Shree Veerayatan Steel Industries Pvt. Ltd., , Hooghly V. ITO, ward - 3(2), Kolkata , Kolkata

ITA 1193/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0525 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 31-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PROVAS ROY
• Keywords: Sale consideration of property below Jantri Value; Earning of tax free income
• Section: 50C; 14A

Judgement Text

ITA NO.1193/KOL/2018 SHREE VEERAYATAN STEEL INDUSTR IES PVT. LTD. A.Y.2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.1193/KOL/2018 ASSESSMENT YEAR : 2012-13 SHREE VEERAYATAN STEEL INDUSTRIES PVT. LTD. -VERSU S- I.T.O., WARD-3 (2), KOLKATA KOLKATA (PAN: AADCS 2472 E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI SUNIL SURANA, ADVOCATE FOR THE RESPONDENT: SHRI PROVAS ROY, ADDL. CIT DATE OF HEARING : 03.09.2018. DATE OF PRONOUNCEMENT : 12.09.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-1, KOLKATA DATED 21 .02.2018 PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT ) RELATING TO A.Y. 2012-13. 2. THERE ARE ONLY TWO ISSUES ARISE IN THIS APPEAL. THE FIRST ISSUE IS APPLICATION OF SECTION 50C OF THE ACT AND THE SECOND IS DISALLOWAN CE U/S 14A OF THE ACT. 3. AFTER HEARING RIVAL CONTENTIONS, I FIND THAT TH E AO AT PARA-1 PAGE -2 OF HIS ORDER HAS CLEARLY STATED THAT THE ASSESSEE HAD SUBM ITTED AN AGREEMENT ON SALE WHICH WAS ENTERED INTO ON 18.11.2010 AND WHICH WAS REGIST ERED ON 25.10.2011. THE CLAIM OF THE ASSESSEE WAS THAT, THE CIRCLE RATE I.E. THE MAR KET VALUE FIXED FOR THE IMMOVABLE PROPERTY REGISTRATION AUTHORITY, FOR THE PURPOSE OF DETERMINATION OF STAMP DUTY VALUE SHOULD BE TAKEN AS ON THE DATE OF AGREEMENT AND NOT THE VALUE AS ON THE DATE OF REGISTRATION OF THE SALE DEED. CONTEMPORANEOUS EVID ENCE IN THE FORM OF ADVANCE GIVEN FOR THE AGREEMENT OF SALE, BY WAY OF CROSSED CHEQUE DRAWN ON BANK WAS PRODUCED BEFORE THE AO. 4. UNDER THE CIRCUMSTANCES THE LAW IS VERY CLEAR. T HE VALUATION AS PER REGISTRATION AUTHORITY FOR THE PURPOSES OF STAMP DUTY, AS ON THE DATE OF ENTERING INTO AGREEMENT OF ITA NO.1193/KOL/2018 SHREE VEERAYATAN STEEL INDUSTR IES PVT. LTD. A.Y.2012-13 2 SALE, SHOULD BE CONSIDERED FOR THE PURPOSES OF COMP UTATION U/S 50C OF THE ACT AND NOT THE VALUATION AS ON THE DATE ON WHICH THE SALE HAS BEEN EXECUTED. HENCE I SET ASIDE THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW BY OBTAINING THE MARKET VALUE FIXED FOR STAMP DUTY PURPOSES BY R EGISTRAR OFFICE AS ON 18.11.2010 I.E. THE DATE OF AGREEMENT OF SALE AND COMPUTING TH E CAPITAL GAINS IN QUESTION. 5. IN THE RESULT THIS GROUND OF APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. 6. GROUND NO.2 IS ON THE ISSUE OF DISALLOWANCE U/S 14A OF THE ACT. THE UNDISPUTED FACT IS THAT THE ASSESEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR. UNDER THE CIRCUMSTANCES IT IS WELL SETTLED THAT NO DISALLOWANCE CAN BE MADE U/S 14A OF THE ACT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS CHETTINAD LOGISTICS PVT. LTD. [2018] 95 TAXMAN 256 AND THE HO NBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS CIT [2009] 317 ITR 86. 7. IN THE RESULT THIS GROUND OF APPEAL IS ALLOWED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED IN PART. O RDER PRONOUNCED IN THE COURT ON 12.09.2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 12.09.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHREE VEERAYATAN STEEL INDUSTRIES PVT. LTD., G.T. ROAD, CHOWMATH, KHANYAN, HOOGHLY-712147 (WEST BENGAL). 2. I.T.O., WARD-3 (2), KOLKATA. 3. C.I.T.(A)- 1, KOLKATA 4. C.I.T-1, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.1193/KOL/2018 SHREE VEERAYATAN STEEL INDUSTR IES PVT. LTD. A.Y.2012-13 3