SUMAN MALHOTRA,NEW DELHI vs. ITO, NEW DELHI

ORDER This appeal is filed by assessee against the Order passed by the Ld. CIT(A)-11, New Delhi relating to Assessment Year 2012- 13 on the following grounds:-

2. The appellant denies his liability to tax as upheld by the Ld. CIT(A) and determined and computed by the AO and the manner in which it has been so determined or computed.

3. The Ld. CIT(A) has erred in law and on facts in sustaining the impugned additions of the extent of Rs. 25,00,000/- on account of undisclosed short term capital gains ignoring the fact and circumstances of the case.

Prayer 4. The appellant crave leave and sanction of the ITAT to file additional evidence, if so required for proper prosecution of the case, based on facts and circumstances, which has not been or could not be adduced or filed before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited as its need was not appreciated.

6. The order of the AO as upheld by the Ld. CIT(A) be declared as null and void ab initio, additions made by the AO and upheld by the Ld. CIT(A) be deleted, and the income returned be accepted as true as per law; or such other order as your honours may deem fit under the circumstances of the case be passed.

Hence, he requested to set aside the issues in dispute to the AO with the directions to decide the same afresh under the law, on the basis of the revised computation for the AY 2012-13 and pass a speaking order. He also relied upon the decision of the ITAT, F-Bench, Mumbai dated 13.10.2015 passed in the case of Furniture concepts (I) Ltd. Vs. ACIT reported (2015) 64 taxmann.com 47 (Mumbai)- Trib.)

5. I have heard both the parties and perused the records, especially the para no. 4.4.2 of the impugned order passed by the Ld. CIT(A) wherein it was mentioned that AO has wrongly rejected the revised computation filed by the assessee during the course of assessment proceedings and similarly Ld. CIT(A) has observed that the assessee has claimed depreciation on the shop in the earlier years and the date of filing of revised return for the current year as well as earlier years had already expired and there was no way by which the appellant could have withdrawn the depreciation claimed on the shop in the earlier years and no provisions of the Act enables the AO to do that. It is also noted that Ld. CIT(A) further observed that AO has rightly rejected the revised computation filed by the assessee which is nothing but an afterthought which has been made by the appellant after doing the cost benefit analysis. I have also perused the decision of the ITAT, F-Bench, Mumbai dated 13.10.2015 passed in the case of Furniture concepts (I) Ltd. Vs. ACIT reported (2015) 64 taxmann.com 47 (Mumbai)- Trib.) wherein vide para no. 2 the Tribunal has held as under:-

“2. During hearing, the crux of argument advanced on behalf of the assessee is that the assessee filed revised computation before the ld. Assessing Officer which was not considered by him and further revised return could not be filed as time for filing the revised return has already been elapsed.

Reliance was placed upon the decision in CIT v.

Pruthvi Brokers & Shareholders [2012] 349 ITR 336/208 Taxman 498/23 taxmann.com 23 (Born.) and order of the Tribunal in Chicago Pneumatic India Ltd. v. Dy. CIT [2007] 15 SOT 252 (Born.). On the other hand, the ld. DR, though defended the conclusion arrived at in the impugned order, but had no objection if the matter is remanded to the file of the ld. Assessing Officer for fresh consideration.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee, a limited company, engaged in the business of trading/reselling of imported/local furniture and other related items. The assessee for the impugned assessment year, filed its return on 2611112007, declaring nil assessable income after adjusting the previous brought forward losses. The return was accompanied by audited accounts along with audit report u/s 44AB of the Income Tax Act, 1961 (hereinafter the Act). Subsequently, the case of the assessee was selected for scrutiny. During course of assessment, the counsel for the assessee realized that in original computation of income in the net profit, the assessee wrongly showed Rs. 1,11,25,326/- which was set off by claiming losses of previous year instead of net loss of Rs. 67,96,925/- as the company failed to make further claim on account of remission by bank under one time settlement (OTS) ofRs. 1,79,24,7511-. The counsel for the assessee, therefore, vide letter dated 14/10/2009 informed the Assessing Officer of the correction, accordingly, the corrected computation was filed with a request to treat the same as revised return since the time limit, prescribed for filing the revised return, had elapsed. However, the Assessing Officer completed the assessment u/s 143(3) of the Act, based upon, original computation showing net profit of Rs. 1,12,40,326/- after disallowing certain expenses which were set off by earlier losses. On appeal, the conclusion drawn by the Assessing Officer was affirmed. The assessee is aggrieved and is in further appeal before this Tribunal.

2.2. Now, question arises whether the revised computation was to be considered by the Assessing Officer specially when time for filing revised return had elapsed? Under the facts, stated hereinabove, the Hon'ble Bombay High Court in Pruthvi Brokers & Shareholders case (supra) held that appellate authorities have power to consider the claim not made in the return by following the decision from Hon'ble Apex Court in Addl. eIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1, wherein, it was held that the assessee is entitled to raise not merely additional legal submissions, before the appellate authorities, but also entitled to raise additional claim before them and further appellate authorities have discretion to permit such additional claims. Thus, we are of the view, that even otherwise, the mandate of the constitution is to levy and collect due taxes, therefore, we remand this issue to the file of the ld. Assessing Officer to examine the claim of the assessee afresh and decide in accordance with law. The assessee be given opportunity of being heard. Thus, this ground of the assessee is allowed for statistical purposes.”

5.1 After perusing the aforesaid finding of the Mumbai, Tribunal and the case laws discussed therein, on identical facts, I am of the considered view that the appellate authorities have power to consider the claim not made in the return by following the decision from the Hon’ble Apex Court in Addl. CIT vs. Gurjargravures (P) Ltd. (178) 111 ITR 1 wherein, it was held that the assessee is entitled to raise not merely additional legal submissions, before the appellate authorities, but also entitled to raise additional claim before them and further appellate authorities have discretion to permit such additional claims. Thus, respectfully following the above precedents, I remand the issue in dispute to the file of the AO to examine the claim of the assessee afresh and decide the same in accordance with law by considering the revised computation and give proper opportunity of being heard to the assessee. The Assessee is also directed to fully cooperate with the AO in the proceedings and did not take any unnecessary adjournment and file all the necessary documents, evidences, if any.