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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI D.T. GARASIA & SHRI D. KARUNAKARA RAOSmt. Nitu Anand Bhushan,
सुनवाई की तायीख / Date of Hearing : 30.03.2017 घोषणा की तायीख /Date of Pronouncement : 07.04.2017 आदेश / O R D E R PER D. KARUNAKARA RAO, AM:
The captioned appeal is filed by the Revenue and the CO is filed by the assessee. Both these appeals are filed against the order of the CIT (A)-38, Mumbai dated 25.3.2015 for the assessment year 2011-2012. Since, the issues raised in these appeals are inter-connected, therefore, for the sake of convenience, they are clubbed, heard combinedly and disposed of in this consolidated order. Appeal wise adjudication is given in the following paras of this order.
(By Revenue) 2. This appeal filed by the Revenue on 11.6.2015 is against the said order of the CIT (A)-38, Mumbai. In this appeal, Revenue raised the following grounds which read as under:- “1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred setting aside the issue of claim of deduction u/s 54 of the Act to Assessing Officer whereas power to set aside is not available to the Ld CIT (A) u/s 251 of the Act w.e.f 1.6.20101.
2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in setting aside the issue to the Assessing Officer directing him to verify the claim u/s 54 of the Act even though the assessee had made no such claim in his return of income.
3. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in setting aside the issue and directing the Assessing Officer to verify the claim u/s 54 of the Act even though the assessee had made no such claim in his return of income disregarding the decision of the Supreme Court in the case of Goetzer (India) Ltd (284 ITR 323) (SC).”
Briefly stated relevant facts of the case are that the assessee, who is an individual, filed the return of income declaring the total income of Rs. 28,18,650/-. Assessee shown the said income under the heads „salary‟ and „loss from house property‟. Assessment was completed u/s 143(3)(ii) of the Act and the assessed income was determined at Rs. 60,49,920/-. In the assessment, AO made addition of Rs. 32,17,967/- on account of long term capital gains and disallowed the claim u/s 54 of the Act. Aggrieved, assessee carried the matter in appeal before the first appellate authority.
During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) granted part relief to the assessee and directed the AO to verify the genuineness of the claim of the assessee allow the deduction u/s 54 of the Act. Aggrieved with the said directions of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds.
During the proceedings before the Tribunal, Ld DR relied heavily on the order of the AO.
On the other hand, Ld Counsel for the assessee relied on the order of the CIT (A) and reiterated the submissions made before the lower authorities.
We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On perusal of the order of the CIT (A) in general and the contents of para 5 (with its sub-paras) in particular, we find the same is relevant to the issue under consideration. Considering the significance and for the sake of completeness of this order, the relevant para 5.6 of the CIT (A)‟s order is extracted as under:-
“5.6. In view of the above findings of the jurisdictional ITAT and the High Court, I find that the Assessing Officer was not justified in not entertaining the claim of the appellant made u/s 54 during the assessment proceedings. The appellant is entitled to make such a claim though not made in the return of income. However, the AO has to independently satisfy himself that the appellant fulfils all the conditions for grant of deduction u/s 54 of the Act. He is directed to make necessary enquiries in this regard, as deemed fit. The genuineness of the claim of the appellant needs to be established before grant of such deduction. With these directions, this ground is disposed of treating the same as partly allowed.”
From the above, we find, before directing the AO to verify the genuineness of the claim of the deduction u/s 54 of the Act, CIT (A) discussed the issue at length and following the precedents on the issue. Considering the same, we are of the opinion, the decision taken by the CIT (A) on this issue is fair and reasonable and it does not call for any interference. Accordingly, grounds raised
by the Revenue are dismissed.
9. In the result, appeal of the Revenue is dismissed. C.O. No. 01/M/2015 (By assessee)
10. This Cross Objection is filed by the assessee on 2.01.2017. In this CO, assessee raised ground stating that the CIT (A) erred in not directing the AO to allow exemption / deduction u/s 54 of the Act. In this regard, we are of the opinion, considering our decision on the Revenue‟s appeal, wherein in principle we approved the decision of the CIT (A) on the issue of claim of deduction u/s 54 of the Act, the adjudication of the CO becomes an academic exercise. Accordingly, grounds raised by the assessee in her CO are dismissed as academic.
11. In the result, Cross Objection filed by the assessee is dismissed as academic.
12. Conclusively, appeal filed by the Revenue appeal and the Cross Objection of the assessee are dismissed.