Late Sri.M.P.Bhaskaran Thirumupad(rep by L/hrSmt. Sulochana, Palakkad V. ACIT, Calicut

ITA 126/COCH/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64846 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-04-2012
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 126/COCH/2012 ASSESSMENT YEAR : 2009-2010 LATE SHRI M.P. BHASKARAN THIRUMULPAD, REP. BY SMT. P. SULOCHANA, L/HR., HARISREE BHAVAN, THACHAMPARA POST, PALAKKAD-678 593. [PAN:ANKPB 2454J] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, CALICUT. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI T.M. SREEDHARAN, SR. ADV. REVENUE BY SHRI S. PRAVEEN, JR. DR DATE OF HEARING 22/08/2012 DATE OF PRONOUNCEMENT 12/10/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22.3.2012 PASSED BY LD CIT(A)-I, KOCHI AND IT RELATES TO THE ASSESSM ENT YEAR 2009-10. THE ASSESSEE IS CHALLENGING THE METHOD OF COMPUTATION OF CAPITAL GA IN ADOPTED BY LD CIT(A) AND ALSO THAT OF THE ASSESSING OFFICER. 2. THE FACTS RELATING TO THE SAID ISSUE ARE STA TED IN BRIEF. THE ASSESSEE IS A RETIRED GOVERNMENT EMPLOYEE AND WAS ALSO THE MANAGER OF AN AIDED SCHOOL NAMED DESABANDHU HIGH SCHOOL. THE ASSETS OF THE SCHOOL CONSISTING OF LAND, BUILDING, FURNITURE AND BUSES ARE OWNED BY THE ASSESSEE. DUR ING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD THE SCHOOL TO A PERSON NAMED SRI VALSAN MADATHIL FOR A CONSIDERATION OF RS.1,05,00,000/-, THE BREAK UP DETAILS OF WHICH IS AS GIVEN BELOW:- LAND RS. 44,00,000/- BUILDING RS. 24,00,000/- I.T.A. NO.126/COCH/2012 2 SCHOOL BUSES RS. 20,00,000/- FURNITURE RS. 17,00,000/- ---------------- RS.1,05,00,000/- ======== IN THE RETURN OF INCOME, THE ASSESSEE DECLARED LONG TERM CAPITAL LOSS AS DETAILED BELOW:- LONG TERM CAPITAL LOSS ON SALE OF LAND RS. 11,30,462/- LONG TERM CAPITAL LOSS ON SALE OF BUILDING RS.39,30,972/- ------------------ RS.50,61,434/- ========== THE ASSESSEE DID NOT DECLARE ANY CAPITAL GAIN ON SA LE OF FURNITURE AND BUSES ON THE PLEA THAT THEY ARE HIS PERSONAL ASSETS AND SALE OF SUCH PERSONAL ASSETS DOES GIVE RISE TO ANY CAPITAL GAIN TAX. 3. THE AO DID NOT ACCEPT THE COMPUTATIONS FURNI SHED BY THE ASSESSEE. HE ALSO DID NOT ACCEPT THE PLEA THAT THE FURNITURE AND BUSES AR E PERSONAL ASSETS. FOR WORKING OUT THE CAPITAL GAIN ON SALE OF LAND, THE ASSESSEE HAD ADOPTED THE MARKET VALUE AS ON 1.4.81 AT RS.2,450/- PER CENT OF LAND. THE AO ADOP TED THE MARKET VALUE AS ON 1.4.1981 AT RS.600/- PER CENT OF LAND AND ACCORDINGLY COMPUT ED THE LONG TERM CAPITAL GAIN. THE AO ALSO WORKED OUT THE WDV OF BUILDING, FURNITURE A ND BUSES AND ACCORDINGLY COMPUTED SHORT TERM CAPITAL GAIN ON SALE OF THOSE ASSETS. A GGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A). 4. THE LD CIT(A) TOOK A TOTALLY DIFFERENT VIEW ON THE MATTER, I.E., THE FIRST APPELLATE AUTHORITY CONSIDERED THE SAID TRANSFER OF SCHOOL AS SLUMP SALE. ACCORDINGLY, AS PER THE PROVISIONS OF SEC. 50B RELATING TO SLUMP SALE, THE LD CIT(A) DETERMINED THE CAPITAL GAIN ON SLUMP SALES AT RS.54,32,742/-. AGGRIEVED B Y THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. TO A SPECIFIC QUERY, IT WAS INFO RMED TO US THAT THE DEPARTMENT HAS ACCEPTED THE ORDER OF LD CIT(A) AND THEY DID NOT PR EFER APPEAL ON IT BEFORE THE TRIBUNAL. I.T.A. NO.126/COCH/2012 3 5. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE PROVISIONS OF SEC. 50B RELATING TO SLUMP SALE IS NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE, AS THE SALE CONSIDERATION FOR INDIVIDUAL ASSETS IS AVAILABLE ON RECORD. THE LD COUNSEL ALSO SUBMITTED HIS ARGUMENTS ATTACKING THE COMPUTATIONS MADE BY THE AO . 6. ON THE CONTRARY, THE LD D.R STRONGLY SUPPORTE D THE ORDER OF LD CIT(A). 7. SEC. 50B PROVIDES FOR THE METHOD OF COMPUTATIO N OF CAPITAL GAIN IN CASE OF A SLUMP SALE OF AN UNDERTAKING OR DIVISION. THE TERM SLUM P SALE IS DEFINED IN SEC. 2(42C) AS UNDER:- SLUMP SALE MEANS THE TRANSFER OF ONE OR MORE UNDE RTAKINGS AS A RESULT OF THE SALE FOR A LUMP SUM CONSIDERATION WITHOUT VALUES BE ING ASSIGNED TO THE INDIVIDUAL ASSETS AND LIABILITIES IN SUCH SALES. EXPLANATION 1: - FOR THE PURPOSES OF THIS CLAUSE, U NDERTAKING SHALL HAVE THE MEANING ASSIGNED TO IT IN EXPLANATION 1 TO CLAUSE (1 9AA). EXPLANATION 2:- FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT THE DETERMINATION OF THE VALUE OF AN ASSET OR LIABILITY FOR THE SOLE PURPOSE OF PAYMENT OF STAMP DUTY, REGISTRATION FEES OR OTHER SIMILAR T AXES OR FEES SHALL NOT BE REGARDED AS ASSIGNMENT OF VALUES TO INDIVIDUAL ASSE TS OR LIABILITIES. A PLAIN READING OF THE DEFINITION OF THE TERM SLUM P SALE WOULD SHOW THAT A SALE CAN BE CONSIDERED AS SLUMP SALE ONLY IF THE UNDERTAKING IS SOLD FOR A LUMP SUM CONSIDERATION WITHOUT ASSIGNING ANY VALUE TO THE INDIVIDUAL ASSET S AND LIABILITIES. HOWEVER, IN THE INSTANT CASE, THE PARTIES HAVE ASSIGNED INDIVIDUAL VALUES TO VARIOUS ASSETS, AS NOTICED IN PARAGRAPH NO.2 SUPRA. HENCE, IN OUR VIEW, THE PROV ISIONS OF SEC. 50B RELATING TO THE SLUMP SALE CANNOT BE APPLIED TO THE FACTS OF THE IN STANT CASE AND HENCE WE ARE OF THE VIEW THAT THE LD CIT(A) HAS MISDIRECTED HIMSELF ON THIS ISSUE. 8. AS STATED EARLIER, THE LD COUNSEL FOR THE ASS ESSEE HAS PUT FORTH MANY CONTENTIONS AGAINST THE STAND TAKEN BY THE ASSESSING OFFICER. SINCE THE LD. CIT(A) HAS GONE TO DECIDE THE ISSUE ON THE PREMISE OF SLUMP SALE, HE D ID NOT ADDRESS ANY OF THE GROUNDS URGED AGAINST THE COMPUTATION MADE BY THE AO. UNDE R THESE CIRCUMSTANCES, WE DO NOT I.T.A. NO.126/COCH/2012 4 FIND IT PROPER TO EXPRESS ANY VIEW ON THE VARIOUS I SSUES, UNLESS THEY ARE ADJUDICATED BY THE LD CIT(A). ACCORDINGLY, WE DEEM IT PROPER TO R ESTORE ALL THE MATTERS TO HIS FILE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AN D RESTORE THE APPEAL TO HIS FILE WITH THE DIRECTION TO ADJUDICATE THE ISSUES AFRESH IN AC CORDANCE WITH LAW AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 12 -10-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12TH OCTOBER, 2012 GJ COPY TO: 1. LATE SHRI M.P. BHASKARAN THIRUMULPAD, REP. BY SM T. P. SULOCHANA, L/HR., HARISREE BHAVAN, THACHAMPARA POST, PALAKKAD-678 593 . 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-2, CALICUT. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITAT COCHIN