2023 (1) TMI 479 - AT - Income Tax

Orders of Appellate Tribunal - section 51 addition - correctness of the assessee s forfeiture claim itself - HELD THAT - We are forced to conclude that the assessee has failed to prove this socalled cash advance amount as the sum forfeited u/s 51. We, therefore, reject all of her arguments as lacking genuineness in light of human probabilities as per Sumati Dayal 1995 (3) TMI 3 - SUPREME COURT And CIT Vs. Durga Prasad More 1971 (8) TMI 17 - SUPREME COURT . AO is accordingly directed to assess this amount as unexplained only. Necessary computation shall follow as per law. The assessee at this stage vehemently argued that we could not change the head of income in section 254(1) proceedings - We are afraid that the learned counsel s instant argument very well goes against the hon ble jurisdictional high court s landmark decision in Gilbert and Barker Manufacturing Company 1976 (12) TMI 39 - BOMBAY HIGH COURT deciding the issue in favour of the tribunal s jurisdiction to this effect. We make it clear that we have heard the assessee at length regarding the instant former issue vis- -vis taxability of the impugned section. AO shall ensure therefore that the impugned sum is assessed as unexplained followed by his necessary computation to be finalized as per law. This first and foremost issue is decided in Revenue s favour in foregoing terms. Deduction u/s 54F - We note from a perusal of the CIT(A) s detailed discussion that both the lower authorities held the assessee ought to have deposited in her capital gain account scheme. It emerges from a perusal of the case file that she had very well purchased the new residential asset/house on 28-03-2013 very well even before the due date of filing the return u/s.139(1) - We thus delete the impugned disallowance for this precise reason alone since no other specific reason has been pointed out in both the lower authorities respective orders under challenge. Assessee succeeds in her instant latter substantive ground therefore.

Summary

Issues:
1. Addition under section 51 and disallowance of section 54F/51 deduction.

Analysis:
1. Addition under section 51:
- The assessee challenged the addition of Rs.23,57,143 under section 51 and the disallowance of section 54F/51 deduction.
- The tribunal examined the forfeiture claim of the assessee and found it lacking in genuineness.
- The tribunal referred to the statutory provision of section 51, emphasizing the deduction of forfeited advance money from the cost of acquisition.
- The tribunal rejected the assessee's technical arguments and upheld the Revenue's contention based on the high court's decision in Ahmedabad Electricity Company Ltd. Vs. CIT (1993) 199 ITR 351 (Bom.) (FB).
- The tribunal concluded that the assessee failed to prove the forfeited amount as genuine and directed the Assessing Officer to assess it as "unexplained."

2. Disallowance of section 54F/51 deduction:
- The tribunal found that the assessee had purchased a new residential asset before the due date of filing the return under section 139(1) of the Act.
- As there was no specific reason provided by the lower authorities for disallowance, the tribunal deleted the disallowance of Rs.19,40,440 under section 54F deduction.
- The assessee succeeded in this latter substantive ground, and the appeal was partly allowed on this issue.

3. The tribunal clarified that it had the jurisdiction to change the head of income in section 254(1) proceedings, citing the decision in CIT Vs. Gilbert and Barker Manufacturing Company (1978) 111 ITR 529 (Bom.).
4. The tribunal pronounced the order on 10th January, 2023, allowing the appeal partly in favor of the assessee.