M/s ETC Industries Ltd., Bhopal V. The ACIT 1(1), Bhopal

CO 27/IND/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7209 (ITAT-INDORE)
• Duration Of Justice: 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Opportunity of being heard; Source of fund; Cost of acquisition; Fair market value
• Section: 50C; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 134/IND/2012 A.Y. 2006-07 ACIT-1(1), BHOPAL . APPELLANT VS. M/S. ETC INDUSTRIES LTD., BHOPAL PAN AABCE 0783 C . RESPONDENT AND, CROSS-OBJECTION NO.27/IND/2012 (ARISING OUT OF ITA NO.134/IND/2012) A.Y. 2006-07 M/S. ETC INDUSTRIES LTD., BHOPAL PAN AABCE 0783 C . OBJECTOR VS. ACIT-1(1), BHOPAL . RESPONDENT 2 REVENUE BY SHRI ARUN DEWAN ASSESSEE BY SHRI SUMIT NEMA DATE OF HEARING 09.5.2012 DATE OF PRONOUNCEMENT 10.5.2012 ORDER PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 29.12.2011 PASSED BY THE LD. FIRST APPELLATE AUTHOR ITY, BHOPAL FOR THE AY 2006-07, ON THE SOLE GROUND THAT THE LD. CIT (A), ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, ERRED I N DELETING THE ADDITION OF RS.50 LAKHS MADE ON ACCOUNT OF UNEXPLAI NED CASH CREDIT U/S 68 OF THE ACT. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I ARUN DEWAN, LD. SR. DR WHO DEFENDED THE ASSESSMENT ORDER ON THE PLEA THAT THE ASSESSEE DID NOT FURNISH THE REQUIRED DETAILS AND SOURCE OF FUNDS OF SUCH SHARE APPLICANTS. IT WAS AL SO PLEADED THAT THE DETAILS OF THE BUSINESS OF SUCH SHARE SUBSCRIBE RS WERE NOT FURNISHED BY THE ASSESSEE. ON THE OTHER HAND, THE L D. COUNSEL FOR 3 THE ASSESSEE SHRI SUMIT NEMA STRONGLY DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT EVEN THE ASSESSING OFFICER HAS NOT DISPUTED THE IDENTITY OF SHAREHOLDER AS THE DETAILS OF TAX RETURNS ALONG WITH PAN, COPY OF PASSPORT, NRE BANK ACCOUNT AND LOANS WERE CONFIRMED BY THE SHAREHOLDER. IT WAS ALSO POIN TED OUT THAT THOUGH THE ASSESSEE IS NOT REQUIRED TO PROVE THE CR EDITWORTHINESS, STILL IT WAS PROVED BY FILING THE SALE PROCEEDS OF RETAIL BUSINESS IN RUSSIA ALONG WITH STATEMENT OF ACCOUNT OF HABIB BAN K, ZURICH AND EMPLOYMENT AGREEMENT. THE LD. COUNSEL FOR THE ASSES SEE RELIED UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - A. CIT VS. LOVELY EXPORTS (2008) 6 DTR (SC) 308; B. CIT VS. SAMIR BIOTECH P. LTD. (2010) 325 ITR 294 (DEL); C. CIT VS. VICTOR ELECTRODES LTD. (2010) 329 ITR 27 1 (DEL); D. CIT VS. STL EXTRUSION P. LTD. (2011) 333 ITR 269 (MP); E. DCIT VS. STL EXTRUSION P. LTD. (2010) 15 ITJ 872 (IND TRIB); F. CIT VS. K.C. FIBRES LTD. (2010) 332 ITR 481 (DEL ); G. CIT VS. ORBITAL COMMUNICATIONS P. LTD. (2010) 32 7 ITR 560 (DEL); H. ACIT VS. DEVSHREE PROJECT P. LTD. (2011) 17 ITJ 607 (IND TRIB); I. ACIT VS. M/S. SHREE KELA PRAKASHAN P. LTD. (2010 ) 14 ITJ 539 (IND TRIB); J. ACIT VS. VENKTESHWAR ISAT P. LTD. (2010) 14 ITJ 83 (CG); K. PEOPLES GENERAL HOSPITAL P. LTD. VS. ACIT (2011) 17 ITJ 355 (IND TRIB); L. SWIFT INTERMEDIA CONVERGENCE LTD. VS. ACIT (2009 ) 13 ITJ 90 (IND TRIB); M. ACIT VS. RAJAT ISPAT P. LTD. (2009) 13 ITJ 201 ( BILASPUR); N. ACIT VS. JAGDAMBA SPONGE P. LTD. (2010) 15 ITJ 1 2 (BILASPUR); O. SUMER CHAND JAIN VS. CIT (2007) 292 ITR 241 (MP) ; P. UMA POLYMERS P. LTD. VS. DCIT (2006) 283 ITR 377 (RAJ); AND Q. ACIT VS. DHARAM DEVELOPERS & FINEST LTD. (2007) 8 ITJ 488/492 (IND TRIB). 4 ON CONSIDERATION OF THE SUBMISSIONS, CASE-LAWS AND MATERIAL ON RECORD, THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) DELETED THE ADDITION OF RS.50 LAKHS. HIS FINDINGS A RE REPRODUCED HEREUNDER: 6.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE APPELLANT, INCLUDING THE CASE LAWS RELIED UPON BY T HE APPELLANT AS ALSO THE FINDING OF THE ASSESSING OFFICER ON THI S ADDITION. THE APPELLANT IS A LIMITED COMPANY AND ACCEPTED SHA RE CAPITAL MONEY OF RS.50 LACS FROM SHRI NAND JI MEHROTRA WHO IS AN NRI. DURING THE ASST. PROCEEDINGS THE APPELLANT COMPANY HAS FILED CONFIRMATION, A COPY OF PASSPORT, COPY OF TAX RETUR N AND COPY OF NRI BANK ACCOUNT BEARING NO.01190029147 OF THE CRED ITOR WITH SBI FRIENDS COLONY NEW DELHI FROM WHERE THE PAYMENT WAS MADE. THE APPELLANT FURTHER FILED COPY OF LETTER DA TED 28.08.2008 SENT BY SHRI NAND JI MAHROTRA FROM MOSCO ALONG WITH COPY OF BANK ACCOUNT WITH HABIB BANK AG ZURICH . THE APPELLANT ALSO FILED COPY OF LETTER OF SHRI NAND JI MEHROTRA WHICH WAS SUBMITTED TO THE ASSESSING OFFICER IN RES PECT OF QUERY MADE BY THE ASSESSING OFFICER. IT IS NOTED TH AT SHRI NAND JI MEHROTRA IS PERMANENT RESIDENT OF B-804, NEW FRI ENDS COLONY, NEW DELHI. HIS PAN IS ANWPM 1310 Q AND ASSE SSED TO TAX FOR THE INCOME EARNED IN INDIA. HIS PRESENT ADDRESS WAS, 6 VERASAEVA APARTMENT - 37 MOSCO RUSIA. THESE FACTS WILL INDICATE THAT THE IDENTITY OF CREDITOR CANNOT DISPU TED AND ABSOLUTELY PROVED. AS REGARDS THE CAPACITY OF THE C REDITORS AND GENUINENESS OF SUCH TRANSACTION, IT IS NOTICED THAT THE AMOUNT HAS BEEN RECEIVED THROUGH CHEQUE ISSUED BY THE CRED ITOR FROM HIS NRI BANK ACCOUNT WITH STATE BANK OF INDIA FRIEN DS COLONY NEW DELHI. THE APPELLANT FURTHER FILED THE EVIDENCE S AS REGARDS THE SOURCE OF AMOUNT CREDITED IN THE ACCOUNT OF THE CREDITOR WITH STATE BANK OF INDIA. THE CREDITOR HAS FILED EV IDENCES TO THE EFFECT THAT AMOUNT WAS REMITTED FROM THE ACCOUNT OF THE CREDITOR WITH HABIB BANK AG ZURICH. THE APPELLANT HAS ALSO F ILED EVIDENCES TO THE EFFECT THAT THE CURRENT EMOLUMENTS OF THE CREDITOR WERE IN EXCESS OF USD 4.50 LACS PER ANNUM (EQUIVALENT TO RS.2.16 CRORE). THE EMPLOYMENT AGREE MENT OF THE CREDITOR DATED 7.7.2005 WITH RETAIL INTERNATION AL COMPANY, WLL ALSO PROVE THE CREDITWORTHINESS OF THE CREDITOR . FURTHER THE DURING APPELLATE PROCEEDINGS THE APPELLANT WAS SPEC IFICALLY 5 REQUIRED TO FURNISH SOME CERTIFICATE OR DOCUMENT IN RESPECT OF DEPOSITS IN THE ACCOUNT OF CREDITOR WITH HABIB BANK AG ZURICH. THE APPELLANT FURTHER FILED A CERTIFICATE OF A BANK DATED 24.11.2010 STATING HERE IN THAT SHRI NAND JI MEHROT RA IS MAINTAINING THIS ACCOUNT SINCE 5.6.2001 AND THAT AN AMOUNT OF RS.USD 6799995 WAS CREDITED IN HIS ACCOUNT ON ACCOU NT OF HIS SHARE OF SALE PROCEEDS OF THE COMPANY (MOTHER CARE RUSSIA). THE AMOUNT OF SHARE CAPITAL OF RS.50 LAC W AS REMITTED ON 2.8.2005 IN THE ACCOUNT OF THE CREDITOR WITH STA TE BANK OF INDIA FRIENDS COLONY, NEW DELHI FROM THE HABIB BANK ACCOUNT. THESE FACTS WILL INDICATE THAT THE APPELLANT HAS AL SO EXPLAINED THE SOURCE OF RS.50 LACS IN THE HANDS OF THE CREDIT OR. IT IS NOTICED THAT THE ASSESSING OFFICER HAS DISBELIEVED THE INCOME EARNING CAPACITY OF THE CREDITOR. HOWEVER, THE VARI OUS DOCUMENT FILED BY THE APPELLANT IN RESPECT OF SUCH AMOUNT OF SHARE CAPITAL INDICATE THAT THE IDENTITY, CREDIT WO RTHINESS AND GENUINENESS OF CREDITORS CANNOT BE DISPUTED. IT MAY BE ALSO MENTIONED IT IS NOT A CASE WHERE THE SHARE HOLDER/C REDITOR IS NON EXISTENCE OR BOGUS. THE ASSESSING OFFICER HAS N OT BROUGHT ANY EVIDENCE ON RECORD WHICH MAY SUGGEST THE DOCUME NTS FILED BY THE APPELLANT IN RESPECT OF THE IDENTITY C REDIT WORTHINESS AND GENUINENESS OF THE CREDITOR IS FALSE OR BOGUS. THEREFORE, KEEPING IN VIEW THE RATIOS OF DECISION RELIED UPON BY THE APPELLANT, I AM OF THE CONSIDERED VIEW THAT THE APP ELLANT HAS DISCHARGED HIS ONUS IN RESPECT OF SHARE OF CAPITAL OF RS.50 LACS AS CONTEMPLATED U/S 68 OF THE IT ACT. THE ADDITION OF RS.50 LACS IS DELETED. 3. IF THE AFORESAID FINDING, RECORDED IN THE IMPUGN ED ORDER, ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL AND TH E CONCLUSION DRAWN IN THE ASSESSMENT ORDER ARE KEPT IN JUXTAPOSI TION AND ANALYZED, WE FIND THAT THE ASSESSEE RECEIVED SHARE APPLICATION MONEY OF RS.50 LACS FROM NAND JI MEHROTRA, AN NRI. THE COPY OF THE CONFIRMATION, DETAILS OF CHEQUE AND THE COPY OF THE PASSPORT WERE DULY FURNISHED BEFORE THE ASSESSING OFFICER. V IDE ORDER ENTRY 6 DATED 27.10.2008, THE ASSESSEE WAS ASKED TO FURNISH THE SOURCE OF FUNDS OF SHRI NAND JI MEHROTRA ALONG WITH BANK S TATEMENT AND RETURN OF INCOME. THE ASSESSEE, VIDE REPLY DATED 28 .11.2008, FURNISHED THE COPY OF BANK ACCOUNT OF SHRI MEHROTRA FROM STATE BANK OF INDIA, NEW FRIENDS COLONY, NEW DELHI ALONG WITH SOURCE OF INCOME AS SALARY FROM SOME INTERNATIONAL COMPANY , DETAILS OF EMOLUMENTS, COPY OF BANK ACCOUNT FROM HABIB BANK, Z URICH, WHICH SHOWED SUBSTANTIAL BALANCE ESTABLISHING CREDI TWORTHINESS. HOWEVER, THE LD. ASSESSING OFFICER MADE THE ADDITIO N OF RS.50 LACS BY TREATING THE SAME AS UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT ON THE PLEA THAT THE GENUINENESS OF SHARE APPLI CATION MONEY REMAINED UNSUBSTANTIATED. ON APPEAL, THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION AND HI S CONCLUSION HAS BEEN REPRODUCED HEREINABOVE. WE FURTHER FIND TH AT DURING FIRST APPELLATE STAGE, THE SUBMISSIONS OF THE ASSESSEE WE RE IDENTICAL WHICH HAVE BEEN REPRODUCED IN PARA 6.3 OF THE IMPUG NED ORDER. 7 3.1 IF THE LANGUAGE USED IN SEC. 68 OF THE IT ACT I S ANALYZED, IT SPEAKS ABOUT OFFERING OF EXPLANATION OF THE SUM FOU ND CREDITED IN THE BOOKS AND NATURE AND SOURCE THEREOF TO THE SATI SFACTION OF THE ASSESSING OFFICER. ON PERUSAL OF TOTALITY OF FACTS AVAILABLE ON RECORD, WE ARE SATISFIED THAT THE ASSESSEE HAS DISC HARGED ITS ONUS BY ESTABLISHING THE IDENTITY OF THE SHARE HOLDER AL ONG WITH NATURE AND SOURCE OF THE MONEY. CONFIRMATION LETTER WAS AL SO FILED BY THE ASSESSEE. EVEN THE LD. ASSESSING OFFICER HAS ACCEPT ED IN THE ASSESSMENT ORDER THAT IDENTITY OF THE SHARE APPLICA NT IS NOT IN DOUBT, THEREFORE, THE DECISION FROM HONBLE APEX CO URT IN THE CASE OF LOVELY EXPORT LTD. (2008) (216 CTR 195) (SC ) CLEARLY COMES TO THE RESCUE OF THE ASSESSEE. THE HONBLE CO URT WHILE COMING TO A PARTICULAR CONCLUSION HELD AS UNDER: IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW, BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF ASSESSEE COMPANY. 8 IF THE AFORESAID CONCLUSION DRAWN BY HONBLE APEX C OURT IS KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRESENT APPEAL, WE ARE SATISFIED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS, CAST UPO N IT. EVEN THE IDENTITY OF THE SHARE APPLICANT IS NOT DISPUTED BY THE LD. ASSESSING OFFICER. EVEN OTHERWISE, THE LD. ASSESSING OFFICER HAS NOT BROUGHT ANY ADVERSE MATERIAL ON RECORD TO PROVE OTHERWISE. THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. M ETACHEM INDUSTRIES (245 ITR 160) (MP), THE RATIO LAID DOWN IN CIT VS. STELLER INVESTMENT LTD. (115 TAXMAN 99) (SC), SHRI BARKHA SYNTHETICS LTD. VS. ACIT (155 TAXMAN 289) (RAJ) AND CIT VS. VALUE CAPITAL SERVICES P. LTD. (307 ITR 334) (DEL) FURTHER SUPPORTS OUR VIEW. THE HONBLE DELHI HIGH COURT IN VALUE CAPITAL SERVICES (SUPRA) DULY CONSIDERED THE DECISIONS FROM FULL BENCH IN CIT VS. SOPHIA FINANCE LTD. (205 ITR 98) (DEL) (FB) AND STELLER INVESTMENT LTD. (192 ITR 287) AND HELD THAT DEPARTM ENT MUST SHOW THAT THE INVESTMENT MADE BY THE SUBSCRIBERS AC TUALLY EMANATED FROM COFFERES OF THE ASSESSEE AND THEN TO BE TREATED AS 9 UNDISCLOSED INCOME U/S 68 OF THE ACT. THEREFORE, KE EPING IN VIEW THE TOTALITY OF THE FACTS AND THE JUDICIAL PRONOUNC EMENTS DISCUSSED HEREINABOVE, WE FIND NO INFIRMITY IN THE STAND OF T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS AFFIRME D, CONSEQUENTLY, THE APPEAL OF THE REVENUE IS HAVING N O MERIT, THEREFORE, DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT TH E CONCLUSION OF THE HEARING. 