Income Tax Appellate Tribunal - Mumbai
Harshadrai K. Doshi, Mumbai vs Ito 12(1)(2) Now With Ito 17(1)(5), ... on 27 February, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES "SMC", MUMBAI Before Shri MAHAVIR SINGH, Judicial Member, and Shri G. MANJUNATHA, Accountant Member ITA No.2823/Mum/2018 Assessment Year: 2007-08 Harshadrai K. Doshi, ITO-12(1)(2), now with ITO-
24, Tardeo Apt. 17(1)(5),
245, Tardeo Road,
बनाम/ Mumbai
Mumbai-400007 Vs.
( नधा रती
/Assessee) (राज व /Revenue)
P.A. No.AACPD1617N
नधा रती क ओर से / Assessee by Shri M. Subramanian
राज व क ओर से / Revenue by Shri Chaudhary Arun Kumar
सन
ु वाई क तार ख / Date of Hearing : 18/12/2018
27/02/2019
आदे श क तार ख /Date of Order:
आदे श / O R D E R
Per G. Manjunatha, (Accountant Member)
This appeal filed by the assessee is directed against the order of the Ld. CIT(A)-28, Mumbai, dated 11/10/2017 and it pertains to AY 2007-08. The assessee has raised following grounds of appeal:-
i. 1) On the facts and circumstances of the case, the learned CIT (A) has erred in dismissing the appeal on technical ground instead of considering the merits of the case.
ii. 2) On the facts and circumstances of the case, the CIT (A) has erred in confirming the revised long term capital gain at Rs.37,89,450/- as on 06/12/2006 and at Rs. 1,54,350/- as on 2 ITA No.2823/Mum2018 Harshad K. Doshi 01/04/1981 as against the valuation at Rs. 25,62,140/- and at Rs. 3,21,024/- as on 01/04/1981 as submitted by the appellant. iii. 3) It is therefore, prayed that the base of computation of long term capital gain as submitted by the appellant vide letter dated 06/04/2011 at Rs. 3,21,024/- as on 01/04/1981 and at Rs. 25,62,140/- as on 06/12/2006 (date of sale of flat) be ordered to be accepted.
2. The assessee has also filed a petition for admission of additional ground taking legal plea challenging the order of the Ld. CIT(A) in sustaining the order passed by the AO u/s 154 of the Act. The relevant additional grounds are as under:-
1. On the facts and in the circumstances of the case & in law, the order dated 10-08-2011 passed u/s 154 of the act is invalid and bad in law.
2. On the facts and in the circumstances of the case & in law, the learned C.I.T.(A) failed to appreciate that there was no apparent mistake in the assessment order dated 23-12-2009 passed u/s 143(3) which could be rectified u/s 154 of the Act.
3. At the outset, the Ld. AR for the assessee submitted that there is delay of 121 days in filing appeal for which petition for condonation of delay along with affidavit of the assessee has been filed. The Ld. AR for the assessee referring to the petition and affidavit submitted that present appeal has been filed belatedly for the reasons that the assessee is around 72 years old and is bed-ridden on account of 90% paralysis of his body, because of this he could not notice the order passed by the Ld. CIT(A) dated 11/10/2017. The house servant kept the same in cupboard and did not inform the assessee's daughter who is staying away at Sion(Mumbai) with her husband. It is only on the visit of assessee's daughter somewhere in the month of April, 2018, she happened to see the copy of CIT(A)'s order. She immediately send this order to Chartered Accountant, Mr. Navnit O. 3 ITA No.2823/Mum2018 Harshad K. Doshi Raithatha, who thereafter managed to file appeal on 04/05/2018. Therefore, he submitted that the delay in filing in appeal is not intentional but due to the circumstances and also ill health of the assessee. Accordingly, the delay in appeal may be condoned.
4. The Ld. DR on the other hand, opposed condonation of delay in filing appeal.
5. We have heard both the parties and perused the material available on record. We find that due to ill health, the assessee could not file appeal in time, therefore, we are of the considered view that there is reasonable cause for not filing appeal within the time prescribed under the Act and hence the delay in filing of appeal has been condoned and the appeal has been admitted for hearing.
6. The brief, facts of the case are that in this case, the assessment has been completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter "the Act") dated 23/12/2009, determining total assessed income at Rs.9,98,130/- which includes long term capital gain of Rs.5,63,160/- on sale of flat. During the course of assessment proceedings, it was noticed that as per Stamp Duty Authority, value of this property was Rs.42,70,896/-. Accordingly, the AO show caused assessee vide order sheet noting dated 06/10/2009 as to why the stamp duty value at Rs.42,70,896/- should not be adopted as per section 50C of the Act. The assessee objected for adoption at stamp valuation, therefore, the AO vide letter dated 16/10/2009 referred the matter to the Valuation Officer to determined the value of property as on 01/04/1981 to determine fair market value of the property. Since, no valuation report was received till 22/12/2009 and 4 ITA No.2823/Mum2018 Harshad K. Doshi the matter was getting barred by limitation on 31/12/2009, the assessment has been completed by taking stamp duty value as full value of consideration and determined the long term capital gain of Rs.5,63,160/-. Thereafter the DVO has sent valuation report vide order u/s 55A of the Act r.w.s 16A(5) of the Wealth Tax Act, 1957 dated 12/11/2010 received on 18/11/2010 and determined fair market value of the property of Rs.1,54,350/-, dated 01/04/1981 and Rs.32,89,450/- dated 06/12/2006. On the basis of valuation report, the AO issued notice u/s 154 of the Act, to rectify mistakes apparent from the order in respect of determination of full value of consideration. In response, the assessee vide letter dated 08/08/2011, submitted a copy of valuation report obtained from an independent valuer and requested to adopt the said value for the purpose of Long Term Capital Gain. The AO after considering the submissions of the assessee and also taken in to account valuation report, completed assessment by adopting fair market value as determined by the DVO as on 01/04/1981 and 06/12/2006 and computed LTCG at Rs.29,86,298/-. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A).
