2015 (6) TMI 713 - AT - Income Tax

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 assessee is not otherwise entitled for the relief in question under the provisions of the Act in seeking the impugned recomputation. It only contends that once there was no time left for filing a revised return, the impugned relief ought not to have been granted. A perusal of the case law hereinabove itself clarifies that the same does not impinge upon the jurisdiction of appellate authorities under the Act. Therefore, we refuse to agree with the Revenue s mere technical plea and affirm the CIT(A) findings under challenge. - Decided against revenue.

Summary

Issues Involved:
1. Whether the CIT(A) erred in directing the AO to adopt the revised Long Term Capital Gain on the sale of shares without the assessee filing a revised return within the time available under Section 139(5) of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Whether the CIT(A) erred in directing the AO to adopt the revised Long Term Capital Gain on the sale of shares without the assessee filing a revised return within the time available under Section 139(5) of the Income Tax Act:

The Revenue's appeal challenges the CIT(A)'s decision to direct the AO to adopt the Long Term Capital Gain (LTCG) on the sale of shares as per the revised computation submitted by the assessee during assessment proceedings, rather than the amount declared in the original return of income. The assessee initially declared LTCG of Rs. 2,37,17,342/- in its return filed on 30.9.2008. During scrutiny, the AO noted that the assessee had calculated the LTCG based on an acquisition cost of Rs. 1 per share. However, the assessee later sought to revise this computation, citing a mistake due to the statutory provision of Section 55(2)(ab), which should have considered the cost of acquisition at Rs. 65 lacs.

The AO declined the revised computation, stating that the time limit for filing a revised return under Section 139(5) had lapsed, and cited the Supreme Court's decision in Goetze (India) Ltd. vs. CIT, which held that amendments in the return of income cannot be made without filing a revised return. Consequently, the AO assessed the LTCG at Rs. 2,37,17,342/- as per the original return.

The CIT(A), however, accepted the assessee's revised computation, reasoning that the incorrect computation was a mere mistake and not a fresh claim of deduction. The CIT(A) emphasized that the AO should have accepted the correct computation when it was brought to his notice, citing the principle that tax authorities should assist taxpayers in ensuring only legitimate taxes are collected, as upheld in various judicial decisions including the Gujarat High Court's ruling in S.R. Koshti vs. CIT.

The CIT(A) also referenced the Punjab and Haryana High Court's decision in CIT vs. Ramco International, which held that a claim made during assessment proceedings without filing a revised return can be considered if it is not a fresh claim. The CIT(A) concluded that the AO was not justified in rejecting the revised computation of LTCG and directed the AO to tax the LTCG at Rs. 2,03,13,425/-.

Upon appeal, the Tribunal upheld the CIT(A)'s decision, noting that the Revenue's contention was merely technical and did not dispute the assessee's entitlement to the relief under the Act. The Tribunal affirmed that the appellate authorities have the jurisdiction to correct such errors, and the mere lapse of the time limit for filing a revised return should not preclude the granting of the correct relief.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s direction to adopt the revised LTCG of Rs. 2,03,13,425/-, and emphasized that the correct computation of income should be accepted even if the time for filing a revised return has lapsed, provided it is not a fresh claim. The Revenue's technical plea was rejected, and the CIT(A)'s findings were upheld.