ITO, CHENNAI V. Shri B.Sivarapakash (HUF), CHENNAI

ITA 1196/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51873 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 16-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASANT R PATE L
• Assessee Lawyers: K E B RENGARAJAN JUNIOR
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1196/MDS/2010 (ASSESSMENT YEAR : 2004-05) THE INCOME TAX OFFICER, BUSINESS WARD VII(1) CHENNAI (APPELLANT) VS. SHRI B. SIVAPRAKASH [HUF] 27, T.H. ROAD NEW WASHERMENPET CHENNAI 600 081. PAN : AACHB 3003 N (RESPONDENT) APPELLANT BY : SHRI PRASANT R. PATE L RESPONDENT BY : SHRI K.E .B RENGARAJAN, JUNIOR STANDING COUNSEL DATE OF HEARING : 06.09.2011 DATE OF PRONOUNCEMENT : O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE FOR THE ASS ESSMENT YEAR 2004-2005 AGAINST THE ORDER DATED 29.04.2010 OF COM MISSIONER OF INCOME TAX (APPEALS)-IX, CHENNAI. I.T.A. NO. 1196/MDS/10 2 2. THE REVENUE HAS TAKEN 3 GROUNDS OF APPEAL. HOWE VER, THE ONLY ISSUE INVOLVED IN THESE GROUNDS IS THAT THE LD . CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT THE CAPITA L GAINS AT RS. 27,44,811/- AS AGAINST RS. 46,77,811 ADOPTED IN TH E ASSESSMENT ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT IT DID NOT ACCEPT THE VALUE ADOPTED BY THE REGISTRAR, AND REFERRED THE SALE DEED U/S 47(1)(A ) OF THE TAMILNADU STAMP ACT TO THE COLLECTOR FOR REFIXING THE VALUE. THE GOVERNMENT OF TAMILNADU BROUGHT A TAMILNADU SAMADH AN SCHEME, ACCORDING TO WHICH, FOR ALL PENDING DOCUMENTS FO R REGISTRATION ONLY 60% STAMP DUTY AND REGISTRATION FEE PAYABLE WAS TO BE PAID. ACCORDINGLY THE ASSESSEE PAID TOTAL STAMP DUTY OF RS. 6,26,914/-. THE VALUE OF THE PROPERTY ON THE BASIS OF STAMP DU TY PAID WORKED OUT TO RS. 48,22,413/-. THE ASSESSING OFFICER OUG HT TO HAVE ADOPTED THIS VALUE ACCORDING TO THE STAMP DUTY PAID AS PER THE ORDER OF THE TRIBUNAL IN ITA NO. 1208/MDS/2008 DATE D 21.2.2008 PASSED IN THE APPEAL AGAINST ORIGINAL ASSESSMENT OR DER. INSTEAD OF I.T.A. NO. 1196/MDS/10 3 THIS, IN THE ASSESSMENT ORDER DATED 31.12.2008, THE ASSESSING OFFICER ADOPTED VALUE AT RS. 67,55,259/- PASSED U/ S 143(3) R.W.S 254 OF THE ACT WITHOUT ALLOWING ANY OPPORTUNITY TO THE ASSESSEE TO ADOPT SUCH VALUE. 4. THE LD. A.R OF THE ASSESSEE, IN APPEAL BEFORE TH E LD. CIT(A), SUBMITTED THAT THE VALUE ADOPTED AT RS. 67,55,259/ - WAS WITHOUT ANY AUTHORITY WHEN THE VALUE ADOPTED AT RS. 57,70, 200/- ACCORDING TO THE ORIGINAL ASSESSMENT ORDER DATED 27.12.2006 W AS BASED ON THE VALUE OBTAINED FROM THE SUB REGISTRAR BY THE ASSESS ING OFFICER WHEN THERE WAS NO SAMADHAN SCHEME PENDING BEFORE THE TRI BUNAL. THE TAMILNADU SAMADHAN SCHEME CAME INTO FORCE AND THE T RIBUNAL AFTER GOING THROUGH