ACIT, Moradabad v. Sh. Afeef Ur Rehman,, Moradabad

ITA 3912/DEL/2010 | 2007-2008
Pronouncement Date: 16-02-2012 | Result: Dismissed

Appeal Details

RSA Number 391220114 RSA 2010
Assessee PAN ITACT1961W
Bench Delhi
Appeal Number ITA 3912/DEL/2010
Duration Of Justice 1 year(s) 5 month(s) 27 day(s)
Appellant ACIT, Moradabad
Respondent Sh. Afeef Ur Rehman,, Moradabad
Appeal Type Income Tax Appeal
Pronouncement Date 16-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 16-02-2012
Date Of Final Hearing 13-02-2012
Next Hearing Date 13-02-2012
Assessment Year 2007-2008
Appeal Filed On 20-08-2010
Judgment Text
ITA 3912/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI A.D. JAIN JUDICIAL MEMBER ITA NO.3912/DEL/2010 ASSTT. YEAR: 2007-08 ASSTT.COMMISSIONER OF INCOME TAX VS SH. AFEEF UR REHMAN CIRCLE II MORADABAD. C/O MEBA BRASS PANDIT NAGLA BY PASS MORADABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: MRS. ANUSHA KHURANA SR. DR RESPONDENT BY: S/SHRI K. SAMPATH RAJKUMAR O R D E R PER G.D. AGRAWAL VICE PRESIDENT IN THIS APPEAL BY THE REVENUE FOLLOWING GROUNDS A RE RAISED:- 1. UNDER THE CIRCUMSTANCES OF THE CASE WHETHER TH E CIT(A) BAREILLY IS JUSTIFIED IN LAW AS WELL AS FACT OF CAS E IN NOT APPRECIATING THE FACT THAT EVEN THE LETTER THROUGH WHICH CLAIM OF BENEFIT U/S 54 OF THE IT ACT 1961 WAS PREFERRED WA S NOT SIGNED BY THE ASSESSEE HIMSELF INSTEAD IT WAS SIGNED BY SOME ONE OTHER THAN THE ASSESSEE. SIGNATURES OF THE ASSESSEE CAN BE VE RIFIED FROM THE SIGNATURES AS APPEARING IN THE VERIFICATION PORTION OF THE RETURN OF INCOME FILED BY THE ASSESSEE. SUCH SIGNATURES CAN ALSO BE FURTHER VERIFIED FROM THE COPIES OF OTHER DOCUMENTS FILED D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS VIZ. COPY OF PURCHASE DEED AND SALE DEEDS OF THE PROPERTY SOLD AND WHICH ARE AVAILABLE ON THE CASE RECORD. 2. UNDER THE CIRCUMSTANCES OF THE CASE WHETHER TH E CIT(A) BAREILLY IS JUSTIFIED IN LAW IN ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION WHICH WAS NOT MADE IN THE ORIGINAL OR REV ISED RETURN WHEREAS IT HAS BEEN HELD BY HONBLE SUPREME COURT O F INDIA IN THE ITA 3912/DEL/2010 2 CASE OF GOETZE (INDIA) LTD. VS CIT 204 CTR 182(SC) WHEREIN HONBLE COURT HAS HELD THAT FOR DEDUCTION NOT MADE IN THE RETURN CANNOT BE ENTERTAINED BY A.O. OTHERWISE THAN BY FIL ING A REVISED RETURN. 3. UNDER THE CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) BAREILLY IS JUSTIFIED IN LAW IN NOT APPRECIATING TH E FACT THAT INABILITY TO FILE THE CLAIM U/S 54 IS RESTING UPON THE ASSESS EE HIMSELF WHICH IS EVIDENT IN THE LIGHT OF THE FACTS NARRATED IN THE E NCLOSED STATEMENT OF FACT. 4. THAT THE ORDER OF THE AO MAY BE RESTORED BY SE TTING ASIDE THE ORDER PASSED BY THE CIT(A). 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THE RETU RN OF INCOME THE ASSESSEE HAD DISCLOSED LONG TERM CAPITAL LOSS OF RS . 12 59 747 FROM THE SALE OF HOUSE PROPERTY. HOWEVER THE AO WORKED OUT THE LONG TERM CAPITAL GAIN AT RS. 16 77 113/-. HE ALSO DENIED THE ASSESSEES CLAIM FOR EXEMPTION FOR PURCHASE OF RESIDENTIAL HOUSE U/S 54 OF THE I.T. AC T ON THE GROUND THAT THE CLAIM WAS NOT MADE IN THE RETURN OF INCOME AND MOR EOVER THE ASSESSEE HAS NOT FILED THE REVISED RETURN. THE CIT(A) ACCEPTED THE ASSESSEES CONTENTION AND DIRECTED THE AO TO ALLOW BENEFIT U/S 54 WITH TH E FOLLOWING FINDINGS:- THE DECISION OF THE HONBLE APEX COURT RELIED BY THE AO IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE BE CAUSE THIS CLAIM WAS NOT BASED ON ANY LETTER FILED BEFORE THE AO TO ALLOW DEDUCTION DURING ASSESSMENT PROCEEDINGS. THE DEDUC TION WOULD NOT HAVE BEEN APPLICABLE IN THE CASE OF THE A SSESSEE AS PER COMPUTATION OF INCOME FILED IN THE RETURN OF IN COME IF THE AO HAD NOT WORKED OUT THE POSITIVE CAPITAL GAINS FR OM THE NIL CAPITAL GAIN AS CLAIMED IN THE RETURN. IN SUCH PEC ULIAR CIRCUMSTANCES I AM OF THE VIEW THAT THE ASSESSEE W AS ELIGIBLE TO ITA 3912/DEL/2010 3 HAVE THE BENEFIT OF THE PROVISIONS OF THE ACT AS A LAWFUL CLAIM. ACCORDINGLY THE GROUND OF APPEAL FOR CLAIM OF BENE FIT U/S 54 IS ALLOWED. 3. THE REVENUE AGGRIEVED WITH THE FINDING OF THE C IT((A) IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSEE DID NOT CLAIM ANY EXEMPTION U/S 54 OF THE I.T. ACT IN THE RETURN OF INCOME AND MOREOVER NO REVISED RETURN WAS FURNISH ED BY THE ASSESSEE. THEREFORE IN VIEW OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT (2006) 284 ITR 323 (SC) THE ASSESSEE IS NOT ENTITLED TO MAKE A FRESH CLAIM WHICH WAS NOT MADE I N THE RETURN OF INCOME. SHE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT (A) SHOULD BE REVERSED THAT THAT OF THE AO MAY BE RESTORED. 5. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT AS PER ASSESSEES WORKING THERE WAS LONG TERM CAPITAL LOSS OF RS.12 59 747/- BECAUSE THE INDEXED COST OF ACQUISITION AS PER THE ASSESSEE WAS RS.57 59 747 /- AND THE SALE CONSIDERATION WAS ONLY RS. 45 LAKH. THOUGH THE ASS ESSEE HAD PURCHASED ANOTHER RESIDENTIAL HOUSE BY INVESTING SALE PROCEED S OF THIS HOUSE THE ASSESSEE DID NOT CLAIM ANY EXEMPTION U/S 54 BECAUSE THERE WAS NO POSITIVE CAPITAL GAIN. EXEMPTION U/S 54 CAN BE CLAIMED ONLY IF THERE IS ANY CAPITAL GAIN. WHEN DURING THE ASSESSMENT PROCEEDINGS THE AO PROPOSED TO RE-WORK ITA 3912/DEL/2010 4 THE LONG TERM CAPITAL GAIN AND WHICH ACCORDING TO THE AO WAS IN A POSITIVE FIGURE THEN ONLY THE ASSESSEE POINTED OUT THAT IT HAS ALREADY PURCHASED A NEW RESIDENTIAL HOUSE FOR WHICH HE IS ENTITLED FOR EXEM PTION U/S 54. AS IT IS THE DUTY OF THE AO TO MAKE A CORRECT COMPUTATION OF INC OME AND EVEN IF THE ASSESSEE HAS OMITTED TO MAKE SOME CLAIM TO WHICH IT IS ENTITLED THE AO IS DUTY BOUND TO ALLOW SUCH CLAIM. IN SUPPORT OF THIS CONTENTION HE RELIED UPON THE CIRCULAR OF THE CBDT VIDE NO.14(XL-35) OF 1955 DATED 11.4.1955. HE STATED THAT THOUGH THE CIRCULAR IS VERY OLD BUT TILL DATE IT HAS NOT BEEN WITHDRAWN. IN THIS CIRCULAR THE GOVERNMENT HAS TA KEN THE VIEW THAT THE OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF THE ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTI ES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY PARTICULARLY IN THE MATTER OF CLAIM ING AND SECURING RELIEFS. THAT IN THIS CASE THE AO INSTEAD OF GUIDING AND A DVISING THE ASSESSEE IN THE LIGHT OF ABOVE DIRECTION OF THE CBDT DENIED THE GE NUINE CLAIM MADE BY THE ASSESSEE WITHOUT ANY BASIS OR REASON. HE THEREFOR E SUBMITTED THAT THE ORDER OF LD. CIT(A) SHOULD BE SUSTAINED. IN THE REJOINDE R IT IS STATED BY THE LD. DR THAT THE CIRCULAR REFERRED TO BY THE LD. CIT(A) IS MORE THAN 55 YEARS OLD AND CANNOT BE APPLIED IN THE PRESENT CIRCUMSTANCES SPE CIALLY AFTER THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT (SUPRA). ITA 3912/DEL/2010 5 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN THE RETU RN OF INCOME THE ASSESSEE HAS WORKED OUT THE CAPITAL GAIN AT A LOSS OF RS. 12 59 747 AS UNDER:- SALE CONSIDERATION 45 00 000/- LESS: COST OF ACQUISITION 32 0 0 000/- INDEXED COST 57 59 7 47/- 57 59 747/- LONG TERM CAPITAL LOSS 12 59.747/- WHEN THERE WAS LONG TERM CAPITAL LOSS OBVIOUSLY T HE ASSESSEE COULD NOT HAVE CLAIMED ANY EXEMPTION U/S 54 OF THE INCOME TAX ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO RAISED SEV ERAL OBJECTIONS WITH REGARD TO COST OF ACQUISITION OF THE ASSET AND ALSO THE YEAR OF ACQUISITION. WHEN IT APPEARED THAT AS PER THE WORKING OF THE AO THERE COULD BE CAPITAL GAIN AS AGAINST THE CAPITAL LOSS CLAIMED BY THE ASS ESSEE IT WAS POINTED OUT BY THE ASSESSEE TO THE AO IN A WRITTEN REPLY THAT THE ASSESSEE HAS PURCHASED A HOUSE ON 11.4.2007 FOR A SUM OF RS. 22 00 000 FOR W HICH HE IS ENTITLED TO EXEMPTION U/S 54 OF I.T. ACT. THE AO DETERMINED TH E CAPITAL GAIN FROM THE SALE OF THE HOUSE AT RS.17 18 423 AS AGAINST THE LO SS DISCLOSED BY THE ASSESSEE AT RS.12 59 747. HE DID NOT ENTERTAIN THE ASSSESSEES REQUEST FOR ALLOWING EXEMPTION U/S 54 ON THE GROUND THAT THE AS SESSEE DID NOT MAKE THE CLAIM IN THE RETURN OF INCOME AND ALSO DID NOT FILE ANY REVISED RETURN. ON THESE FACTS HE APPLIED THE DECISION OF GOETZE (IND IA) LTD. VS CIT (SUPRA). ITA 3912/DEL/2010 6 CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE WE ARE OF THE OPINION THAT ON THESE FACTS THE DECISION OF GOETZE (INDIA) LTD. VS CIT DOES NOT APPLY. THE ISSUE BEFORE THE AO WAS THE CO MPUTATION OF CAPITAL GAIN. AS PER THE WORKING OF THE ASSESSEE THERE WA S A CAPITAL LOSS BUT SINCE AS PER THE WORKING OF THE AO THERE WAS A CAPITAL G AIN IN SUCH CIRCUMSTANCES THE ASESSEE WAS ENTITLED TO EXEMPTIO N U/S 54. THE ASSESSEE COULD NOT HAVE CLAIMED EXEMPTION U/S 54 IN THE RETU RN OF INCOME BECAUSE ACCORDING TO HIM THERE WAS A CAPITAL LOSS. IN ITS CIRCULAR NO. 14 DATED 11.4.1955 THE CBDT HAS DIRECTED ITS OFFICER AS UND ER:- OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS O NE OF THEIR DUTIES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY PARTI CULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TA XPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICA TE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOUL D IN THE LONG RUN BENEFIT THE DEPARTMENT FOR IT WOULD INSPIRE C ONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FR OM THE DEPARTMENT. ALTHOUGH THEREFORE THE RESPONSIBILIT Y FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSEE ON WHOM IT IS IMPOSED BY LAW OFFICERS SHOULD- (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO W HICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO TH EIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPT ED FOR CLAIMING REFUNDS AND RELIEFS. ITA 3912/DEL/2010 7 THOUGH THE ABOVE CIRCULAR IS VERY OLD IT HAS NOT B EEN POINTED OUT THAT THE ABOVE CIRCULAR HAS EITHER BEEN WITHDRAWN OR MODIFIE D. IN FACT THE ABOVE CIRCULAR CORRECTLY DEFINES WHAT IS THE DUTY OF THE AO. THE DUTY OF THE AO IS TO DETERMINE THE CORRECT ASSESSABLE INCOME. THE GO VERNMENT OF INDIA IS NOT SUPPOSED TO COLLECT THE TAX AT A HIGHER FIGURE THAN WHAT THE CITIZEN IS ACTUALLY LIABLE TO PAY BY TAKING ADVANTAGE OF THE IGNORANCE OF THE TAXPAYER. IF THE TAXPAYER IS IGNORANT IT IS THE DUTY OF THE AO TO A SSIST THE TAXPAYER IN A REASONABLE MANNER. CONSIDERING THE ABOVE CIRCULAR AND ALSO THE FACTS OF THE ASSESSEES CASE WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE CIT(A). THE SAME IS SUSTAINED AND REVENUES APPEAL IS DISMISSED . 7. IN THE RESULT THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 16.2.2012. SD/- SD/- ( A.D. JAIN ) ( G.D. AGRAWAL ) JUDICIAL MEMBER VICE PRESIDENT DT. 16TH FEBRUARY 2012 GS COPY FORWARDED TO:- 1. ACIT MORADABAD. 2. SHRI AFEEF UR REHMAN MORADABAD. 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR ITA 3912/DEL/2010 8