SHRI MANOJ KUMAR PODDAR, RANCHI V. DCIT CIR-2 , RANCHI

ITA 132/RAN/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1633 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDERJT SINGH
• Assessee Lawyers: M K CHOUDHURY
• Keywords: Sale consideration of property below Jantri Value; Capital Gains
• Section: 50C; 142(1); 143(1); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH E COURT AT KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO. 132 / RAN / 2018 ASSESSMENT YEAR :2013-14 SHRI MANOJ KUMAR PODDAR, C/O RAMJIDAS PARMANAND, JYOTI SANGAM LANE, UPPER BAZAR, RANCHI-834001 [ PAN NO.ACVPP 0745 J ] V/S . PRINCIPAL COMMISSIONER OF INCOME TAX, RANCHI /APPELLANT .. / RESPONDENT / /BY APPELLANT SHRI M.K. CHOUDHURY, ADVOCATE /BY RESPONDENT SHRI INDERJT SINGH, CIT-DR /DATE OF HEARING 24-11-2020 /DATE OF PRONOUNCEMENT 09-12-2020 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE PRINCIPAL COMMISSIONER OF INCOME TAX-RANCHIS ORDER DATED 26.03.2018 PASSED IN MEMO.NO. PR.CIT/RAN/263/2017-18/3495-98 I NVOLVING PROCEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE BASIC RELEVANT FACTS. THIS ASSE SSEE HAD FILED HIS RETURN ON 25.02.2015 STATING TOTAL INCOME OF 36,13,890/-. THE SAME STOOD SUMMARILY PROCESSED U/S 143(1) OF THE ACT. THE ASSE SSING OFFICER THEREAFTER TOOK UP CASS LIMITED SCRUTINY ON THE SOLE ISSUE OF SALE CONSIDERATION OF ITA NO.132/RAN/2018 A.Y. 2013-14 SH. MANOJ KR. PODDAR VS. PCIT, RAN PAGE 2 PROPERTY IN ITR IS LESS THAN CONSIDERATION REPORTED AND FRAMED THE REGULAR ASSESSMENT IN ISSUE DATED 11.03.2016 NOT ON LY ACCEPTING THE TAXPAYERS IMPUGNED INCOME BUT ALSO MADE IT CLEAR T HEREIN THAT THE GROSS SALE CONSIDERATION WAS THE SAME IN ITR AND INFORMATION A VAILABLE WITH THE DEPARTMENT. 3. A PERUSAL OF THE CASE FILE SUGGEST THAT THE PCIT THEREAFTER SOUGHT TO INVOKE HIS SEC. 263 REVISION JURISDICTION THEREBY T ERMING THE ABOVE REGULAR ASSESSMENT AS AN ERRONEOUS ONE CAUSING PREJUDICE TO INTEREST OF THE REVENUE. HE ISSUESD HIS SHOW CAUSE NOTICE DATED 12. 07.2016 TO THIS EFFECT READING AS UNDER:- IT MAY PLEASE BE RECALLED THAT THE RETURN FOR THE A /.Y. 2013-14, DECLARING THEREIN A TOTAL INCOME OF RS.36,13,890/-, WAS FILED BY YOU ELECTRONICALLY ON 21/2/2015. RETURN WAS PROCESSED U/S 143(1). SUBSEQU ENTLY YOUR CASE GOT SELECTED FOR SCRUTINY UNDER THE CASS WHICH HAD CATE GORIZED YOUR CASE AS A LIMITED SCRUTINY ONE. STATUTORY NOTICES U/S 143(2 ) & 142(1) WERE DULY ISSUED BY THE DCIT, CIRCLE-2, RANCHI, AFTER HERRING AND SC RUTINY OF THE RELEVANT DOCUMENTS THE ASSESSMENT ORDER WAS FINALLY PASSED B Y THE A.O ON 11/3/2016, WHEREBY THE RETURNED INCOME WAS ACCEPTED. THE REASON FOR SELECTION OF YOUR CASE FOR SCRUTINY WAS THAT THE SALE CONSIDERATION OF PROPERTY AS DECLARED BY YOU IN THE RETURN WAS LESS THAN THE FIGURE REPORTED IN AIR. IN THE COURSE OF THE ASSESS MENT PROCEEDING THE A.O EXAMINED THIS ISSUE AND SHE FOUND THAT THOUGH THE C ONSIDERATION OF RS.3,51,61,500/- AS REFLECTED IN THE AIR EXCEED THE SALE CONSIDERATION OF RS.2,07,77,500/- AS DECLARED BY YOU IN THE RETURN, THE SAID APPARENT DIFFERENCE WAS ATTRIBUTABLE TO THE FACT THAT THE AI R / ITS ERRONEOUSLY REPORTED THE SAME TRANSACTIONS MORE THAN ONCE, THEREBY INFLA TING THE AMOUNT OF SALE CONSIDERATION. SINCE THIS ERROR GET DETECTED BY THE A.O SHE CHOSE NOT TO DRAW ANY ADVERSE INFERENCE IN YOUR CASE DURING THE LIMIT ED SCRUTINY ASSESSMENT PROCEEDING. AS THE SCOPE OF THOROUGH ENQUIRY IN YOU R CASE WAS RESTRICTED IN VIEW OF THE CBDTS INSTRUCTION NO. 7 OF 2014 DATED 26/9/2014 AND SINCE THERE WAS A VERY LITTLE TIME LEFT WITH THE A.O AFTER THE SUBMISSION OF THE RELEVANT DOCUMENTS RELATING TO THE PROPERTY BY YOU, THE A.O WAS CONSTRAINED TO ACCEPT THE INCOME DECLARED IN THE RETURN. SUBSEQUENT SCRUTINY OF THE SALE DEED AS SUBMITTED B Y YOU DURING THE ASSESSMENT PROCEEDING REVEALED THAT THERE WAS A DIF FERENCE OF RS.39,31,200/- BETWEEN THE SALE CONSIDERATION ACTUALLY RECEIVED BY YOU AND THE STAMP DUTY VALUATION OF THE PROPERTY. HENCE THE SAID AMOUNT OU GHT TO HAVE BEEN BROUGHT TO TAX UNDER THE HEAD CAPITAL GAIN IN CONSONANCE WITH THE PROVISIONS OF SEC. 50C OF THE I.T. ACT, 1961. IT IS NOTICED THAT THE A.O FAILED TO TAX THE SAID AMOUNT IN HER ASSESSMENT ORDER. OMISSION TO DO SO O N THE PART OF THE A.O. ITA NO.132/RAN/2018 A.Y. 2013-14 SH. MANOJ KR. PODDAR VS. PCIT, RAN PAGE 3 HAS THEREBY CLEARLY RENDERED THE ASSESSMENT ORDER D ATED 11/3/2016 ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS THUS PROPOSED TO INVOKE THE PROVISIONS OF SEC. 263 IN YO UR CASE. YOU ARE ACCORDINGLY DIRECTED TO APPEAR BEFORE THE U NDERSIGNED EITHER IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE ON27 /7/2016 AT 12.30 P.M. IN HIS OFFICE CHAMBER SITUATED ON THE FIRST FLOOR OF T HE CENTRAL REVENUE BUILDING, 5A, MAIN ROAD, RANCHI TO EXPLAIN AS TO WHY SUCH ACT ION SHOULD NOT BE TAKEN IN RESPECT OF THE COMPLETED ASSESSMENT PROCEEDING F OR THE A.Y 2013-14. IT MAY BE NOTED THAT IN THE EVENT OF NON-COMPLIANCE ON YOUR PART, THE CASE MAY9 BE ADJUDICATED EX-PARTE ON MERIT WITHOUT ANY FURTHE R CORRESPONDENCE WITH YOU. PLEASE TREAT THE MATER AS URGENT . THE ASSESSEE STRONGLY CONTESTED PCITS ABOVE REVISI ON PROPOSAL WHICH STANDS DECLINED IN IS IMPUGNED ORDER DATED 26.03.20 18 DECLARING THE ABOVE REGULAR ASSESSMENT AS REVISABLE U/S 263 OF THE ACT FOLLOWED BY DIRECTIONS ISSUED TO THE ASSESSING OFFICER TO MAKE NECESSARY E NQUIRIES QUA THE DIFFERENCE BETWEEN THE SALE CONSIDERATION RECEIVED FROM TRANSFER OF PROPERTY AND THE STAMP DUTY VALUE AS REPORTED IN THE AIR AT 3,51,61,500/- AS AGAINST THAT DECLARED OF 39,31,200/- ONLY. THIS LEAVES ASSESSEE AGGRIEVED. 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS AGAINST AND IN SUPPORT OF THE PCITS ACTION INVOKING SEC. 2 63 REVISION JURISDICTION. THERE CAN HARDLY BE ANY DISPUTE ABOUT THE SETTLED L AW REGARDING THE IMPUGNED REVISION JURISDICTION THAT BEFORE THE CIT OR THE PC IT, AS THE CASE MAY BE, SEEKS TO REVISE ANY ASSESSMENT BY TERMING IT AS AN ERRONEOUS CAUSING PREJUDICE TO INTEREST OF THE REVENUE, HE HAS TO SAT ISFY HIMSELF THAT BOTH THESE CONDITIONS CO-EXIST SIMULTANEOUSLY AS HELD IN IN MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX (2000) 243 ITR 83 (SC) COMMISSIONER OF INCOME TAX VS. MAX INDIA (2007) 295 ITR 282 (SC) AND COMMISSIONER OF INCOME TAX VS. KWALITY STEEL SUPPLIERS COMPLEX (2017) 395 ITR 1 (SC) TO THIS EFFECT. THEIR LORDSHIPS FURTHER MAKE IT CLEAR THAT NOT EACH & EVERY YEAR ASSESSMENT IS AN ERRONEOUS ARE CAUSING PREJUDICE TO THE INTEREST OF THE ITA NO.132/RAN/2018 A.Y. 2013-14 SH. MANOJ KR. PODDAR VS. PCIT, RAN PAGE 4 REVENUE IN CASE THE ASSESSING OFFICER HAS TAKEN ONE OF THE TWO POSSIBLE VIEWS WHICH IS SOUGHT TO BE SUBSTANTIATED BY THE RE VISIONAL AUTHORITY. 