SMT. VIJAYAMMA SYAMPRAKASH VAIDYAN,,SURAT vs. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(3),, SURAT

This appeal by the Assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)-II,[CIT(A)] Surat dated 10.05.2016 for the A.Y. 2012-13. The assessee raised the following grounds of appeal as under: “(1). That the learned CIT(A) has grievously erred in law and on facts, in holding that the assessment is to be made as per the original return, whereas the appellant has duly filed the revised return of income, wherein the claim of reduction of long term capital gains of Rs.1,25,23,073/- is made, which is not considered by AO at all.

Brief facts of the case are that the assessee is an individual. The assessee filed her return of income for assessment year 2012-13 on 02.10.2012 declaring total income of Rs. 11.62 Crore. In the computation of total income the assessee claimed long term capital gain of Rs. 12.39 Crore. The assessee also furnished working of capital gain. Subsequently, the assessee filed revised return of income on 26.03.2013 declaring total income of Rs. 10.37 Crore. The assessee also furnished revised computation of income. In the revised computation of income the assessee claimed long term capital gain of Rs.11.14 Crore and also furnished revised working of the capital gain, thereby claiming reduction in capital gain. In the Note appended below the revised computation of total income, the assessee claimed that as per Share Purchase Agreement (SPA) the assessee paid certain amount to M/s. Neo Structu Construction Pvt. Ltd. And M/s.Spetech Plant Equipment Pvt. Ltd., and accordingly the net consideration of sale of shares were reduced. The case was selected for scrutiny. The Assessing Officer (AO) while passing the assessment order accepted the returned income filed originally. In the original return of income, Smt.Vijayamma S.Vaidyan Vs. DCIT, Circle-1(3), Surat/ A.Y. 2012-13 the assessee claimed long term capital gain of Rs.12.39 crores. However, the reduction in capital gain claimed in revised return was not considered by passing the assessment order.

Aggrieved by the action of AO, the assessee filed appeal before the Ld.CIT(A). Before ld CIT(A), the assessee filed written submissions dated 04.05.2016, which is extracted by ld CIT(A) in para 5 of the impugned order. In the written submissions the assessee stated that in the revised return of income the assessee claimed reduction in capital gain of Rs. 1.25 Crore. The AO completed the assessment on the basis of original return of income and that no reason was given by him for not considering the revised return of income. The assessee also relied on the decision of Mumbai Tribunal in dated 13th October 2012, wherein it was held that where the time limit for filing the revised return has passed and the assessee filed revised computation and prayed to treat the same as revised return. The revised computation was not accepted by AO, however, on second appeal the Tribunal accepted the revised computation and restored the matter back to the file of AO to consider the claim of assessee afresh. The Tribunal while restoring the claim of that assessee followed the Judgment of Hon’ble Supreme Court in Gurjagrauvreous P Ltd (111 ITR 1 SC), wherein it was laid down that the assessee is not only entitled to raise additional grounds of appeal but also entitled to raise additional claim. The assessee also furnished revised return of total income to claim the reduction in her sale price of shares of Neo Structo Construction Ltd. Smt.Vijayamma S.Vaidyan Vs. DCIT, Circle-1(3), Surat/ A.Y. 2012-13

We have heard the submission of Ld.Authorised Representative(AR) of the assessee and Ld.Departmental Representative(DR) for the Revenue. We have also gone through the orders of the authorities below. The Ld.AR of the assessee submits the AO while passing the assessment order not considered the revised return nor given any reason. The assessee filed revised return on 16.03.2013 and claimed reduction of certain amount paid to M/s. Neo Structo Construction Pvt. Ltd., and M/s Spetech Plant Equipment Pvt. Ltd., and claimed the reduction of amount from the long term capital gain. The AO accepted the original return of income. The assessee before first appellate authority has raised specific ground of appeal that in revised return of income the assessee claimed certain reduction on account of amount paid to M/s.Neo Structo Construction Pvt. Ltd. and M/s Spetech Plant Equipment Pvt. Ltd. The ld. CIT(A) instead of allowing the contention Smt.Vijayamma S.Vaidyan Vs. DCIT, Circle-1(3), Surat/ A.Y. 2012-13 of the assessee concluded that the original return filed by assessee was beyond the time limit allowed by CBDT. The CBDT allowed/extended for filing of return of income for relevant assessment year up to 31.08.2012. The assessee filed original return on 02.10.2012 which was beyond the extended period, therefore, the original return was invalid. The Ld.AR of the assessee submits that even otherwise, if it is presumed that assessee has not claimed reduction by way of filing revised return, the assessee is entitled to raise additional claim before the first appellate authority. The assessee also raised his claim before the ld.CIT(A) and as per the decision of Hon'ble Jurisdictional High Court in CIT Vs. Mitesh Impex [46 taxmann.com 30] (Guj). The assessee has a right to raise fresh claim. The ld.CIT(A) instead of considering the claim of assessee, decline to entertain the grounds of appeal. On the ground that the original return of income was filed beyond the due date. The ld.AR of the assessee further submits that the assessee is legally entitled to raise new claim before the Appellate Authority even without revising return before the AO. The Ld.AR submits that Hon'ble Supreme Court in Gotez (I) Ltd. Vs CIT [284 ITR 323] held that the power to entertain the fresh/ addition claim by appellate authority is not restrict, though AO is not entitled to consider the fresh claim in absence of revised return. In strengthen his submission, the Ld. AR of the assessee also relied upon the decision of Hon'ble Jurisdictional High Court in S. R. Koshi Vs CIT 276 ITR 165 and decision of Ahmedabad Tribunal in Adani Power Ltd., in and 1686/AHD/2014 dated 28.06.2018.