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ACIT, Ahmedabad Versus Amrapali Capital & Financial Services Ltd.

2015 (6) TMI 713 - ITAT AHMEDABAD

Long Term Capital Gain on sale of shares of BSE Ltd. - revised computation submitted by the assessee during assessment proceedings - Held that:- The CIT(A) has accepted the assessee’s revised computation as per section 55(2)(ab) of the Act. The Assessing Officer had refused the very relief by quoting the case law of Goetze (India) Ltd. (2006 (3) TMI 75 - SUPREME Court) and also the fact that the time limit for filing revised return had already elapsed. This is not the Revenue’s case that the ass .....

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findings under challenge. - Decided against revenue. - ITA No.1836/Ahd/2011 - Dated:- 9-6-2015 - Shri Pramod Kumar and Shri S.S. Godara,JJ. For the Petitioner: Shri Dinesh Singh, Sr.D.R., For the Respondent: Shri Mehul Thakker, A.R. ORDER PER SHRI S.S. GODARA, JUDICIAL MEMBER This Revenue s appeal for A.Y.2008-09, arises from order of the CIT(A)-XVI Ahmedabad dated 26.5.2011 passed in case no.CIT(A)-XIV/ACIT/Cir.-3/700/10-11, in proceedings u/s.143(3) of the Income Tax Act in short the Act . 2. .....

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y filed its return on 30.9.2008 admitting income of ₹ 14,00,83,790/-. The Assessing Officer took up scrutiny. He inter alia noticed the assessee to have declared long term capital gains arising from buyback of 4652 shares of Bombay Stock Exchange Ltd. originally allotted @Rs.1 per share. The assessee had taken this allotment price as cost of acquisition. Thereafter, it quoted demutualization and corporatization of recognized stock and insertion of section 55(2)(ab) of the Act providing cos .....

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b). It adopted purchase cost of the shares at ₹ 651 per share instead of ₹ 1. The Assessing Officer declined to accept its recomputation by holding that time limit for filing revised return u/s.139(5) of the Act had already lapsed and the assessee s recomputation was not permissible without there being a revised return as per the case law of Goetze (India) Ltd. Vs. CIT (2006) 157 Taxman 1 (SC). He acted accordingly and the assessee s capital gains of ₹ 2,37,17,342/- stood asses .....

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ve also considered the decisions relied upon by the Ld. Counsel. As per the facts of the case, the appellant had sold 4,562 shares of BSE Ltd. under the buy back scheme of BSE Ltd. and disclosed the Long Term Capital Gain of ₹ 2,37,17,342/- in the return of income. The cost of acquisition of per share was taken at rupee one with indexing in computing the Long Term Capital Gain. No mistake was noticed by the appellant in computation of the aforesaid Long Term Capital Gain till the lapse of .....

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t a consideration of ₹ 2,37,22,400/-. The appellant had taken the cost of acquisition of 4,562 shares so sold under the buy back scheme of the BSE Ltd. at ₹ 5,066/- and declared the Long Term Capital Gain of ₹ 2,37,17,342/-. However, during the course of assessment proceedings, it was noticed by the appellant that as per the provisions of sec. 55(2)(ab) of the Act, the cost of 10,000/- shares of BSE Ltd. should have been taken for ₹ 65,10,000/-. Noticing this mistake, the .....

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e Act. The contention of the Assessing Officer was that the time for furnishing the revised return of income had expired on 31.03.2010, therefore, the assessee cannot revise the income by filing of revised statement of income. For this contention, the Assessing Officer had placed reliance on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd vs. CIT reported in (2006) 157 Taxman 1 (SC) in which it was held that there is no provision under the Income- tax Act to make .....

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t the department is not supposed to take the advantage of any mistake committed by the assessee or ignorance of assessee regarding the provisions of law and that the department is duty bound to even assist the assessee so as to make him aware of the provisions, which may be beneficial to him. Reliance was placed by him on the CBDT Circular No. 14(XL-35) dated 11.04.1955. Reliance was also placed on the decision of the Hon'ble Gujrat High Court in the case of CIT vs. Ahmedabad keiser E Hind M .....

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llant and the CBDT Circulars are binding on the departmental officers but CBDT Circular No. 14(XL-35) dated 11.04.1955 had lost its existence after the introduction of Income-tax Act, 1961. Now, the Circular issued under the provisions of sec. 119 are only binding in nature. The appellant therefore, cannot derive any support from the aforesaid Circular and from the aforesaid relied upon decisions as quoted above. 2.5 The Ld. Counsel had made a reference to the powers of the CIT(A) in his second .....

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ll defined not only in the Income-tax Act, 1961 but well explained by the Hon'ble Apex Court and by the various High Courts at several occasions. However, this submission of the Ld. Counsel has no relevance. This could have been considered if any additional ground or any additional evidence was being admitted. Otherwise, the CIT(A) is duty bound and required to dispose of the appeal filed before him as per law. The present appeal is also decided under the aforesaid powers. 2.6 However, I agr .....

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t that the appellant had not claimed any fresh deduction during the course of assessment proceedings but the appellant had only requested the Assessing Officer vide letter dated 16.12.2010 to modify the computation of Long Term Capital Gain already made. Therefore, in my opinion, the decision of the Hon'ble Appex Court in Goetze (India) Ltd. (supra) is not applicable in facts of the case of the appellant. This perception can be understood by an example. If the appellant had declared the inco .....

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ave been no reason to compute it for ₹ 2,37,17,342/-. Thus, if the upward revision was possible by the Assessing Officer why not the down ward revision which is as per the provisions of the Act. Here, the observations of the Hon'ble Gujrat High Court (as relied upon by the Ld. Counsel) in the case of S.R. Koshti vs. CIT 276 ITR 165 (Guj.) are very much relevant. The Hon'ble High Court in the aforesaid decision had observed in para-20 that "20. A word of caution. The authoritie .....

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,1981, has laid down the approach that the authorities must adopt in such matters in the following terms: "The Supreme Court has observed in numerous decisions, including Ramlal v. Rewa Coalfields Ltd., AIR 1962 SC 361; State of West Bengal v. Administrator, Howrah Municipality, AIR 1972 SC 749, and Babhutmai; Raichand Oswal v. Laxmibal R. Tarte, AIR 1975 SC 1297, that the State authorities should not raise technical pleas if the citizens have a lawful right and the lawful right is being de .....

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tal Gain on the sale of 4,562 shares of the BSE Ltd. for ₹ 2,03,13,425/- when the correct computation was brought to his notice. 2.7 The Ld. Counsel had submitted that a similar issue was decided by the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Ramco International (2011) 332 ITR 306 (P&H) by holding that: The assessee claimed deduction under section BO-IB of the Incometax Act, 1961. Though assessee furnished Form 10CCB and other requisite documents, the Assessing .....

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uring the assessment proceedings, the claim of the assessee was admissible. The assessee was not making any fresh claim and had duly furnished and submitted the Form for the claim under section 80-IB, there was no requirement of filing any revised return." 2.8 In the aforesaid case of the Hon'ble Punjab and Haryana High Court, the Counsel the Revenue had submitted that the assessee made the claim by way of an application without filing a revised return and in such a situation, the decis .....

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