7. Before the Ld. CIT(A), the assessee has filed elaborate written submissions on 28/11/2014. The assessee has challenged the order u/s 154 of the Act, on legal grounds as well as on merits. The Ld. CIT(A), after considering the submissions of the assessee and also taken into account, the facts of the presence case, came to the conclusion that though the objection of the assessee regarding legality of initiation of proceeding u/s 154 of the Act on subject matter in question not being mistake apparent 5 ITA No.2823/Mum2018 Harshad K. Doshi from record stands accepted in principle, issue is whether doctrine of merger prevents the undersigned from a ruling at variance with CIT(A) order pre-existing and very much alive.
For the reason, The Ld. CIT(A) -10 vide order dated 10/12/2014 has dismissed appeal filed by the assessee on quantum proceedings. The Ld. CIT(A) further observed that the aspect of DVO and 154 should have formed part of additional grounds before the Ld. CIT(A)-10 and if not adjudicated, a separate 154 against CIT(A) order or alternatively appeal before higher forum was the answer. There cannot subsist two substantive orders on same subject matter by two parallel authorities. With these observations, he dismissed the appeal filed by the assessee without discussing the issue on merit. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.
8. The Ld. AR for the assessee submitted that the Ld. CIT(A) erred in dismissing appeal without appreciating the fact that there is mistake apparent from record from the order of the ld. AO which needs rectification u/s 154 of the Act, therefore, 154 order passed is illegal and void ab-initio. The Ld. CIT(A), without appreciating the facts has simply dismissed the appeal on the ground that the issue on the merit have already been considered by then the Ld. CIT(A) and hence in view of doctrine of merger the present appeal filed before the Ld. CIT(A) is also merged with the quantum appeal but facts remains that in order to invoke provisions of section 154 of the Act, there must be prima facie mistake in the order of the AO, but in this case, the AO want to rectify the assessment order by replacing DVO valuation of the property as against stamp duty authority which cannot be considered as mistake apparent from record. 6
ITA No.2823/Mum2018 Harshad K. Doshi
9. The Ld. DR, on the other hand, strongly supported the order of the Ld. CIT(A).
10. We have heard both parties and perused the material available on record. Initially assessment has been completed by adopting stamp duty valuation of the property as full value of consideration for transfer and long term capital gain has been determined by taking cost of acquisition as 01/04/1981 at Rs.7,14,400/-, since the DVO report was not received before completion of the assessment. The AO has passed 154 order by replacing FMV determined by DVO in respect of property as 01/04/198 and also as on date of sale i.e. 06/12/2016 and recomputed Long Term Capital Gain of Rs.29,86,298/-. The assessee has objected DVO valuation and filed independent valuation report as per which the value of property has been determined at Rs.3,21,024/- as on 01/04/1981 and Rs.25,62,140/- as on 06/12/2016. In these facts and background, if you look into the order u/s 154 passed by the AO, whether exist any mistake apparent on record from the order of the AO which requires rectification u/s 154 of the Act has to be seen. The AO has passed assessment order u/s 143(3) by adopting stamp duty value as full of consideration in place value shown in the sale deed. The value determined by the DVO as per the provision of section 55A of the Act as on 01/04/1981 and also as on 06/12/2006 is also one plausible view which can be adopted in place of value shown in the deed of transfer. When the AO has taken one of the possible view at the time of 143(3) assessment can he rectify the assessment u/s 154 by replacing value determined by the DVO. The provisions of section 154 makes it clear that in order rectify any order u/s 154 of the Act, there should be a 7 ITA No.2823/Mum2018 Harshad K. Doshi prima-facie mistake apparent from record. If the issue is debatable which can be decided on prolonged discussions or deliberations, the same cannot be subject matter of 154 proceedings. In this case, the issue of full value of consideration is a subject matter of deliberations and which can be decided by prolonged discussions and a view can be taken, therefore, the Ld. CIT(A) came to the conclusion that there is prima facie merit in the arguments of the assessee insofar as subject matter of 154 proceedings, but he went on to decide the issue on technical grounds by applying the principle of doctrine of merger because in earlier proceedings, the Ld. CIT(A) has decided the issue of computation of Long Term Capital Gain against the assessee. Further, once, the Ld. CIT(A) has been accepted the fact that the assessee has strong case on legal grounds of initiating 154 on subject matter in question, wrong in not adjudicating the issue on merit. We, therefore, of the opinion that, there is no merit in the finding of the Ld. CIT(A) and hence, we set-aside order of CIT(A) and restore the issue to the file of the Ld. AO to decide the issue on the basis of DVO report and objections of the assessee.
11. In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 27/02/2019.
Sd/- Sd/-
(Mahavir Singh) (G. Manjunatha)
या यक सद य /JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मब
ुं ई Mumbai; दनांक Dated : 27/02/2019
f{x~{tÜ? P.S //. न.स.
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ! / The Appellant (Respective assessee)
2. "#यथ! / The Respondent.
3. आयकर आय& ु त(अपील) / The CIT, Mumbai.
8
ITA No.2823/Mum2018 Harshad K. Doshi
4. आयकर आय& ु त / CIT(A)- , Mumbai,
5. (वभागीय " त न+ध, आयकर अपील य अ+धकरण, मब ुं ई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील'य अ(धकरण, मब ुं ई / ITAT, Mumbai