Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)
The appeal filed by the assessee is directed against the order dated 15.11.2016 passed by the learned CIT(A)-52, Mumbai and it relates to A.Y. 2010-11. The assessee is aggrieved by the decision of the learned CIT(A) in confirming the disallowance of exemption claimed by the assessee u/s. 54F of the Act.
The facts relating to the issue are stated in brief. The assessee filed her return of income u/s. 139(1) for the year under consideration on 21.9.2011. The assessee was subjected to search on 10.2.2012. Consequent thereto, the assessee filed return of income in response to the notice issued u/s. 153 of the Act on 14.12.2012. In both the returns the assessee had declared long term capital gain on sale of commercial property. The assessee did not claim any deduction u/s. 54F of the Act. Subsequently, the assessee filed a revised return u/s. 153A of the Act on 31.1.2014, wherein the assessee claimed deduction u/s. 54F of the Act in respect of a new flat purchased by her.
2 Mrs. Shweta Avarsekar
The Assessing Officer rejected the claim of the assessee on the following grounds :- (a) The assessee already owns a property at Avasekar Heights and the same has been let out. The assessee is staying in another residential house property, which means that she also owns one more property which has not been disclosed in the return of income. Since the assessee holds more than one residential house property on the date of sale of commercial asset, she has not entitled for deduction u/s. 54F of the Act.
(b) Hon'ble Apex Court in the case of Sun Engineering Works Pvt. Ltd. (198 ITR 297) has held that the assessment u/s. 147 is for the benefits of the Revenue.
Before the learned CIT(A), the assessee submitted that she was holding only one residential flat at Avasekar Heights and she has purchased one more flat at Sumer Trinity Tower by using proceeds of commercial property. Accordingly, she submitted that she is eligible for deduction u/s. 54F of the Act, as she held only one house on the date of sale of commercial asset. She submitted that the flat, where she resides, does not belong to her. Accordingly the assessee contended that the inference drawn by the Assessing Officer that she is holding one more property where she resides is based on presumptions only.
However, the learned CIT(A) took the view that the assessee cannot make fresh claims in the return filed u/s. 153A of the Act and in this regard he placed reliance on the following case laws :- (a) Charchit Agarwal Vs. CIT (129 TTJ 438)(Del) (b) Genmal Kothari Vs. DCIT (139 ITD 297)
Aggrieved by the order passed by the learned CIT(A) the assessee has filed this appeal before us.
We have heard the parties and perused the record. Presumption drawn by the Assessing Officer that the assessee also owns a property where she resides is according to learned AR not based on facts. He submitted that the 3 Mrs. Shweta Avarsekar property where she resides does not belong to the assessee. He further submitted that the decision rendered by Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) is related the proceedings u/s. 147 of the Act, whereas the current proceedings is related u/s. 153A of the Act. He further submitted that the case laws relied upon by Ld CIT(A) (supra) are related to unabated assessment years, whereas the year under consideration is abated assessment. In the case of abated assessments, the entire assessment is open before the AO, since the assessments, if any, pending shall abate. The learned AR submitted that Hon'ble Bombay High Court has considered an identical issue in the case of CIT Vs. B.G. Shirke Construction Technology (P) Ltd. (2017) 293 CTR (Bom) 505, wherein Hon'ble Bombay High Court has held that the assessee could make fresh claim before the Assessing Officer in 153A proceedings, even if the said claim is not make in the return filed under that section.
6. Learned Departmental Representative, on the contrary, placed reliance on the order passed by the learned CIT(A).
Having heard the rival contentions, I am of the view that there is merit in the contention of the assessee, as the claim of the assessee is supported by the decision rendered by Hon'ble Bombay High Court in the case of B.G. Shirke Construction Technology P. Ltd. (supra). There is no dispute with regard to the fact that the present assessment falls in the category of abated assessment and hence the entire assessment is open before the AO. This aspect has been considered by Hon’ble Bombay High Court in the above said case and for the sake of convenience, I extract below the relevant observation made by Hon'ble Bombay High Court:-
The reliance on the decision of the apex Court In CIT vs. Sun Engineering Works (P) Ltd. (supra) by the Revenue is misplaced. The above case dealt with reopening of an assessment under s. 147 of the Act. It was in that context that the apex Court observed that the order passed under ss. 147/148 and the AO is primarily restricted to such income which has escaped assessment and does not permit
4 Mrs. Shweta Avarsekar reconsideration of Issue which are concluded in the earlier assessment years in favour of the Revenue.
In the present facts for the subject assessment years It is an undisputed position that the pending assessment before the AO consequent to return filed under s. 139(1) of the Act for the subject assessment years had abated. This was on account of the search and as provided in second proviso to s. 153A(1) of the Act. The consequence • is of notice under s. 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in tld regard to which a notice has been issued. It is this return which is filed consequent to the notice which would be subject of assessment by the Revenue for the first time in the case of abated assessment proceedings. A. Consequent to notice under s. 153A of the Act the earlier return flied for t e the purpose of assessment which is pending, would be treated as non- est in law. Further, s. 153A(1) of the Act itself provides on filing of the of return consequent to notice, the provisions of the Act will apply to the return of income so filed. Consequently, the return filed under s. 153A(1) 'td, of the Act is a return furnished under section 139 of the Act. nt of Consequently, the respondent-assessee is being assessed in respect of is abated assessment for the first time under the Act. Therefore the nd provisions of the Act which would be otherwise applicable in case of return filed in the regular course under s. 139(1) of the Act would also continue to apply in case of return filed under s. 153A of the Act and the case laws on the provision of the Act would equally apply.
This Court in CIT vs. Pruthvi Brokers & Shareholders (P) Ltd. (supra) while dealing with a return of income filed under s. 139(1) of the Act has held that an assessee is entitled to raise a fresh claim before the appellate authorities, even if the same was not raised before the AO at the time of filing return of income or by filing a revised return of income. This Court also placed reliance upon decision of the apex Court in Nattortcj.1 Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249: (1998) 229 ITR 383 (SC) wherein while dealing with the powers of the AO it had held that a claim not made in the return of income, the Court may lead to non-entertainment of claim by the AO. However, this restriction in the power of the AO will not affect the power of the Tribunal to entertain a fresh claim.
In view of the fact that the issue stands concluded by the decision of Ii this Court in CIT vs. Pruthvi Brokers & Shareholders 'P) Ltd. (supra) the question as proposed does not give rise to any substantial question of law. Thus not entertained.
5 Mrs. Shweta Avarsekar
Thus I notice that the claim of the assessee for deduction u/s 54F of the Act can be entertained in the facts and circumstances of the present case. The assessee has also demonstrated before Ld CIT(A) that she is holding only one residential house on the date of sale of commercial property. It has been submitted that the house, where she resides, does not belong to her. If that be the case, the assessee shall be entitled for deduction u/s. 54F of the Act. However, the assessee has chosen not to disclose the ownership details of the house where she is residing, i.e., whether it belongs to some other family members or it was rented flat. Accordingly I set aside the order passed by Ld CIT(A) and restore the same to the file of the Assessing Officer with the direction to allow the claim of the assessee u/s. 54F of the Act after satisfying himself about the claim of the assessee.
In the result, appeal filed by the assessee is allowed.
Order has been pronounced in the Court on 4.5.2017.