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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member)
The captioned appeal by assessee for Assessment Year [AY] 2012-13 contests invocation of revisional jurisdiction u/s 263 by Ld. Principal Commissioner of Income-Tax-9, Mumbai [PCIT], vide order No. CIT-9/263/Canary 2016-17 dated 29/03/2017. The assessment u/s 143(3) was framed by Ld. Income Tax Officer-9(2)(2), Mumbai on 19/03/2015.
The facts leading to the same are that the assessee, being resident corporate assessee deriving interest income was assessed u/s 143(3) for impugned AY on 19/03/2015 at Rs.1,75,840/- as against returned loss of Rs.16,97,207/- filed by the assessee on 28/09/2012. 3.1 Subsequently, the said assessment was subjected to exercise of revisional jurisdiction u/s 263 by Ld. PCIT vide show cause notice dated 23/02/2017 on the premises that the assessee sold a Flat No. 11 at new Twilight Cooperative Housing Society Limited, 15th Road, Bandra West, Mumbai-400052 vide agreement dated 15/11/2011 which was acquired by the assessee vide of deed of transfer dated 18/06/2009. However, the resultant capital gain of Rs.40,34,797/- was not reflected by the assessee in the return of income and hence the quantum order was erroneous and prejudicial to the interest of the revenue within the meaning of Section 263 of the Income Tax Act, 1961. 3.2 The assessee pleaded that the resultant capital gain was ‘Nil’ due to interest cost paid by the assessee against the same and therefore, the Canary Hospitality Private Limited Assessment Year 2012-13 same was not reflected in the computation of income. It was further contended that the details of interest claimed were discussed orally with Ld. AO during quantum assessment proceedings which was allowed after due verification by Ld. AO and therefore, revision of order u/s. 263 was not warranted for. 3.3 However, Ld. PCIT noted that the relevant details thereof were not available in the assessment records and the issue was nowhere discussed by Ld. AO in the assessment order. It was further noted that the evidences of payment of interest were nowhere furnished by the assessee. Finally, not convinced with assessee’s submissions, Ld. PCIT set aside the assessment order with a direction to reframe the same afresh. Aggrieved by the said action u/s 263, the assessee is in further appeal before us.
The Ld. Counsel for assessee [AR] reiterating the contentions as raised before Ld. PCIT, submitted that the relevant details were furnished during assessment proceedings and the claim was allowed by Ld. AO after due verification and therefore, exercise of revisional jurisdiction was bad in law.
Per Contra, Ld. DR placed reliance on the stand of Ld. PCIT and contended that relevant details were nowhere produced by the assessee and the Ld. AO failed to assess the capital gain earned by the assessee and therefore, the only course available to the revenue was revisional jurisdiction u/s 263 an therefore, the exercise of power was perfectly valid.
We have carefully considered the rival contentions and perused relevant material on record. First of all, a perusal of quantum Canary Hospitality Private Limited Assessment Year 2012-13 assessment order dated 19/03/2015 reveals that the issue of Capital Gains earned by assessee is nowhere discussed by Ld. AO in the said order. The Ld. AR, himself, has admitted that capital gain was not reflected either in the return of income or computation of income. Even otherwise, we have observed the same upon perusal of documents placed before us. The Ld. AR has produced a letter dated 17/12/2014 to contend that complete detail of computation of capital gain and interest cost was provided during assessment proceedings. However, upon comparison with original assessment records produced before us by the revenue, we find difference in the letter produced before us by Ld. AR and the letter found in the assessment records and therefore, no reliance could be placed on the same. Prima facie, the only documents produced by the assessee qua the transaction are Agreement of Purchase and Sale vide letter dated 10/11/2014. However, the details of interest and supporting evidences are nowhere furnished by the assessee. Therefore, on the totality of above facts, we concur with the stand of revenue that Ld. AO completely missed out the said issue during quantum assessment proceedings and rightly been subjected to revisional jurisdiction u/s. 263.
At this stage, we are required to examine whether the twin conditions viz. erroneous and prejudicial to the interest of the revenue are fulfilled or not and the same, in the present case, has prima facie been fulfilled and therefore, we upheld the invocation of revisional jurisdiction u/s 263 by Ld. PCIT and hence, no hesitation in dismissing assessee’s appeal.
Resultantly, the assessee’s appeal stands dismissed.
Canary Hospitality Private Limited Assessment Year 2012-13 Order pronounced in the open court on 04th October, 2017.