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02-01-2019, Ashok G. Kalra, Section 45(3), 55(3), Tribunal Mumbai

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1 week 1 day ago #8275 by amit
Section - 45(3), 55(3), 2(47), 147, 45, 48, 55
Order Date - 02-01-2019
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - ITO
Respondent - Ashok G. Kalra
Justice - MAHAVIR SINGH, JM & MANOJ KUMAR AGGARWAL, AM
Citation - 119Taxpundit72
Appeal No. - I .T.A. No.7226/Mum/2016
Asstt. Year - 2007-08

Order

PER : Manoj Kumar Aggarwal

1. Aforesaid appeal by revenue for Assessment Year [AY] 2007-08 contest the order of Ld. Commissioner of Income-Tax (Appeals)-37, Mumbai, [CIT(A)], Appeal No.CIT(A)-37/IT-29/ITO 25(2)(1)/2012-13 dated 07/09/2016 on following effective grounds of appeal:-

1. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in deleting the addition of Rs. 1,37,31,300/- on account capital gain tax on transfer of capital asset.

2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in interpreting the provisions of section 45(3), section 55(3) and section 2(47) of the Income-tax Act.

3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) has erred in completely disregarding the findings of Udaipur Search team.

4. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in relying on the judgements of 1). Manohar Pyarelal Sadane (2012) 138 ITD 250, ITAT Pune

2). Yashwant Kalra [ITA No. 534/Jodh/2013]. Whereas, the decisions of the Hon'ble ITAT benches has been based on the decision of Hon'ble Supreme Court in the case of B.C. SrinivasSetty(1981) 128 ITR 294(SC). The facts B.C. SrinivasSetty(1981) 128 ITR 294(SC) are completely different from the facts of the case of assessee. As per the judgement of Honorable Supreme court in the case B.C. SrinivasSetty (l98l) 128 ITR 294(SC) if the date and cost of acquisition of any intangible asset like Goodwill cannot be ascertained then it is not an asset and cannot be taxed under capital gain. However, reference of the above case laws by Ld. CIT(A) in his appellate order is irrelevant as far as facts of the case are concerned as cost of acquisition and date of acquisition was brought on record by AO in his remand report and which has been completely ignored in the Appellate order.

5. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in not remanding back the information received from Baluchistan Co-op Housing Society to the file of AO.

6. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of Assessing officer be restored.” Although the assessee has preferred cross-objection against the same, however, the same has not been pressed during hearing before us and therefore, the same stand dismissed in limine.

2.1 Facts in brief are that the assessee being resident individual engaged in the business of marbles under proprietorship concern namely marble kraft was subjected to reassessment proceedings for impugned AY vide order u/s 144 read with Section 147 passed by Ld. Income Tax Officer-21(1)(1), Mumbai [AO] on 05/03/2013. The income of the assessee was determined at Rs.151.22 Lacs after addition of LongTerm Capital Gains [LTCG] u/s 45(3) for Rs.137.31 Lacs as against the original income which was finally assessed u/s 143(3) at Rs.13.91 Lacs after giving effect to the order of first appellate authority.

2.2 The reassessment proceedings were initiated pursuant to receipt of certain information from Dy. CIT, Udaipur that a search and seizure action was carried out in the case of Shri Lalit Sharma (Surya Estate Group) on 23/04/2008 wherein certain documents pertaining to a partnership firm namely M/s Goverdhan Plaza were seized.

2.3 The stated firm Goverdhan Plaza consisted of 11 partners out of which 4 partners were from Karla family, the assessee being one of them having 16% share in the firm. Upon perusal of statement of Shri Lalit Sharma recorded on 07/05/2008, it came to notice that the firm had acquired a plot of land measuring 12,322 Square Feets from 4 membersof the Kalra family at agreed price of Rs.3,300/- per square feet. Since Kalra family had 50% collective share in the firm, other partners agree to pay 50% of market value of the plot [50% of 12322xRs.3,300/- per square feet] amounting to Rs.203.31 Lacs to the Kalra family. The book value of the plot was taken @Rs.1,200/- per square feet in the books of the firm. On the basis of said information, Ld. AO formed an opinion that the assessee was liable to pay LTCG on transfer of plot of land to the firm and accordingly, the assessee was required to explain the same with requisite documentary evidences. Since the assessee could not file the requisite documents / explanation, the assessment was completed on best judgment basis u/s 144 wherein the LTCG was determined and

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