Sh. Ram Kishan, Meerut V. ITO, Hapur

ITA 1291/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0256 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1291/DEL/2013 1291/DEL/2013 1291/DEL/2013 1291/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005 - -- - 06 0606 06 SHRI RAM KISHAN, SHRI RAM KISHAN, SHRI RAM KISHAN, SHRI RAM KISHAN, S/O SHRI MOOL CHAND, S/O SHRI MOOL CHAND, S/O SHRI MOOL CHAND, S/O SHRI MOOL CHAND, NEW ABADI, KOTHI NEW ABADI, KOTHI NEW ABADI, KOTHI NEW ABADI, KOTHI GATE, GATE, GATE, GATE, HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). PAN : AARPK4998E. PAN : AARPK4998E. PAN : AARPK4998E. PAN : AARPK4998E. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2, 2,2, 2, HAPUR, HAPUR, HAPUR, HAPUR, DISTT. GHAZIABAD. DISTT. GHAZIABAD. DISTT. GHAZIABAD. DISTT. GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY MALIK, ADVOCATE. RESPONDENT BY : SHRI VIKRAM SAHAY, SR.DR. DATE OF HEARING : 08.04.2015 08.04.2015 08.04.2015 08.04.2015 DATE OF PRONOUNCEMENT : 10.06.2015 10.06.2015 10.06.2015 10.06.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-0 6 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), MUZAF FARNAGAR DATED 31 ST JANUARY, 2013. 2. THE GROUNDS OF APPEAL NO.1 & 2 OF THE ASSESSEE ARE AS UNDER:- 1. A) THAT THE FACTS AND FIGURES RELATING TO THE COMPUTATION OF INCOME UNDER THE HEAD CAPITAL GAIN BEING SAME AS DECLARED IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING AND IN THE ABSENCE OF ANY FRESH MATERIAL AND EVIDENCE HAVING BEEN BROUGHT ON RECORD OF THE CASE BY THE LD.AO, THERE WAS NO LEGAL WARRANT TO RESORT TO THE PROVISIONS OF SECTION 147/148 OF THE I. T. ACT. B) THE INITIATION OF PROCEEDING U/S 147/148 OF I.T. ACT ON FACTS AND IN LAW AMOUNTED TO REVIEW OF THE ISSUE ITA-1291/DEL/2013 2 BASED ON SAME FACTUAL ASPECTS. THE INITIATION AND TH E CONSEQUENT ASSESSMENT FRAMED DESERVES TO BE ANNULLED BEING VOID, ILLEGAL AND WITHOUT JURISDICTIO N. 2. THAT THE LD.CIT(A) ON FACTS AND IN LAW AND THE GROUNDS TAKEN AND BASIS ADOPTED WENT WRONG TO HOLD THAT THERE WAS NO LEGAL INFIRMITY IN THE ISSUE OF NOTI CE U/S 148 OF I.T. ACT. THE RECORDED FINDING BEING ERRONEOUS AND UNTENABLE ON FACTS AND IN LAW DESERVES TO BE QUASHED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH ERE WAS NO MATERIAL BEFORE THE ASSESSING OFFICER TO INITIATE RE ASSESSMENT PROCEEDINGS IN THIS CASE WHICH ARE BASED ON MERE CHAN GE OF OPINION. LEARNED DR SUBMITTED THAT THE MATERIAL WAS THERE TO R EOPEN THE CASE AND THE REASONS WERE PROPERLY RECORDED IN THIS CASE FOR REOPENING THE ASSESSMENT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THE REASONS FOR REOPENING OF THE CASE WERE RECORDED UNDER SECTION 147 OF THE ACT AND ORIGINAL ASSESSMENT IN THIS CASE WERE FRAMED IN SUMMARY ASSESSMENT UNDER SECTION 143(1) OF THE ACT. WE ALSO FIN D THAT THE ASSESSEE HAS CLAIMED SET OFF OF BROUGHT FORWARD CAPITAL L OSS OF ASSESSMENT YEAR 2004-05 AGAINST THE INCOME FROM LONG TER M CAPITAL GAINS IN THIS YEAR AND THE ASSESSING OFFICER HAS RECORDED THE REASONS FOR REOPENING THAT FROM THE RECORDS OF THE PRECEDIN G YEAR, IT IS SEEN THAT THERE WAS NO CAPITAL LOSS AS DETERMINED IN THE EA RLIER ASSESSMENT YEAR 2004-05 FOR WHICH THE ASSESSEE MAY BE ENTITLED TO CARRY FORWARD. IN THESE FACTS, WE ARE OF THE VIEW THAT THE REOPENING WAS RIGHTLY MADE IN THIS CASE AND, ACCORDINGLY, GROUND NOS.1 & 2 OF THE ASSESSEE ARE DISMISSED. 