Manohar Lal Gupta, INDORE V. ITO-4(5), INDORE

ITA 126/Ind/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6991 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 11-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.P.MOURYA
• Assessee Lawyers: S M.D. KABRA; J.N
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Retrospective amendment; Cost of acquisition; Fair market value; Valuation report; Set aside
• Section: 143(3); 54B; 50C; 142(1); 201

Judgement Text

MANOHAR LAL GUPTA ITA NOS.126/IND/2019 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 126/IND/2019 ASSESSMENT YEAR 2015-16 PAN : BCJPG9107Q SHRI MANOHARLAL GUPTA, V/S ITO-4(5), 204, SANT MARG, INDORE GANDHI NAGAR, INDORE (APPELLANT) (RESPONDENT) REVENUE BY SHRI R.P. MOURYA, SR.DR ASSESSEE BY S/SHRI M.D. KABRA & J.N. SHARMA, ARS DATE OF HEARING 30.07. 201 9 DATE OF PRONOUNCEMENT 31 .07.2019 O R D E R PER MANISH BORAD, A.M. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSE PERTAINING TO ASSESSMENT YEARS 2015-16 IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- II (IN SHORT LD.CIT(A)], INDORE DATED 14.11.2018 WHICH IS ARI SING OUT OF THE ORDER U/S 143(3) OF INCOME TAX ACT, 1961 DATED 15.1 2.2017 FRAMED BY ITO-5(5), INDORE. MANOHAR LAL GUPTA ITA NOS.126/IND/2019 2 2. INITIALLY THE ASSESSEE RAISED 25 GROUNDS OF APPE AL WHICH WERE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE AND NOT AS PER RULE 8 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963. SUBSEQU ENTLY REVISED GROUNDS WERE FILED BY THE ASSESSEE ON 24.4.2019 RAI SING FOLLOWING GROUNDS; 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING ADDITI ON OF RS. 92,78,000/- MADE BY AO INVOKING SECTION SOC WHEREAS THE APPELLA NT CITED BEFORE C!T(A) CASE LAWS IN HIS FAVOUR THAT FIRST PROVISO OF SECTI ON SOC IS CURATIVE IN NATURE AND SHOULD BE GIVEN RETROSPECTIVE EFFECT FROM 01.04 .2003, THE DATE EFFECTIVE FROM WHICH SECTION SOC WAS INTRODUCED. THE APPELLANT HAD RELIED ON THE JUDGMENT OF IT AT INDORE BENCH IN THE CASE OF MANOJ YADAV (SMT. RUKMANI YADAV)AND ANR.; VS. INCOME TAX OFFICER AND ANR. (OR DER PASSED ON OCTOBER 9( 2018) 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING J COMPLETE DETAILS OF PAYMENTS MADE TOWARDS TRANSFER EXPENSES WHICH ARE FULLY VERI FIABLE. 3.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING PART DISALLO WANCES OF EXEMPTION CLAIMED U/S S4B ON THE GROUND TAKEN BY THE AO THAT REINVESTMENT IN AGRICULTURAL LAND IN FY 2012-13 WAS MADE PRIOR TO T HE DATE OF SALE/REGISTRY IN FY 2014-15. THE APPELLANT IN HIS FAVOUR RELIED O N THE JUDGMENT OF ITAT INDORE BENCH IN THE CASES OF HEMANT KUMAR NEMA ANR. VS. ACIT 3CL), INDORE. THE APPELLANT HAD ALSO RELIED ON CBDT CIRCU LAR 359 DATED IO MAY, 1983. MANOHAR LAL GUPTA ITA NOS.126/IND/2019 3 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CITCA) ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING PART D ISALLOWANCE OF EXEMPTION U/S 54B AS DONE BY THE AO ON THE GROUND THAT RE-INV ESTMENT IN AGRICULTURAL LAND WAS MADE IN THE NAME OF APPELLANT 'S SON. THE APPELLANT HAD RELIED ON THE JUDGMENT OF MP HIGH COURT IN HIS FAVOUR AND OTH ER CASE LAWS AS WELL. JUDGMENT OF ITAT INDORE BENCH IN THE CASE OF ACIT 2 CL) INDORE V. DEEPAK KUMAR DHAWAN WAS ALSO CITED BEFORE CITCA) TO DRAW S UPPORT FROM. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CITCA) ERRED BOTH ON FACTS AND IN LAW IN NOT ACCEPTING DEP OSIT OF RS. 42,53,000/- MADE IN CAPITAL GAIN DEPOSIT ACCOUNT SCHEME, 1988 T HOUGH THE APPELLANT HAD RELIED ON JUDGMENT IN THE CASE CIT V. RAJESH KU MAR JALAN OF GAUHATI HIGH COURT. 6. THAT THE ORDER OF THE LD. CITCA) IS LIABLE TO BE QU ASHED AS HE HAS NOT CONSIDERED ORDER OF TRIBUNAL AND COURTS OF LAW INCL UDING JURISDICTIONAL HIGH COURT OF MP AND ITAT , INDORE BENCH AND OTHER COURT S AS WELL. 7. THE APPELLANT CRAVES TO ALTER / AMEND/ ADD/WITHDRAW OR RAISE ANY ADDITIONAL GROUND OF APPEAL DURING THE COURSE OF HE ARING . 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM OTHER SOURCES. E- RETURN OF INCOME FILED ON 26.08.2015 FOR ASSESSMENT YEAR 2015-16 DECLARING INCOME OF RS.6,75,820/-. CASE SELECTED F OR SCRUTINY THROUGH CASS FOLLOWING SERVING OF NOTICES U/S143(2) AND 142(1) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCE3EDI NGS LD. A.O OBSERVED THAT THE ASSESSEE HAS SOLD MOVEABLE PROPER TY MEASURING MANOHAR LAL GUPTA ITA NOS.126/IND/2019 4 0.587 HECTARE AND 2.014 HECTARE FOR TOTAL CONSIDERA TION OF RS.5,82,22,000/- THROUGH SALE DEED DATED 12.5.2014. FAIR MARKET VALUE ASSESSED BY STAMP VALUATION AUTHORITY WAS AT RS.6,75,00,000/-. LD. A.O APPLIED SECTION 50C TAKI NG THE FAIR MARKET VALUE AND MADE ADDITION OF RS.92,78,000/-. LD. A.O MADE ADDITION IN RESPECT OF EXCESS CLAIM OF INDEX COST O F ACQUISITION. DISALLOWANCE WAS ALSO MADE FOR TRANSFER EXPENSES CL AIMED BY THE ASSESSEE. LD. A.O DENIED THE EXEMPTION CLAIMED U/S 54B OF THE ACT FOR THE AGRICULTURE LAND PURCHASED IN THE NAME OF A SSESSEES SON. LD. A.O ACCORDINGLY ASSESSED THE INCOME AT RS.2,87, 87,881/- UNDER THE HEAD LONG TERM CAPITAL GAIN. AGGRIEVED ASSESSE E PREFERRED APPEAL BEFORE LD. CIT(A) AND PARTLY SUCCEEDED. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE OF PROCEEDINGS BEFORE THE TRIBUNAL ON 11.7.2019 REQUES TED FOR ADMITTING THE VALUATION REPORT OF REGISTERED VALUER IN SUPPORT OF ITS CONTENTION THAT THE LD. A.O WAS NOT JUSTIFIED IN AD OPTING THE FAIR MARKET VALUE AS PER THE STAMP VALUATION AUTHORITY S INCE THE IMPUGNED LAND WAS ADJOINING TO SLUM AREA. THE REQU EST OF THE MANOHAR LAL GUPTA ITA NOS.126/IND/2019 5 ASSESSEE WAS ACCEPTED AND ON 25.7.2019 VALUATION RE PORT FROM THE REGISTERED VALUER SHRI SURENDRA KUMAR JAIN (BAJAJ) WAS PLACED ON RECORD VALUING THE LAND UNDER CONSIDERATION AT RS.4 ,86,39,000/-. DURING THE COURSE OF HEARING LD. COUNSEL FOR THE AS SESSEE REQUESTED FOR SETTING ASIDE ALL THE ISSUES RAISED IN THE APPE AL TO THE FILE OF LD. A.O FOR DECIDING SINCE THIS FACT WAS NOT PLACED BEF ORE THE LD. A.O. LD. DEPARTMENTAL REPRESENTATIVE WAS FAIR ENOUGH IN NOT OPPOSING THE REQUEST OF THE ASSESSEE TO SET ASIDE THE ISSUES TO THE FILE OF LD. A.O FOR ADJUDICATING THE ISSUES AFRESH. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. ASSESSEE REQUESTED THROUGH GROUNDS OF A PPEALS RELATING TO THE ADDITIONS CONFIRMED BY LD. CIT(A) MADE BY LD. A .O U/S 50C OF THE ACT, DENYING OF EXEMPTION U/S 54B OF THE ACT AN D DISALLOWANCE OF INDEX COST OF ACQUISITION. WE OBSERVE THAT THE INI TIAL POINT OF LONG TERM CAPITAL GAIN STARTS FROM THE SALE CONSIDERATIO N. THE ASSESSEE RECEIVED SALE CONSIDERATION OF RS.5,82,22,000/- FRO M SALE OF LAND IN TOTAL MEASURING TO 2.014 HECTARE. LD. A.O ADOPTED THE FAIR MARKET VALUE ON THE BASIS OF STAMP VALUATION AUTHORITY AT RS.6,75,00,000/-. AS PER THE REGISTERED VALUER REPORT FILED DURING TH E COURSE OF HEARING MANOHAR LAL GUPTA ITA NOS.126/IND/2019 6 BEFORE US THE FAIR MARKET VALUE OF THE LAND IN QUES TION IS VALUED AT RS.4,86,39,000/-. THE REGISTERED VALUER HAS REDUCE D THE VALUE BY 15% ON ACCOUNT OF POOR LOCATION I.E. SLUM LOCALITY, DISPUTED APPROACH AND DEPRESSION IN THE MARKET. 6. WE OBSERVE THAT THE VALUATION REPORT OF THE REGI STERED VALUER WAS NOT FOR CONSIDERATION BEFORE THE LD. A.O BEFORE MAKING THE ADDITION. WE, THEREFORE, IN THE INTEREST OF JUSTIC E AND TOTALITY OF FACTS SET ASIDE THE ISSUE ADOPTING SALE CONSIDERATION FOR COMPUTING THE MARKET VALUE TO THE FILE OF LD. A.O FOR DECIDING AF RESH. AS REGARDS OTHER DISALLOWANCES AND DENIAL OF BENEFIT U/S 54B O F THE ACT LD. COUNSEL FOR THE ASSESSEE REFERRED TO VARIOUS JUDGM ENTS INCLUDING THAT OF JURISDICTIONAL HIGH COURT AS WELL AS THE TR IBUNAL. SINCE ONE OF THE MAJOR ISSUE HAS ALREADY BEEN DECIDED TO SET ASI DE TO THE FILE OF LD. A.O, WE DEEM IT PROPER TO DO THE SAME WITH THE REMA INING ISSUES ALSO RAISED BEFORE US. WE HOWEVER DIRECT THE LD. A.O TO DECIDE THE ISSUES AS PER THE PROVISIONS OF LAW AND JUDICIAL PRONOUNCE MENTS WITH REFERENCE TO THE JUDGMENTS OF JURISDICTIONAL HIGH C OURT AS WELL AS THE DECISION OF INDORE BENCH OF I.T.A.T. IN THE RESULT ALL THE ISSUES RAISED IN THIS APPEAL ARE SET ASIDE TO THE FILE OF LD. A.O FOR DECIDING AFRESH AS MANOHAR LAL GUPTA ITA NOS.126/IND/2019 7 PER THE TERMS AND DIRECTIONS INDICATED ABOVE. NEED LESS TO MENTION THAT PROPER OPPORTUNITY OF BEING HEARD SHOULD BE GI VEN TO THE ASSESSEE. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2 019 SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 31 JULY, 2019 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE