2014 (6) TMI 142 - AT - Income Tax

Addition of Transfer Fees and TDR premium power of appellate commission to accept fresh claim being revised computation - Held that - Even if a claim is not made before the AO it can be made before the appellate authorities - The jurisdiction of the appellate authorities to entertain such a claim is not barred Relying upon Jute Corporation of India Limited vs. CIT 1990 (9) TMI 6 - SUPREME Court - the power of the Appellate Commissioner is coterminous with that of the Income Tax Office and an appellate authority while hearing appeal against the order of the subordinate authority has all the powers which the original authority may have in deciding the questions before it subject to the restrictions or limitations if any prescribed by statutory provisions. In the absence of any statutory provision the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. Revised Computation not accepted on wrong appreciation of facts Held that - CIT(A) failed to exercise his appellate jurisdiction u/s 250 of the Act Relying upon Smt. Prabhavati S. Shah v. CIT 1998 (2) TMI 107 - BOMBAY High Court - the powers conferred on the first appellate authority u/s 250(4) of the Act, being a quasi-judicial power, it is incumbent on him to exercise the same, if the facts and circumstances justify - though the discretion is vested with the appellate authorities to admit or reject the new/additional claim but the discretion in that regard is to be exercised fairly and justifiably so as to serve the interest of justice thus, the matter is remitted back to the Tribunal for fresh adjudication Decided in favour of Assessee.

Summary

Issues:
1. Appeal against order of CIT(A) regarding revised computation not accepted.
2. Addition on account of Transfer Fees and TDR premium.

Analysis:

Issue 1:
The assessee, a Co-operative Housing Society, filed a return declaring income but later revised it during assessment proceedings, claiming exemption for transfer fees and TDR premium on the principle of mutuality. The AO, citing a Supreme Court decision, rejected the revised claim as untimely. The CIT(A) upheld this decision, stating the assessee did not fulfill conditions for mutuality principle. The ITAT, referring to a Bombay High Court case, emphasized the appellate authority's power to entertain additional claims. They criticized the CIT(A) for not considering the relevant claim and remanded the issue for fresh consideration, citing Tribunal decisions supporting the assessee's claim.

Issue 2:
The assessee contested the addition of Transfer Fees and TDR premium, arguing they were exempt due to the mutuality principle. The CIT(A) disagreed, leading to an appeal before the ITAT. The ITAT, considering Tribunal decisions in the assessee's favor for earlier years, remanded the issue to the CIT(A) for a fresh decision, emphasizing the need for a fair assessment based on relevant legal precedents and providing the assessee with a reasonable opportunity to present their case.

In conclusion, the ITAT allowed the appeal for statistical purposes, highlighting the importance of considering all relevant claims and legal precedents while ensuring a fair and just assessment process.