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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
आदेश / ORDER
PER ANIL CHATURVEDI, AM
These two appeals filed by two different Assessees are emanating out of
the separate orders of Commissioner of Income Tax (Appeals)- 2, Pune dated
14.09.2016 and 15.09.2016 for A.Y. 2012-13.
Before us, at the outset, Ld.D.R. submitted that though the two appeals
filed by two different assessees are against the separate order of Commissioner
of Income Tax (Appeals)-2, Pune but the issue involved in both the appeals are
identical except for the amounts and the assessees and therefore, his
arguments will also be common and therefore these two appeals can be heard
and disposed of together. We therefore for the sake of convenience proceed to
dispose of the two appeals by a consolidated order, but however, proceed with
narrating the facts in ITA No.123/PUN/2017 for assessment year 2012-13.
The relevant facts as culled out from the material on record are as
under:-
Assessee is an individual stated to be having income from capital gains,
bank interest and other sources. The Assessing Officer noted that Assessee
had sold immovable property on 30.12.2011 (land at Survey No. 203(3),
Sangamner, Budruk, Ahmednagar) jointly along with 20 members for
Rs.96,00,000/-. Assessing Officer further noticed that assessee had not filed
the return of income. The Assessing Officer therefore held that capital gain has
escaped assessment and accordingly, notice was issued to the assessee
3 ITA No. 123 & 124/PUN/2017 A.Y. 2012-13
u/s.148 of the Income Tax Act, 1961 on 11.03.2015 which was duly served on
Assessee on 16.03.2015. In response to the notice u/s.148 of the Act,
Assessee filed return of income on 04.06.2015 declaring total income as ‘Nil’.
The case was taken up for scrutiny and thereafter, assessment was framed
u/s.143(3) r.w.s. 147 of the Act vide order dated 04.06.2015 and the total
income was determined at Rs. 8,64,455/-. Aggrieved by the order of
Assessing Officer, Assessee carried the matter before CIT(A) who vide order
dated 14.09.2016 (in appeal No.PN/CIT(A)-2/Wd-4/AN/356/2015-16)
dismissed the appeal of Assessee by holding as under:
“5. The facts of the case are that the appellant sold an jointly held immovable property on 30/12/2011 for total sale consideration of Rs.96,00,000/-. However, she did not file return of income for the year in question. Therefore, the case was reopened by issuing notice u/s.148 of the Act. In response to the notice issued u/s.148, the appellant filed return of income on 04.06.2015 electronically declaring total income of Rs. Nil. During the assessment proceedings, the appellant claimed deduction under section 54F of the Act. However, the A.O. disallowed the same stating that the appellant was not entitled for the said deduction as the consideration was invested in the name of his son i.e. not in the name of the appellant. The assessment was completed on 04/06/2015 thereby making proportionate addition of Rs.8,64,455/- on account of long term capital gain, which was agreed by the appellant as well. 6. In the first ground of appeal, the appellant has stated the A.O did not consider the cost of acquisition. On perusal of the assessment order, it is noticed that during assessment proceedings the appellant was not prevented from making any such claim before A.O. and he admitted the addition made on account of long term capital gain. In view of this, the additional evidence produced during appellate proceedings is not admissible in the light of provisions of Rule 46A of I. T. Rules, 1962, as his case is not falling under any of the exceptional clauses as mentioned in Rule 46A. 7. With regards to the second ground of appeal, it is noticed that the appellant made claim u/s 54F of the Act which not allowed by the A.O. as the 'consideration was invested in the name of the appellant's son. As per the provisions of section 54 F of the Act, for claiming the said deduction the amount of sale consideration should be invested by the assessee in his/her own name. There is nowhere written under this section that the deduction can be claimed if the investment is made in any other's name. Thus the A.O. has rightly disallowed the deduction. 8. In view of the aforesaid facts, I hold that the A.O. has rightly made the addition of Rs.8,64,455/- on account of long term capital gain disallowing the deduction claimed by the appellant u/s 54F of the Act. I do not find any reason to interfere with the assessment order passed by the A.O.”
4 ITA No. 123 & 124/PUN/2017 A.Y. 2012-13
Aggrieved by the order of CIT(A), Assessee is now in appeal before us.
The grounds raised by the assessee filed along with Form No.36 are
argumentative in nature and not in consonance with Rule 8 of the Income Tax
(Appellate Tribunal) Rules, 1963. However, before us, ld. DR submitted that
the solitary issue is with respect to taxing of capital gains.
