UDAYABANU TANUKULA, MUMBAI V. CIT 34, MUMBAI

ITA 1266/MUM/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2297 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Assessee Lawyers: GAUTAM S SALECHA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Reassessment proceedings
• Section: 143(3); 154

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SANJAY ARORA , AM ./ I.T.A. NO. 1266/MUM/2015 ( / ASSES SMENT YEAR: 2005 - 06 ) UDAYABANU TANUKULA C/O. S. G. SALECHA & CO., B - 6, KIRAN BUILDING, 1 ST FLOOR, OPP. SONA UDYOG, PARSI PANCHAYAT ROAD, ANDHERI (E), MUMBAI - 400 069 / VS. ITO - 22(3)(5), PIRAMAL CHAMBERS, 3 RD FLOOR, ROOM NO. 32, LALBAUG, MUMBAI - 400 012 ./ ./ PAN/GIR NO. ABWPT 2413 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI GAUTAM S. SALECHA / RESPONDENT BY : SHRI VISHWAS JADHAV / DATE OF HEARING : 03.12.2015 DATE OF ORDER : 10.12.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 34 , MUMBAI (CIT(A) FOR SHORT) DATED 24.12.2014 , DIS MISSING THE A SSESSEES APPEAL CONTESTING THE REJECTION OF ITS APPLICATION U/S. 154 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2005 - 06 BY THE ASSESSING OFFICER (A.O.) VIDE HIS ORDER DATED 11.5.2012. 2. THE BRIEF FAC TS OF THE CASE ARE THAT ASSESSMENT IN THE FIRST INSTANCE WAS FINALIZED U/S. 143(3) ON 02.7.2007, ASSESSING LONG TERM CAPITAL GAIN (LTCG) ON THE S ALE OF 2 ITA NO. 1266/MUM/2015 (A.Y. 2005 - 06) UDAYABANU TANUKULA VS. ITO THREE PLOTS OF LAND (BEARING NUMBERS 154, 155 AND 156) AT RS.96,852/ - . THE TRANSFER CONSIDERATION WAS AD OPTED U/S.50C OF THE A CT AT RS.17,59,300/ - , ALLOWING THE INDEX ED COST OF ACQUISITION AT RS.16,62,448/ - . R EASSESSMENT PROCEEDINGS WERE SUBSEQUENTLY INITIATED IN VIEW O F THE DIFFERENCE IN THE CAPITAL GAIN ASSESSED AND THAT ARISING ON THE BASIS OF PURCHASE AN D SALE AGREEMENTS. THE SAME WAS, ACCORDINGLY, DETERMINED AT RS.5,32,501/ - , COMPUTING THE SALE CONSIDERATION AND INDEXED COST OF ACQUISITION AT RS.19,59,260/ - AND RS.14,26,759/ - RESPECTIVELY, THEREBY ENHANCING THE LTCG BY RS.4,35,649/ - (RS.5,32,501 RS.96, 852). THE ORIGINAL AND THE REVISED FIGURES ARE AS UNDER: (AMOUNT IN RS.) PURCHASE CONSIDERATION SALE CONSIDERATION LTCG PLOT OA RA OA RA OA RA (1) (2) (3) (4) (3) (1) (4) (2) 154 4,72,971 2,88,828 4,22,300 4,22,300 155 4,72,971 5,23 ,034 5,56,200 5,56,200 156 7,16,506 6,14,897 7,80,800 9,80,760 16,62,448 14,26,759 17,59,300 19,59,260 9 6, 8 52 5,32,501 THE ASSESSEE OBJECTED VIDE APPLICATION U/S. 154 DATED 09.2.2012 (FILED ON 13.2.2012/COPY ON RECORD), STATI NG THAT THOUGH THE SAL E PRICE OF P LOT NO. 156 HAD BEEN SINCE (I.E., VIDE RECTIFI CATION ORDER DATED 29.12.2011) RECTIFIED BY TAKING IT AT RS.7,80,800/ - INSTEAD OF RS.9,80,760/ - , THE BASIS FOR THE COMPUTATION OF THE REVISED INDEX ED COST AT RS.14.27 LACS, I.E., AS AGAINST THE ORIG INAL VALUE OF RS.16.62 LACS, HAD NOT BEEN INDICATED IN THE ASSESSMENT ORDER . THE SAID APPLICATION WAS D ISPOSED OF BY THE ASSESSING OFFICER ( A.O. ) VIDE HIS ORDER DATED 11.5.2012, STATING THAT THERE WAS NO MISTAKE APPARENT FROM THE RECORD. IN APPEAL, THE ASS ESSEE EXPLAINED THAT THE DIFFERENCE IN THE INDEX ED COST OF ACQUISITION HAD OCCURRED AS STAMP DUTY AND REGISTRATION CHARGES HAD NOT BEEN INCLUDED WHILE COMPUTING THE PURCHASE COST, AND WHICH WAS APPARENT FROM THE PURCHASE DEEDS ON RECORD. THE LD. CIT(A), ME NTIONING THE DIFFERENT FIGURES AS STATED IN THE ASSESSMENT A ND REASSESSMENT ORDER S (AS ABOVE), HELD THAT THERE WAS, IN 3 ITA NO. 1266/MUM/2015 (A.Y. 2005 - 06) UDAYABANU TANUKULA VS. ITO VIEW THEREOF, NO MISTAKE APPARENT FROM THE RECORD. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. THE PARTIES HAVE BEEN HEARD , AND THE MATERIAL ON RECORD PERUSED. THE ASSESSEE HAD ALREADY BEEN ALLOWED INDEX ED COST OF ACQUISITION AT RS.16.62 LACS VIDE REGULAR ASSESSMENT DATED 02.7.2007. THE SAME STOOD REVISED TO RS.14.26 LACS IN THE REASSESSMENT ORDER. N O REASON FOR THE SAME IS STATED IN THE REASSESSMENT ORDER. IT IS THIS THAT LED THE ASSESSEE TO QUESTION THE BASIS OF THE SAME, EVEN AS THE OTHER FIGURE MODIFIED IN THE REASSESSMENT ORDER, I.E., THE SALE PRICE O F PLOT NO. 156, WAS RECTIFIED, BRINGING IT TO THE SAME FIGURE AS ASSUMED EARLIER . THE A.O. , INSTEAD OF EXPLAINING THE DIFFERENCE, I.E., THE REASON THERE - FOR, MERELY STATED THAT NO RECTIFICATION IS CALLED FOR. IN APPEAL, WHE RE - AT THE ASSESSEE (ON HIS OWN) FOUND THE DIFFERENCE AS ON ACCOUNT OF EXCLUSION OF STAMP DUTY AND REGISTRATION CH ARGES, THE LD. CIT(A) , RATHER THAN VERIFYING THE SAME ON THE BASIS OF THE MATERIAL ON RECORD OR CAUS ING IT BY THE A .O., AND SETTLING THE MATTER BY ISSUING DEFINITE FINDINGS OF FACT BASED ON THE MATERIAL ON RECORD, MERELY REITERATED THAT THERE WAS NO MISTAK E APPARENT FROM THE RECORD. THE REDUCTION IN THE (INDEX ED ) PURCHASE COST BY THE A.O. COULD ONLY BE ON THE BASIS OF THE MATERIAL ON RECORD OR THE DIFFERENCE IN THE CALCULATION , BOTH MISTAKES APPARENT . THE REVENUES STANCE AND ATTITUDE IS INEXPLICABLE , AND N EITHER COULD THE LD. DR JUSTIFY IT BEFORE M E IN ANY MANNER. THIS IS ALL THE MORE UNFORTUNATE CONSIDERING THAT THE REVISION IN THE PURCHASE COST IN THE REASSESSMENT PROCEEDINGS WAS WITHOUT THE ASSESSEE BEING SHOW CAUSED IN THE MATTER. STAMP DUTY AND REGISTR ATION CHARGES INCURRED ON PURCHASE ARE DEFINITELY A PART OF THE COST, DEDUCTIBLE U/S. 48( I I) IN COMPUTING THE CAPITAL GAINS CHARGEABLE U/S. 45 OF THE ACT. THE LAW IN THE MATTER IS PATENTLY CLEAR. BE THAT AS IT MAY, THE A.O. IS DIRECTED TO COMPUTE THE CAPIT AL GAIN ON EACH OF THE PLOTS UNDER REFERENCE BY INCLUDING THE STAMP DUTY AND REGISTRATION CHARGES (I.E., AS PER THE PURCHASE DEEDS ON RECORD THE BASIS O N WHICH THE PURCHASE COST HAS BEEN DETERMINED) AS A PART OF THE IR PURCHASE COST. I DECIDE ACCORDINGLY. 4 ITA NO. 1266/MUM/2015 (A.Y. 2005 - 06) UDAYABANU TANUKULA VS. ITO 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED ON THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON DECE MBER 03 , 201 5 AT THE CONCLUSION OF THE HEARING ITSELF. SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 10 . 12 .201 5 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / TH E CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI