9911796707
TMI Blog1986 (9) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed this interest claimed as a deduction on the ground that there was no evidence for the same. It was only on this disallowance that the assessee filed an appeal against the net computation of the short term capital loss of Rs. 5,323. The AAC, by his order dt.31st July 1984allowed the assessee's appeal directing the ITO to allow the deduction of Rs. 24,575 under the head "Business". 2. On11th January 1985, CIT, Delhi-VIII,New Delhiissued a show cause notice to assessee purporting to act under s. 263. Apparently, he had looked into the assessment record for this assessment year. He found that the assessee sold 29,17 per cent of half portion of the house property at No. 23, Ansari Road, Darya Ganj, Delhi for Rs. 3,50,000 on 24th November ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... looking to the mode of the acquisition of interest in the said house property by the assessee i.e., by adverse possession. The CIT found no substance in this objection. He, therefore, directed that ITO to assess the entire capital gains of Rs. 2,42,514 arising on the sale of the house property in the previous year relevant for the asst. yr. 1980-81, as per the computation below: "1. Saleprice of 29.17 per cent half portion of property No. 23,Ansari Road, Daryaganj,Delhi Rs. 3,50,000 2. Less: Cost of acquisition of property (value as on1st April, 1964is not to be taken as property was acquired thereafter) 21,648 Long term capital gain Rs. 3,28,352 Less: Deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at her command that this was a clear case of taking unfair advantage of exemption ranted by the legislature but with built-in safeguards for the Revenue. The assessee was quick to take advantage of the exemption provision but, quite unfairly, ignored the legislature prescription regarding the restrictions on sale and hence nothing could have been a fitter case for interference by the CIT. It was emphasised that after all the Department has no right of appeal against an order of the ITO and if the ITO makes a serious mistake and that mistake affects the Revenue prejudicially, the only course provided by the legislature to correct the situation was through the revisional power of the CIT under s. 263. She contended that interpretation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order, which is not the subject matter of the appeal before the appellate authority. The doctrine of merger only operates with regard to the points taken in appeal before an appellate authority and which come to the adjudicated upon by that authority. On the merits of the disputes, the departmental representative relied upon the reasoning of the Comrr., 7. In reply, Shri Iyer pointed out for the assessee that both the above decisions of the Supreme Court were considered specifically by the Karnataka High Cout (Full Bench) in CIT vs. Hindustan Aeronautics Ltd. (1986) 54 CTR (Kar) 158 (FB) : (1986) 157 ITR 315 (Kar) (FB). After such consideration, the court held that the CIT has no power to entertain an assessee's petition under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the AAC even on points not appealed against. In this regard, the Special Bench preferred (in Shree Arbinda Mills, to follow the decision of the Bombay High Cout in CIT vs. Tejaji Paras Ram Kharwala (1953) 23 ITR 412 (Bom) in preference to the decision of the Gujarat High Cout in Karsandas Bhagwandas Patel vs. G.V. Shah, ITO, Rajkot Ors. (1975) 98 ITR 255 (Guj). 9. In any case, it is apparent that, on this issue, two equally valid opinions are possible, one in favour of the assessee. In such a situation, it is settled law that the interpretation in favour of the tax payer has to be preferred. Sec. CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 : (1973) 88 ITR 192 (SC). In this view, we hold that the CIT had no jurisdiction to in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