THE SAID SCHEME, SET ASIDE THE ORIGINAL ASSESSMENT FOR REDOING IT ACCORDING TO NEW GUIDELIN E VALUE FIXED BY THE GOVERNMENT ACCORDING TO TAMILNADU SAMADHAN SCHE ME. WHEN THE REASSESSMENT WAS DONE AS PER THE SET ASIDE ORDE R OF THE TRIBUNAL, THE ASSESSEE ALREADY PAID STAMP DUTY ACCO RDING TO THE SCHEME AS PER THE STAMP DUTY PAID AS STATED ABOVE T HE GUIDELINE VALUE WORKS OUT TO RS. 48,22,413/-. THE ASSESSING OFFICER OUGHT TO I.T.A. NO. 1196/MDS/10 4 HAVE ADOPTED THIS VALUE AT RS. 48,22,413/- TO WORK OUT TO CAPITAL GAIN TAX AFTER DEDUCTING THE COST INDEX VALUE AND I NVESTMENT MADE IN THE RESIDENTIAL PROPERTY WHICH WORKS OUT AS UNDE R: VALUE OF THE PROPERTY ACCORDING TO SAMADHAN SCHEME RS. 48,22,413/- AS PER STAMP DUTY PAID OF RS. 626914 AT 13% COST INDEX VALUE RS. 1,76,10 2.00 INVESTMENT IN RESIDENTIAL PROPERTY RS. 19,01,500.0 0 RS. 20,77,602/- RS. 27,44,811/- 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS HELD AS UNDER: 8.1 I HAVE CAREFULLY CONSIDERED THE ARGUMENT PUT FORTH BEFORE ME BY THE LEARNED REPRESENTATIVE AND ALSO GONE THROUGH THE MATERIALS AVAILABLE ON RECORD AND THE ASSESSMENT ORDER. AS PER THE TAMILNADU GOVERNMENT SAMADHAN SCHEME VIDE ABSTRACT OF G.O. MS.NO.95 DATED 23.04.2007 OF COMMERCIAL TAXES I.T.A. NO. 1196/MDS/10 5 AND REGISTRATION (JI) DEPARTMENT, THE GOVERNMENT HAS GIVEN A REMISSION OF 40% OF THE DIFFERENCE OF STAMP DUTY BETWEEN THE DUTY ALREADY PAID AND WHAT IS CHARGEABLE ON THE VALUE OF ASSET. THE RELEVANT PORTION IS AS UNDER: 'THE GOVERNMENT, AFTER CAREFUL CONSIDERATION, HAVE DECIDED TO IMPLEMENT A 'SAMADHAN SCHEME' BY GIVING A REMISSION OF 40% (FORTY PERCENT) OF THE DIFFERENC E OF STAMP DUTY BETWEEN THE DUTY ALREADY PAID AND WHAT IS CHARGEABLE ON THE VALUE OF THE PROPERTIES (BOTH FOR LAND A ND BUILDINGS INCLUDING CHARGEABLE ASSETS) AS PROPOSED BY THE REGISTERING OFFICER ON THE BASIS OF GUIDELINE REGISTER IN RESPECT OF LAND AND THE PWD SCHEDULE OF RATES IN RESPECT OF BUILDINGS. THE GOVERNMENT ISSUED FOLLOWING INSTRUCTIONS IN THIS REGARD' 8.2 AS PER 'SAMADHAN SCHEME' THE APPELLANT HAS ALREADY PAID 2,50,000/AT THE TIME OF REGISTRATION AND THE BALANCE OF RS. 3,76,914/- AS STAMP DUTY PAID PUT TOGETHER COMES TO RS. 6,26,914/- AND APPLYING 13% ON THE REGISTRATION I.T.A. NO. 1196/MDS/10 6 CHARGES, THE VALUE COMES TO RS. 48,22,413/- AND FURTHER AFTER DEDUCTING OF COST INDEXATION AND TAKING INTO ACCOUNT THE INVESTMENT IN RESIDENTIAL PROPERTY, THE NET TAXABLE CAPITAL GAIN IS ARRIVED AT RS. 27,44,811/- IS IN ORDER AND THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE TAXABLE CAPITAL GAIN OF RS. 27,44,811/- AND I DIRECT THE ASSESSING OFFICER TO DELETE RS. 19,32,846/-. 6. THE LD. D.R. SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER WHEREAS THE LD. A.R. OF THE ASSESSEE FILED AN ORDER OF THE CHENNAI D BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. SHRI V . VIJAYAN IN ITA NO. 1392/MDS/2009 FOR ASSESSMENT YEAR 2006-07 ORDER DATED 30.3.2010 AND SUBMITTED THAT ON THE VERY SAME FACTS THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE TRIBUNAL IN THE CASE OF SHRI V. VIJAYAN IN ITA NO. I.T.A. NO. 1196/MDS/10 7 1392/MDS/2009 FOR ASSESSMENT YEAR 2006-07 ORDER DAT ED 30.3.2010 HELD AS UNDER: 6. AS REGARDS REGISTRATION FEE, THE GOVERNMENT DIR ECT THAT IN AS MUCH AS STAMP DUTY IS REDUCED BY ISSUE OF NOTIFIC ATION UNDER SECTION 9 OF THE INDIAN STAMP ACT, 1899, THE REGISTRATION FEE HAS TO BE LEVIED ON THE REDUCED VAL UE FOR WHICH STAMP DUTY HAS TO BE PAID ACCORDING TO ARTICLE 1(B) OF THE TABLE OF FEES OF THE REGISTRATION ACT, 1908 AND HENCE IT IS NOT NECESSARY TO ISSUE A SEPARATE NOTIFICATION FOR R EMITTING THE REGISTRATION FEE. A READING OF THE ABOVE WOULD SHOW THAT THE GOVERNMEN T ORDER WAS ISSUED FOR DETERMINATION OF MARKET VALUE AN D TO ENABLE THE GOVERNMENT TO RELEASE THE BLOCKED REVENUE . THE REMISSION OF 40% IS ON THE DIFFERENCE OF DUTY ALREAD Y PAID AND WHAT WAS CHARGEABLE ON THE VALUE OF THE PROPERTIES, AS PROPOSED BY THE REGISTERING OFFICER ON THE BASIS OF GUIDELINE REGISTER. IT IS ALSO MENTIONED THAT A SEPARATE NOT IFICATION I.T.A. NO. 1196/MDS/10 8 WAS NOT NECESSARY FOR REMISSION OF REGISTRATION FEE SINCE THE REGISTRATION FEE AS REDUCED WAS BEING LEVIED BASED O N THE REDUCED VALUE FOR WHICH STAMP DUTY HAD TO BE PAID. THEREFORE, IT IS CLEAR THAT THE REMISSION WAS RELAT ABLE TO THE MARKET VALUE OF THE PROPERTY BASED ON THE GUIDELINE R EGISTER. IF THAT BE SO, WHILE APPLYING SECTION 50C OF THE AC T, FULL VALUE OF CONSIDERATION WHICH IS TO BE CONSIDERED BY THE ASSESSING OFFICER COULD BE TAKEN ONLY AFTER GIVING E FFECT TO THE GOVERNMENT ORDER MENTIONED SUPRA, WHEREBY THE M ARKET VALUE IS BROUGHT DOWN BY 40%. AS MENTIONED BY THE L D. COUNSEL FOR THE ASSESSEE, THE RATE OF STAMP DUTY CONT INUED TO BE 8% AND THE REDUCTION OF 40% WAS ONLY SINCE THE MA RKET VALUE WAS BROUGHT DOWN. HENCE WE FIND NO LACUNAE IN THE DIRECTIONS GIVEN BY THE LD. CIT(A) IN THIS REGARD. 8. THE LD. D.R. COULD NOT POINT OUT ANY GOOD REASON FOR WHICH THE ABOVE DECISION OF THE TRIBUNAL SHOULD NOT BE FOLLOW ED BY US. AS THE ORDER OF THE LD. CIT(A) IS IN CONFORMITY WITH THE ORDER OF THE TRIBUNAL QUOTED ABOVE, WE FIND NO ERROR IN THE ORDE R OF THE LD. I.T.A. NO. 1196/MDS/10 9 CIT(A). IT IS CONFIRMED. GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT 9 TH SEPTEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 9 TH SEPTEMBER, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE