Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI AMIT SHUKLA & SHRI GAGAN GOYAL
PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of National Faceless Appeal Centre; Delhi (for short ‘NFAC”) dated 20.03.2023 u/s. 143 (1) of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y. 2018-19.
The brief facts of the case are that assessee company deriving income from business, capital gain and other sources. Return of income for the year under consideration was filed on 31.10.2018 declaring total income at Rs. 4, 07,989/-. In its return of income assessee claimed exemption u/s.10 (38) on sale of units of mutual fund amounting to Rs. 10, 77,600/- on which STT was paid by the assessee. Case of the assessee was processed u/s. 143(1) vide dated 17.06.2019 vide this order u/s. 143(1) CPC Bangalore disallowed the claim of the assessee u/s. 10(38) amounting to Rs.10, 77,599/-. Against this order u/s. 143(1) assessee being aggrieved filed an appeal before the ld. CIT(A) who in turn confirmed this order of CPC passed u/s. 143(1).
We have gone through the intimation issued u/s. 143(1) and order of ld. CIT (A). We found that claim of the assessee was disallowed on the ground of “In Schedule BP, SI.No.A.3b Income/receipt credited to profit and loss account considered under other heads of income, is more than the sum of S1.No. A(1)(a)(i), A(2)(a) A(3)(1)(1a), A(3)(ii)(2a) A(5)(a) A(6)(a) B(1)(a)(i) , B(2)(a), B(3)(a) , B(4)(1a) B(6)(1a), B(6)(2a), B(6)(3a) , B(7)(a) in Schedule Capital Gain, Sl.No.5 and Sl. No. 8 in Schedule DPM and S.No.5 and Sl.No.8 in Schedule DOA”. Against this reasoning given by CPC, Bangalore, ld. CIT (A) adjudicated the matter vides para 6.1 of his order as under:-
“6.1 The only issue involved in both the substantive grounds of appeal is centric to upward addition by the CPC. It is the claim of the appellant that the CPC has not allowed exemption u/s. 10(38) of the Act so claimed in the ROI, i.e Long Term Capital Gain on sale of Mutual Funds. In the statement of facts, the appellant has stated that CPC has disallowed exemption claimed u/s. 10(38) of the Act was ignored by the CPC and no reason was assigned. However, on the contrary, the appellant has, in the written submission has inter alia has stated as under- "In Schedule BP Si No A.3b Income/receipt credited to the profit & loss account considered under other heads of income, is more than the sum of SI. No: A(1)(a)(l), A(2)(a), A(3)(1)(1a,) A(3)(ii)(2a), A(5)(a), A(b) (a), B(1)(a)(i), B(2)(a), B(3)(a), B(4) (ia), B(6)(ia), B(6)(2a), B(6)(3a) B(7)(a) in Schedule Capital Gain Sl. No 5 and SI. No: 8 in Schedule DPM and S. No: 5 and Si. No: 8 in Schedule DOA" ENT Thus, it appears that the appellant has made a distinguishable fact in the statement of the fact Nevertheless the reason for upward variance has been accorded by the CPC On perusal of documents submitted by the appellant and reason for variance advanced by the CPC it appears that the appellant has erred in filling values in ITR. In the submission, the appellant has obscure its error and fault crept in filing return of income. From the reasoning advanced by CPC there is absolute mismatch. However to meet the end of justice the AO is directed to verify the ITR of the appellant and allow exemption u/s. 10(38) of the Act only if the reasons given by the CPC is found erroneous, otherwise, the variance stands confirmed. While verifying the ITR, the A.O. shall verify schedule -BP together with entries of Profit and Loss of the ITR. Accordingly, these grounds of appeals are partly allowed. “
4. It is clear from the order of ld. CIT (A) that assessee has provided copy of computation of income along with supporting working of Long Term Capital Gain as also Balance Sheet, Profit & Loss A/c, relevant note and transaction statement issued by mutual fund are enclosed. Assessee sold mutual funds at Rs.19, 77,599/- against the cost of acquisition of Rs. 9, 00,000/-. On this transaction assessee paid STT also at Rs. 19.78/-. Thus, there is a long term capital gain earned of Rs. 10, 77,599/- which is exempted u/s.10 (38) of the Act. Now what happened is assessee from accounting point of view shown this amount of Rs. 10, 77,599/- in its profit and loss account but the figure of Rs.10, 77,599/- shown separately as exempted income in its return of income. These facts of the assessee are not challenged by the ld. CIT (A) also.
5. Based on above facts we do not find any error or omission at the end of the assessee which can be covered by the processing u/s. 143 (1). Moreover, we have not found any response on our file issued by CPC, Bangalore against the objection filed against this assessment by the assessee. This isolated processing without considering properly the response of the assessee and ROI filed by the assessee, this order of CPC, Bangalore u/s.143 (1) is null and void. Astonishingly, the ld. CIT(A) also ignored the facts on file and referred the matter back to the Jurisdictional AO to verify the ITR of the assessee with consequential claim. We do not find any legal strength in the order of ld. CIT (A) and direct the Jurisdictional AO to allow the claim of the assessee without any further verification. In the result, grounds of the appeal taken by assessee are allowed.
In the result, appeal of the assessee is allowed.