M/S. RAJENDRA NATHANI (HUF), RAIPUR (CG) V. ITO- 1(2), RAIPUR (CG)

ITA 1/BIL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2690 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJIT KR LASKAR
• Assessee Lawyers: AMAN BANSAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard
• Section: 143(3); 50C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.1/RPR/2016 ASSESSMENT YEAR : 2010-11 RAJENDRA NATHANI (HUF), H-100, I-6, RAJIV NAGAR, SHANKAR NAGAR, RAIPUR (CG). VS. ITO- 1(2), RAIPUR (CG). PAN : AADHN1997J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMAN BANSAL, CA DEPARTMENT BY : SHRI AJIT KR. LASKAR, DR DATE OF HEARING : 13-08-2018 DATE OF PRONOUNCEMENT : 13-08-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 15.10.2015 OF THE LD. CIT(A)- 1, RAIPUR (CG) RELATI NG TO ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM THE HOUSE PROPERTY AS WELL AS C APITAL GAIN FROM SALE OF PROPERTY. DURING THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE SOLD A PROPERTY FOR RS.15,00,000/- AND PAID TAXES ON CAPITAL GAIN A S PER RULES. HOWEVER, THE 2 ITA NO.1/RPR/2016 MARKET VALUE OF THE PROPERTY WAS RS.53,26,300/-. S INCE THERE WAS UNDERSTATEMENT OF CAPITAL GAIN, THE CASE OF THE ASS ESSEE WAS REOPENED AND THE ASSESSING OFFICER IN THE ORDER PASSED U/S 143(3)/14 7 DETERMINED THE TOTAL INCOME AT RS.41,17,930/- WHEREIN HE MADE ADDITION O F RS.38,26,300/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAIN. 4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED A.O. HAS ERRED ON FACTS AND IN LAW IN SUBSTITUTING THE ACTUAL CONS IDERATION OF RS.15,00,000/- WITH VALUE ADOPTED FOR STAMP DUTY PURPOSES AT RS.53,26,3 00/- IN VIEW OF PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961 AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I [HEREINAFTER REFERRED TO AS CIT(A)] HAS ERRED IN CONFIRMING THE ENHANCEMENT TO THE TOTAL INCOME DONE BY LEARNED A.O . WITHOUT CONSIDERING THE PROVISIONS OF SECTION 50C(2) OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ASSESSM ENT ORDER PASSED U/S 143(3) WHEN THE PROCEEDINGS HAD BEEN INITIATED U/S 147. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ASSESSM ENT PROCEEDINGS INITIATED U/S 147 MERELY BASED ON AIR INFORMATION WITHOUT INDEPENDENT APPLICATION OF MIND. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER VARY AND / OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 5. THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDITI ONAL GROUND:- 1(A) ON THE FACT AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER AND THE CIT(A) ERRED IN APPLYING THE PROVISIONS OF SECTION 50(C) O N TRANSFER OF THE LEASEHOLD RIGHTS OF LAND AND BUILDING. 3 ITA NO.1/RPR/2016 6. RELYING ON VARIOUS DECISIONS, THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE GROUND BEING A LEGAL ONE AND SINCE ALL MAT ERIAL FACTS ARE ALREADY AVAILABLE ON RECORD, THEREFORE, THIS GROUND SHOULD BE ADMITTED. 7. THE LD. DR ON THE OTHER HAND STRONGLY OPPOSED TH E ADMISSION OF THE ADDITIONAL GROUND. 8. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FACT THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS A LEGAL ONE AND AL L MATERIAL FACTS ARE ALREADY AVAILABLE ON RECORD, THE ADDITIONAL GROUND RAISED B Y THE ASSESSEE IS ADMITTED. 9. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE COPY OF THE ASSIGNMENT DEED EXECUTED IN FAVOUR OF THE ASSESSEE AND SUBMITT ED THAT THE SAME CLEARLY MENTIONS THAT THE TRANSFER IS OF LEASEHOLD RIGHTS F OR THE REMAINING LEASE PERIOD AND NOT A TRANSFER OF LAND AND BUILDING. THEREFORE , IT BEING A TRANSFER OF LEASEHOLD RIGHTS PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN THE PRESENT CASE. REFERRING TO THE DECISION OF THE HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. M/S. GREENFIELD HOTELS & ESTATES PVT. LTD. VIDE ITA NO.735 OF 2014 ORDER DATED 24.10.2016, HE SUBMITTED THAT THE HONBLE HIG H COURT IN THE SAID DECISION HAS HELD THAT SECTION 50C IS NOT APPLICABLE WHILE C OMPUTING CAPITAL GAINS ON TRANSFER OF LEASEHOLD RIGHTS IN LAND AND BUILDING. HE ACCORDINGLY SUBMITTED THAT 4 ITA NO.1/RPR/2016 THE ADDITION MADE BY THE ASSESSING OFFICER AND UPHE LD BY THE LD. CIT(A) IS NOT TENABLE AND, THEREFORE, THE SAME SHOULD BE DELETED. 10. THE LD. DR ON THE OTHER HAND SUBMITTED THAT SIN CE THIS ASPECT WAS NEVER RAISED BEFORE THE ASSESSING OFFICER AND THE LD. CIT (A), THEREFORE, THIS MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICE R FOR ADJUDICATION OF THE ISSUE AFRESH. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE GRIE VANCE OF THE ASSESSEE IN THE IMPUGNED APPEAL IS REGARDING THE APPLICABILITY OF P ROVISIONS OF SECTION 50C WHILE COMPUTING THE CAPITAL GAINS ON TRANSFER OF LE ASEHOLD RIGHTS IN LAND AND BUILDING. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS NEVER RAISED THE APPLICABILITY OF PROVISIONS OF SECTION 50C WHILE CO MPUTING THE CAPITAL GAINS ON TRANSFER OF LEASEHOLD RIGHTS IN LAND AND BUILDING E ITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT(A). CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER T O RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICAT E THE ISSUE AFRESH IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT CITED (SUPRA) AND AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND 5 ITA NO.1/RPR/2016 DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. ON THIS 13 TH AUGUST, 2018. SD/- SD/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13-08-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., RAIPUR. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY ITAT, RAIPUR