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TMI Blog2016 (4) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... own to have been incurred on sale of property located at Masjid Moth, Greater Kailash-II, New Delhi. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition made by the A.O. on account of disallowance of long term capital loss by admitting additional evidence even though the A.O had objected to its admission on both on principle and on merits. 3. On the facts and in the circumstances of the case, the CIT(A) has erred, in violation of rule 46A of the Income Tax Rules 1962, by not following the decision of Hon'ble High Court in the case of Manish Buildwell Pvt. Ltd. 204 Taxman 106, wherein it was held by the Hon'ble jurisdictional High Court to give two stage opportunity under Rule 46A i.e. first before admission of additional evidence and second after admission of additional evidence. 4. The order of the Ld. CIT (A) is erroneous and is not tenable on facts and in law. 5. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. The grounds taken in the cross objection by the assessee are as under:- 1. That the order passed under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee of earlier years, the said property had been acquired from the sources outside the books of accounts. Accordingly, he disallowed the long term capital loss as claimed by the assessee in his return of income and completed the assessment u/s 153A/143(3) of the Act. 5. Aggrieved, the assessee filed an appeal before the first appellate authority and the ld. CIT (A), after observing the submissions of the assessee, deleted the addition as under :- 6. I have gone through the above submissions of the appellant and have perused the AO's order and considered the facts and evidences on record. 6.1 From the perusal of the assessment order it is seen that AO s objection is that the said property at Masjid Moth has not been shown in the balance sheet for the assessment years 2002-03 and 2003-04 and since no documents viz. purchase deed and sale deed for the said property were filed, the AO accordingly disallowed the capital loss claimed by the appellant in its return of income. 6.2 It is further seen from the balance sheet filed by the appellant during the appellate proceedings from Assessment Years 1994-95 to 2003-04 that the said property has duly been reflected in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant balance sheet for Assessment Year 1994-95 till 2003-04 where the property in question is regularly duly been reflected, I hold that the AO's view that loss on sale of property is not allowable being an unaccounted assets is not correct. Hence, the addition of ₹ 1,05,76,383/- made by the AO deserves to be deleted. 6. Ld. DR relied on the order of the AO and submitted that the said property was not shown in the state of affairs/balance sheet filed by the assessee of earlier years. He further submitted that the ld. CIT (A) was not right in accepting the additional evidences like sale deed and purchase deed produced for the first time by the assessee before him and also not giving the opportunity to the AO under Rule 46A before and after the admission of the same. He, therefore, pleaded that the order of the CIT (A) be set aside and that of the AO be restored. 7. On the other hand, the ld. AR for the assessee relied on the order of the ld. CIT (A) and reiterated the submissions made before him. He submitted that the assessee sold equity share of M/s. Satnam Overseas Ltd., M/s. Union Overseas Bank, M/s. Oriental Bank of Commerce and M/s. Global Trust Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. He also submitted that as far as, the assessee was concerned the purchase was made from M/s. J.K. Synthetics Ltd. and in this regard, he referred to Para A of Agreement to Sell on Page 1 in which perpetual lease deed was made in the name of M/s. Vipps India which sold it to M/s. J.K. Synthetics Ltd. and from whom the assessee had purchased the property. Therefore, he submitted that the contention of the AO that the assessee had become the owner of the property only on 14.02.2003 was erroneous as the property in question was purchased by the assessee in the year 1993. 7.1 Ld. AR further submitted that the assessee purchased the property against agreement to sell dated 28.07.1993 and the said property was duly reflected in the balance sheet as on 31.03.1994 i.e. AY 1994-95 being the book value at ₹ 84,26,500/-. He also submitted that the same was regularly shown in the balance sheet for AYs 1994-95 to 20003-04 and the ld. CIT (A) rightly appreciated the same on the basis of the evidences filed before him. 7.2 As regards the objection of revenue under Rule 46A, ld. AR submitted that the AO was given the opportunity by the ld. CIT(A) to comment on the documents fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee filed an appeal before the Tribunal. The inclusion of the amount was not objected to even in the grounds of appeal as originally filed before the Tribunal. 9. Subsequently, the assessee by a letter raised additional grounds to the effect that the said sum could not be included in the total income. The assessee contended that on an erroneous admission, no income can be included in the total income. It was further contended that the ITO and the Commissioner of Income-tax (Appeals) had erred and failed in their duty in adjudicating the matter correctly and by mechanically including the amount in the total income. It is pertinent to note that the assessee contended that it was entitled to the deduction in view of two orders of the Special Benches of the Tribunal and the assessee further stated that it, had raised these additional grounds on learning about the legal position subsequently. 10. The Tribunal declined to entertain these additional grounds. The Supreme Court did not answer the question on merits, but framed the following question and held as under:- 4. The Tribunal has framed as many as five questions while making a reference to us. Since the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of CIT vs. Kabul Chawla in ITA 707 / 2014 has laid the law on this issue as under :- 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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