Kamlesh G. Mathreja, Mumbai vs Department Of Income Tax

Asst. CIT Cir 21(1), Vs. Kamlesh G Mathreja, Mumbai Trishul, Plot No.6, Road No.6, Hatkesh Soc., JVPD Scheme, Vile Parle (W) Mumbai- 400 056 PAN AFXPM7948D (Appellant) ( Respondent)

CO No.81/Mum/2013 (Arising out of ITA No.2771/Mum/2012 Assessment Year:2008-09

Kamlesh G Mathreja, Vs. Asst. CIT Cir 21(1), Mumbai Mumbai (Cross-Objector) ( Respondent)

Appellant by : Shri Asghar Zain Cross Objector by : Shri N R Agarwal

Date of Hearing : 01.06.2015 Date of Pronouncement 01.06.2015

ORDER

Per I P Bansal, Judicial Member

The appeal is filed by the Revenue and the cross-objection by the assessee. Both are directed against the order passed by the CIT(A) dated 29.02.2012 for A.Y. 2008-09.

2. The grounds of appeal raised by the Revenue read as under:

2 ITA No.2771/M/2012 & CO 81/M/2013 AY:2008-09

"1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing Long Term Capital Gain exemption of Rs.1,80,43,695/-

2. The CIT(A) has failed to appreciate that the Dy. Superintendent of land records has issued a certificate 13.12.2010 stating that the Valshind village is about 1600 to 1700 meters from the BNMC jurisdictional limit.

3. The CIT(A) has failed to appreciate that as per the map submitted by the AO, there is a motorable road cutting the Mumbai Nashik Bhiwandi Bypass, leading to Pise Dam as per which the overall road distance of the assessee's plot from the municipal limits of BNMC is only 5.5 Kms. And that the notification issued in respect of section 2(14)(ii)(b) is very clear that the distance of 8 Kms from the municipal limits should be considered in all directions.

4. The CIT(A) has failed to appreciate that the Dy. Collector of Urban Land Development vide order dated 24.05.2007 has described the said land as urban and that no agricultural activity was carried on by the assessee and no agricultural income was declared by the assessee in his returns of income for any of the preceding years.

5. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored."

The grounds of appeal raised by the assessee in the cross-objection read as under:

"1. The learned CIT(A) erred in confirming the validity of reopening u/s. 148 of the act.

2. The learned CIT(A) erred in not considering the deduction of the Index cost Rs.2,65,204/- from sale proceeds & deduction u/s. 54F for investment in house property.

3. The learned CIT(A) erred in not disposing off alternative submission for definition of capital asset u/s. 2(14)(iii) Clause (a) of the act.

4. The learned CIT(A) erred in not disposing off appellants submission about Non disposal of Objections by A.O."

3. At the outset, it was submitted by the learned AR that the issue raised by the Revenue in the present appeal is covered by the earlier orders of the Tribunal in the case of sons of the assessee and only the name of the assessee is changed and all other facts remain the same. Reference was made to the order of the Tribunal dated 07.03.2014 passed in ITA Nos. 6562 & 6564/Mum/2011 in the cases of ACIT 3 ITA No.2771/M/2012 & CO 81/M/2013 AY:2008-09

vs. Sunil G Mathreja & ACIT vs. Vishal G Mathreja respectively . Copy of this order is placed at pages 33- 38 of the paper-book. Reference was made to para 8 of the said order, which for the sake of convenience is reproduced below:

"8. We have heard the rival parties and carefully perused the orders of the lower authorities and the relevant material evidence brought on record. The entire dispute revolves around the issue whether the impugned agricultural land is situated within 8 kms from the limits of Municipality as alleged by the Revenue or it is beyond 8 kms as claimed by the assessee. The entire exercise of the AO depends only on one thing which is the physical verification of the distance done by the AO. However, it is not in dispute that while measuring the distance, the AO took an approach route which is owned by MCGM for maintenance of chlorination plant. This is established by the certificate of the Dy. Hydraulic Engineer (Operations), Municipal Corporation of Greater Mumbai. It is also a fact that this certificate was submitted by the assessee before the Ld. CIT(A).

