ACIT, CHENNAI V. M.N.Thirunavukkarasu, CHENNAI

ITA 1267/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68709 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 1267/MDS/2013 ASSESSMENT YEAR : 2007-08 THE ASST. COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-II, CHENNAI-34. (APPELLANT) VS SHRI M.N. THIRUNAVUKKARASU, NO.6, FIRST LINK STREET, CIT COLONY, MYLAPORE, CHENNAI 600 004. [PAN: AABPT 1831 H] (RESPONDENT) REVENUE BY : SHRI T.N. BETGERI, JCIT ASSESSEE BY : NONE DATE OF HEARING : 24-09-2013 DATE OF PRONOUNCEMENT : 24-09-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-VI, CHEN NAI DATED 18-01-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 200 7-08. THE ONLY ISSUE IN THE APPEAL IS WHETHER PROVISIONS OF S ECTION 50C ARE APPLICABLE IN THE CASE. I.T.A. NO. 1267/MDS/2013 2 2. THE ASSESSEE SOLD HIS AGRICULTURAL LAND FOR A SU M OF ` 1,46,72,000/- DURING THE RELEVANT PREVIOUS YEAR. T HE LAND WAS SITUATED WITHIN THE LIMITS OF MARAIMALAI NAGAR MUNI CIPALITY. THE ASSESSEE DID NOT ADMIT CAPITAL GAINS ARISING OUT OF SALE OF AGRICULTURAL LAND. THE ASSESSEE FILED RETURN OF IN COME FOR THE AY. 2007-08 ON 31-08-2006 DECLARING INCOME AS ` 8,28,333/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. AS SESSMENT WAS COMPLETED ON 30-12-2009. SUBSEQUENTLY, THE CASE WA S RE-OPENED AND NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 (HE REIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSE E ON 31-03-2011 AND NOTICE U/S. 143(2) R.W.S. 129 WAS ISSUED TO THE ASSESSEE ON 20-09-2011. DURING THE RE-OPENING PROCEEDINGS, THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE LAND IS IN J URISDICTIONAL LIMITS OF MARAIMALAI NAGAR MUNICIPALITY, THE EXEMPTION CLA IMED BY THE ASSESSEE IS INCORRECT. THE ASSESSING OFFICER DID N OT ACCEPT THE ESTIMATED VALUE AND MADE ADDITION OF ` 2,51,41,094/- BY INVOKING THE PROVISIONS OF SECTION 50C. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 28-12 -2011 PASSED U/S. 147 R.W.S. 143(3), THE ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) HELD THA T IN THE FACTS OF THE CASE INVOKING THE PROVISIONS OF SECTION 50C BY THE I.T.A. NO. 1267/MDS/2013 3 ASSESSING OFFICER TO ENHANCE THE SALE CONSIDERATION IS INCORRECT. THE CIT(APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE . NOW, THE REVENUE HAS COME IN APPEAL IMPUGNING THE O RDER OF THE CIT(APPEALS). 3. SHRI T.N. BETGERI, APPEARING ON BEHALF OF THE RE VENUE VEHEMENTLY OPPOSED THE IMPUGNED ORDER AND RELIED ON THE GROUNDS OF APPEAL. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESPIT E SERVICE OF NOTICE. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 50C F OR MAKING ADDITION ON ACCOUNT OF SALE OF AGRICULTURAL LAND BY THE ASSESSEE. THE CIT(APPEALS) HAS DELETED THE ADDITION WITH THE FOLLOWING OBSERVATIONS: 5. I HAVE GONE THROUGH THE FACTS PLACED BEFORE ME, PROVISIONS OF S.50C AND THE CASE LAWS RELIED UPON. FOR THE PU RPOSE OF CONVENIENCE THE PROVISIONS OF S.50C(1) AS EXISTED F OR THE AY. 2007-08 ARE EXTRACTED HERE. 50C (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUI NG AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING I.T.A. NO. 1267/MDS/2013 4 LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE AD OPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (HE REAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSE SSABLE] SHALL, FOR THE PURPOSE OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. 6. FROM A SIMPLE READING OF THE SAID PROVISIONS IT IS APPARENT THAT THE VALUE SO ADOPTED OR ASSESSED BY THE REGIST RATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF SUCH TRANSACTION FOR THE PU RPOSE OF S.48. HOWEVER, IN THIS GIVEN CASE NO SUCH VALUE WA S ADOPTED OR ASSESSED BY THE AUTHORITY UNDER THE STATE GOVERN MENT MEANING SUB-REGISTRAR SINCE THE TRANSFER WAS NOT WI THIN THE REALMS OF THE KNOWLEDGE OF THE SUB-REGISTRAR. IN T HE ABSENCE OF PRESENTING THE DOCUMENTS TO THE SUB-REGISTRAR FO R THE PURPOSE OF REGISTRATION IT CANNOT BE STATED THAT TH E PROPERTY HAS BEEN ASSESSED AT A VALUE DIFFERENT THAN THE VAL UE OF CONSIDERATION DECLARED BY THE APPELLANT. IT IS A D IFFERENT MATTER THAT THE PROVISIONS OF S.50C(1) HAS BEEN AMENDED W. E.F. 01.10.2009 TO BRING NON-REGISTERED SALES ALSO WITHI N ITS PURVIEW BUT FOR THE AY. 2007-08 THIS AMENDMENT CANN OT BE BROUGHT INTO OPERATION. HENCE THE PROVISIONS OF S. 50C(1) CANNOT BE APPLIED FOR DISTRIBUTING THE SALE CONSIDE RATION AS SUPPORTED BY THE RATIO IN THE CASE LAW ABOVE. 7. IT IS ALSO TO BE TAKEN INTO CONSIDERATION THAT T HE SAID LANDS BELONGING TO THE ASSESSEE WERE PROPOSED TO BE ACQUI RED BY THE GOVERNMENT OF TAMIL NADU BY A NOTIFICATION DULY PUBLISHED I.T.A. NO. 1267/MDS/2013 5 IN THE GAZETTE, WHICH WOULD DEFINITELY SUPPRESS THE MARKETABILITY OF THE LANDS IF NOT ELIMINATE THE SAM E. EVEN IN SUCH A SITUATION ALSO THE PROVISIONS OF S.50C(1) CA NNOT BE INVOKED. FOR BOTH THESE REASONS IT IS HELD THAT IN VOKING THE PROVISIONS OF S.50C BY THE AO TO ENHANCE THE SALE CONSIDERATION IS INCORRECT AND HENCE THE ADDITION I S DIRECTED TO BE DELETED. WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT(A PPEALS). THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FIND INGS GIVEN IN THE IMPUGNED ORDER. WE COULD NOT FIND ANY REASON TO IN TERFERE WITH THE ORDER OF THE CIT(APPEALS). THE IMPUGNED ORDER IS C ONFIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERITS. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 24 TH SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 24 TH SEPTEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR