VISHAL KALYANI GALA,THANE vs. ITO WD 3(4), THANE

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य लेखा सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order, dated 27/01/2015, of the CIT (A) – 2,Thane the assessee has filed the present appeal.Assessee, an individual, filed his return of income on 27/09/2011,declaring total income of Rs. 11.80 lakhs. The Assessing Officer (AO) completed the assessment, u/s.143 (3) of the Act,on 20/02/2014,determining his income at Rs. 63.86 lakhs.

2.During the course of hearing before us,the Authorised Representative(AR) stated that considering the low tax effect of the amount involved,the assessee was not interested in pressing GOA-3. Hence, same stands dismissed as not pressed.

3.Vide his application, dated 11/05/2017, the assessee had made a request for admission of additional evidences.In the application the assessee had stated that he had furnished all the details,called for by the AO, during the assessment 1528/M/15;Vishal Kalyanji Gala proceedings on 9/01/2014 and 28/01/2014, that the AO did not ask for any other details/explanation, that only after receipt of the assessment order, he came to know that gains arising from sale of agricultural land was taxed as STCG on the ground that no agricultural activities were undertaken, that during the appellate proceedings he had filed the evidences which were called from his native place, that the assessee was able to prove that there was dispute relating to the plot of land, that all the documents submitted by him were rejected by the First Appellate Authority (FAA) without considering them,that the documents filed before him were crucial and were germane to the issue at hand. Referring to the provisions of Rule, 29 of the Income Tax Appellate Tribunal Rules, 1963 he requested that additional evidences produced before us should be taken on record as same would go to the root of the issue. He also relied upon the judgment of Hon’ble Bombay High Court, delivered in the case of Prabhavati Shah (231 ITR 1).

4.Before us,the AR stated that additional evidences were crucial to decide the issue, that the FAA had not taken note of the same.The Departmental Representative (DR) left the issue of admission of additional evidences to the Bench.

5.We have perused the application made by the assessee under Rule 29 of the ITAT Rules and the documents submitted along with it. Facts of the case are that during the assessment proceedings, the AO found that during the year under consideration the assessee had sold immovable property situated at village Maska, district Kutch, Gujarat for a total consideration of Rs. 1.50 crore, that he had not offered any profit for taxation out of the transaction in the return filed by him. He brought the fact to the notice of the AR of the assessee during the course of assessment proceedings.The AR filed details of Short-Term Capital Gains (STC G) amounting to Rs. 51.59 lakhs on sale of one third share of the 1528/M/15;Vishal Kalyanji Gala immovable property sold by the assessee.It was claimed that profit earned on sale of plot of land was exempt as the sale was of agricultural land. The AO was not satisfied with the explanation filed by the assessee and issued a show cause notice in that regard after considering the available material, he held that plot of land sold by the assessee was not agricultural and on the date of sale, that the surplus realised by the assessee was liable to be taxed as STCG. He made an addition of Rs.51,59,347/-to the total income of the assessee. Aggrieved by the order of the AO, the assessee preferred an appeal before the FAA and made elaborate submissions before him. The assessee also filed additional evidences before the FAA.But,same were rejected without passing any reasoned order.We also find that the FAA has not commented upon the additional evidences,nor did he call for a remand report from the AO in that regard.In our opinion,he should have dealt with the additional evidences as per Rule 46A of the Income Tax Rules,1962. 5.1.In our opinion evidences produced before us should have been considered before deciding the appeal. Therefore, following the judgment of Prabhavati Shah (supra), we hold that in the interest of Justice, the matter should be restored back to the file of the FAA for fresh adjudication. He is directed to admit the additional evidences filed before us and decide the appeal afresh. He would afford a reasonable opportune of hearing to the assessee. Effective ground of appeal(GOA-1&2) are decided in favour of the assessee, in part. As a result, appeal filed by the assessee, stands partly allowed. फलतः िनधा"रती "ारा दािखल क" गई अपील अंशतःमंजूर क" जाती है. Order pronounced in the open court on 13th September, 2017. आदेश क" घोषणा खुले "यायालय म" "दनांक 13 िसतबर, 2017 को क" गई । (रिवश सूद रिवश सूद रिवश सूद /Ravish Sood) (राजे"" / RAJENDRA) रिवश सूद "याियक सद"य / JUDICIAL MEMBER लेखा लेखा लेखा सद"य लेखा सद"य सद"य / ACCOUNTANT MEMBER सद"य मुंबई Mumbai; "दनांक/Dated : 13.09 .2017. Jv.Sr.PS. 3 1528/M/15;Vishal Kalyanji Gala