Kailash Prasad Khemka, Jamshedpur V. ITO, Jamshedpur

ITA 126/RAN/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9991 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: RAJIV MITTAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 126 /RAN/2016 ASSESSMENT YEAR : 2005 - 06 KAILASH PRASAD KHEMKA, , M/S. CONTINENTAL PROJECTS & MARKETING, 530, KASIDIH, STRAIGHT MILE ROA, SAKCHI, JAMSHEDPUR VS. ITO, WARD 2(2), JAMSHEDPUR PAN/GIR NO. ACAPK 7050 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI RAJIV MITTAL, AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 14 /12/ 2016 DATE OF PRONOUNCEMENT : 14 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - JAMSHEDPUR , DATED 28.3.2016 , FOR THE ASSESSMENT YEAR 2005 - 06 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION OF RS.11,73,410/ - AS LONG TERM CAPITAL GAINS. 3. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE 2 ITA NO. 126/RAN/2016 ASSESSMENT YEAR :2005 - 06 UNDISPUTED FACTS ARE TH AT DURING THE YEAR, THE ASSESSEE HAS GIFTED A PIECE OF LAND MEASURING 0.08.60 HECTARE EQUIVALENT TO MORE OR LESS TWENTY ONE AND HALF DECIMALS TOGETHER WITH BOUNDARY WALL TIN SHED ROOF AND KHAPRAPOSH HOUSE HAVING BUILT U P AREA OF 1000 SQ.FT SITUATED AT BHLY ADIH AREA SAKCHI TO H IS BROTHER SRI BHADRAMAL KHEMKA. HE FOUND THAT IN THE GIFT DEED, THE ASSESSEE HAS SHOWN THE VALUE OF LAND AT RS.48,000/ - . ACCORDING TO THE ASSESSING OFFICER, THE STAMP DUTY VALUATION ADOPTED BY THE DISTRICT SUB - REGISTRAR FOR STAMP PUR POSES WAS RS.13 LAKHS AND, THEREFORE, U/S.50C OF THE ACT, HE ADOPTED T H E SALE CONSIDERATION AT RS.13 LAKHS FOR THE LAND AND AFTER ALLOWING DEDUCTION FOR THE INDEXED COST OF ACQUISITION OF RS.1,26,593/ - COMPUTED THE LONG TERM CAPITAL GAINS ON THE LAND AT RS.11,73,410/ - , WHICH WAS ASSESSED TO TAX. 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSI NG OFFICER. 5. BEFORE ME, LD A.R. OF THE ASSESSEE SUBMITTED THAT AS PER PROVISIONS OF SECTION 48 OF THE ACT, THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED AS A RESULT OF THE TRANSFER OF CAPITAL ASSET, THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER AND THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO. HENCE, HE SUBMITTED THAT THE ASSESSEE WAS LIABLE TO CAPITAL GAINS ON TRANSFER OF ASSETS FOR CONSIDERATION. HE SUBMITTED THAT 3 ITA NO. 126/RAN/2016 ASSESSMENT YEAR :2005 - 06 IN THE INSTANT CASE, THE ASSESSEE HAS EXECUTED THE GIFT DEED, WHICH FACT IS NOT IN DISPUTE AND HENCE, THE TRANSFER WAS WITHOUT ANY CONSIDERATION. THEREFORE, THE ASSESSING OFFICER W AS NOT JUSTIFIED IN ASSUMING THE CONSIDERATION FOR THE LAND GIFTED BY HIM ON THE BASIS OF STAMP VALUATION OF THE LAND AT RS.13 LAKHS. HENCE, IT WAS HIS SUBMISSION THAT THE ASSESSEE WAS NOT LIABLE FOR ANY CAPITAL GAINS TAX DURING THE YEAR UNDER CONSIDERATI ON. 6. ON THE OTHER HAND, LD D.R. AGREED WITH THE SUBMISSION OF LD A.R. OF THE ASSESSEE. 7. I FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD GIFTED A PIECE OF LAND AS PER GIFT DEED DATED 9.6.2004 TO HIS BROTHER SRI BHADRAMAL KHEMKA . THE COST OF THIS LAND HAS BEEN MENTIONED IN THE DEED AT RS.48,000/ - . THE ASSESSING OFFICER HAS TREATED THE TRANSFER OF THIS LAND FOR CONSIDERATION OF RS.13 LAKHS BY ADOPTING THE STAMP DUTY VALUATION AS THE CONSIDERATION RECEIVED BY THE ASSESSEE AND ASS ESSED THE ASSESSEE TO LONG TERM CAPITAL GAINS AT RS.11,73,410/ - . THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE HAS NOT SOLD THE LAND BUT HAS GIFTED THE LAND TO HIS BROTHER SRI BHADRAMAL KHEMKA AND HENCE, WAS NOT EXIGIBLE TO ANY LONG TERM CAPITAL G AINS. LD D.R. COULD NOT CONTROVERT THE SUBMISSION OF THE LD A.R. OF THE ASSESSEE BY BRINGING ANY MATERIAL ON RECORD. HE ALSO COULD NOT BRING ON RECORD TO SHOW THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT OF CONSIDERATION FOR GIFTING THE LAND TO HIS BROTHER VIDE GIFT DEED 9.6.2004. 4 ITA NO. 126/RAN/2016 ASSESSMENT YEAR :2005 - 06 IN ABSENCE OF THE SAME, IN MY CONSIDERED OPINION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING THE LONG TERM CAPITAL GAINS FROM THE TRANSFER OF LAND OF RS.11,73,410/ - . I, THEREFORE, SET ASIDE THE ORDERS OF LOWER AUTHORIT IES AND DELETE THE ADDITION OF RS. 11,73,410/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO N OUNCED IN THE OPEN COURT ON 14 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S. SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 14 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : KAILASH PRASAD KHEMKA , , M/S. CONTINENTAL PROJECTS & MARKETING, 530, KASIDIH, STRAIGHT MILE ROA, SAKCHI, JAMSHEDPUR 2. THE RESPONDENT. ITO, WARD 2(2), JAMSHEDPUR 3. THE CIT(A) JAMSHEDPUR 4. CIT , JAMSHEDPUR 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//