Mukul Rohatgi Vs PCIT (ITAT Delhi)
This appeal arose from a revision order passed under Section 263 of the Income-tax Act, 1961 for Assessment Year 2020-21. The original assessment was completed under Section 143(3) read with Section 144B. The Principal Commissioner of Income Tax (PCIT) revised the assessment on three main issues: (i) taxability of certain mutual funds as long-term or short-term capital gains, (ii) Annual Letting Value (ALV) of various properties in India and abroad, and (iii) non-initiation of penalty proceedings under Section 271C for alleged non-deduction of TDS.
On the first issue, the PCIT held that six funds treated by the assessee as equity-oriented and taxed under Section 112A at a concessional rate were not equity-oriented and should be taxed at normal rates as short-term capital gains. The PCIT recomputed capital gains and directed reassessment. Before the Tribunal, the assessee produced details including ISIN codes and fund statements to show that the funds were equity-oriented and held for more than one year. The Tribunal observed that these details were filed during the original assessment and examined by the Assessing Officer (AO), who formed a view. The Tribunal held that this was one of the possible views and that the PCIT had not recorded how the funds were not equity-oriented. However, the Tribunal directed the AO to verify the purchase cost of the SBI Gold Fund.
