Itxa/169/2018 Of Pr. Commissioner Of Income Tax -15 v. Just Textiles Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION +0530 INCOME TAX APPEAL NO.169 OF 2018 Principal Commissioner of Income Tax – 15 ….Appellant V/s. Just Textiles Limited ….Respondent ---- Mr. Suresh Kumar for appellant.None for respondent. ---- CORAM : K.R. SHRIRAM &N.R. BORKAR, JJ. DATED : 12[th] APRIL 2022 P.C.: 1The following substantial questions of law are proposed in this appeal : (a) Whether on the facts and circumstances of the case, theHon’ble Tribunal was right in law in holding that there is noescapement of income for AY 2008-2009 and there is nomerit for reopening the assessment for AY 2008-2009? (b) Whether on the facts and circumstances of the case, theHon’ble Tribunal was correct in applying provision of section50 of the Act since land is not a depreciable assets, provisionsof section 50 cannot be applied to this sale, the capital gainought have been computed as per section 48 of the IncomeTax Act? 2We have considered the impugned order with the assistance of Mr. Suresh Kumar and we find there is nothing perverse in the impugned order that requires our interference. 3The assessee, i.e., respondent, was aggrieved for reopening of the assessment completed under Section 143(3) of the Income Tax Act, 1961 (the Act) without considering the facts and circumstances of the case.On merits also the assessee was aggrieved for addition made on account oflong term capital gains for sale of land. The assessee’s case is that theamount of capital gains was already taxed in the Assessment Year 2007-2008 and again making an addition for the same income would amount todouble taxation of the very same income which is not permissible under theAct. 4The Income Tax Appellate Tribunal (ITAT), after going throughthe records and proceedings and after considering the matter in detail, hascome to a conclusion and rightly so that there was no tangible material toreopen the assessment for Assessment Year 2008-2009 and the AssessingOfficer has only changed his opinion which is not permissible. Reliance hasbeen placed on the decision of the Apex Court in CIT V/s. Kelvinator IndiaLimited[1]. The ITAT has concluded that in Assessment Year 2007-2008 capitalgain so offered by the assessee was accepted by the Assessing Officer.Thereafter, without any tangible material, the Assessing Officer has changedhis opinion and recorded a satisfaction that income should be taxable in theAssessment Year 2008-2009 and not in the Assessment Year 2007-2008. Theattempt to reopen is on the very same income and therefore, there waschange of opinion on the very same set of facts and circumstances. 5Even on merits, the ITAT has found that the Assessing Officerhas wrongly applied provisions of Section 48 to compute capital gaininstead of Section 50 applicable to depreciable assets. ITAT has acceptedassessee’s contention that the sale consideration was consolidated for landas well as building and hence, assessee has computed capital gain underSection 50 as there was no authentic method to bifurcate the saleconsideration into land and building separately and therefore, the assesseecomputed capital gain under Section 50. ITAT has also accepted that thecapital gain computed under Section 50 was having higher burden of tax asrate of tax on short term capital gain is higher than the long terms capitalgain and under Section 50, benefit of indexation is also not allowable. 6In our view, the Tribunal has not committed any perversity orapplied incorrect principles to the given facts and when the facts andcircumstances are properly analysed and correct test is applied to decide theissue at hand, then, we do not think that question as pressed raises anysubstantial question of law. 7The appeal is devoid of merits and it is dismissed with no orderas to costs. (N.R. BORKAR, J.) (K.R. SHRIRAM, J.)