Ita/187/2022 Of Income Tax Department v. Shri Satyanarayan Sharma

IN THE HIGH COURT OF MADHYA PRADESH AT INDOREBEFORE HON'BLE SHRI JUSTICE VIVEK RUSIA & HON'BLE SHRI JUSTICE RAJENDRA KUMAR (VERMA) ON THE 12[th] OF DECEMBER, 2022 INCOME TAX APPEAL No. 187 of 2022 BETWEEN:- INCOME TAX DEPARTMENT PRINCIPAL COMMISSIONER OFINCOME TAX AAYKAR BHAWAN NEAR WHITE CHURCH INDORE(MADHYA PRADESH) .....PETITIONER (MS. VEENA MANDLIK, LEARNED COUNSEL FOR THE APPELLANT) AND SHRI SATYANARAYAN SHARMA 11/2, SOUTH TUKOGANJSWAPNALOK COLONY INDORE (MADHYA PRADESH) .....RESPONDENTS (NONE FOR THE RESPONDENT.) This appeal coming on for hearing on admission this day, JUSTICE VIVEK RUSIA passed the following: ORDER Appellant – Principal Commissioner of Income Tax-I, Indorehas filed the present Income Tax Appeal u/s. 260A of the IncomeTax Act, 1961 against order dated 17.1.2022 passed by the IncomeTax Appellate Tribunal (ITAT) in M.A. No.09/2021, whereby order dated 28.12.2012 passed in ITA No.426/Ind/2018 has been recalled.The assessment year in this case is 2013-2014. The respondent filed the Income Tax return declaring theincome of 9,96,030 on 8.7.2014. The case was processed u/s. 143(1)(i/ii) of the Income Tax Act on 4.11.2014. Accordingly, notice u/s.143(2) of the Act was issued on 31.8.2015 by the Income TaxOfficer-I, Indore. In response to the said notice, CharteredAccountant (CA) of the respondent appeared and answered thequery. The assessee is having the business of trading milk anddeclared the sale of Rs.66,72,091 and shown a profit ofRs.5,74,111/- during the said assessment year. He sold theagricultural land for a sale consideration of Rs.1,20,00,000/- by wayof registered sale-deed. The assessee claimed to have invested theamount in purchase of another agricultural land at Rs.36,40,080/-and a house property at Rs.78,36,081/- and claimed deduction u/s.54F of the Act. The copies of the ledger and bills were produced asan evidence of investment. The Assessing Officer (AO) completedthe assessment u/s. 143(3) of the Act by making additional longterm capital gain of Rs.6,54,892/-. The assessee preferred an appeal before the PrincipalCommissioner of Income Tax-I (PCIT), Indore. Vide order dated26.3.2018 the learned PCIT held that the AO was required todetermine the cost of new assets correctly for determining theeligible amount u/s. 54F and remanded the matter back. The AO u/s. 143(3) read with Section 263 of the Actcompleted the assessment on 10.12.2018 after making an additionof long term capital gain of Rs.20,49,395/- by allowing thededuction of Rs.61,64,265/- u/s. 54F of the Act. Being aggrieved bythe aforesaid order, the assessee preferred an appeal before theCommissioner, Income Tax (CIT) against the addition ofRs.20,49,395/-. Learned CIT has affirmed the aforesaid addition.Thereafter, the assessee approached the ITAT by filing an appealagainst order dated 26.3.2018 passed by the CIT. The ITAT allowedthe appeal partly by holding that it is not clear that the assessee hadentered into a contract with the contractor that included the cost offurniture and other fixtures for making a house habitable becauseonly the civil construction cannot be treated as an investment in ahouse for residential purpose. Being aggrieved by the aforesaid order, the assessee preferredMisc. Appeal u/s. 254(2) of the Income Tax Act before the ITATwhich came to be allowed by impugned order dated 17.1.2022whereby the ITAT has quashed the proceedings by holding that theorder passed by the AO was not erroneous in nature as the AO hadchosen one of the permissible view judicially accepted. Hence thepresent appeal before this Court proposing two substantial questionsof law. However, the appellant has made a declaration that the taxeffect is of Rs.6.78 Lakhs which is less than the permissible limit asper Clause 10(c) of Circular No.3/2018 dated 11.7.2018 whererevenue audit objection in the case has been accepted by the Department. However, no such audit objection has been brought onrecord, whereas, the assessment order says that the case of theassessee/respondent was proceeded u/s. 143(1(i/ii) of the Act whichis based on any arithmetical error in the return and an incorrectclaim, if such incorrect claim is apparent from any information inthe return. There is no such mention about the objection taken bythe Audit Office of the Department. Therefore, this appeal is notmaintainable as the tax effect is less than the permissible limit. Even otherwise, the Department has never challenged theorder passed by the AO on 23.3.2016 and 10.12.2018 and afterremand by the PCIT vide order dated 26.3.2018. Vide order dated17.1.2022 the ITAT has restored the assessment order dated23.3.2016 on an application filed by the assessee which theDepartment has never challenged before the appellate authority orthe Tribunal. However, the said order has been modified vide orderdated 10.12.2018 by the AO by granting an addition ofRs.20,49,395/- on long term capital gain. Hence, on merit also, nocase is made out. Accordingly, this appeal fails and is hereby dismissed inlimine. [ VIVEK RUSIA ] [AMAR NATH (KESHARWANI)] JUDGE. JUDGE. Alok/- Digitally signed by ALOK GARGAV Date: 2022.12.22 11:06:41 +05'30'