ITO 25(3)(4), MUMBAI vs. SUMITRA HARILAL MALLAH, MUMBAI

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ITA 1826/MUM/2013Status: DisposedITAT Mumbai24 May 2016AY 2009-103 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal in limine. It was held that the tax effect of the appeal was below Rs. 10,00,000, and the issues raised did not fall under the exceptions specified in CBDT Circular No. 21 of 2015.

What were the facts?

The Revenue appealed against the CIT(A)'s order which treated profit on sale of a flat as Long Term Capital Gain and allowed exemption under Section 54. The Revenue argued that the assessee initially offered it as Short Term Capital Gain and that the CIT(A) admitted new evidence and incorrectly determined the acquisition date and exemption calculation.

What were the issues?

Whether the appeal is maintainable based on the tax effect as per CBDT circulars, and whether the CIT(A) erred in admitting new evidence and allowing exemption under Section 54.

Which sections of the Income-tax Act were involved?

Section 54

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI

Before: SHRI SANJAY ARORA (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri. K.Mohandas
For Respondent: Ms. Keyuri Desai
Hearing: 24/05/2016Pronounced: 24/05/2016

This appeal has been filed by the revenue against order dated 31/12/2012 passed by the Ld CIT(A)-35, Mumbai for the assessment year 2009-10.

2.

The revenue has challenged the impugned order on following effective grounds:-

(i). “On the facts in the circumstances of the case and in law, the Ld. CIT(A) erred in treating the profit on sale of flat as Long Term Capital Gain and allowing the same as exempt u/s 54 of the I.T.Act, 1961 even though assessee has not declared the said profit in return of income nor claimed any exemptions, even more so only, when the assessee was confronted during the assessment proceedings, offered the said profit as Short Term Capital Gain.”.

(ii) “On the facts in the circumstances of the case and in law, the Ld. CIT(A) erred in admitting a new evidence, i.e. allotment letter which was not produced before the Assessing Officer in contravention of Rule 46A of the Income Tax Rules”.

(iii) “On the facts in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the date of issue of allotment letter is the date of acquisition of property as there is no proof that possession of flat was taken on the date of allotment letter”.

(iv) “On the facts in the circumstances of the case and in law, the Ld. CIT(A) erred in accepting the assessee’s working of Long Term Capital Gain (again in contravention of Rule 46A of Income-tax Rules), wherein the assessee has claimed an exemption of Rs. 20,57,585/- u/s 54 of the I.T.Act, 1961 by investing the profit in a flat and 3 plots even though as per the provisions of sec. 54, no exemption is available on investments in plots”.

(v) “The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the AO be restored”.

3 At the outset, the Ld. Counsel for the assessee submitted that the tax effect in this case is below 10,00,000/- as the total exemption u/s54 of the Act claimed by the assessee is Rs. 20,57,585/-. Hence, as per the CBDT Circular No. 21 of 2015, dated 10/12/2015, the present appeal is not maintainable.

4.

The Ld. DR fairly admitted that the tax effect in department’s appeal is below 10 Lakhs, We find that the Revenue has also challenged the assessment of capital gain of Rs. 25,56,900/- as long term capital gain by the Ld. CIT(A). The tax effect, however, is below Rs. Ten lacs. Further, the issue raised in appeal does not fall under any of the exceptions specified in para 8 of the Circular. Since, it has been specifically clarified in the Circular aforesaid that the instruction will apply retrospectively to all the pending appeals; the present appeal filed by the revenue is not maintainable. We, therefore, dismiss the same in limine.

Order pronounced in the open court on 24th May, 2016

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