TMI Blog2021 (1) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, he rejected the claim of capital gain on the reason that the assessee has not filed revised return of income by placing reliance on the judgment of Hon ble Supreme Court in the case of Goetze (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] In our opinion, this judgment is applicable with regard to claim before the AO, and not before the first appellate authority or the appellate Tribunal. Even if there is no revised return, the assessee can claim exemption before the appellate authorities. It being so, we set aside the order of the CIT(Appeals) on this issue and remand the same to the AO with a direction to consider the claim of assessee u/s. 54B of the Act and decision afresh on merits. The assessee shall place necessary evidence in respect of the claim of deduction u/s. 54B of the Act and the same shall be examined by the AO on merits in accordance with law - Appeal of the assessee is partly allowed for statistical purposes. - ITA No.2650/Bang/2019 - - - Dated:- 4-1-2021 - Shri N.V. Vasudevan, Vice President And Shri Chandra Poojari, Accountant Member For the Appellant : Shri Anand Bhat, CA For the Respondent : Shri Pradeep Kumar, CIT(DR)(ITAT), Bengalur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B and 5F. 8. That the learned Commissioner has erred in not considering exemption u/s 54F with respect to construction of house property amounting to ₹ 43,54,152 out of the total investment in residential property of ₹ 65,00,000. 9. That the learned Commissioner has erred in directing the AO to levy tax and interest. 10. That the appellant craves leave to add to and/ or to alter, amend, rescind, modify, the grounds above produce further documents before or at the time of hearing of this appeal. 3. The facts of the issue are that the assessee claimed that he has sold an agricultural land in March, 2006 for a consideration of ₹ 61 lakhs and after deducting the cost of acquisition, the long term capital gain was worked out @ ₹ 52,85,489. Against this, claim for deduction u/s. 54F of the Act is that the sale proceeds are invested in residential building constructed at Panathur Village, Bangalore at an estimated cost of ₹ 65 lakhs. The assessee filed supporting evidences of cost of construction. The AO granted deduction u/s. 54F of ₹ 38,95,283 and brought the balance amount of ₹ 13,90,206 as taxable long term capital gain. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessment order under the Income Tax Act. It was only during the hearing of the appeal that the assessee claimed an additional deduction in respect of its liability to purchase tax. The Appellate Assistant Commissioner (AAC) permitted it to raise the claim and allowed the deduction. The Tribunal held that the AAC had no jurisdiction to entertain the additional ground or to grant relief on a ground which had not been raised before the Income Tax Officer. The Tribunal also refused the appellant's application for making a reference to the High Court. The High Court upheld the decision of the Tribunal and refused to call for a statement of case. It is in these circumstances that the appellant filed the appeal before the Supreme Court. 9. The Supreme Court held as under:- 5. In CIT v Kanpur Coal Syndicate, a three Judge bench of this Court discussed the scope of section 31(3)(a) of the Income Tax Act, 1922 which is almost identical to section 251(1)(a). The court held as under: (ITR p.229) If an appeal lies, section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 993] 199 ITR 351/66 Taxman 27 considered a similar situation. In that case, the appellant/assessee did not claim a deduction in respect of the amounts it was required to transfer to contingencies reserve and dividend and tariff reserve either before the Income Tax Officer or before the Appellate Assistant Commissioner in appeal. Subsequently, the Hon'ble Bombay High Court in the case of Amalgamated Electricity Co. Ltd. v. CIT [1974] 97 ITR 334 , held that such amounts represented allowable deductions on revenue account. The appellant, therefore, raised a new claim and additional grounds before the Tribunal in that connection. The Tribunal rejected the same. The second question which was raised in the reference before the Hon'ble Division Bench of Mumbai High Court was as under:- (2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in not allowing the assessee leave to raise in its own appeals additional grounds and in the departmental appeals cross objections regarding the deductibility of the sums transferred to contingency reserve and tariff and dividend control reserve? 12. The Division Bench which heard the reference, finding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it had raised these additional grounds on learning about the legal position subsequently. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under:- 4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribunal has not examined the additional grounds raised by the assessee on merit, we do not propose to answer the questions relating to the merit of those contentions. We reframe the question which arises for our consideration in order to bring out the point which requires determination more clearly. It is as follows: Where on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee, whether the Tribunal has jurisdiction to examine the same. 14. Under Section 254 of the Income Tax Act, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961 . There shall be no order as to costs. [Emphasis supplied] 16. The Hon'ble Supreme Court did not hold anything contrary to what was held in the previous judgments to the effect that even if a claim is not made before the assessing officer, it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim has not been negated by the Supreme Court in this judgment. In fact, the Supreme Court made it clear that the issue in the case was limited to the power of the assessing authority and that the judgment does not impinge on the power of the appellate authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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