TaxTMI 
TaxTMI 
TaxTMI 
2010 (10) TMI 766
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....e deed. Thus the long- term capital gain was calculated short by Rs. 15,59,235 (Rs. 60,59,235 - Rs. 45,00,000) in view of section 50C of the IT Act. The Assessing Officer, therefore, rectified the intimation vide order dated 4-4-2005 under section 154. 4. Assessee preferred appeal before ld. CIT(A) who allowed the appeal of the assessee by observing that the Assessing Officer wrongly assumed jurisdiction by invoking provisions of section 154 as the issue is highly debatable. 5. The ld. CIT(A) allowed the issue in favour of the assessee on merit also. This order was passed by ld. CIT(A) in appeal No. 169/05-06 dated 5-4-2006. The department filed appeal before the Tribunal against the order of ld. CIT (A). It was agitated that ld. CIT(A) was wrong in holding that it is a mistake not apparent from record and gave a relief of Rs. 15,59,235 on account of long-term capital gain made under section 50C on merit also. The Tribunal confirmed the order of ld. CIT(A) while deciding the departmental appeal in ITA No. 702/JP/2006 vide order dated 30-11-2007. 6. After the order of ld. CIT(A) the Assessing Officer issued a notice under section 148 on 22-11-2006.on the same very reasoning by wh....
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.... a sum of Rs. 15,59,235 to the total income of the assessee. While applying provisions of section 50C, the Assessing Officer has mentioned in his order that in explanatory memorandum which was released by the Board vide letter No. 153/91/2002/TPL 258 ITR (St.) 13, dated 27-8-2002 wherein it was stated that this amendment will take effect from 1st April, 2003 and will accordingly apply in relation to assessment year 2003-04 and subsequent years. Therefore, the contentions of the assessee were rejected and the impugned addition as stated above was made by the Assessing Officer. 10. Assessee preferred appeal before ld. CIT (A) before whom the similar contentions were raised by the assessee as were made before Assessing Officer. It was also submitted that the order under section 154 was challenged before ld. CIT (A) who has allowed the appeal of the assessee on legal issue as well as on merit and the order of ld. CIT(A) has been upheld by the Tribunal. Accordingly it was submitted that under these circumstances when Assessing Officer was not sure that whether to proceed under section 148 or under section 154 then definitely this is not a proper case to issue notice under section 148 o....
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.... facts of the case in confirming the action of the Assessing Officer in adopting the sale consideration, being the value adopted by the Sub-Registrar for the purposes of stamp duty at Rs. 60,59,235 under section 50C as against Rs. 45 lakhs declared by the appellant in the registered sale deed representing the actual sale consideration and thus thereby enhancing the amount of capital gain to Rs. 21,14,059 as against Rs. 5,54,824 declared by the appellant, resulting into addition of Rs. 15,59,235. The addition so made and confirmed by the CIT (A) being totally contrary to the provisions of law and facts may kindly be deleted in full. (3) The ld. Assessing Officer further erred in law as well as on the facts of the case in charging interest under section 234B. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 16. The ld. Counsel of the assessee filed detailed written submissions along with copy of various case laws on which reliance has been placed by ld. A/R. Attention of the Bench was drawn on various documents and on the ratio of variou....
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....ate proceedings by the ld. Counsel of the assessee along with rejoinder dated 4-8-2010. 21. The ld. D/R has strongly stated that though the ld. CIT(A) has decided the issue in favour of the assessee oh both the account i.e., quashing the proceedings under section 154 as well as on merit, however the Tribunal has not decided the issue on merit. The relevant portion of the order of Tribunal was read also by the ld. D/R. 22. Against these arguments, the ld. Counsel of the assessee has stated that it is wrong to suggest that Tribunal has not decided the issue on merit and has decided against the finding of ld. CIT (A) quashing the proceedings under section 154 only. Attention of the Bench was drawn on copy of order of Tribunal placed on record wherein it is clearly mentioned that order of ld. CIT(A) is confirmed. The ld. Counsel of the assessee also read the operative portion of order of Tribunal. It was further submitted that Hon'ble Supreme Court in the case of CIT v. Sun Engineering Works (P.) Ltd. [1992] 198 ITR 297 has explained that the decision of Hon'ble Supreme Court cannot be read and interpreted out of the context merely by picking a few words. One has to bear in mind the ....
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....at pages 32 to 36 filed by assessee. The department challenged the order of ld. CIT (A) who set aside the proceedings under section 154 as well as allowed the issue on merit in favour of the assessee. The Tribunal has recorded its finding in para 7 while deciding the appeal in ITA No. 702/JP/2006 for assessment year 2003-04 vide order dated 30-11-2007. Finding of the Tribunal for the sake of convenience and completeness are reproduced here as under :- "7. Considering the above submissions, we find substance in the basic contention of the ld. A/R that on a debatable issue section 154 cannot be invoked. In the present case, undisputedly, it was a debatable issue as to whether provisions laid down under section 50C of the Act which came into effect from 1-4-2003 will be applicable also on those transfer registered before 1-4-2003. In the present case the sale deed, a copy whereof has been placed at pages 4 to 14 of the paper book has been registered on 12th July, 2002 i.e., well before 1-4-2003. Thus in our view the ld. CIT(A) has rightly come to the conclusion that in the present case the Assessing Officer was not justified in invoking the provisions of section 154 of the Act since ....