The case file reveals that there was delay of 65 days in filing the present
appeal. On perusal of the grounds of appeal which are argumentative in
nature, it is Assessee’s submission that the assessee is an old lady aged 73
years and is stated to be suffering from serious illness because of which delay
has occurred in filing the present appeal and therefore, the delay be condoned.
Considering the aforesaid facts and in view of the settled law that when
substantial justice and technicalities are pitted against each other, then the
cause of substantial justice deserves to be preferred, we in the interest of
justice, condone the delay and admit the appeal for hearing.
On the date of hearing none appeared on behalf of Assessee nor any
adjournment application was filed. We, therefore, proceed to dispose of the
appeal ex-parte qua the assessee after considering the material on record and
after hearing the Ld.D.R.
Before us, Ld. DR supported the order of Assessing Officer.
We have heard the submissions made by the Ld. DR and perused the
material on record. On perusal of grounds of appeal which are argumentative
and descriptive in nature, the factual position that emerges is that assessee
held an agricultural land (211 gunthas-5.227 acres) located at Survey No.
203(3), Sangamner, Budruk,, Ahmednagar whichy was held jointly by
assessee along with 20 other members. The land was acquired prior to 1981.
5 ITA No. 123 & 124/PUN/2017 A.Y. 2012-13
Assessee’s share in the land was 19 gunthas. The land was sold on
30.12.2011 for Rs.96 lacs and Assessee’s share was Rs.8,64,455/-. Assessing
Officer considered the entire share of Assessee of Rs.8,64,455/- as capital
gains. It is assessee’s contention that if the indexation benefit is considered,
there would not be any taxable capital gains. On perusing the assessment
order, we find that the entire sale consideration has been considered as capital
gains and no indexation benefit has been considered while working out the
capital gains. The mode and manner of computing capital gains is given in
Section 48 of the Act. The 2nd proviso to Section 48 provides that where long
term capital gains arise from the transfer of a long term capital asset, the cost
of acquisition of the asset has to be read as “indexed cost of acquisition”.
Indexed cost of acquisition has been defined in Clause-(iii) of the Explanation
to Section 48 as an amount which bears to the cost of acquisition the same
proportion as the cost inflation index for the year in which the asset is
transferred beard to the cost inflation index for the first year in which the
asset was held by the Assessee or for the year beginning on the 1st day of
April, 1981, whichever is later. It is not the case of the Revenue that the asset
sold by the Assessee is not a long term capital asset and the gains arising
thereto are not long term capital gains. In such a situation, we are of the view
that the capital gains have to be computed after considering the indexed cost
of acquisition, which has not been done in the present case. At this juncture,
it would be relevant to refer to CBDT Circular No.14 (XL-35) dated
11/04/1955 which states that the Officers of the Department must not take
advantage of the ignorance of an Assessee as to his rights & it is one of their
duties to assist a tax-payer in every way particularly in the matter of claiming
and securing relief. It is also a settled law that the Circulars issued by CBDT
are binding on the Department.
In view of the above facts, we are of the view that in the interest of
justice, the matter needs to be remanded to the file of Assessing Officer to
6 ITA No. 123 & 124/PUN/2017 A.Y. 2012-13
work out the capital gains in accordance with law. We, therefore, without
deciding the issue on merits, restore the issue back to the file of Assessing
Officer and direct him to decide the issue afresh in accordance with law.
Needless to state, the Assessing Officer shall grant adequate opportunity of
hearing to the assessee. Accordingly, grounds raised by assessee are allowed
in statistical purposes.
In the result, appeal of Assessee is allowed for statistical purposes.
As far as appeal in the case of ITA No.124/PUN/2017 in the case of
Dashrath Dharmraj Mule is concerned, since the facts in the case of Dashrath
Dharmraj Mule in ITA No.124/PUN/2017 are similar to the facts of the case of
Indubai Dharmraj Mule (in ITA No.123/PUN/2017), we, therefore, for similar
reasons stated hereinabove while deciding the issue of Indubai Dharmraj
Mule, allow the grounds raised in the case of Dashrath Dharmraj Mule in ITA
No.124/PUN/2017 for statistical purpose. Thus, the appeal of Assessee is
allowed for statistical purposes.
In the result, both appeals of the Assessees are allowed for statistical
purposes.
Order pronounced on this 24th day of April, 2018.
Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 24th April, 2018 SB
7 ITA No. 123 & 124/PUN/2017 A.Y. 2012-13
आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeals)-2, Pune. 4. The Pr. CIT-1, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.
// True Copy //
आदेशानुसार / BY ORDER,
�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.