2024 (9) TMI 15 - AT - Income Tax

Entitlement to adopt higher value of cost of acquisition - Entertaining fresh claims before appellate authorities - assessee had submitted that while arriving at the value of capital gains, the cost of acquisition of shares was taken at lower value in the return of income which led to the capital gains on higher side - assessee submitted revised computation of capital gain during the course of assessment proceedings HELD THAT - It is admitted position that assessee had claimed higher cost of acquisition of shares during the course of assessment proceedings (cost of acquisition claimed in the return of income was Rs. 128.39/- as against Rs. 184.09/- claimed in the revised computation filed before the AO). Similar claim was made before the CIT(A). CIT(A) rejected the claim by placing reliance on the judgment of Goetze (India) Ltd. 2006 (3) TMI 75 - SUPREME COURT As in case of Karnataka State Co-operative Federation Ltd. 2021 (3) TMI 694 - KARNATAKA HIGH COURT after considering the judgment of Goetze (India) Ltd., 2006 (3) TMI 75 - SUPREME COURT held that when assessee makes a fresh claim before the appellate authority, even if the same is not claimed in the original return of income or in the revised return of income, the CIT(A) is empowered to consider the fresh claim of the assessee. The Hon ble High Court categorically held that the appellate powers of a CIT(A) are not impinged / restricted when a fresh claim is made before him. We restore the matter to the AO. AO is directed to examine whether assesee is entitled to higher cost of acquisition of Rs. 184.09 per share. The assessee shall place the necessary evidence in support of his case and shall not seek unnecessary adjournment in the matter. The AO is directed to afford reasonable opportunity of hearing to the assessee - Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
1. Correct cost of acquisition of shares.
2. Filing of revised return of income.
3. Entertaining fresh claims before appellate authorities.

Analysis:
1. The appellant contested the assessment order regarding the cost of acquisition of shares, claiming the correct value was Rs. 3,04,78,745 instead of Rs. 2,12,22,225 considered by the assessing officer. The appellant argued that the lower value was due to an oversight in the return of income, and the assessing officer should have assisted in computing the correct total income. The Tribunal noted the discrepancy and directed the AO to reexamine whether the appellant is entitled to the higher cost of acquisition, emphasizing the need for supporting evidence.

2. The appellant's inability to file a revised return during assessment proceedings due to the e-filing window closure was a point of contention. The Tribunal acknowledged the appellant's submission that the revised computation should be treated as a revised return. However, the CIT(A) had dismissed the appeal, citing the necessity of filing a revised return under section 139(5) of the Income Tax Act. The Tribunal's decision to remand the matter to the AO for reassessment included instructions for the appellant to provide necessary evidence without unnecessary delays.

3. The issue of entertaining fresh claims before appellate authorities was crucial in this case. The appellant had made a fresh claim for higher cost of acquisition before the CIT(A), which was rejected based on the Goetze (India) Ltd. judgment. However, the Tribunal referred to the PCIT Vs. Karnataka State Co-operative Federation Ltd. case, highlighting that appellate authorities have the power to consider fresh claims even if not raised in the original or revised return. The Tribunal relied on legal precedents to support its decision to allow the appeal for statistical purposes, emphasizing the importance of fair consideration of claims before appellate bodies.

Overall, the Tribunal's decision focused on upholding the appellant's right to present fresh claims before appellate authorities, ensuring a fair assessment process and the consideration of all relevant evidence. The judgment highlighted the importance of providing supporting documentation and avoiding unnecessary delays in the reassessment process.