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....he Assessing Officer was debatable one. Thereafter, the Tribunal has mentioned that besides the contention that it was a debatable issue, hence section 154 was not applicable, the assessee also contended that the provisions laid down under section 50C have come into effect from 1-4-2003 whereas property in question was sold by the assessee on 12-7-2002. Before coming into effect of section 50C from 1-4-2003, the value of property was generally being accepted by the department as the amount in consideration between the parties. Under these circumstances the Tribunal held that the ld. CIT(A) has rightly held that the issue was debatable hence application of section 154 of the Act by the Assessing Officer to work out the long-term capital gain at Rs. 21,14,059 was not justified. Thus the order of ld. CIT(A) is upheld and the grounds are, therefore, rejected. Last sentence of the order of the Tribunal is "The grounds are, therefore, rejected". Thus it is amply proved that Tribunal has not decided one ground but the grounds of the department. In our considered view the order of the Tribunal cannot be read in isolation to draw an inference that Tribunal has confirmed the order of ld. CIT....
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....hether any appeal to the Tribunal had to be filed by the department against the order of AAC, the Commissioner of Income-tax sent a note to the Officer stating that no appeal to the Tribunal was necessary against the order of AAC, as the alternative remedy of reopening the assessment under section 147(b) of the Act was available to withdraw the depreciation allowed and accordingly requested the Officer to take suitable action. In pursuance of this Memorandum by the Commissioner, the Officer initiated assessment proceedings under section 147(b) and ultimately completed the assessment withdrawing the depreciation allowed. This order of reassessment was affirmed by the Tribunal which held that Commissioner's memorandum to the Officer constituted information within the meaning of section 147(b). On a reference to the Hon'ble High Court at the instance of the assessee, the Hon'ble Madras High Court has held as under :- "(1) that the finding of the Appellate Assistant Commissioner was that there was no mistake on the part of the officer in allowing depreciation and hence there was no escapement of taxable income and this order had become final as the department not only did not file any....
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....not started any proceedings on account of change of opinion as Assessing Officer has recorded the reasons for initiation of proceedings under section 147. The assessment in this case was completed under section 143(1). The order passed under section 143(1) cannot be termed that any opinion has been expressed by the Assessing Officer as held by various Hon'ble High Courts including the Hon'ble Apex Court. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Rajesh Jhaveri Stock Broker (P.) Ltd. (supra). 29. After considering the submissions on this controversy, we find that the contention of ld. A/R is not acceptable. If order under section 143(1) is taken into consideration and thereafter if on the reasons recorded for the purpose of issuing notice under section 147 are taken into consideration, then it is clearly seen that the Assessing Officer may have right in initiating proceedings under section 147. Undisputed, there was no opinion expressed by the Assessing Officer as the assessment was completed under section 143(1) only. Where the assessment has been completed under section 143(1) and thereafter it is found that some income has escaped assessment and....
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....ssessee by which it has been held that provisions of section 50C are applicable with effect from 1-4-2003 whereas sale transaction has been effected on 12-7-2002. This order of ld. CIT (A) has been affirmed by the Tribunal. We are not supposed to comment on the finding of the Tribunal. However, for sake of completeness, we would like to add and discuss this controversy in the following manner. 32. The ld. Counsel of the assessee has strongly placed reliance on the decision of Hon'ble Rajasthan High Court in the case of CIT v. Laxman Singh [1986] 159 ITR 983. The facts and findings of this case have been discussed by Hon'ble High Court from paras 2 to 6 which are reproduced here as under:- "2. The assessee is an individual. The assessment year under consideration is 1973-74. It was found by the ITO during the course of assessment proceeding that the assessee had sold ornaments during the accounting year relevant to the assessment year 1973-74 for Rs. 53,426. The gold ornaments were sold for Rs. 40,300. The case of the assessee was that till the previous year relevant to the assessment year 1973-74 gold ornaments were not included in the definition of 'asset' and so no capital gain....
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....earing apparel and furniture but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him. Explanation.-For the purposes of this sub-clause "jewellery" includes- (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel; (b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel." It was rightly not disputed by the learned counsel for the Revenue that the Finance Act of 1972 is not retrospective and, therefore, whatever substantive rights had accrued to the assessee prior to 1st April, 1973 they could not be taken away. In these circumstances no valid exception can be taken to the finding recorded by the AAC that there was no capital gain to the assessee as a result of the sale of gold ornaments and jewellery which was affirmed by the Tribunal in appeal filed by the Department. 6. For the aforesaid reasons that the gold ornaments and jewellery becam....
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....te. 35. As stated earlier that we are not commenting on the finding of the Tribunal but we are observing these observations in support of the finding of the Tribunal given already. Accordingly the contention of the assessee on this issue are liable to be accepted which have already been accepted by the Tribunal and contention of ld. D/R that this issue has not been decided by the Tribunal as in his view the Tribunal has decided the issue in respect of quashing order under section 154 only is rejected. 36. Now the issue comes in respect to argument of ld. A/R that Assessing Officer has not dealt with the issue in right perspective while framing the re-assessment. It was submitted by ld. A/R that Assessing Officer has ignored letter dated 24-9-2007, copy of which is placed at page 29 of PB. In this letter it was submitted that "in continuation to our earlier submission dated 18-9-2007, alternatively and assuming that the provision of section 50C do apply in the previous year relating to assessment year 2003-04, it is submitted that the assessee has been conferred a right that the assessee may make a claim before the Assessing Officer under section 50C(2) that the value adopted or a....