GOKULDAS H PARIKH, MUMBAI v. ITO WD 21(1)(4), MUMBAI

ITA 7197/MUM/2013 | 2009-2010
Pronouncement Date: 24-11-2017 | Result: Allowed

Appeal Details

RSA Number 719719914 RSA 2013
Assessee PAN APNPP5390J
Bench Mumbai
Appeal Number ITA 7197/MUM/2013
Duration Of Justice 3 year(s) 11 month(s) 15 day(s)
Appellant GOKULDAS H PARIKH, MUMBAI
Respondent ITO WD 21(1)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted G
Tribunal Order Date 24-11-2017
Date Of Final Hearing 06-07-2017
Next Hearing Date 06-07-2017
First Hearing Date 06-07-2017
Assessment Year 2009-2010
Appeal Filed On 09-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI D.T. GARASIA JUDICIAL MEMBER AND SHRI RAJESH KUMAR ACCOUNTANT MEMBER ITA NO.5494/M/2012 ASSESSMENT YEAR: 2009-10 ITO 25(2)(3) WD. 21(1)(4) C-10 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI VS. SHRI GOKULDAS H. PARIKH GOKUL NIWAS BAJAJ ROAD VILE PARLE (W) MUMBAI 400 057 PAN: APNPP5390J (APPELLANT) (RESPONDENT) ITA NO.7197/M/2013 ASSESSMENT YEAR: 2009-10 LATE SHRI GOKULDAS H. PARIKH REPRESENTED BY LEGAL HEIR RAJESH GOKULDAS PARIKH GOKUL NIWAS BAJAJ ROAD VILE PARLE (W) MUMBAI 400 057 PAN: APNPP5390J VS. ITO 25(2)(3) WD. 21(1)(4) C-10 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI PRADIP N. KAPASI A.R. REVENUE BY : SHRI TUFAIL AHMED KHAN D.R. DATE OF HEARING : 20.09.2017 DATE OF PRONOUNCEMENT : 24.11.2017 O R D E R PER D.T. GARASIA JUDICIAL MEMBER: THE ABOVE TITLED APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE HAVE BEEN PREFERRED AGAINST THE ORDER D ATED 21.06.2012 ITA NO.5494/M/2012 & ITA NO.7197/M/2013 LATE SHRI GOKULDAS H. PARIKH 2 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREIN AFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009- 10. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE FACTS OF THE CASE IN BRIEF ARE THAT IN VIEW OF THE RECOVERY PROCEEDINGS IN CASE OF M/S. PARIKH BROTHERS THE IM MOVABLE PROPERTY BEING PLOT OF LAND WITH BUNGALOW CONSTRUCTED THEREO N AT VILE PARLE MUMBAI WAS ATTACHED BY THE TRO. THE ASSESSEE WAS P ARTNER IN FIRM M/S. PARIKH BROTHERS ALONG WITH HIS BROTHER. THE S AID PLOT WAS ORIGINALLY OWNED BY SHRI HIRALAL O. PARIKH WHO WAS FATHER OF THE ASSESSEE AND ON THE SAID PLOT THERE WAS DOUBLE STOR IED CONSTRUCTION WAS DONE BY FATHER IN 1955. AFTER THE DEATH OF FAT HER THE ASSESSEE ALONG WITH THE BROTHER INHERITED SAID LAND ALONG WI TH BUILDING. THE SAID PROPERTY AFTER ATTACHMENT BY TRO WAS AUCTIONED BY TRO AND THE SALE WAS CONFIRMED BY THE TRO AT A CONSIDERATIO N OF RS.20.21 CRORES AND THE DUES OUTSTANDING AGAINST THE FIRM M/ S. PARIKH BROTHERS WAS ADJUSTED AGAINST THE SALE CONSIDERATION AND REM AINING SALE PROCEEDS WERE PAID BACK TO THE ASSESSEE. SALE PROC EEDS WAS DIVIDED BETWEEN ASSESSEE AND HIS BROTHER. THE 50% OF GROSS SALE PROCEEDS I.E. RS.10 10 50 000/- WAS ADOPTED AS SALE CONSIDER ATION FOR PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. SINCE NO RETU RN WAS FILED BY THE ASSESSEE THE CASE WAS REOPENED U/S. 147 BY ISSUING OF NOTICE U/S. 148 DATED 22.01.2010. THE ASSESSEE CLAIMED THAT SINCE THE PROPERTY BELONGS TO HIS FATHER THE ASSESSEE HAS NOT SOLD THE SAME. THEREFORE NO CAPITAL GAIN IS ATTRACTED IN THE HANDS OF THE AS SESSEE. THE ITA NO.5494/M/2012 & ITA NO.7197/M/2013 LATE SHRI GOKULDAS H. PARIKH 3 ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) COMPLETED EX- PARTE ORDER AND BENEFIT OF COST OF ACQUISITION WAS GIVEN. 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) DID NOT ALLOW THE APPEAL OF THE ASSESSEE. 4. THE LD. A.R. SUBMITTED THAT THE ASSESSMENT WAS P ASSED EX- PARTE AND THE REOPENING IS NOT VALID. THE LD. A.R. ALSO SUBMITTED THAT THE AO COMPUTED THE LONG TERM CAPITAL GAINS ON THE ENTIRE AMOUNT WITHOUT GIVING COST OF ACQUISITION. THE LD. A.R. SUBMITTED THAT ASSESSEE HAS TAKEN GROUNDS FROM 1 TO 3 AND FOU R ADDITIONAL GROUNDS WERE ALSO TAKEN. THE PROPERTY WAS NOT OWNE D BY THE ASSESSEE BUT IT IS BELONGS TO HIS FATHER AND IT BEC OMES A PROPERTY OF ESTATE OF FATHER. THE CAPITAL GAIN WAS TAXABLE IN HANDS OF ASSESSEE EXECUTED UNDER SECTION 168 AND AS PER THE LAW ASSES SEE WAS 1/5 TH OWNER. THE YEAR OF TAXATION SHOULD BE A.Y. 2008-09 IN WHICH YEAR THE TRANSFER TOOK PLACE THEREFORE THE PROCEEDING IS ILLEGAL. THE LD. A.R. ALSO SUBMITTED THAT TRANSFER OF PROPERTY WAS B Y TRO AND HE ALONE HAD AUCTIONED THE PROPERTY AND THERE IS NO TR ANSFER. THEREFORE ASSESSEE IS NOT LIABLE TO TAX. NO CONSIDERATION WA S RELEASED UNLESS TAX OF PARTNERSHIP WAS PAID. THEREFORE THE TAXES RECOVERED SHOULD BE EITHER REDUCED FROM AUCTIONED SALE OR DEDUCTED A S EXPENDITURE FOR TRANSFER. ASSESSEE HAS ALSO TAKEN ADDITIONAL GROUND BEFORE US BY WAY OF A PAPER BOOK BY FILING THE SYNOPSIS. DURING THE CO URSE OF HEARING THE LD. A.R. SUBMITTED THAT MATTER REQUIRES VERIFIC ATION AT THE STAGE ITA NO.5494/M/2012 & ITA NO.7197/M/2013 LATE SHRI GOKULDAS H. PARIKH 4 OF AO AS THE AO AND THE LD. CIT(A) HAVE NOT DEALT W ITH THIS ISSUE IN DETAIL. THEREFORE ASSESSEES APPEAL MAY BE RESTOR ED TO THE FILE OF AO SO THAT ASSESSEE CAN AGITATE ALL THESE ISSUES BEFOR E THE AO. 5. THE LD. D.R. RELIED UPON THE ORDER OF THE LD. CI T(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. WE FIND THAT THE ASSESSEE HAS TAKEN THE GROUNDS AND AD DITIONAL GROUNDS WHICH WERE NOT DEALT BY AO AND LD. CIT(A). THEREFO RE IN THE INTEREST OF JUSTICE WE ARE OF THE VIEW THAT THE IS SUE MAY BE DETERMINED BY THE AO AFTER GIVING DUE OPPORTUNITY O F HEARING. THEREFORE WE RESTORE THIS ISSUE BACK TO THE FILE O F AO TO DECIDE ALL THE POINTS WHICH ARE RAISED BY THE ASSESSEE IN HIS WRITTEN SUBMISSIONS AND DECIDE THE MATTER AFRESH AFTER GIVING DUE OPPOR TUNITY OF HEARING. ITA NO.5494/M/2012 (DEPARTMENTAL APPEAL) 7. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE I S IN RESPECT OF THE RELIEF GIVEN TO THE ASSESSEE BY ACCEPTING THE I NDEXED COST VALUE ON THE BASIS OF THE VALUERS REPORT. 8. THE LD. CIT(A) HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT BY OBSERVING AS UNDER: 3.3. I HAVE CONSIDERED ARGUMENT OF THE LD.AR. SO F AR AS THE CONTENTION OF THE APPELLANT THAT NO LTCG IS CHARGEA BLE IN HANDS OF APPELLANT THE SAME IS NOT TENABLE AS EVEN IF THE S AME HAS BEEN FORCIBLY MADE BY TRO BUT STILL THE LTCG IS CHARGEAB LE IN CASE OF COMPULSORY ACQUISITIONS AS THE SAME ALSO FALLS WITH IN THE MEANING OF TRANSFER. THE COPY OF THE VALUATION REPORT OF THE R EGISTERED VALUER WAS NOT FURNISHED DURING THE ASSESSMENT PROCEEDINGS TH E SAME WAS AN ADDITIONAL EVIDENCE. NO SUCH DETAILS COULD BE GIVEN BEFORE THE AO AS IT WAS BEING CLAIMED THAT NO CAPITAL GAINS WAS CHARGEA BLE IN HANDS OF ITA NO.5494/M/2012 & ITA NO.7197/M/2013 LATE SHRI GOKULDAS H. PARIKH 5 APPELLANT THEREFORE NO VALUATION REPORT WAS FURNIS HED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. IT IS WELL SE TTLED PRINCIPLE THAT EVEN IF COST OF ACQUISITION IS NOT ASCERTAINABLE T HE BENEFIT OF COST OF ACQUISITION IS TO BE ALLOWED AS PER THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.81. UNDER THESE CIRCUMSTANCES THE COPY OF THE VALUATION REPORT WAS FORWARDED TO THE AO FOR HIS COMMENTS. THE AO VIDE HIS REMAND REPORT DATED 26.04.2012 WHICH HAS BEEN FORWARDED BY THE JCIT 21(1) VIDE DAT ED 1.5.2012 WHEREIN IT HAS BEEN CONTENDED THAT THOUGH REPORT OF THE GOVERNMENT RECOGNIZED VALUER IS NOT OF THE DEPARTMENT VALUER BUT SAME MAY BE CONSIDERED ON MERIT. THE APPELLANT IS 77 YEARS OF AGE AND THE SAID PROPERTY HAS BEEN SOLD BY THE TRO FORCEFULLY TO RECOVER THE OUTSTANDING DEMANDS OF THE FIRM M/S. PARIKH BRO THERS. THE A.O. WHILE TAXING LTCG IN THE HANDS OF THE ASSESSEE SHOULD HAVE ALLOW ED THE DEDUCTION FOR INDEXED COST BASED ON SOME PARAMETERS OR MADE THE REFERENCE TO THE DVO FOR ASCERTAINING FAIR MARKET VALUE AS ON 1.4.81. REDUCTION OF COST F OR COMPUTING THE CAPITAL GAINS IS A STATUTORY DEDUCTION WHICH CANNOT BE DENIED JUST BEC AUSE NO SUCH DETAILS WERE FURNISHED BECAUSE BEFORE THE AO THE ASSESSEE WAS DI SPUTING TAXABILITY OF LTCG AT ALL. HAVING NOT DONE SO AT THE TIME OF ASSESSMENT P ROCEEDINGS THE ONLY OPTION LEFT WITH THE ASSESSEE IS TO GET VALUATION REPORT AFTER ASSESSMENT ORDER IS PASSED. UNDER THESE CIRCUMSTANCES THE REGISTERED VALUER'S REPORT THOUGH BEING SUBMITTED FOR THE FIRST TIME DURING THE APPELLATE PROCEEDINGS IS TO B E ADMITTED AS THE AO ALSO IN HIS REMAND REPORT HAS NOT FOUND ANY DISCREPANCY WITH SA ID VALUATION REPORT. THE REPORT OF THE REGISTERED VALUER VALUING PROPERTY AT RS.49 88 325/- AS ON 14.81 SEEMS TO BE REASONABLE. UNDER THESE CIRCUMSTANCES THE COST OF ACQUISITION AS ON 1.4.81 STILL HAVE TO BE TAKEN AT RS. 49 88 325/- WHICH AFTER APPLYING INDEXATION COST COMES TO RS.2 90 32 051/- WHICH IS REQUIRED TO BE REDUCED FR OM THE 10 10 50 000 BEING 50% SHARE OF GROSS SALE CONSIDERATION. ACCORDINGLY THE LTCG TAXABLE IN HANDS OF APPELLANT WOULD COME TO RS. 7 20 17 949/.-. THE AO IS THEREFORE DIRECTED TO ASS ESS THE LTCG IN HANDS OF APPELLANT AT RS 7 20 17 949/- ONLY. 9. DURING THE COURSE OF HEARING WE FIND THAT THE L D. CIT(A) HAS CALLED FOR THE REMAND REPORT AND THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE AS PER LAW. MOREOVER THE RE PORT OF REGISTERED VALUE OF RS.49 88 325/- WAS CONSIDERED TO BE REASON ABLE. 10. DURING THE COURSE OF HEARING THE LD. D.R. DID NOT BRING ANY EVIDENCE CONTRARY TO THE FINDING OF LD. CIT(A). TH EREFORE WE DISMISS THE DEPARTMENTAL APPEAL. ITA NO.5494/M/2012 & ITA NO.7197/M/2013 LATE SHRI GOKULDAS H. PARIKH 6 11. IN THE RESULT ASSESSEES APPEAL IS ALLOWED AND THE DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.11.2017. SD/- SD/- (RAJESH KUMAR) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 24.11.2017. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR ITAT MUMBAI.