B.S.Sanjay (HUF), Bangalore V. Income Tax Officer Ward-3(4) , Bangalore

ITA 1141/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5923 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABIRAMA KARTHIKEYAN IRS
• Assessee Lawyers: V CHANDRASHEKAR
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Revised return
• Section: 50C; 234B; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1141 /BANG/2018 ASSESSMENT YEAR : 2011 - 12 SHRI B.S. SANJAY [HUF], # 501, SALAPURIA ARISTOCRACY, NO. 76, 14 TH CROSS, J.P. NAGAR, BANGALORE 560 078. PAN: AABHB9462J VS. THE INCOME TAX OFFICER, WARD 3 (4), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI ABI RAMA KARTHIKEYAN, IRS (DR) DATE OF HEARING : 01 . 0 5 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-4, BANGALORE DATED 29.12.2017 FOR ASSESS MENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX [APPEALS] PASSED UNDER SECTION 250 OF THE ACT DATED 29/12/201 7 IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW IN NOT HOLDING THAT THE ENTIRE ASSESSMENT IS VOID-AB-I NITIO AS THE ASSESSMENT WAS CONCLUDED BY THE LEARNED ASSESSING O FFICER WITHOUT ISSUANCE OF STATUTORY NOTICE U/S.143(2) OF THE ACT ON A VALID REVISED RETURN OF INCOME FILED BY THE APPELLANT, DESPITE NO TICING THE FACT THAT THE APPELLANT HAS FILED A VALID REVISED RETURN OF I NCOME AND ALSO HAS CONSIDERED THE TOTAL INCOME AS DECLARED IN THE REVI SED RETURN OF INCOME FILED BY THE APPELLANT FOR THE PURPOSES OF C OMPUTING THE TOTAL INCOME OF THE APPELLANT IN THE IMPUGNED ASSESSMENT ORDER PASSED UNDER SECTION 143(2) OF THE ACT, ON THE FACTS AND C IRCUMSTANCES OF THE ITA NO. 1141/BANG/2018 PAGE 2 OF 4 CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS NOT JUSTIFIED IN HOLDING THAT, AS THE APPELLANT HAS PARTICIPATED AND HAS NOT OBJECTED IN THE ASSESSMENT PROCEEDINGS AS REGARD TO THE NON- ISSUANCE OF A NOTICE U/S. 143(2) OF THE ACT ON A REVISED RETURN F ILED BY THE APPELLANT AND ERRED IN HOLDING THAT THE ORDER OF ASSESSMENT I S VALID, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LEARNED COMMISSI ONER OF INCOME- TAX (APPEALS) FAILED TO APPRECIATE THAT MERE PARTIC IPATION IN AN INVALID ASSESSMENT PROCEEDINGS CANNOT CURE THE PROCEDURAL A SPECT OF VALIDITY OF PROPER ASSUMPTION OF JURISDICTION ON THE FACTS A ND CIRCUMSTANCES OF THE CASE. 4. WITHOUT PREJUDICE THE APPELLANT DENIES ITSELF LI ABLE TO TAXED OVER AND ABOVE THE INCOME REPORTED BY THE APPELLANT IN T HE REVISED RETURN OF INCOME AMOUNTING TO RS. 7,72,330/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED AUTHORITIES BELOW WERE NOT JUSTIFIED IN ADDING A SUM OF RS. 4,70,400/- BY INVOKING THE PROVISIONS OF SECTIO N 50C OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WITHOUT PR OPERLY APPRECIATING THE REASONS FOR DIFFERENCE IN THE AGREED VALUE OF S ALE CONSIDERATION AS AGAINST THE VALUE ADOPTED FOR THE PURPOSES OF SECTI ON 50C OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE AUTHORITIES BELOW ERRED IN LAW IN NOT APPREC IATING THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE DETERMINED BY THE DEPARTMENT VALUATION OFFICER WHICH WAS CONSIDERED B Y THE LEARNED ASSESSING OFFICER IN THE IMPUGNED ORDER OF ASSESSME NT AND THE ACTUAL AMOUNT OF SALE CONSIDERATION RECEIVED BY THE APPELL ANT IS MARGINAL TO THE EXTENT OF 7.34% ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LAW IN CHARGING THE INTEREST U/S. 234B OF THE ACT AND FURTHER THE CALCU LATION OF INTEREST U/S. 234 B OF THE ACT IS NOT IN ACCORDANCE WITH LAW SINC E THE RATE, METHOD OF CALCULATION, QUANTUM IS NOT DISCERNABLE FROM THE ORDER OF ASSESSMENT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE , SUBSTITUTE OR MODIFY ANY OF THE GROUNDS URGED ABOVE. 9. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN A DDITION TO LEGAL ISSUE RAISED BY ASSESSEE AS PER GROUND NOS. 2 AND 3, THERE IS ONLY ONE ISSUE INVOLVED ON MERIT ITA NO. 1141/BANG/2018 PAGE 3 OF 4 BEING ADDITION OF RS. 4,70,400/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 50C OF IT ACT. HE SUBMITTED THAT THE ISSUE ON MERIT IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER RENDERED IN T HE CASE OF M/S. JOHN FOWLER (INDIA) PVT. LTD. VS. DCIT IN ITA NO. 7545/MUM/2014 DATED 25.01.2017. HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER AND DRAWN M Y ATTENTION TO PARA NOS. 5 TO 7 OF THIS TRIBUNAL ORDER AND POINTED OUT THAT IT WA S HELD BY TRIBUNAL IN THIS CASE THAT IF THE DIFFERENCE BETWEEN THE VALUATION AS PER STAMP DUTY AND THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS LESS THAN 15%, IN SUCH CIRCUMSTANCES NO ADDITION CAN BE MADE. HE ALSO POI NTED OUT THAT THE TRIBUNAL IN THIS CASE HAS FOLLOWED TWO OTHER TRIBUNAL ORDERS RENDERED IN THE CASE OF SMT. SITA BAI KHETAN VS. ITO IN ITA NO. 823/JP/2013 DATE D 27.07.2016 AND IN THE CASE OF RAHUL CONSTRUCTIONS VS. DCIT AS REPORTED IN 38 DTR 0019. HE SUBMITTED THAT IN THE PRESENT CASE, THE DIFFERENCE BETWEEN THE SALE PRICE AND THE VALUATION AS PER STAMP DUTY IS LESS THAN 10% BE CAUSE IN THE PRESENT CASE, THE ASSESSEE HAS SHOWN SALE CONSIDERATION OF RS. 59 .40 LAKHS AND THE DVO HAS VALUED THE PROPERTY U/S. 50C(2) OF IT ACT AT RS . 64,10,400/- AND BECAUSE OF THIS DIFFERENCE, THE ADDITION IS MADE BY THE AO OF RS. 4,70,400/- WHICH IS LESS THAN 10% OF THE VALUE OF SALE CONSIDERATION DECLARE D BY ASSESSEE OF RS. 59.40 LAKHS AND THEREFORE, AS PER TRIBUNAL ORDER, NO ADDI TION IS JUSTIFIED. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELO W. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND FORCE IN THE SUBMISSIONS OF LD. AR OF ASSESSEE BECAUSE I FIND THAT IN THE PRESENT C ASE, THE SALE CONSIDERATION AS PER SALE DEED IS RS. 59.40 LAKHS AND THE VALUE A DOPTED BY DVO U/S. 50C (2) IS RS. 64,10,400/- AND THEREFORE, THE DIFFERENC E BETWEEN THESE TWO VALUES IS OF RS. 4,70,400/- WHICH IS LESS ABOUT 8% OF THE SAL E CONSIDERATION SHOWN BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE TRIBUNAL ORDE R CITED BY LD. AR OF ASSESSEE HAVING BEEN RENDERED IN THE CASE OF M/S. JOHN FOWLE R (INDIA) PVT. LTD. VS. DCIT (SUPRA) AND ALSO OTHER TWO TRIBUNAL ORDERS FOLLOWED BY THE TRIBUNAL IN THAT CASE BEING TRIBUNAL ORDER RENDERED IN THE CASE OF SMT. S ITA BAI KHETAN VS. ITO (SUPRA) AND RAHUL CONSTRUCTIONS VS. DCIT (SUPRA), I HOLD THAT IN THE FACTS OF THE PRESENT CASE, NO ADDITION IS JUSTIFIED AND THEREFOR E, I DELETE THE SAME. IN VIEW OF THIS DECISION ON THE MERIT OF THE CASE, THE TECHNIC AL AND LEGAL ISSUE RAISED BY ITA NO. 1141/BANG/2018 PAGE 4 OF 4 ASSESSEE AS PER GROUND NOS. 2 AND 3 BECOMES OF ACAD EMIC INTEREST AND HENCE, I HOLD THAT NO ADJUDICATION IS CALLED FOR ON THAT A SPECT. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.