Shri Deepak Kumar Kapoor, Bhopal V. The DCIT 1(2), Bhopal

ITA 13/IND/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5840 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N D PATWA S
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.13/IND/2014 A.Y. 2008-09 DEEPAK KUMAR KAPOOR, BHOPAL PAN ABXPK 7657 E :: APPELLANT VS DCIT-1(2), BHOPAL :: RESPONDENT ASSESSEE BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA, ADVOCATES RESPONDENT BY SHRI R.A. VERMA, DR DATE OF HEARING 20.1.2016 DATE OF PRONOUNCEMENT 20.1.2016 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF LD. CIT(A)-I, BHOPAL, DATED 10.10.2013. THE SUM & S UBSTANCE OF THE ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 2 GROUNDS OF APPEAL IS THAT LD. CIT(A) HAS ERRED IN C ONFIRMING THE ADDITION INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T. ACT CHARGING LTCG ON THE ASSESSEE WHEN NO SALE CONSIDER ATION WAS RECEIVED FOR COMPUTING THE LTCG. 2. FACTS, IN BRIEF, ARE THAT ON SCRUTINY, THE AO OB SERVED THAT THE ASSESSEE HAS SOLD/TRANSFERRED COMMERCIAL LAND MEASU RING 0.25 ACRE SITUATED AT BAWADIA LALAN, BHOPAL TO SHRI BHAR AT PATEL IN EXCHANGE WITH THE AGRICULTURE LAND OF 5.790 ACRES A T VILLAGE ANWALA AND OF 3.038 ACRES AT JHAGARIAKHURD, BHOPAL AGGREGA TING TO 8.828 ACRES LAND. THE AO WAS OF THE VIEW THAT AS PER GUID ELINES, MARKET VALUE OF THE LAND TRANSFERRED BY THE ASSESSEE WAS C ALCULATED FOR STAMP DUTY PURPOSES AT RS.64 LACS, WHEREAS THE ASSE SSEE HAD SHOWN SALE CONSIDERATION AT RS.33,76,100/- FOR CALC ULATING OF LTCG DECLARED AT RS.31,01,100/-. IN VIEW OF SECTION 50C OF THE I.T. ACT, THE AO ADOPTED THE FULL VALUE OF CONSIDERATION I.E. LAND TRANSFERRED BY THE ASSESSEE AT RS.64 LACS AS AGAINST RS.33,76,1 00/- SHOWN BY THE ASSESSEE AND ACCORDINGLY, RECOMPUTED THE LTCG A T RS.61,25,000/- AS UNDER: MARKET VALUE OF IMMOVABLE PROPERTY RS.64,00,000 LESS: INDEXED COST OF ACQUISITION RS. 2,75,000 LTCG RS.61,25,000 ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 3 CONSEQUENTLY, THE AO MADE ADDITION AT RS.30,23,900/ - (RS.61,25,000 RS.31,01,100). AGAINST THE SAME, TH E ASSESSEE APPROACHED THE LD. CIT(A). BEFORE LD. CIT(A), THE A SSESSEE SUBMITTED THAT SINCE IN THE TRANSACTION UNDER EXCHA NGE/BARTER SYSTEM, NO MONETARY CONSIDERATION WAS RECEIVED OR A CCRUED TO THE ASSESSEE, THE PROVISIONS OF SECTION 50C ARE NOT APP LICABLE. HOWEVER, LD. CIT(A) TOO DID NOT ACCEPT THE CONTENTI ON OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE AO. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND CONTE NDED THAT THE ASSESSEE EXCHANGED THE OLD LAND WITH ANOTHER LAND W HICH WAS AN AGRICULTURAL LAND. THE STAMP VALUE OF THE OLD LAND WAS RS.64 LACS, WHICH WOULD BE STAMP VALUE U/S 50C, WHEREAS THE FAI R MARKET VALUE OF THE LAND RECEIVED BEING THE GUIDELINE VALUE OF T HE LAND RECEIVED WAS THE SALE CONSIDERATION U/S 48 I.E. RS.33,76,000 /-. AS PER SECTION 50C(1), THE VALUE ADOPTED BY STAMP VALUATIO N AUTHORITY BEING RS.64 LACS