KISHOR GORAKHNAHT BHAGWAT,PUNE vs. INCOME-TAX OFFICER, WARD - 7 (4), PUNE

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ITA 1295/PUN/2019Status: DisposedITAT Pune27 July 2022AY 2009-103 pages
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What did the Tribunal hold?

The Tribunal upheld the addition of long-term capital gains as it was agreed upon by the assessee. However, the disallowance of Section 54 deduction was deleted as it was made by way of enhancement in the first appellate proceedings, which is not permissible.

What were the facts?

The assessee challenged an addition of long-term capital gains and a disallowance of Section 54 deduction. The long-term capital gains addition was agreed to by the assessee during assessment proceedings.

What were the issues?

Whether an addition made by way of enhancement in first appellate proceedings is permissible. Whether an agreed addition during assessment proceedings can be challenged later.

Which sections of the Income-tax Act were involved?

Section 54,Section 143(3)

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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI S. S. GODARA

For Appellant: Shri M. K. Kulkarni
For Respondent: Shri M. G. Jasnani
Hearing: 27.07.2022Pronounced: 27.07.2022

ORDER

PER S. S. GODARA, JM:

1.

This assessee’s appeal for assessment year 2009-10 arises against the CIT(A)-8, Pune’s order dated 09.07.2019 passed in case no.PN/CIT(A)-8/ITO. Wd. 7(4)/407/18-19/121 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short “the Act”. Heard both the parties. Case file perused.

2.

Coming to the assessee’s first and foremost substantive ground challenging long term capital gains addition of Rs.9,69,438/- made in the course of assessment herein dated 12.12.2011 as upheld in the CIT(A)’s lower appellate order, it emerges at the outset that the assessee had himself agreed to the same as per learned counsel’s endorsement to this effect dated 09.12.2011 during scrutiny (para 4 of assessment). That being the case, I see no reason to interfere with the impugned “agreed” addition. The same stands upheld.

3.

Next comes the latter issue of section 54 deduction disallowance of Rs.26,15,958/- made in the CIT(A)’s order by way of enhancement. There could be hardly in dispute that such an addition in the nature of altogether a new head of income in first appellate proceedings goes contrary to the settled legal proposition in CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC), CIT vs. Union Tyres (1990) 240 ITR 556 (Delhi) and CIT vs. M/s. Sardarilal & Co. (2001) 251 ITR 864 (Delhi) (FB). The impugned latter addition stands deleted for this precise reason alone. The Revenue’s vehement argument supporting the same are rejected therefore.

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