5. WE KEEP IN VIEW THE FOREGOING SETTLED LEGAL PROP OSITION AND ADVERT TO THE RELEVANT FACTS INVOLVED IN THE INSTANT LIS . LEARNED AUTHORIZED REPRESENTATIVES ONLY ARGUMENT DURING THE COURSE OF HEARING IS THAT THE ASSESSING OFFICER HAD FRAMED HIS REGULAR ASSESSMENT ON THE ABOVE SOLE ISSUE OF LIMITED SCRUTINY REGARDING SALE CONSIDERATION OF PROPERTY IN ITR ALLEGEDLY FOUND LESS THAN THAT REPORTED. LEARNED CIT-DRS CAS E ON THE OTHER HAND; GOING BY THE PCITS SEC.263 SHOW CAUSE NOTICE, IS T HAT SINCE THE ASSESSING OFFICER HAD NOT EXAMINED THE ABOVE SOLE ISSUE, THE IMPUGNED REVISION JURISDICTION HAS BEEN RIGHTLY INVOKED IN FACTS OF T HE INSTANT CASE. 6. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO THE FOREGOING RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE PCITS EXERCISE OF RE VISION JURISDICTION, WE FIND NO MERIT IN THE REVENUES STAND. WE MAKE IT CLEAR T HAT THE PCIT HAS HIMSELF MADE IT CLEAR IN THE REVISION SHOW CAUSE NOTICE THA T THE REASON OF DIFFERENCE BETWEEN THE SALE CONSIDERATION REFLECTED IN THE AIR AND THAT DECLARED IN THE RETURN WAS ATTRIBUTABLE TO THE ERRONEOUS REPORTING OF THE VERY TRANSACTIONS FOR MORE THAN ONCE RESULTING IN INFLATION THEREOF (SUPR A). THAT BEING THE CASE AND MORE SO IN VIEW OF THE FACT THAT THE ASSESSING OFFI CER HAD CARRIED OUT ALL OF HIS ENQUIRIES DURING ASSESSMENT, WE FIND NO SUBSTANCE T O AFFIRM THE PCITS EXERCISE OF REVISION JURISDICTION WITH FORMER ISSUE IN THE SHOW CAUSE NOTICE HEREINABOVE. 7. COMING TO THE LATTER ASPECT OF INVOKING SEC.50C FOR THE PURPOSE OF MAKING LTCG CAPITAL GAINS ADDITION / DISALLOWANCE QUA BETWEEN SALE CONSIDERATION AND STAMP PRICE, WE OBSERVE THAT THE SAME NEVER FORMED THE REASON OF LIMITED SCRUTINY AND THEREFORE, THE ASSES SING OFFICER WENT BY THE SOLE ISSUE OF DIFFERENCE IN SALE CONSIDERATION OF P ROPERTY IN ITR TO BE LESS THAN THE CONSIDERATION REPORTED ONLY. WE CONCLUDE THAT A NY ADDITION OF CAPITAL GAINS ITA NO.132/RAN/2018 A.Y. 2013-14 SH. MANOJ KR. PODDAR VS. PCIT, RAN PAGE 5 U/S 50C OF THE ACT NEVER FORMED THE SUBJECT-MATTER OF LIMITED SCRUTINY AS PER THE CBDTS INSTRUCTIONS NO. 7 OF 2014 DATED 26.09.2 014. THE ASSESSING OFFICER HAD THEREFORE RIGHTLY NOT GONE BEYOND THE S OLE REASON OF SCRUTINY AND HIS ALLEGED INACTION COULD NOT BE HELD AS AN ERRONE OUS ONE CAUSING PREJUDICE TO INTEREST OF THE REVENUE GIVING RISE TO EXERCISE OF THE PCITS SEC. 263 REVISION JURISDICTION IN HIS ORDER UNDER CHALLENGE. THE SAME STANDS REVERSED THEREFORE. THE REGULAR ASSESSMENT HEREIN DATED 1.03 .2016 STANDS RESTORED AS THE NECESSARY COROLLARY. WE ORDER ACCORDINGLY. 8. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 09 /12/2020 SD/- SD/- ( ') ($% ') (J.SUDHAKAR REDDY) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP SR.P.S. &- 09 / 12 /20 20 / / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI MANOJ KR. PODDAR, C/O RAMJIDAR PARM ANAND, JYOTI SANGAM LANE, UPPER BAZA R, RANCHI-834001 2. /RESPONDENT-PR. CIT, RANCHI-834001 3. 0 3 / CONCERNED CIT RANCHI 4. 3- / CIT (A) RANCHI 5. 7 %%0, 0 , / DR, ITAT, RANCHI 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ AB % 0 SR. PRIVATE SECRETARY, 0,