MAHENDRA AKHALAL DEDHIA,MUMBAI vs. CPC, BANGALORE

Ld. AR appearing on behalf of the assessee reiterated the same arguments as were raised by him before the revenue authority and also relied upon written submissions. The contents of the written submissions filed by the assessee are reproduced herein below:

Statement of Income for the Year end 31.03.2014

Intimation Order us 143(1) dated 17.06.2015

Rectification Application us 154 submitted on 21.03 2017

E nirvana Application filed on 13.07.2020

Copies of sales Bills of gold ornaments and silver.

Copy of Purchase agreement for Shop Sold.

Extract Copies of agreement for new flat Purchased.

On the other hand, Ld. DR appearing on behalf of the department relied upon the orders passed by the revenue authorities.

I have heard the counsel for both the parties and have gone through the documents placed on record , judgements cited before me and the orders passed by the revenue authorities. From the records, I noticed that the facts of the 5 Mahendra Akhalal Dedhia, Mumbai case are that assessee had claimed capital gain exemption under section 54F of Rs.19,85,387/- for investment in new residential flat in joint name and details of the capital assets sold and exemption claimed by the assessee is as follows.

Since the capital gain was less then the investment in new flat. However in intimation dated 17th June 2015, capital gain exemption of Rs.12,31,137/- on gold and silver utensils was denied. Although rectification applications were filed but still exemption was not given in full. And ultimately, appeal was filed before Ld. CIT(A) and during the course of appeal assessee filed written submissions and placed on record the following documents

Statement of Income for the Year end 31.03.2014

Intimation Order us 143(1) dated 17.06.2015

Rectification Application us 154 submitted on 21.03 2017

E nirvana Application filed on 13.07.2020

Copies of sales Bills of gold ornaments and silver.

Copy of Purchase agreement for Shop Sold.

Extract Copies of agreement for new flat Purchased.

But Ld. CIT(A) dismissed the appeal of the assessee by holding that the assessee has failed to submit documents required for consideration of capital gain deduction under section 54F. Therefore genuineness of capital gain deduction cannot be verified and hence disallowance of Rs 12,31,137/- made by the AO CPC was confirmed and deduction of Rs.7,54,250/- claimed under section 54F on sale of the shop was added back.

Ld. AR vehemently argued that before the assessee could respond to the notices issued by Ld. CIT(A), the appeal was dismissed and even enhancement notice under section 251(2) of the Act was also not served and no reasonable opportunity was provided before enhancement.

After having gone through the facts of the present case, I am of the view that the provisions of section 251(2) of the Act are mandatory in nature and CIT(A) was to provide reasonable opportunity of show cause before enhancing the assessment and in this regard I found reliance on the decision of Hon’ble Supreme Court of India in the case of 7 Limited Vs ACIT [2023] (6) TMI 117, ITAT Kolkata and also from the decision of Coordinate Bench of ITAT Mumbai in the case of Edelwiess Asset management Ld Vs. ACIT, Mumbai, TMI 650 – ITAT Mumbai.

Although Ld. DR submitted that assessee had not appeared when the case was taken up and proper opportunities were granted by the revenue authority before making enhancement.

Be that as it may, in my view, sufficient opportunity should have been granted by Ld. CIT(A) before making enhancement and in the present case it has been specifically argued that no opportunity of hearing was provided by Ld. CIT(A). Therefore in my view, the interest of justice would be met in case the issue between the parties is decided on merits after providing fair opportunity of hearing to the assessee. Therefore, considering the above factual and legal position, the bench feels that the ends of justice would be met only if the matter is restored back to the file of Ld. CIT(A), thus, the present appeal of the assessee is restored to the file of CIT(A) for deciding the issue afresh on merits by providing opportunity of hearing to the assessee. The 8 Mahendra Akhalal Dedhia, Mumbai assessee shall not seek any adjournment on frivolous grounds and remain cooperative during the course of proceedings. 12. Before parting, I make it clear that my decision to restore the matter back to the file of the CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the CIT(A) independently in accordance with law. Order pronounced in the open court on 18.02.2025. (SANDEEP GOSAIN) JUDICIAL MEMBER

अपीलाथ / The Appellant 2. थ / The Respondent. 3. संबंिधत आयकर आयु / The CIT(A) 4. आयकर आयु(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुबई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, सािपत ित ////

उप/सहायक पंजीकार ( Asst.