4. NOW, WE SHALL TAKE UP THE CROSS-OBJECTION (27/IN D/2012) ARISING OUT OF THE IMPUGNED ORDER DATED 29.12.2011. THE ASSESSEE HAS CHALLENGED THE SUSTAINANCE OF ADDITION OF RS.12,20,700/- FOR THE ALLEGED INCOME FROM LONG TER M CAPITAL GAIN U/S 50C OF THE ACT. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT SINCE EXPLANATION HAS BEEN FURNISH ED BY THE ASSESSEE, SEC. 50C WILL APPLY ONLY WHEN SEC. 50 APP LIES. ON THE OTHER HAND, THE LD. SR. DR DEFENDED THE IMPUGNED OR DER BY 10 SUBMITTING THAT THE PROVISION OF SEC. 50C WILL APPL Y TO THE FACTS OF THE PRESENT APPEAL. 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON THE RECORD. THE FACTS, IN BRI EF, ARE THAT THE ASSESSEE SOLD A FLAT AT VIJAY STAMBH AND SHOWED THE CAPITAL GAIN AS UNDER: PARTICULARS AMOUNT (RS.) VIJAY STAMBH FLAT VALUE 729585 LESS: DEPRECIATION (SLM) 183292 WDV VALUE 546293 PROFIT 303707 SALE PRICE 8,50,000 THE LD. ASSESSING OFFICER EXAMINED THE SALE DEED WH EREIN FOR THE PURPOSES OF STAMP DUTY, THE VALUE WAS ADOPTED AT RS .17,67,000/-. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE SALE CONSIDERATION VALUE MAY NOT BE TAKEN AS PER SEC. 50 C. THE ASSESSEE CLAIMED THAT SINCE THE FLAT IS A DEPRECIAB LE ASSET, THE PROVISION OF SEC. 50 IS NOT APPLICABLE. THE LD. ASS ESSING OFFICER OPINED THAT SINCE SEC. 50C OF THE IT ACT APPLIES TO ALL CAPITAL ASSET, NO DISTINCTION CAN BE MADE BETWEEN DEPRECIAB LE AND NON- 11 DEPRECIABLE ASSET, CONSEQUENTLY, HE COMPUTED THE CA PITAL GAIN AS UNDER: TOTAL SALE CONSIDERATION AS PER MARKET VALUE - RS .17,67,000 LESS VALUE AS SHOWN IN THE COMPUTATION - RS.5,46, 293 LONG TERM CAPITAL GAIN - RS.12,20,700 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) AFFIRMED THE STAND OF THE LD. ASSESSING OFFICER BY FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE MUMBAI BENCH O F THE TRIBUNAL HELD THAT PROVISIONS OF SECTION 50C WILL A PPLY TO THE CASE OF THE ASSESSEE. THE ASSESSEE IS AGGRIEVED AND HAS CHALLENGED THE CONCLUSION DRAWN BY THE FIRST APPELLATE AUTHORI TY BY WAY OF THIS CROSS OBJECTION. 4.2 DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E PLACED RELIANCE ON THE DECISION IN THE CASE OF ACIT VS. RO JER PEREIRA COMMUNICATIONS PRIVATE LIMITED (2009) 34 SOT 64 (MU MBAI ITAT), DCIT VS. CABLE CORPORATION (ITA NO. 5592/MUM /2002) ORDER DATED 29 TH OCTOBER, 2009 AND THE DECISION IN CIT VS. RHODOEN SILK MILLS PRIVATE LIMITED (2011) 332 ITR 3 30 (P&H). WE HAVE GONE THROUGH THE CASE LAWS CITED BY THE LD. CO UNSEL FOR THE 12 ASSESSEE. IF THE APPLICABILITY OF SECTION 50C OF TH E ACT IS ANALYSED, WE FIND THAT WHAT IS MODIFIED BY SECTION 50 IS THE COST OF ACQUISITION IN CASE OF DEPRECIABLE ASSET FOR COMPU TING CAPITAL GAINS WHILE THE TERM THE FULL VALUE OF CONSIDERATI ON RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE ASSET USED IN SECTION 48 HAS REMAINED THE SAME. THUS, THE DEEMING FICTION C REATED IN SECTION 50 MODIFIES THE PROVISIONS OF SECTION 48 ON LY TO THE EXTENT OF MODIFYING THE TERM COST OF ACQUISITION AND THE SAID FICTION OPERATES IN THE LIMITED FIELD. THUS, THE DEEMING FI CTION CREATED U/S 50C OPERATES IN A SPECIFIC FIELD WHICH IS DIFFERENT FROM THE FIELD IN WHICH SECTION 50 IS APPLICABLE. IT DOES NOT STAND TO ANY LOGIC AS TO WHY THE PROVISIONS OF SECTION 50C SHOULD NOT BE APP LIED IN THE CASE OF LAND AND BUILDING. IF THERE WAS ANY LEGISL ATIVE INTENTION TO EXCLUDE THE APPLICABILITY OF THE PROVISIONS OF SECT ION 50C TO CASES INVOLVING TRANSFER OF LAND AND BUILDING COVERED BY SECTION 50, NOTHING PREVENTED THE LEGISLATURE TO MAKE THE PROVI SO IN THE STATUTE. THERE IS NO EXTENSION OF THE LEGAL FICTIO N CREATED IN THE SAID PROVISION BEYOND ITS LEGITIMATE FIELD. IT IS NOT A CASE WHERE 13 SUPPOSITION IS SOUGHT TO BE IMPOSED ON A SUPPOSITIO N OF LAW WHICH IS NOT WARRANTED OR USED BY THE LANGUAGE OF THE REL EVANT PROVISION. IN ANY CASE, A HARMONIOUS INTERPRETATIO N OF THE RELEVANT PROVISION MAKES IT CLEAR THAT THERE IS NO EXCLUSION OF APPLICABILITY OF ONE FICTION IN A CASE WHERE OTHER FICTION IS APPLICABLE. THERE IS NO CONFLICT IN THESE TWO LEGAL FICTIONS WHICH OPERATES IN DIFFERENT FIELDS. FURTHER, NO DISTINCTI ON IS MADE BETWEEN A DEPRECIABLE ASSET AND A NON-DEPRECIABLE A SSET IN THE PROVISIONS OF SECTION 50C, THEREFORE, IT CANNOT BE SAID THAT SAID PROVISION IS NOT APPLICABLE IN A CASE OF TRANSFERAB LE ASSET WHICH IS COVERED BY PROVISIONS OF SECTION 50 OF THE ACT, THE REFORE, PROVISIONS OF SECTION 50C WERE APPLICABLE TO TRANSF ER OF DEPRECIABLE ASSET COVERED BY SECTION 50 AND THE CAP ITAL GAIN ARISING FROM SUCH TRANSFER HAS TO BE COMPUTED BY AD OPTING THE STAMP DUTY VALUATION. OUR VIEW IS FORTIFIED BY THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF UNITED MARINE AC ADEMY (2011) 138 TTJ (MUM) (SB) 129 AND THE DECISION FROM HONBLE APEX COURT IN COMMON WEALTH TRUST LIMITED V. CIT; 2 28 ITR 1 14 (SC). IT IS PERTINENT TO MENTION HERE THAT WHILE C OMING TO A PARTICULAR CONCLUSION, THE SPECIAL BENCH CONSIDERED THE FOLLOWING JUDICIAL DECISIONS :- A. ACIT VS. ROGER PEREIRA COMMUNICATIONS (P) LIMITE D; (2009) 34 SOT (MUM) B. CHHATTURAM HOLIRAM LIMITED VS. CIT; 25 ITR 326(P AT) C. CIT V. ACE BUILDERS PRIVATE LIMITED; 281 ITR 210 (BOM). D. CIT VS. ONGC (2002) 255 ITR 413 (RAJ) E. CIT V. TONY ELECTRONICS LIMITED; 228 CTR 364 (D EL) F. HUKUMCHAND MILLS LIMITED. VS. CIT; 47 ITR 949 (B OM) G. INDRALOK HOTELS (P) LIMITED VS. ITO (2009) 20 DT R (MUM) 148 K. K.R. PALANISAMY & OTHERS VS. UOI 306 ITR 6111 ( MAD) J. MRS. MUNIRA S. BUTAWALA (ITA NO. 3468/MUM/2007) L. SINGER INDIA PRIVATE LIMITED (ITA NO. 1785/MUM/2 007) J CURCULAR NO. 8 OF 2008 DATED 27 TH AUGUST, 2002. IT IS PERTINENT TO MENTION HERE THAT THE DECISION O F ACIT VS. ROJER PAREIRA COMMUNICATIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE HAS BEEN DULY CONSIDERED, ALONG WITH OTHER DECISION S, MENTIONED HEREINABOVE BY THE SPECIAL BENCH AND ULTIMATELY CON CLUDED THE PROVISIONS OF SECTION 50C ARE APPLICABLE TO TRANSFE R OF DEPRECIABLE ASSET COVERED BY SECTION 50 AND, THEREFORE, CAPITAL GAINS ARISING FROM SUCH TRANSFER HAS TO BE COMPUTED BY ADOPTING T HE STAMP DUTY VALUATION. THEREFORE, WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED CIT(A). 15 5. THE LD. COUNSEL FOR THE ASSESSEE RAISED ALTERNAT IVE PLEA THAT IF IT IS HELD THAT THERE SHOULD BE SUBSTITUTION OF FARE MARKET VALUE AS AGAINST THE ACTUAL SALE CONSIDERATION, THEN THE ADJUSTMENT OF FARE MARKET VALUE, ADOPTED BY DVO, AT RS.17,56,400/ - MAY BE CONSIDERED IN DEPRECIATION CHART PREPARED AS PER TH E ACT FOR WHICH OUR ATTENTION WAS INVITED TO PAGE 180 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT THE ALLOWABLE DEPRECIATION WOULD BE AS UNDER: OPENING WDV OF THE BLOCK RS.3120237 LESS:FAIR MARKET VALUE OF THE FLAT RS. 1756400 CLOSING WDV OF THE BLOCK RS.1363837 DEPRECIATION ON CLOSING WDV @10% RS.136383 THE LD. SR. DR CONTENDED THAT THIS ALTERNATIVE PLEA WAS NOT RAISED BEFORE THE LD. ASSESSING OFFICER AND ALSO BEFORE TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS), THEREFORE, IT NEEDS EXAMINATION. ON CONSIDERATION OF FACTS AND THE ASSE RTION MADE BY THE LD. RESPECTIVE COUNSEL, IN THE INTEREST OF THE JUSTICE, THE ALTERNATIVE PLEA RAISED BY THE ASSESSEE IS SENT TO THE FILE OF THE LD. ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE C LAIM OF THE 16 ASSESSEE AND TO DECIDE IN ACCORDANCE WITH LAW FOR W HICH DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSES SEE. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM, THEREFORE, ON THE ISSUE OF ALTERNATIVE SUBMISSION, THE CROSS-OBJECTION RAISED BY THE ASSES SEE IS ALLOWED FOR STATISTIC PURPOSES ONLY. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED WHE REAS THE CROSS-OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED F OR STATISTICAL PURPOSES ONLY AS INDICATED HEREINABOVE. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10.5.2012 . SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.5.2012 COPY TO: APPELLANT(S)/RESPONDENT(S)/CIT/CIT(A)/DR !VYS!