ITO, New Delhi V. Shri Pramod Tyagi, New Delhi

ITA 1174/DEL/2013

• Counselvise Citation: 117420114 RSA 2013
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition
• Section: 50C; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.-1174/DEL/2013 (ASSESSMENT YEAR-2009-10) ITO, WARD-26(4), E-2, 18 TH FLOOR, CIVIC CENTRE, NEW DELHI-110002. (APPELLANT) VS SH.PRAMOD TYAGI, WZ-81/6, GULAB BAGH, UTTAM NAGAR, NEW DELHI-110059. PAN-ACXPT8859R (RESPONDENT) APPELLANT BY: MS. MEENAKSHI VOHRA, SR. DR RESPONDENT BY: NONE ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER DATED 28.12.2012 OF CIT(A)-XXIV, NEW DELHI PERTAINING TO 2009-10 ASSESSMENT YEAR WHEREIN VIDE ORDER PASSED U/S 154/250 DATED 15.02.2 013, THE CIT(A) CORRECTED IN HIS ABOVE-MENTIONED ORDER THE ASSESSMENT ORDER WRONGLY MENTIONED AS 2006-07 ASSESSMENT YEAR TO 2009-10 AND ITO, WARD-25(4) WRO NGLY MENTIONED HAS BEEN CORRECTED TO ITO, WARD-26(4). 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING HOWEVER ON GOING THROUGH THE MATERIAL AVAILABLE ON RECORD IT W AS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PARTE QUA THE AS SESSEE RESPONDENT ON MERIT AFTER HEARING THE LD. SR. DR. THE RELEVANT FACTS EMANATI NG FROM A PERUSAL OF THE ASSESSMENT ORDER ARE THAT THE ASSESSEE INDIVIDUAL D ECLARED AN INCOME OF RS.1,65,890/- WHICH WAS PROCESSED U/S 143(1). THE CASE WAS SELEC TED FOR SCRUTINY UNDER CASS BY ISSUANCE OF NOTICE U/S 143(2) AND 142(1) AND THE IN COME WAS ASSESSED AT RS.43,24,340/- AS A RESULT OF ADDITIONS MADE OF RS. 38,25,423/- DENYING THE CLAIM OF 2 I.T.A .NO.-1174/DEL/2013 LONG TERM CAPITAL GAIN AND RS.32,895/- AS DIFFERENC E IN INTEREST AS PER AR INFORMATION AND WHAT WAS DISCLOSED BY THE ASSESSEE. 3. THE ASSESSEE CHALLENGED THE ADDITION MADE BY WAY OF DENYING LONG TERM CAPITAL GAIN BEFORE THE CIT(A) WHO VIDE HIS ORDER U NDER CHALLENGE CONSIDERING THE GROUNDS AGITATED DELETED THE ADDITION. 3.1. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. THE FACTS AS TAKEN INTO CONSIDERATION BY THE CIT(A) ARE SET OUT IN PARA 2 WHICH ARE REPRODUCED HEREUNDER FOR READY-REFERENCE:- 2. RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 2 3.02.2010 DECALRING A NET INCOME OF RS.1,65,890/-. THE CASE WAS SELECTED FOR SCRUTINY,. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THE APPEL LANT HAD SOLD TWO PLOTS OF LAND DURING THE YEAR UNDER CONSIDERATION, BEING PLOT NO. -61, KHASRA NO.-162, NAWADA, NEW DELHI (167.22 SQ MTRS.) AND PLOT NO.-321, KHASR A NO-64/19, NANGLI VIHAR EXTENSION, NEW DELHI (146.30 SQ. MTRS.). BOTH THE PLOTS OF THE LAND WERE SOLD THROUGH POWER OF ATTORNEY AND NOT THROUGH REGISTERE D SALE DEED. THE AO TOOK THE VALUE OF THE PLOTS AS PER CIRCLE RATE AT RS.16, 100/- PER SQ. MTR. AND CALCULATED THE RESULTANT LONG TERM CAPITAL GAIN AT RS.38,25,42 3/-. HE MADE THE ADDITION OF THIS AMOUNT UNDER THE HEAD CAPITAL GAINS BY INVOK ING THE PROVISIONS OF SECTION 50C OF THE ACT. APART FROM THE ABOVE, THE AO ALSO HAD AIR INFORMATION REGARDING INTEREST OTHER THAN INTEREST ON SECURITIES TO BE CH ARGED TO TAX IN THE HANDS OF THE APPELLANT AT RS.55,865/-, ON DEPOSITS IN CORPORATIO N BANK. THE AO FOUND THAT THE APPELLANT HAD DISCLOSED INTEREST INCOME ONLY AT RS. 22,970/- IN HIS INCOME AND EXPENDITURE ACCOUNT AND THEREFORE, HE ADDED BACK TH E BALANCE AMOUNT OF RS.32,895/- TO THE INCOME OF THE APPELLANT. 3.2. THE RECORD SHOWS THAT THE ASSESSEE ADVANCED VA RIOUS ARGUMENTS ON FACTS AND LAW BEFORE THE CIT(A). THESE HAVE BEEN EXTRACTED I N THE IMPUGNED ORDER AT PARA 4.2 AND ARE REPRODUCED HEREUNDER FOR READY-REFERENCE :- 4.2. IN GROUND NOS. 2, 3 & 4, THE APPELLANT HAS IM PUGNED THE INVOCATION OF SEC.50C OF THE ACT, THE ADOPTION OF THE RATE OF RS. 16,100/- PER SQ MTR. WITHOUT ANY BASIS AND THE ADDITION OF RS.38,25,423/- TO THE INC OME OF THE APPELLANT UNDER THE HEAD LONG TERM CAPITAL GAIN. THE LD. AR OF THE APP ELLANT HAS SUBMITTED THAT SECTION 50C OF THE ACT WOULD COME INTO PLAY ONLY IF THE SALE CONSIDERATION OF THE CAPITAL ASSET IS LESS THAN THE VALUE ADOPTED OR AS SESSED BY ANY AUTHORITY OF THE STATE GOVERNMENT FOR THE BASIS OF PAYMENT OF STAMP DUTY IN RESPECT OF TRANSFER. THE LD. AR SUBMITTED THAT IN THE INSTANT CASE, BOTH THE PROPERTIES WERE TRANSFERRED THROUGH GENERAL POWER OF ATTORNEY (GPA) AND NOT THR OUGH REGISTERED SALE DEEDS. THEREFORE, THERE WAS NO ASSESSMENT OR ADOPTION OF V ALUE OF THE PROPERTY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY BY ANY STATE GOVER NMENT AUTHORITY. AS SUCH, THE PROVISIONS OF SECTION 50C OF THE ACT WOULD NOT BE ATTRACTED IN THIS CASE. THE LD. AR OF THE APPELLANT HAS RELIED UPON THE JUDGEME NT OF HONBLE JODHPUR BENCH OF 3 I.T.A .NO.-1174/DEL/2013 THE ITAT IN THE CASE OF NAVNEET KUMAR THAKKAR VS. I TO (2008) 110 ITD 525 (JODHPUR), WHEREIN THE HONBLE ITAT HAS HELD THAT U NLESS THE PROPERTY TRANSFERRED HAS BEEN REGISTERED BY A SALE DEED AND FOR THAT PUR POSE VALUE HAS BEEN ASSESSED AND STAMP DUTY HAS BEEN PAID BY THE PARTIES, SECTIO N 50C CANNOT COME INTO OPERATION. IF A PROPERTY IS TRANSFERRED UNDER A PO WER OF ATTORNEY TRANSACTION, AND VALUE HAS NOT BEEN ASSESSED FOR THE PURPOSE OF STAM P DUTY, SECTION 50C HAS NO APPLICATION. THE LD. AR HAS ALSO RELIED UPON THE C ASE OF PUNJAB POLY-JUTE CORPORATION VS. ACIT (2009) 313 ITR (AT) 178, WHERE IN IT HAS BEEN HELD THAT SECTION 50C OF THE ACT IS APPLICABLE ONLY WHEN THER E IS VALUATION AT A HIGHER VALUE FOR STAMP VALUATION PURPOSES BY THE STATE AUTHORITY THAT THE VALUE DECLARED BY THE ASSESSEE IN THE SALE DEED. WHEN THERE IS SUCH A DI FFERENCE, THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY HAS TO BE SUBSTITU TED FOR THE SALE CONSIDERATION OF THE PROPERTY MENTIONED IN THE SALE DEED. IN THE IN STANT CASE, THERE HAS BEEN NO SUCH VALUATION FOR STAMP DUTY PURPOSES AS THE TRANS ACTION WAS THROUGH GPA. THE LD. AR HAS ALSO RELIED UPON THE CASE OF ACIT VS EXC ELLENT LAND DEVELOPERS PVT. LTD. (2010) 001 ITR (TRIB.) 563, WHEREIN IT HAS BEE N HELD THAT THE SETTLED LAW IS THAT THE DEEMING PROVISIONS ARE TO BE STRICTLY CONS TRUED AND WILL NOT EXTEND TO AREAS OTHER THAN THOSE TO WHICH IT IS DEEMED TO APP LY. THE DEEMING PROVISION CONSUMES AN UNREAL THING AS REAL. THEREFORE, THE P ROVISIONS OF SECTION 50C OF THE ACT CANNOT BE IMPORTED IN THE INSTANT CASE. 3.3. CONSIDERING THESE FACTS, THE CIT(A) CAME TO TH E FOLLOWING CONCLUSION:- 4.3. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER. I HAVE ALSO CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT AS WELL AS THE CASE LAWS CITED BY THE LD. AR IN HIS FAVOUR. IN THE LIGHT OF THE JUDI CIAL PRONOUNCEMENTS CITED BY THE LD. AR, I AM OF THE OPINION THAT THE ADDITIONS MADE BY THE AO IN THE CASE OF THE APPELLANT UNDER THE HEAD LONG TERM CAPITAL GAIN BY IMPORTING THE CIRCLE RATE, DO NOT STAND THE TEST OF JUDICIAL SCRUTINY AND THEREFO RE, RESPECTFULLY FOLLOWING THE JUDGEMENT GIVEN BY THE HONBLE ITAT, JODHPUR BENCH IN THE CASE OF NAVNEET KUMAR THAKKAR (SUPRA), I HEREBY DELETE THE ADDITION OF RS.38,,25,423/- MADE TO THE INCOME OF THE APPELLANT. 4. IN THE ABOVE FACTUAL BACKGROUND, LD. SR. DR PLAC ES RELIANCE UPON THE ASSESSMENT ORDER. HOWEVER FINDINGS AVAILABLE ON RE CORD WERE NOT ASSAILED BY WAY OF ANY EVIDENCE OR DOCUMENT IN SUPPORT OF THE ACTION O F THE AO. A PERUSAL OF THE ASSESSMENT ORDER ON THE OTHER HAND SHOWS THAT WITHO UT BRINGING ANYTHING ON RECORD, THE CIRCLE RATE HAS BEEN ADOPTED @16,100/- PER METE R. FOR READY-REFERENCE WE DEEM IT APPROPRIATE TO REPRODUCE FROM THE VERY BRIEF ASS ESSMENT ORDER IN ORDER TO ADDRESS HOW THE ISSUE WAS CONSIDERED AND DEALT WITH BY THE AO:- 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESS EE HAS DECLARED INCOME FROM HOUSE PROPERTY AND INCOME FROM BUSINESS AND IN COME FROM CAPITAL GAINS. 4 I.T.A .NO.-1174/DEL/2013 THE CAPITAL GAINS IS WORKED OUT U/S 50C AS UNDER AF TER ADOPTING THE CIRCLE RATE @ 16100 PER MTR ON THE SALE OF THE PLOTS:- (I) LONG TERM CAPITAL GAINS PROPERTY NO 61, KHASRA NO-162, NAWADA, NEW DELHI =1 67.22SQ.MTRS*16100/- = RS.26,92,242/- LESS COST OF ACQUISITION = (-) RS.979749/- TOTAL = RS.17,12,493/- PROPERTY NO-321, KHASRA NO-64/19, NANGLI VIHAR EXTN = 146.3SQ.MTRS*16100/- = RS.2355430/- LESS;COST OF ACQUISITION = (-) RS.242500/- TOTAL = RS.2112930 TOTAL CAPITAL GAIN (I) + (II) =RS.17,12,493+ RS .2112930/- = RS.3825423/-. 4.1. IN THE ABOVE BACKGROUND WHERE THE ISSUE HAS NO T BEEN DISCUSSED BY THE AO. THE LD. SR. DR WAS REQUIRED TO ADDRESS AS TO WHAT WAS THE BASIS OF THE ADOPTION OF THE CIRCLE RATE OF RS.16,100/- PER SQ. MTR. BY THE AO. SINCE THE ASSESSMENT ORDER IS SILENT ON THIS VERY VITAL RELEVANT FACT THE LD. SR. DR FAIRLY CONCEDED THAT IN THE ABSENCE OF ANYTHING ELSE SHE WOULD MERELY RELY UPO N THE AO AND WAS NOT IN A POSITION TO ADD ANYTHING ELSE IN SUPPORT OF THE DEP ARTMENTAL GROUND. ACCORDINGLY IN THE LIGHT OF THE ABOVE-MENTIONED PECULIAR FACTS AND CIRCUMSTANCES IN THE ABSENCE OF ANY RELEVANT DISCUSSION IN THE RELEVANT ASSESSMENT ORDER, WE FIND NO GOOD REASON TO INTERFERE WITH THE FINDING ARRIVED AT IN THE IMPUGN ED ORDER. ACCORDINGLY FOR THE REASONS GIVEN HEREINABOVE THE GROUNDS RAISED BY THE DEPARTMENT ARE DISMISSED. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 TH OF MARCH 2014. SD/- SD/- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:- 11 /03/2014 *AMIT KUMAR* 5 I.T.A .NO.-1174/DEL/2013 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI