PRINCIPAL COMMSSIONER OF INCOME TAX 2 vs. SHITAL PIYUSHBHAI PATEL

TAXAP/1279/2018HC GujaratGJHC24049109201805 August 2019Author: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE A.C. RAO9 pages
AI SummaryDismissed

What were the facts?

The Revenue has filed two appeals against the orders of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2009-2010. The assessee, Rital R. Patel, had filed a return declaring a total income of Rs. 2,21,510/-. The Assessing Officer (AO) completed the assessment at Rs. 5,50,58,288/-, making an addition of Rs. 5,48,36,783/- towards long-term capital gain. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who partly allowed the appeal, directing the AO to adopt the consideration shown by the assessee and allow deduction for brokerage, while also enhancing the assessment. Both the assessee and the Revenue appealed to the ITAT, which allowed both appeals for statistical purposes, remanding the issues to the AO for fresh adjudication.

What did the High Court hold?

The High Court held that no error was committed by the ITAT in allowing the appeals and remanding the matters to the AO. The Court found that the ITAT had recorded valid reasons for remanding the matters. Regarding the assessee's contention about additional evidence, the Court agreed with the ITAT's rejection, stating that the assessee failed to demonstrate an inability to submit the evidence during assessment proceedings or a reasonable cause for not raising the ground before the AO. Therefore, the additional evidence was rightly not considered by the AO, CIT(A), and ITAT. The Court found no substantial question of law arising and dismissed the appeals. The AO is directed to decide the issue afresh based on the assessee's claim for substituting the fair market value as on 1/4/1981 as the cost of acquisition, with the assessee to furnish necessary details. The AO is also to consider the claim for exemption as per law, relevant CBDT Circulars, and after giving the assessee a reasonable opportunity of being heard.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts in not deciding the grounds raised by the department on merits, specifically concerning the CIT(A) directing the AO to adopt the consideration shown by the assessee by comparing it with jantri rates, without appreciating evidence on sale consideration. 2. Whether on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts in not upholding the sale consideration taken by the AO instead of the sale consideration offered by the assessee, despite the assessee failing to furnish documentary evidence like a sale deed. 3. Whether on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts in not rejecting the claim for deduction towards brokerage expenses as the assessee failed to furnish documentary evidence. Revenue's Contention: The ITAT erred in not upholding the AO's sale consideration and in not rejecting the brokerage claim due to lack of documentary evidence. The Revenue relies on the fact that the assessee failed to provide documentary evidence such as a sale deed to substantiate its claim regarding sale consideration and brokerage expenses. Assessee's Contention: The appeals have no substance and deserve to be dismissed. The assessee contends that the ITAT erred in remanding the matter instead of considering the additional evidence of a Valuation Report of a registered valuer as on 1/4/1981, which should be adopted as the cost of acquisition at the assessee's option.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(4),Section 143(2),Section 143(3),Section 271(1)(c),Section 53A,Section 2(47),Section 50(c),Section 55(2)(b),Section 54EC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/1277/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1277 of 2018 With R/TAX APPEAL NO. 1279 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 2, VADODARA Versus RITAL R. PATEL ========================================================== Appearance: MR VARUN K PATEL(3802) for the Appellant(s) No. 1 MRS SANGEETA N PAHWA(527) for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 05/08/2019

ORAL ORDER (PER : HONOURABLE MR.JUSTICE A.C. RAO)

1.00.

As common question of law arise in both these appeals, the same are heard, decided and disposed of by this common judgement and order treating the Tax Appeal No.1277/2018 as main Appeal.

2.00.

Tax Appeal No.1277 of 2018 under section 260A of the Income Tax Act, 1961 (“the Act” for short) has been preferred by the revenue challenging the order passed by the Income Tax appellate Tribunal in ITA No.710/Ahd/2014 dated 12/7/2017 for A.Y. 2009

The order continues below.

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