2023 (1) TMI 479 - AT - Income Tax

Tribunal rules on forfeiture & deduction, directs Assessing Officer, clarifies jurisdiction.

Sonia Satish Sethiya Versus ACIT, Jalna Circle, Jalna

Sonia Satish Sethiya Versus ACIT, Jalna Circle, Jalna - TMI Issues:1. Addition under section 51 and disallowance of section 54F/51 deduction.Analysis:1. Addition under section 51: - The assessee challenged the addition of Rs.23,57,143 under section 51 and the disallowance of section 54F/51 deduction. - The tribunal examined the forfeiture claim of the assessee and found it lacking in genuineness. - The tribunal referred to the statutory provision of section 51, emphasizing the deduction of forfeited advance money from the cost of acquisition. - The tribunal rejected the assessee's technical arguments and upheld the Revenue's contention based on the high court's decision in Ahmedabad Electricity Company Ltd. Vs. CIT (1993) 199 ITR 351 (Bom.) (FB). - The tribunal concluded that the assessee failed to prove the forfeited amount as genuine and directed the Assessing Officer to assess it as 'unexplained.'2. Disallowance of section 54F/51 deduction: - The tribunal found that the assessee had purchased a new residential asset before the due date of filing the return under section 139(1) of the Act. - As there was no specific reason provided by the lower authorities for disallowance, the tribunal deleted the disallowance of Rs.19,40,440 under section 54F deduction. - The assessee succeeded in this latter substantive ground, and the appeal was partly allowed on this issue.3. The tribunal clarified that it had the jurisdiction to change the head of income in section 254(1) proceedings, citing the decision in CIT Vs. Gilbert and Barker Manufacturing Company (1978) 111 ITR 529 (Bom.).4. The tribunal pronounced the order on 10th January, 2023, allowing the appeal partly in favor of the assessee.