29.10.2024 Milan, LDC ITA No. 1105/MUM/2024 Assessment Year: 2013-14 6 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध, आयकर अपीलीय अदधकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai "