HEMENDRA MATHRADAS KOTHARI,MUMBAI vs. ACIT 17(1), MUMBAI

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ITA 599/MUM/2020Status: DisposedITAT Mumbai27 August 2021AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that appellate authorities have the power to admit additional claims, unlike the AO who is restricted to claims in the return or revised return. Therefore, the revised computation claiming indexation was admitted.

What were the facts?

The assessee disclosed Long Term Capital Gain (LTCG) but failed to claim indexation benefit in the original return. During assessment, a revised computation claiming indexation was filed, which was rejected by the AO and CIT(A) citing Goetze (India) Ltd. The assessee argued that appellate authorities can entertain fresh claims.

What were the issues?

Whether appellate authorities can entertain a fresh claim for indexation benefit on LTCG that was not claimed in the original or revised return of income.

Which sections of the Income-tax Act were involved?

Section 48

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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI

Hearing: 17/08/2021Pronounced: 27/08/2021

ORDER PER VIKAS AWASTHY, J.M: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-28, Mumbai [hereinafter referred to as ‘the CIT(A)’] ' dated 29.11.2019 for the Assessment Year (AY) 2015-16. 2. Sh. Madhur Agarwal appearing on behalf of the assessee submitted that in the return of income, the assessee had disclosed Long Term Capital Gain (LTCG), however, while computing LTCG, the assessee failed to claim the आअसं. 599/मुं/2020 (िन.व.2015-16) (A.Y.2015-16) benefit of indexation. During the course of assessment proceedings, the assessee filed revised computation of LTCG after claiming indexation on cost of acquisition of asset. The Assessing Officer (AO) rejected the assessee’s revised computation on the ground that the claim has not been made either in the return of income or in the revised return of income, hence, the claim cannot be accepted. The assessee filed appeal against the assessment order dated 29.06.2016 before the CIT(A). In First Appellate proceedings, the CIT(A) refused to entertain revised computation of LTCG in the light of decision of Hon’ble Apex Court in the case of Goetze (India) Ltd. Vs. CIT 288 ITR 323. The ld. Authorized Representative (AR) submitted that there is no bar in entertaining fresh claim of the assessee by the appellate authorities. In support of his submission, the ld. AR placed reliance on the decision of CIT Vs. Pruthvi Brokers and Shareholders P. Ltd. 349 ITR 336 (Bom).

3.

Per contra, Sh. Gurubinder Singh representing the Department vehemently supported the order of CIT(A). The ld. DR submitted that the Hon’ble Supreme Court of India in the case of Goetze India (supra) has held that the AO can only entertain assessee’s claim either in return of income or by way of revised return of income. The AO has no jurisdiction to entertain fresh claim made in assessment proceedings by way of revised computation.

4.

Both sides heard, orders of authorities below examined. The solitary issue in the present appeal is with regard to assessee’s claim of indexation on the cost of acquisition of asset. Undisputedly, the assessee in the return of income has declared LTCG and while declaring such capital gain, the assessee has not claimed the benefit of indexation on the cost of acquisition of asset. The provisions of the Act grant benefit to the assessee to claim indexation on आअसं. 599/मुं/2020 (िन.व.2015-16) (A.Y.2015-16) the cost of acquisition while computing capital gains. The AO rightly rejected the assessee’s claim made during assessment proceedings by way of revised computation. The AO has no power to entertain claim made otherwise than by way of revised return. The Hon’ble Apex Court in the case of Goetze (India) Ltd. Vs. CIT (supra) has clarified that the powers of the Appellate Tribunal are not impinged to entertain fresh claim made otherwise than by filing revised return.

5.

The Hon’ble Jurisdictional High Court in the case of CIT Vs. Pruthvi Brokers and Shareholders P. Ltd. (supra) considering the ratio laid down in Goetze (India) Ltd. (supra) has held that the appellate authorities have power to admit additional claim made before them. Thus, in view of the facts of the case and the law laid down by the Hon’ble Apex Court and the Hon’ble Jurisdictional High Court, we admit revised computation of LTCG made by the assessee after claiming benefit of indexation on the cost of acquisition. We deem it appropriate to restore the issue back to the file of AO to re-compute LTCG after granting the benefit of indexation to the assessee, in accordance with law.

6.

In the result, appeal of the assesee is allowed for statistical purpose. Order pronounced in the open court on Friday, the 27th day of August, 2021. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (VIKAS AWASTHY) लेखा सद�य / ACCOUNTANT MEMBER �याियक सद�य / JUDICIAL MEMBER मुंबई/Mumbai, �दनांक/Dated: /08/2021 SK, PS

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