8.1. A perusal of the order of the Ld. CIT(A) shows that the Ld. CIT(A) invoking his powers u/s. 250(4) of the Act asked the assessee to furnish certain details. In response to which, the assessee filed this certificate. Therefore, in our understanding of the law, this cannot be termed as violation of Rule 46A. However, at the same time, even if there are no express provisions which could suggest that the Ld. CIT(A) is bound to give an opportunity to the AO in respect of the evidence gathered by virtue of Sec. 250(4) of the Act, in our considered view the principles of natural justice demand that nothing should be used against a person which has been collected behind the back of that person, therefore, in our humble opinion, this certificate of Dy. Hydraulic Engineer (Operations) need to be confronted to the AO for this limited purpose of whether the approach road taken by the AO is a private road or public road . We restore the matter back to the files of the AO. The assessee is directed to file a copy of the said letter of Dy. Hydraulic Engineer (Operations) before the AO. The AO is directed to verify the genuineness of the said letter and decide the issue of distance accordingly. We would like to make it very clear that the AO is only directed to verify the genuineness of this letter of Dy. Hydraulic Engineer (Operations) only. If the AO is satisfied with the genuineness of the letter, the impugned land shall be treated as an agricultural land exempt from capital gain tax.

9. In the result, these two appeals filed by the Revenue are allowed for statistical purpose."

4. It was further submitted by the learned AR that the matter was restored back to the file of the AO only for the purpose of verifying the genuineness of the letter issued by Dy. Hydraulic Engineer (Operations) and after verifying such facts, the learned AO in the case of son of the assessee viz. Sunil G Mathreja has found that 4 ITA No.2771/M/2012 & CO 81/M/2013 AY:2008-09

the said letter issued was genuine and appropriate relief was allowed by the AO in the case of the son of the assessee vide assessment order passed by the AO in respect of son of the assessee viz. Shri Sunil G Mathreja vide order passed u/s. 143(3) r.w.s. 254 of the I.T.Act, 1961. A copy of this order is filed at pages 41- 44 of the paper-book. Learned AR also pointed out to the letter, dated 06.08.2014, sent by the AO in the case of Sunil G Mathreja to the Executive Engineer, O/o The Dy. Hydraulic Engineer (Operation), copy of which is placed at page 39 of the paper- book, inquiring with regard to the genuineness of the letter for which the matter was restored to the AO. The learned AR also referred to the response received from the office of the Executive Engineer (operations), which is dated 02.09.2014 and received by the AO on 04.09.2014, copy of this letter is placed at page 40 of the paper-book. He submitted that on the basis of this letter the AO in the case of the son of the assessee has accepted the issue. Thus, it was pleaded by the learned AR that in the case of the assessee, since the matter has been accepted in the case of son of the assessee, the departmental appeal should be dismissed.

5. We have heard both the parties and their contentions have carefully been considered. It is the case of the learned AR that based upon the aforementioned order of the Tribunal dated 07.03.2014, in which similar issue was raised in the case of sons of the assessee and such plea has been accepted, therefore, relief should be granted to the assessee on the basis of the assessment made by the AO in pursuance of the directions of the Tribunal. We do not find such argument of the learned AR as convincing. Undisputedly, the verification which was made by the AO in the case of the son of the assessee relates to the case of son of the assessee. Therefore, on the basis of acceptance of the claim in the case of the son of the assessee, we cannot accept such claim, unless similar verification is carried out in the case of assessee. Therefore, respectfully following the aforementioned order of the Tribunal in the case of son of the assessee, we pass similar order and the matter is restored back to the file of the AO for making similar verification. We order accordingly.

6. The appeal filed by the Revenue is considered to be allowed for statistical purpose in the manner aforesaid.

5 ITA No.2771/M/2012 & CO 81/M/2013 AY:2008-09

7. So far as it relates to the cross-objections filed by the assessee, the learned AR during the course of hearing did not press the cross-objection and this fact is endorsed on the order sheet, where the learned AR has stated that "the cross- objection is not pressed". Accordingly, the cross-objection filed by the assessee is dismissed as not pressed.

8. To sum up, the appeal filed by the Revenue is allowed for statistical purpose in the manner aforesaid and the cross-objection filed by the assessee is dismissed as being not pressed.

Order pronounced in the open court on this 1st day of June, 2015.

Sd/- Sd/-

(Rajendra) (I P Bansal) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, Dt : 1st June, 2015 SA

Copy forwarded to : 1. The Appellant 2. The Respondent 3. The C.I.T, concerned 4. The CIT (A)-concerned 5. The DR, "A" Bench, Mumbai BY ORDER

//True Copy// ASSISTANT REGISTRAR ITAT, Mumbai Benches, Mumbai