5. GROUND NO.3 OF THE ASSESSEES APPEAL IS AS UNDER:- ITA-1291/DEL/2013 3 THAT THE COMPUTATION OF LONG TERM CAPITAL GAIN BASE D ON THE SALE PRICE AS PER PROVISIONS OF SEC. 50C AND CIRCLE RATE OF THE PROPERTY AT RS.2,89,000/- AS AGAIN ST THE ACTUAL SALE CONSIDERATION OF RS.2,00,000/- WAS ILLEGAL, VOID AND WITHOUT JURISDICTION. 6. WE FIND THAT THE ACTUAL SALE CONSIDERATION IN THIS CASE WAS `2 LAKHS AND THE ASSESSING OFFICER HAS ADOPTED THE CIRCLE RATE OF THE PROPERTY AT `2.89 LAKHS WITHOUT REFERRING THE ISSUE TO THE DVO AS PER PROVISIONS OF SECTION 50C OF THE ACT. MOREOVER, THE ASSESSEE SHOULD HAVE BEEN CONFRONTED WITH THE CIRCLE RATE OF THE PR OPERTY, SO THAT THE ASSESSEE MAY FILE OBJECTIONS TO THE SAME AND THE MATTER COULD HAVE BEEN REFERRED TO THE DVO. NO SUCH EXERCISE WAS UNDERT AKEN BY THE ASSESSING OFFICER AND, ACCORDINGLY, THE ADDITION OF `89 ,000/- MADE ON THIS GROUND IS INVALID AND WE DECIDE THE ISSUE IN FAVOU R OF THE ASSESSEE AND, ACCORDINGLY, GROUND NO.3 IS ALLOWED. 7. GROUND NO.4 OF THE ASSESSEES APPEAL IS AS UNDER:- 4. THAT WITHOUT PREJUDICE TO GROUND NO.3, IF THE SA LE PRICE WAS TO BE ADOPTED AT CIRCLE RATE, THEN COST OF ACQUISITION ON THE BASIS OF STAMP VALUE OF RS.2,25,000/- OF WHICH THE INDEXED COST IS RS.3,26,283/- DESERVES TO BE ADOPTED. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HIS GROUND OF APPEAL IS ALTERNATIVE IN NATURE TO THE GROUND OF APPEAL NO.3 OF THE ASSESSEE. 9. IN VIEW OF OUR DECISION ABOVE ALLOWING GROUND NO .3 IN FAVOUR OF THE ASSESSEE, WE DISMISS GROUND NO.4 OF THE ASSESSEE AS ALTERNA TIVE IN NATURE. 10. GROUND NO.5 OF THE ASSESSEE IS AS UNDER:- ITA-1291/DEL/2013 4 THAT THE COMPUTATION OF LONG TERM CAPITAL GAIN AT RS.2,38,994/- DESERVE TO BE QUASHED AND ANNULLED AND THE DECLARED LONG TERM CAPITAL GAIN DESERVES TO BE ACCEPTED. 11. WE FIND THAT THE ONLY DIFFERENCE WAS DUE TO REPA IRS ETC. CLAIMED AT `8,000/- BY THE ASSESSEE AS IMPROVEMENT TO THE ASSESSEE IN THE SHOP PURCHASED ON 10.03.1998 WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER. THERE BEING NO VALID REASON FOR SUCH DISALLO WANCE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO IMPROVEMENT OF `8,000/ - TO ITS PROPERTY IN THE SHAPE OF SHOP PURCHASED ON 10.03.1998 AND ALSO THE INDEXED COST OF THIS IMPROVEMENT OF `8,000/- WHILE DETERMININ G THE LONG TERM CAPITAL GAINS ASSESSABLE IN THE HANDS OF THE ASSESSEE. WE DI RECT THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAINS ACCORDING LY. GROUND NO.5 OF THE ASSESSEES APPEAL IS PARTLY ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT M MM M EMBER EMBER EMBER EMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI RAM KISHAN, SHRI RAM KISHAN, SHRI RAM KISHAN, SHRI RAM KISHAN, S/O SHRI MOOL CHAND, NEW ABADI, KOTHI GATE, S/O SHRI MOOL CHAND, NEW ABADI, KOTHI GATE, S/O SHRI MOOL CHAND, NEW ABADI, KOTHI GATE, S/O SHRI MOOL CHAND, NEW ABADI, KOTHI GATE, HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). HAPUR (DISTT. GHAZIABAD). 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -2, HAPUR, DISTT. GHAZIABAD. 2, HAPUR, DISTT. GHAZIABAD. 2, HAPUR, DISTT. GHAZIABAD. 2, HAPUR, DISTT. GHAZIABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR