D.C.I.T Cir - 10,kolkata, Kolkata V. M/s Lalita Steel Industries Pvt Ltd, Kolkata

ITA 1007/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4846 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: VAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard
• Section: 50C

Judgement Text

1 ITA NO.1007/KOL/2013-M/S. LALITA STEEL INDUSTRIES P VT. LTD. A.Y.2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.1007/KOL/2013 ASSESSMENT YEAR : 2009-10 D.C.I.T., CIRCLE-10, , -VERSUS- M/S. LALITA STEEL INDUSTRIES PVT.LTD. KOLKATA KOLKATA (PAN:AAACL5434G) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI NIRAJ KUMAR, CIT FOR THE RESPONDENT: SHRI SUBASH AGARWAL, ADVOCATE & MISS VARSHA JALAN, ADVOCATE DATE OF HEARING : 08.04.2016. DATE OF PRONOUNCEMENT : 11.05.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 15.01.2013 OF CIT(A) XII, KOLKATA, RELATING TO AY 2009-10. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ S AS FOLLOWS: 1. WHETHER THE LD. CIT(A)-XII, KOLKATA WAS JUSTIFI ED IN HOLDING THE TERM ASSESSABLE INSERTED IN SEC 50C BY FINANCE ACT (NO.2) 2009, W.E .F. 01-10-2009 IS TO BE ADOPTED PROSPECTIVELY AND NOT RETROSPECTIVELY AS PER THE IT ACT 1961? 3. THE ASSESSEE IS A COMPANY. THE ASESSEE E-FILED RETURN OF INCOME ON 23.09.2009 SHOWING A TOTAL INCOME OF RS.57,43,640/- . DURING THE RELEVANT YEAR, THE ASSESSEE HAS SHOWN PROFIT ON SALE OF OFFICE LOCATED AT 104, S.P. MUKHERJEE ROAD, OF RS.5,17,489/- BY DEDUCTING W.D.V. AS ON 31.03.2008 OF RS.73,82,511/- FROM THE SALE VALUE OF RS.79,00,000/-. THE ASSESSEE ENTERED INTO AN AGREEMENT FOR SALE OF THE PROPERTY DATED 14.1.2009. IN THE RETURN OF INCOME FILED FOR AY 2009-10 THE ASSESSEE DECLARED CAPITAL GAIN ON THE BASIS OF AGREEMENT FOR SALE DATED 14.1.2009 COUPLED WITH DELIVERY OF POSSESSION. IN OTHER WORDS THE ASSESSE E CONSTRUED THE DATE OF AGREEMENT AS THE DATE OF TRANSFER U/S.2(47)(IV) OF THE INCOME TAX ACT, 1961 (ACT). THE REGISTERED 2 ITA NO.1007/KOL/2013-M/S. LALITA STEEL INDUSTRIES P VT. LTD. A.Y.2009-10 DEED OF CONVEYANCE WAS HOWEVER EXECUTED ONLY ON 19. 5.2009 (FALLING WITHIN AY 2010-11). THE MARKET VALUE OF THE SAID PROPERTY WA S ASSESSED BY THE ADDL. REGISTRAR OF ASSURANCES-I, KOLKATA FOR THE PURPOSE OF STAMP D UTY AND REGISTRATION AT RS.L,87,31,030/- AS ON 19.05.2009 (I.E., THE DATE O F REGISTRATION). LATER, THE LD. A.O. ISSUED A LETTER DATED 21.09.2011 ADDRESSING TO ADDL . REGISTRAR OF ASSURANCES - I, KOLKATA FOR ASSESSING THE MARKET VALUE OF THE PROPE RTY AS ON 14.01.2009 (I.E., THE DATE OF TRANSFER). THE ADDL. REGISTRAR OF ASSURANCES - I , KOLKATA VIDE HIS LETTER DATED 23.09.2011 HAS CONFIRMED THAT THE MARKET VALUE AS O N 14.01.2009 WILL BE 8% LESS THAN THE ASSESSED VALUE AS ON 19.05.2009. 4. BASED ON THE LETTER OF THE ADDL.REGISTRAR OF AS SURANCES AND KEEPING IN MIND THE PROVISIONS OF SEC.50C OF THE ACT, THE AO WAS OF TH E VIEW THAT THE SALE CONSIDERATION OF THE PROPERTY HAS TO BE SUBSTITUTED FROM RS.79,0 0,000 AS ADOPTED BY THE ASSESSEE IN HIS COMPUTATION OF CAPITAL GAIN TO RS.L,72,32,S94/- (AFTER DEDUCTING 8% OF RS.L,87,31,0301-) THE VALUE OF THE PROPERTY AS PER VALUATION OF REGISTRAR OF ASSURANCES FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION. TH E AO ACCORDINGLY COMPUTED CAPITAL GAIN AT A SUM OF RS.98,50,083/- (RS.L,72,32,S94/- - RS.73,82,511/-) WAS COMPUTED BY HIM TO BE PROFIT/ STCG ON TRANSFER. SINCE RS.5,17, 489/- WAS ALREADY OFFERED TO TAXATION, BALANCE SUM OF RS.93,32,S94/- WAS ADDED B ACK TO TOTAL INCOME. 5. THE STAND OF THE ASSESSEE WAS THAT THE LD. A. O . IGNORED THE SUBMISSION OF THE ASSESSEE THAT THE CONVEYANCE WAS NOT REGISTERED DU RING THE YEAR IN QUESTION AND THAT THE TERM 'ASSESSABLE' WAS INSERTED IN SEC. 50C W.E. F. 01.10.2009, THEREFORE, THE ASSESSABLE VALUE OF THE PROPERTY IN QUESTION CANNOT BE CONSIDERED AS DEEMED CONSIDERATION. PRIOR TO SUCH AMENDMENT IT IS ONLY IN A CASE WHERE TRANSFER IS REGISTERED THAT THE PROVISIONS OF SEC.50C OF THE ACT WERE ATTR ACTED AND WHEN TRANSFER IS EFFECTED U/S.2(47) OF THE ACT WITHOUT REGISTRATION PROVISION S OF SEC.50C OF THE ACT WERE NOT APPLICABLE. THE AMENDMENT REFERRED TO ABOVE WAS MA DE WITH A VIEW TO REMOVE THE LACUNAE IN THE LAW BUT WAS APPLICABLE ONLY PROSPECT IVELY. THIS WAS NOT CONSIDERED BY THE AO. 3 ITA NO.1007/KOL/2013-M/S. LALITA STEEL INDUSTRIES P VT. LTD. A.Y.2009-10 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS FOLLOWS :- I HAVE CONSIDERED THE FINDING OF THE AO. AND THE W RITTEN SUBMISSION AND CASE LAWS FILED AND DISCUSSED BY THE AR. DURING THE APPELLANT PROCE EDING I FIND THAT THE AGREEMENT TO SALE IN THIS CASE AS COMPLETED ON 06-01- 2009 BECAU SE THE POSSESSION OF THE OFFICE SPACE AS GIVEN ON THE SIMULTANEOUSLY. THEREFORE, IN MY OP INION KEEPING IN VIE THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SEDEO FORE X INTERNATIONAL (SUPRA) AS WELL AS THE BOMBAY TRIBUNAL DECISION IN THE CASE OF ACLT VS . PRAVEEN GANDHI (SUPRA). IN THIS CASE THE AMENDED AND INSERTED WORD ' ASSESSABLE' IN SEC. 50C OF THE I.T.ACT, 1961 WHICH CAME INTO EFFECT FROM 01-10-2009 IS NOT APPL ICABLE. THEREFORE, AO'S ACTION OF MAKING ASSESSMENT ON THE BASIS OF ASSESSABLE VALUE OF THE PROPERTY IN THIS CASE IS NOT JUSTIFIED. THUS, ASSESSEE'S APPEAL ON GROUND NO. 1 IS ALLOWED. 7. AGGRIEVED BY THE ORDER OF CIT(A) REVENUE HAS PR EFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR T HE ASSESSEE FAIRLY SUBMITTED THAT THE HONBLE ALCUTTA HIGH COURT IN THE CASE OF M/S . BAGRI IMPEX PVT. LTD. VS ACIT 214 TAXMAN 305 (CAL) TOOK A VIEW THAT THE AMENDMENT TO THE PROVISION OF SECTION 50C OF THE ACT BY THE FINANCE ACT 2009 W.E.F. 1.10. 2009 WAS APPLICABLE RETROSPECTIVELY. IN VIEW OF THE ABOVE RULING THE DE CISION OF CIT(A) HAS TO BE REVERSED. HOWEVER, IT WAS BROUGHT TO OUR NOTICE AS AGAINST TH E DECISION OF HONBLE CALCUTTA HIGH COURT THE ASSESSEE HAS PREFERRED A STAY LEAVE APPLICATION IN SLP VIDE CIVIL NO.17138/2013 IN THE HONBLE SUPREME COURT BY ITS O RDER DATED 10.05.2013 WAS PLEASED TO STAY IN THE IMPLEMENTATION OF THE ORDER OF THE HONBLE CALCUTTA HIGH COURT. THE LIMITED REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT THE MATTER MAY BE REMANDED TO THE AO TO DECIDE IN ACCORDANCE WITH THE ULTIMATE OUTCOME OF THE APPEAL PENDING BEFORE THE HONBLE SUPREME COURT. THE LEARN ED DR RELIED ON THE ORDER OF AO. 9. WE ARE OF THE VIEW THAT IT WOULD BE JUST AND PR OPER TO SET ASIDE THE ORDER OF CIT(A) ON THIS ISSUE AND REMAND THE SAME TO THE AO FOR CON SIDERATION AFRESH IN THE LIGHT OF THE LEGAL POSITION AS IT MAY BE EMANATED FROM THE O RDER OF THE HONBLE SUPREME COURT 4 ITA NO.1007/KOL/2013-M/S. LALITA STEEL INDUSTRIES P VT. LTD. A.Y.2009-10 IN THE PENDING APPEAL REFERRED TO ABOVE. THE AO WIL L AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE AFR ESH. FOR STATISTICAL PURPOSES THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED. 10. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE COURT ON 11.05.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11.05.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. LALITA STEEL INDUSTRIES PVT. LTD., 227, AJC BOSE ROAD, KOLKATA-700020. 2. DCIT, CIRCLE-10, KOLKATA. 3. CIT(A)-XII, KOLKATA 4. CIT-IV, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES