Sureshchandra Babubhai Suratwala, Pune V. Income-tax Officer, Ward - 2(1), Pune

ITA 01/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5070 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-12-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 01-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Cost of acquisition; Revised return
• Section: 50C; 2(14)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.01/PUN/2018 / ASSESSMENT YEAR : 2007-08 SURESHCHANDRA BABUBHAI SURATWALA 24/6, PREM NAGAR SOCIETY, BIBWEWADI, PUNE-411 037 PAN : AHQPS2249A .... / APPELLANT ! / V/S. THE INCOME TAX OFFICER, WARD 2(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI M.K. VERMA & SHRI RAJESH GAWALI / DATE OF HEARING : 05.02.2019 / DATE OF PRONOUNCEMENT : 06.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-4, PUNE DATED 08.06.2017 FOR THE ASSESSMENT YEAR 2007-08 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, 1. THE HON'BLE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER REFUSING TO CONSIDER THE REVISED COMPUTATIO N OF INCOME FILED IN ASSESSMENT PROCEEDINGS BY RELYING ON THE DECISION O F GOETZE INDIA LTD. 2 ITA NO. 01/PUN/2018 A.Y.2007-08 VS. CIT (2006) 284 ITR 323 (SC). THE APPELLANT PLEA DS THAT THE REVISED COMPUTATION OUGHT TO HAVE BEEN CONSIDERED IN THE IN TEREST OF JUSTICE. 2 . THE HON . CIT(A) ERRED IN HOLDING THAT COST OF CONSTRUCTION O F TWO BUILDINGS ON GAT NOS. 1083/1A AND 1083/2 ESTIMATED BY THE VALUATION OFFICER AT RS . 8 , 09,776 AND RS.7 , 09 , 293 RESPECTIVELY WERE RIGHTLY CONSIDERED BY THE VALUATION OFFICER WHEN IN FACT TH ESE BUILDINGS WERE NOT EXISTING AT THE TIME OF SALE OF THE SUBJECT LAND AN WERE NOT MENTIONED IN THE RESPECTIVE SALE DEEDS . 3. THE HON . CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO CHA RGING TO INCOME TAX , GAIN ON SALE OF FOUR AGRICULTURAL LANDS THOUGH THE SUBJECT LANDS WERE NOT ' CAPITAL ASSET ' AS PER SECTION 2(14) OF INCOME TAX ACT. THE APPELLANT PLEADS THAT THE AO ' S ACTION IS NOT VALID . 4. THE HON. CIT(A) ERRED IN CONFIRMING THE ACTION O F THE AO ADOPTING VALUES FIXED BY THE MAHARASHT R A GOVERNMENT FOR STAMP DUTY PURPOSE, UNDER SECTION 50C OF THE IT ACT WHEN COMPUTING GAIN IN AL L FOUR INSTANCES OF SALE , IN PLACE OF SALE CONSIDERATION AS PER SALE AGREEMEN TS ACTUALLY RECEIVED BY THE ASSESSEE . THE APPELLANT PLEADS THAT THE AO ' S ACTION IS NOT VALID. 5. THE APPELLANT PLEADS FOR DIRECTIONS ALLOWING THE APPEAL AND CRAVES LEAVE TO , ADD TO , ALTER , AMEND , MODIFY OR WITHDRAW ANY OR ALL GROUNDS OF APPEAL. 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE SU BMITTED THAT GROUND NOS. 2, 3 AND 4 ARE THE GROUNDS ON MERITS WHERE AS, GROUND NO. 1 IS THE LEGAL GROUND. 2.1 WITH REGARD TO THE LEGAL GROUND, THE SUBMISSIONS OF TH E LD. AR WAS THAT THE ASSESSEE FILED RETURN OF INCOME ON 24.08.2007 DE CLARING TOTAL INCOME OF RS.5,17,686/-. THIS INCLUDED LONG TERM CAPITAL GAIN RS.10,15,1 76/- ON SALE OF FOUR AGRICULTURAL LANDS DURING THE PREVIOUS YEAR AT VILLAGE : MAR KAL, TQ. KHED, DIST.- PUNE, GAT NO. 234, HISSA NO. 1A, VILLAGE : PIMPAGALO N, TQ. KHED, DIST. PUNE AND 1/5 TH SHARE IN LAND AT GAT NO. 265 & 308, VILLAGE KHADKI, TQ. DAUND, DIST. PUNE. THE TOTAL SALE CONSIDERATION FOR THE LANDS WAS RS.17,00,000/- AGAINST WHICH INDEXED COST OF ACQUISITION RS.6 ,29,238/- AND INDEXED COST OF IMPROVEMENTS RS.55,586/- WERE CLAIMED U/S.4 8 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE PARTICULARS OF SALE OF AGRICULTURAL LANDS ARE SUMMARIZED AS UNDER: 3 ITA NO. 01/PUN/2018 A.Y.2007-08 SR. NO. LAND DESCRIPTION AREA DATE OF SALE SALE VALUE AS PER AGREEMENT STAMP DUTY VALUE A GAT NO.1083, HISSA NO.1A, VILLAGE MARKAL, TQ. KHED, DIST. PUNE. 274 16.01.2007 685000 1090556 B GAT NO.234, HISSA NO.1A, VILLAGE PIMAPLGAON, TQ. KHED, DIST. PUNE 1.16 13/12/2006 15,000 27,376 C GAT NO.1083, HISSA NO.2, VILLAGE MARKAL, TQ. KHED, DIST. PUNE. 240 13/12/2006 600000 955231 1300000 2073163 D 1/5 TH SHARE IN GAT NO.265 & 308, VILLAGE KHADKI, TQ. DAUND, DIST. PUNE 142.4 163.8 10/01/2007 10/01/2007 400000 968000 TOTAL 1700000 3041163 THE ASSESSEE ADOPTED IN HIS COMPUTATION OF INCOME, SALE C ONSIDERATION FIGURES AS PER AGREEMENT WHICH IS LOWER THAN THE STAMP DU TY VALUATION FOR THE PROPERTIES FIXED BY THE GOVERNMENT OF MAHARASHTRA. 3. IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE R EALIZED THAT THE SUBJECT AGRICULTURAL LANDS WERE EXCLUDED FROM THE DEFINITION OF CAPITAL ASSETS UNDER SECTION 2(14) OF THE ACT. ACCORDINGLY, A REVISED COMP UTATION OF INCOME WAS FURNISHED TO THE ASSESSING OFFICER WITH A REQUEST TO C ONSIDER THE SAME WHILE FINALIZING ASSESSMENT. THE ASSESSING OFFICER REFERRED THE VALUATION OF THE LAND TO THE DEPARTMENTAL VALUATION OFFICER (DVO). THE DVO ACCEPTED THAT LANDS AT VILLAGE PIMPALGAON WERE AGRICULTURAL LANDS AND HAS N OT VALUED THE SAID LAND. THE DVO HAS VALUED LANDS AT THREE OTHER VILLAGES AT UNREALISTICALLY HIGH VALUES WITHOUT PROPERLY APPRECIATING THE FACTS AND C IRCUMSTANCES OF THE CASE. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ADOPTING STAMP DUTY VALUE FIXED BY THE GOVERNMENT OF MAHARASHTRA FOR ALL FOUR SALE 4 ITA NO. 01/PUN/2018 A.Y.2007-08 TRANSACTIONS. HE HAS DENIED CLAIM FOR EXCLUSION OF SALE OF AGR ICULTURAL LANDS FROM COMPUTATION OF INCOME AND IGNORED THE REVISED COMPU TATION OF INCOME FURNISHED IN ASSESSMENT PROCEEDINGS, ON THE GROUND THAT SUCH A CLAIM COULD MADE ONLY BY FILING REVISED RETURN OF INCOME BY PLACING RELIA NCE ON THE RATIO OF GOETZE INDIA LTD. VS. CIT, REPORTED AS 284 ITR 323. 4. WITH REGARD TO GROUND NO.1 IN GROUNDS OF APPEAL I.E. ON THE LEGAL GROUND, THE ASSESSEE SUBMITTED THAT LD. CIT(APPEALS) ERRE D IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER REFUSING TO CONSIDER THE RE VISED COMPUTATION OF INCOME FILED IN ASSESSMENT PROCEEDINGS BY RELYING ON THE DECISION OF GOETZE INDIA LTD. VS. CIT (SUPRA.). THE ASSESSEE PLEADS THAT THE REVISED COMPUTATION OUGHT TO HAVE BEEN CONSIDERED IN THE INTEREST OF JUSTICE . THE LD. AR PRAYED THAT THE MATTER MAY BE REMANDED TO THE FILE OF THE LD. CIT(APPEALS). 5. THE LD. DR CONCEDED TO THE PRAYER OF THE LD. AR OF THE ASSESSEE. 6. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS AND ALSO CONSIDERED THE ORDERS OF THE REVENUE AUTHORITIES. T HE ASSESSING OFFICER HAS TAKEN A DECISION RELYING ON THE DECISION IN THE CASE OF GOETZE INDIA LTD. VS. CIT (SUPRA.). THE ASSESSEE MAKES A PRAYER BEFORE US T HAT THE REVISED COMPUTATION OF INCOME FILED DURING ASSESSMENT PROCEEDINGS S HOULD HAVE BEEN CONSIDERED AND LD. CIT(APPEALS) SHOULD HAVE ADJUDICATED TH E MATTER VIS--VIS REVISED COMPUTATION OF INCOME FILED. 7. IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER BACK TO HIS FILE TO ADJUDICATE THE MA TTER IN COMPLIANCE WITH PRINCIPLES OF NATURAL JUSTICE. HENCE, LEGAL GROUND HAS BE EN ALLOWED FOR STATISTICAL PURPOSES. 5 ITA NO. 01/PUN/2018 A.Y.2007-08 SINCE, THE PRAYER OF THE LD. AR TO REMAND THE MATTER TO THE FILE OF LD. CIT(APPEALS) FOR RE-ADJUCATION IS ACCEPTED, OTHER GROUNDS ON MERITS FOR THE TIME BEING BECOMES ACADEMIC. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON 06 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 06 TH FEBRUARY, 2019. SB '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-4, PUNE. 4. THE PR. CIT-3, PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 01/PUN/2018 A.Y.2007-08 DATE 1 DRAFT DICTATED ON 0 5 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 05 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER