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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI AMIT SHUKLA & SHRI RAJESH KUMARDr. Sunil Jaychandra Bandekar,
The aforesaid appeal has been filed by the assessee against the impugned order dated 13.10.2010 passed by CIT(A)-3, Mumbai for the quantum of assessment passed u/s. 143(3) r.w.s. 254 of the Income Tax Act, 1961 for the Assessment Year 2003-04.
The following grounds are raised in the appeal :
“1. The Assessing Officer erred in disallowing the expenditure of transfer to decide the correct Short Term Capital Gains on transfer of property.
2. The method of accounting is redundant for proper calculation of Short Term Capital Gains and therefore Assessing Officer erred in rejecting the claim of expenses on transfer as the same being not claimed in the regular return of income.”
The brief background of the case is that the original assessment was completed u/s. 143(3) on 29.11.2005, wherein Short Term Capital Gains on sale of clinic Gala was computed at Rs. 4,17,104/- by adopting the market value at Rs.8,77,500/- as determined by the Stamp Duty authorities in terms of Sec. 50C, as against the sale consideration of Rs.6,00,000/- as per Deed of Transfer dated 15.2.2003. In the first appeal, Ld. CIT(A) confirmed the said addition made after invoking the provisions of Sec. 50C. In the second appeal filed before the Tribunal, the matter was set aside to the file of Assessing Officer vide order dated 5.3.2007 for making a reference to the Valuation Officer for determining the Fair Market Value (FMV) of the property in question. The Departmental Valuation Officer (DVO) estimated the value of the property at 6,35,794/- as against market value of Rs.8,77,500/- determined by the Stamp Duty authorities. The Assessing Officer, accordingly, computed the Short Term Capital Gains by taking the market value at Rs. 6,35,794/-. Before the Assessing Officer the assessee’s case was that the transfer fees paid on 30.4.2003 for Rs. 23,600/- should have been reduced from the FMV. In support, the assessee had furnished the photocopy of the receipt issued by the co-operative housing society for Rs. 47,200/-, however, the remark on the said receipt mentions that it was a voluntary contribution towards building development fund. The Assessing Officer had rejected this contention on the ground that firstly, as assessee had not claimed this deduction in the course of original assessment proceedings and secondly, the claim was made after receiving of the Valuation report whereby the assessee has claimed deduction of Rs. 23,600/- for transfer fee paid, and the proof was filed for the payment of Rs. 47,200/-.
4. In the first appeal before Ld. CIT(A), assessee submitted that out of Rs. 47,200/-, half of the amount was borne by the purchaser and the other half by the seller. Therefore, same should be liable for deduction. Further evidences were also filed by the assessee before the Ld. CIT(A) with regard to the transfer fee paid to the CHS. The matter was sent back to the Assessing Officer to submit his remand report and in the remand report, the Assessing Officer objected to such additional evidence on the ground that, firstly, the said expenses were not claimed in the return of income filed for Assessment Year 2003-04 and secondly, assessee is following cash system of accounting and the said expenses were not made during the year under consideration. Lastly, he also relied upon the decision of the Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT reported in 284 ITR 323, wherein it has been laid down that the Assessing Officer has no power to entertain the claim of deduction otherwise than the revised return. In response to the same, detailed submissions were made before the Ld. CIT(A) by the assessee which has been incorporated from pages 5 to 7 of the appellate order. The Ld. CIT(A) held that the impugned assessment proceedings were in compliance of ITAT’s order by which the matter has been set aside for making the reference to DVO and accordingly decide the issue of determination of market value for calculation of Capital Gains. It was in the set aside proceedings that reference to the Valuation Officer was made and Valuation report obtained. This claim of the assessee was neither made in the return of income nor in the course of the original assessment proceedings. This issue was also not raked up before the First Appellate Authority or even before the Tribunal in the first round. The order passed in pursuance of Tribunal has to be limited to the mandate and directions of the Tribunal only. Accordingly, he dismissed the assessee’s claim.
After considering the rival submissions made by the parties before us and on the perusal of the materials placed before us, we find that the sole dispute is with regard to the sale value for the purpose of computation of Short Term Capital Gains. The assessee had shown the sale consideration as per the Deed of Transfer at Rs.6,00,000/-, whereas the FMV as per the Stamp Duty authorities was Rs.8,77,500/-, and accordingly the sale consideration was taken in view of the deeming fiction of Sec. 50C and Short Term Capital Gains was determined. The matter had travelled upto the Tribunal from which stage this issue was set aside to the file of the Assessing Officer for making a reference to the Valuation Officer so as to determine the FMV of the property. In pursuance thereof, Valuation report was obtained and the FMV of the property was determined at Rs.6,35,794/-, leaving only a marginal difference of Rs.35,794/-. Now, in the second round of proceedings, assessee has taken a new plea that a deduction from the cost should be given on account of transfer fee paid for Rs. 27,200/-. This claim, as stated by the Ld. CIT(A), was neither made by the assessee in the return of income nor before the assessment proceedings before the Assessing Officer. Rather, upto the stage of Tribunal no such claim was made. Once, the matter is set aside by the Tribunal for a limited purpose, then, the assessment has to be framed within the directions of the Tribunal. The determination of income and issue has to be circumscribed strictly in accordance with the order of the Tribunal and it cannot travel beyond. Accordingly, we agree with the conclusion drawn by the Ld. CIT(A) that once such a claim is not arising out of the mandate and directions of the Tribunal, then, the same cannot be raked up or a fresh claim can be made in the second round of proceedings. Accordingly, the order of Ld. CIT(A) is affirmed and the grounds raised by the assessee is dismissed.
In the result, appeal filed by the assessee is dismissed.
Order pronounced in the open court on 6th May, 2016.