Shri Jayeshbhai Chhaganbhai Patel, Ahmedabad V. The DCIT, Circle-4(2), Ahmedabad

CO 159/AHD/2019

AI Insights

This case involves a Cross Objection by the Assessee, Shri Jayeshbhai Chhaganbhai Patel, against the Revenue's appeal concerning the assessment order for the Assessment Year 2015-16. The primary issue was the application of section 50C of the Income Tax Act, 1961, which pertains to the consideration received from the transfer of capital assets, specifically land and buildings. The Assessee argued that the addition made under section 50C was incorrect as the rights in the property were surrendered/cancelled, and the transaction was completed before the new Jantri rates came into effect. The CIT(A) had deleted the addition, a decision supported by the Tribunal, referencing various legal precedents and the specific circumstances of the transaction, including the timing of the payment and the signing of the agreement to sell (banakhat).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114126 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-09-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 13-08-2019
• Other Referred Cases: Goetz (India) Ltd. vs. CIT, Mitesh Impex Pvt. Ltd. vs. CIT, Dharamshibhai Somani vs. CIT, Jute Corporation of India Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Tax effect; Revised return
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Shri Jayeshbhai Chhaganbhai Patel, 40, Nirant Park Society, Opp. Sun-N-Step Club, Ahmedabad PAN: AGEPP3244K (Appellant) Vs The DCIT, Circle-4(2), Ahmedabad (Respondent) Assessee Represented: None Revenue Represented: Ms. Saumya Pandey Jain, Sr.D.R. Date of hearing : 19-09-2023 Date of pronouncement : 20-09-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This Cross Objection is filed by the Assessee as against the Revenue appeal in ITA No. 79/Ahd/2019 arising out of appellate order dated 30.11.2018 passed by the Commissioner of Income Tax (Appeals)-4, Ahmedabad against the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2015- 16. C.O. No. 159/Ahd/2019 (in ITA No. 79/Ahd/2019) Assessment Year 2015-16 C.O. No. 159/Ahd/2019 A.Y. 2015-16 Page No Shri Jayeshbhai Chhaganbhai Patel. vs. DCIT 2 2. The Grounds of Cross Objection filed by the Assessee are as follows: [1]Learned CIT(A) has rightly allowed claim of loss by filing revised computation of income during the assessment proceedings without having recourse to a revised return, placing reliance on principle embedded in Article 265 of Indian constitution (No tax can be collected except by the authority of law), CBDT Circular No. 14 dated 11 April 1955 and explaining the ratio of the Goetz (India) Ltd. ruling. [2]As per the law laid down by the Gujarat High Court in case of Mitesh Impex Pvt. Ltd. [2014] 46 taxmann.com 30 (Gujarat), the appellant can raise any additional claim at any appellate stage of the proceeding without filling the revised return. Hence the ground of the learned AO is not correct. It be held so. [3]The learned AO wrongly applied provisions of Sec.50C wherein the appellant surrendered/cancelled rights accrued in property although capital in nature but not akin to a transfer of capital asset being land or building. Sec. 50C, being deeming provision, limited to land, building or both should not be extended beyond the purpose for which it is enacted and therefore not applicable to appellant's case. [4]The Learned CIT(A) has rightly given relief on the basis of Explanatory Notes to provisions of Finance (No.2) Act, 2009 as well as amendment made by Finance Act, 2016 to Sec.50C (inserting the proviso) concurring with the view of the jurisdictional Tribunal holding it being curative and retrospective (treated effective from the date on which the law was introduced). The AO has not disputed the fact of appellant making payment through account payee cheque for entering agreement to sale (banakhat) prior to enforcement of new jantri rates becoming effective from 18/4/2011. 3. None appeared on behalf of the assessee in spite of service of notices to the assessee, even in the previous hearings as well as Revenue appeal in ITA No. 79/Ahd/2019, None appeared on behalf of the assessee. The grounds raised by the assessee are in support of the order passed by the Ld. CIT(A) who deleted the addition made u/s. 50C of the Act observing as follows: “...In view of the fact that the total sale consideration has been received by the seller society before 18.04.2011 (revision of Jantri rate) and the banakhat signed earlier than that date has been given effect in substance, I agree with the appellant that the relief required to be granted as per ratio laid down by jurisdictional ITAT in the case of Dharamshibhai Somani Consequently, the addition made u/s 50C is hereby deleted. The first issue is decided in favour of appellant.” .......................... C.O. No. 159/Ahd/2019 A.Y. 2015-16 Page No Shri Jayeshbhai Chhaganbhai Patel. vs. DCIT 3 It is noted that there is no finding by the AO that the loss on this property is non- genuine and the claim has not been allowed on technical ground which has been addressed in the case laws relied herein above. In such circumstances, and as per ratio laid down at 187 ITR 688 (SC) in the case of Jute Corporation of India Ltd., I am constrained to agree with the appellant. In view of facts and circumstances of the case, I direct the AO to allow the loss on Sentosa Property as per provisions of the Act. The Second issue is decided in favour of the appellant.” 4. In our considered opinion, there is no separate adjudication is required against the grounds raised by the assessee in the Cross Objection since the Revenue appeal in ITA No. 79/Ahd/2019 was dismissed by order of this Tribunal dated 31-05-2022 on account of Low Tax Effect. Thus the findings made by the Ld. CIT(A) have become final. Thus the Grounds raised by the assessee in the above Cross appeal are treated as allowed. 5. In the result, the C.O. filed by the Assessee is allowed. Order pronounced in the open court on 20-09-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 20/09/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद