Hemant Khatri, Kanpur vs Assessee

Shri Hemant Khatri, Vs A.C.I.T., 55/57, Kahu Kothi, Central Circle-III, Kanpur. Kanpur. PAN:ACIPK9681R (Appellant) (Respondent)

Appellant by Shri Rakesh Garg, Advocate Respondent by Shri Rajnish Yadav, D. R. Date of hearing 27/11/2014 Date of pronouncement 16/01/2015 ORDER PER A. K. GARODIA, A.M.

This is an assessee's appeal directed against the order passed by learned CIT(A)-I, Kanpur dated 25/08/2011 for the assessment year 2006-2007.

2. The grounds raised by the assessee are as under:

"1. That the Learned Commissioner of Income Tax (A)-II, Kanpur has been wrong in law and on facts in sustaining the addition of Rs.16,71,000/- being long term capital gain instead of claiming exemption U/s 54F of the Income Tax Act, 1961 in revised computation of income.

2. That the addition of Rs.16,71,000/- made by Assessing Officer being long term capital gain claiming exemption U/s 54F of the Income Tax Act, 1961 in revised computation of income and sustained by Learned Commissioner of Income Tax (A)-I, Kanpur is without considering the real facts of the case and is unjustified and arbitrary.

3. That the order passed by the Learned Commissioner of Income Tax (A)-I, Kanpur is bad in law on facts and against the principles of natural justice."

3. It was submitted by Learned A.R. of the assessee that it is noted by CIT(A) in para 7.1.1 of his order that the assessee has not claimed the deduction u/s 54F in the original return of income. The claim was made by the 2

assessee before the Assessing Officer in course of assessment proceedings, which was not considered by the Assessing Officer by following the judgment of Hon'ble Apex Court rendered in the case of Goetze (India) Ltd. vs. CIT 284 ITR 323 (SC) and therefore, this claim should have been examined and decided by the CIT(A). Since he has not done so, the matter may be restored to the file of the CIT(A) for deciding the issue on merit.

4. Learned D.R. of the Revenue supported the order of learned CIT(A).

5. We have considered the rival submissions. We find that both the authorities below have not examined the claim of the assessee regarding deduction u/s 54F by following the judgment of Hon'ble Apex Court in the case of Goetze (India) Ltd. (supra) because this claim was not made by the assessee in the return of income. Admittedly, as per this judgment of Hon'ble Apex Court, the Assessing Officer cannot examine this claim but the powers of CIT(A) are not curtailed by this judgment of Hon'ble Apex Court. Hence, CIT(A) should have examined the claim of the assessee and should have decided the issue on merit. Since he has not done so, we restore the matter to his file for deciding the issue afresh after affording reasonable opportunity of being heard to both sides.

6. In the result, the appeal of the assessee stands allowed for statistical purposes.

(Order was pronounced in the open court on the date mentioned on the caption page)

Sd/. Sd/.

(SUNIL KUMAR YADAV) ( A. K. GARODIA ) Judicial Member Accountant Member

Dated:16/01/2015. *C.L.Singh

Copy of the order forwarded to : 1.The Appellant 2.The Respondent. 3.Concerned CIT 4.The CIT(A) 5.D.R., I.T.A.T., Lucknow Asstt. Registrar