OR THE CONSIDERATION BEING RS.33,7 6,000/-, WHICHEVER IS HIGHER, SHALL BE THE FULL VALUE OF CON SIDERATION. BUT, ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 4 SECTION 50C(2) PROVIDES AN EXCEPTION INTER-ALIA, ST ATES THAT WHERE THE ASSESSEE CLAIMS BEFORE ANY AO THAT THE VALUE AD OPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB -SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THE AO MAY REFER THE VALUATION OF THE CAP ITAL ASSET TO A VALUATION OFFICER. THUS, LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE ASSESSEE MAY CLAIM THE FAIR MARK ET VALUE TO BE BELOW THE STAMP VALUE. ACCORDINGLY, THE ASSESSEE RE QUESTED THE AO TO ADOPT THE MARKET VALUE, WHICH WAS STAMP VALUE OF THE ASSET RECEIVED BUT THE AO TURNED DOWN THE REQUEST OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE PRESENT CASE, NO REFERENCE TO DVO WAS REQUIRED AS T HE AO NEVER DENIED THAT THE MARKET VALUE OF THE ASSET RECEIVED WAS RS.33,76,000/- AND NO EVIDENCE OF UNDERHAND DEALING WAS FOUND. CONSEQUENTLY, THE STAMP VALUE OF THE ASSET RECEIVED SHOULD BE TREATED AS THE FAIR MARKET VALUE FOR THE PURPOSE OF SECTION 50C(2) AND CAPITAL GAINS SHOULD BE COMPUTED ACCORDINGLY. R ELIANCE WAS ALSO MADE IN THE CASES OF CIT VS. MOTORS & GENERAL STORES [66 ITR 692 (SC)]; CIT VS. KHARWAR (BM) [72 ITR 603 (SC)]; N. MEENAKSHI, [226 CTR 625 (MAD)]; SUNIL KUMAR AGRAWAL, [(2014) 2 72 CTR 332 ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 5 (CAL)]. ON THE OTHER HAND, LD. DR PLACED RELIANCE O N THE ORDERS OF THE REVENUE AUTHORITIES. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD AND FIND THAT IN VIEW OF THE FA CTS AND SUBMISSIONS THEREOF, AS NARRATED ABOVE, THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. THE ASSESSE E HAS FILED A PAPER BOOK RUNNING INTO 37 PAGES ALONG WITH WRITTEN SUBMISSIONS, WHEREIN, THE RELEVANT DOCUMENTS HAVE BEEN ANNEXED. ASSESSEE HAS AGITATED THAT THE SUBMISSIONS OF THE ASSESSEE A ND RELEVANT SUB-SECTIONS OF THE SECTION 50C WERE NOT TAKEN INTO CONSIDERATION BY THE AO IN THE PROPER PERSPECTIVE AS NOT DISCUSSI NG IN THE SPEAKING MANNER AND MADE THE ADDITION IN THE GENERA L MANNER. ALL THESE REQUIRE CONSIDERATION OF THE AO IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS AS QUOTED IN ASSESSEES SUBMISSIONS. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. IN TERMS AS DISCUSSED ABOVE, THE MATTER IS RESTORED BACK TO THE FILE OF THE LD. AO WITH DIRECTION TO FRAME THE ASSESSMENT DE NOVO AS P ER LAW. THE AO SHALL DECIDE THE ISSUE AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE SHALL BE AT LIBERTY TO FILE ANY FURTHER EVIDENCE, IF ANY, IN SUPPORT OF THE CLAIM. ITA NO.13 OF 2014 DEEPAK KUMAR KAPOOR 6 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES ONLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20.1.2016 . SD/- ( D.T. GARASIA) JUDICIAL MEMBER SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 20.1.2016 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE