Ajay Jain Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that order passed without considering the documents and without examining the correct residential status of the assessee is liable to be restore back for de novo adjudication.
Facts- In appeal before the learned CIT(A), the assessee raised grounds challenging the assessment by treating the assessee as ‘Resident’ as against the return of income filed in the status of ‘Non-Resident’. The assessee also challenged the computation of long-term capital gains by treating the cost of acquisition of shares as Nil. In order to substantiate the cost of acquisition of shares at Rs.81,04,212, the assessee also furnished additional documents, which could not be filed during the assessment proceedings, along with an application under Rule 46A of the Income Tax Rules, 1962. However, the learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on both issues. Being aggrieved, the assessee is in appeal before us.
Conclusion- From the perusal of the impugned order, it is evident that the learned CIT(A) neither sought any remand report from the AO nor considered any of the aforesaid documents while dismissing the assessee’s appeal in respect of the computation of long-term capital gains at Rs.1,78,60,000. Further, there is no examination of the correct residential status of the assessee by any of the lower authorities. Therefore, in view of the above and in the interest of justice, we deem it appropriate to restore both issues to the file of the AO for de novo adjudication after considering the details filed by the assessee pertaining to his residential status as well as the documents/information furnished before the learned CIT(A) as additional evidence. The assessee is also directed to fully cooperate and comply with all the notices and furnish all the details as sought by the AO without any default. As a result, the grounds raised by the assessee are allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order dated 19/12/2022 passed under section 250 of the income tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2011-12.
2. In its appeal, the assessee has raised following grounds:-
“1. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in not rectifying the error of the Assessing Officer in assessing your Appellant under the status of Resident as against the Return of Income filed under the status of Non-Resident.
2. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in accepting the cost value of shares of Devashish Builders Private Limited at Rs. Nil as taken by the Assessing Officer which is arbitrary and against the fact of the case.
3. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in accepting the long-term capital gain liable to tax wrongly determined by the Assessing Officer at Rs. 1,78,60,000/- as against Rs. 97.55,788/- as disclosed by your Appellant.
4. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in not accepting the balance sheet and capital accounts of financial years 2005-06 to 2010-11 filed with the Assessing Officer and also clearly communicating to the Assessing Officer that the assessment for the assessment year 2008-09 was made u/s 143(3) of the Income tax Act, 1961 wherein the copies of the balance sheet and capital account were duly filed at the time of assessment by your Appellant which clearly mention the cost value of the said shares.
5. THAT the Commissioner of Income tax (Appeals] has erred in law as well as under the circumstances of the case in passing the Order without going through the records of the case and seeing that an application under Rule 46A of Income tax Rules, 1962 was already filed by your appellant wherein all the records and documents mentioned by the Assessing Officer were already produced and submitted.
6. THAT the Commissioner of Income tax (Appeals) has erred, in law as well as under the Circumstances of the case in not mentioning about any Remand Report received from the Assessing Officer in his Order and inspite of communication from the old incumbent Commissioner of Income tax (Appeals) that further notices would be issued after receipt of Remand Report from the Assessing Officer.
7. THAT the Commissioner of Income tax (Appeals) has erred in law as well as under the circumstances of the case in wrongly mentioning in the Order that the Appellant did not attend to the notices whereas in fact the appellant had continuously enquired about the Remand Report and had submitted all the documents required and was ready to come for personal hearing also with any other documents required.
8. THAT Your appellant craves to modify, delete or make additional grounds of appeal at the time of meaning of appeal.”
3. The brief facts of the case as emanating from the record are: The assessee is an individual and has derived income from house property, capital gain and other sources. For the year under consideration, the assessee filed his return of income on 26/09/2011 declaring a total income of Rs.99,18,740. During the assessment proceedings, upon verification of the computation of income, it was observed that the assessee has shown long-term capital gain of Rs.97,55,788 on the sale of shares. Accordingly, the assessee was asked to furnish details of long-term capital gains. In response thereto, the assessee furnished the following details:-
