ITO - 42(1)(5), MUMBAI vs. SAMYUKTA NAIR, MUMBAI

The Assessee filed rectification application under Section 154 of Act which was rejected vide Rectification Order dated 09/09/2020.

Being aggrieved, the Assessee preferred appeal before CIT(A) which was allowed vide order dated, 29/11/2024 and the addition of INR.6.9 Crores was deleted.

Now the Revenue has challenged the above relief granted by the CIT(A) by way of present appeal on the grounds reproduced at Paragraph 2 above.

Relying upon the grounds raised by the Revenue in present appeal, it was contended by the Learned Departmental Representative that the CIT(A) had failed to appreciate that Capital Loss of INR.3,00,97,077/- was correctly disallowed while processingreturn of income and that the booking made by the Assessee did not result in securing any rights in the flat. It was further contended that the CIT(A) had erred in deleting addition of INR.6.9 Crores as a same was liable to tax in the hands of the Assessee as other income.

Countering the submissions made by the Learned Departmental Representative, the Learned Authorized Representative for the Assessee pointed out that the contentions raised by the Revenue are based upon incorrect understanding of facts. The Capital Loss of INR.3,00,97,077/- was accepted while processing return of income. INR.6.9 Crores represented the difference between amount received back from the developer (Net of Service Tax) and the payments 3 Assessment Year 2017-2018 made to the developer by the Assessee (Net of Service Tax). The Learned Authorized Representative for the Assessee submitted that the addition made while processing return of income had resulted in double taxation of same income once under the head Capital Gains as offered by the Assessee and then again under the head Income from Other Sources as done by the Central Processing Unit while processing the return of income. Therefore, the CIT(A) was correct in deleting the addition of INR.6.9 Crores.

We have considered the rival submissions and have perused the material on record.

We find that the submissions made by Learned Authorized Representative for the Assessee are factually correct. As per the Computation of Capital Loss placed on record, the Assessee had made aggregate payment of INR.30,92,70,000/- which included Service Tax of INR.92,70,000/-. After excluding the aforesaid service tax element, the payments made by the Assessee come to INR.30 Crores. As per the aforesaid computation, the Assessee had received aggregate amount of INR.37,82,70,000/-. After excluding the service tax element of INR.92,70,000/-, the same comes to INR.36.90 Crores. On perusal of the Form 26AS placed on record, we find that the developer had deducted tax at source on differential amount of INR.6.90 Crores. The aforesaid facts have not been disputed by the Revenue, and the same clearly establish that the differential amount of INR.6.90 Crores received by the Assessee from the developer on surrender of rights in the flat was included by the Assessee while computing Capital Loss (which has been accepted while processing return of income). On perusal of Intimation Order issued under Section 143(1) of the Act, we find that Capital Loss of INR. INR.3,00,97,077/- disclosed by the Assessee in the return of income has not been disturbed. The Revenue has failed to appreciate the correct facts, and has brought to tax the same 4 Assessment Year 2017-2018 differential amount of INR.6.90 Crores in the hands of the Assessee as ‘Income from Other Sources’while processing return of income under Section 143(1) of the Act. On perusal of the impugned order, we find that the Learned CIT(A) had appreciating the aforesaid facts correctly and had deleted the aforesaid addition of INR.6.90 Crores. We do not find any infirmity in the order passed by the Learned CIT(A). Accordingly, Ground No.1 to 3 raised by the Revenue are dismissed.

In result, the present appeal preferred by the Revenue is dismissed.