DCIT, Circle - 9, Kolkata, Kolkata V. M/s. Bagrees Investments Pvt. Ltd., Kolkata

ITA 1335/KOL/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9608 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 31-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2011
• Court: TRIBUNAL
• Department Lawyers: S S ALAM
• Assessee Lawyers: GAUTAM B ANERJEE
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI WASEEM AHMED, AM & SHRI S.S. VISWANETHRA RAVI, JM ] ITA NO.1335/KOL/2011 ASSESSMENT YEAR : 2006-07 D.C.I.T., CIRCLE-9, -VERSUS- M/S. BAGREES INVESTM ENTS PVT.LTD. KOLKATA KOLKATA (PAN:AACCB 1528 P) (APPELLANT) (RESPONDENT) ITA NO.1667/KOL/2011 ASSESSMENT YEAR : 2006-07 J.C.I.T., (OSD)CIRCLE-9, -VERSUS- M/S. BAGRI SYNTH ETICS PVT.LTD. KOLKATA KOLKATA (PAN:AACCB 9912 A) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI S.S.ALAM, JCIT. SR.DR FOR THE RESPONDENT : SHRI GAUTAM BANERJEE, CA DATE OF HEARING : 22.12.2016. DATE OF PRONOUNCEMENT : 11 .01.2017 ORDER PER SHRI WASEEM AHMED, AM THESE APPEALS OF THE REVENUE ARISE OUT OF THE DIFFERENT ORDERS OF .COMMISSIONER OF INCOME TAX(APPEALS)-VIII, KOLKATA IN APPEAL NOS. 176 & 174/CIT(A)- VIII/KOL/08-09 DATED 26.07.2011 & 12.09.2011 RESPEC TIVELY FOR A.Y.2006-07 ASSESSMENTS WERE FRAMED BY ACIT, CIRCLE-9, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) V IDE HIS ORDER DATED 03.11.2008. ITA NO.1335/KOL/2011 (M/S.BAGREES INVESTMENT PVT. L TD.) 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CLT(A) ERRED IN ACCEPTING FRESH EVIDENCE WHICH IS IN VIOLATION OF R ULE 46A OF THE LT. RULE, 1962. 2. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE THE ADDITION OF RS. 1, 29,78,906/- ADDED AS LONG TERM CAPITAL GAIN. 3. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSING OFFICER IS WITHIN HIS RIGHT TO ADOPT THE SALE ITA NO.1335 & 1667/KOL/2011 M/S. BAGRE ES INVESTMENTS P.LTD & M/S. BAGRI SYNTHETICS P.LTD. A..Y. 2006-07 2 CONSIDERATION AS PER THE VALUATION OF STAMP DUTY AU THORITY WHICH IS HIGHER THAN THE VALUE DECLARED BY THE ASSESSEE.' 4. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW. LD. CIT(A) HAS ERRED IN ADMITTING THE EVIDENCES ON WHICH THE ASSESSING OFFI CER MADE THIS DISALLOWANCES OF EXPENSES RELATING TO CAPITAL GAIN INCOME.' 3. GROUND NO.2 RAISED BY THE REVENUE IS THAT T HE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR RS.1,29,78,906/- ON ACC OUNT OF LONG TERM CAPITAL GAIN. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE, IN THE PRESENT CASE, IS A PRIVATE LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF FINANCIAL SE RVICES. THE ASSESSEE, IN THE YEAR UNDER CONSIDERATION, HAS SOLD THE LAND AND OFFERED THE INCOME UNDER THE HEAD CAPITAL GAIN. THE ASSESSEE IN WORKING OUT THE CAPITAL GAIN ON THE SALE OF LAND HAS TAKEN SALE CONSIDERATION AS PER THE DEED OF CONVEYANCE. ON QU ESTIONED BY THE AO FOR NOT TAKING HIS SALE CONSIDERATION AS DETERMINED BY THE STAMP D UTY VALUATION AUTHORITY, THE ASSESSEE SUBMITTED THE LAND WAS SOLD ON 15 TH OCTOBER, 1996 AND THE POSSESSION OF THE PROPERTY WAS HANDED OVER IN THE FINANCIAL YEAR 1996 -97. AT THAT RELEVANT TIME THE PROVISION OF SECTION 50C OF THE ACT WAS NOT IN EXIS TENCE. IT CAME IN THE STATUTE W.E.F. 01.04.2002. THE ASSESSEE ALSO SUBMITTED THAT THE CO NSIDERATION FOR THE SALE OF LAND WAS TAKEN IN THE EARLIER YEARS AND THEREFORE THE PROVIS ION AS DEFINED U/S 2(47) OF THE ACT CANNOT BE RECOGNIZED IN THE YEAR UNDER CONSIDERATIO N I.E. FINANCIAL YEAR 2005-06. HOWEVER, THE AO DISREGARDED THE CLAIM OF THE ASSESS EE BY OBSERVING THAT THE ASSESSEE HAS WORKED OUT THE CAPITAL GAIN ON THE SALE OF LAND IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ALSO TAKEN THE INDEXATION COST BEN EFIT TILL THE FINANCIAL YEAR 2005-06. IN VIEW OF THE ABOVE THE AO INVOKED THE PROVISION O F SECTION 50C OF THE ACT AND ACCORDINGLY WORKED OUT THE CAPITAL GAIN FOR THE YEA R UNDER CONSIDERATION. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE C IT(A), WHO HAS CONFIRMED THE ORDER OF AO AFTER GIVING RELIEF TO THE ASSESSEE IN PART. AGGRIEVED BY THIS, THE REVENUE HAS COME UP IN APPEA L BEFORE US. ITA NO.1335 & 1667/KOL/2011 M/S. BAGRE ES INVESTMENTS P.LTD & M/S. BAGRI SYNTHETICS P.LTD. A..Y. 2006-07 3 6. AT THE OUTSET, THE LD. AR BEFORE US SUBMITTED THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF BAGRI IMPEX (P)LTD VS ACIT REPORTED IN 259 CTR 553 (CAL) WHERE THE ISS UE WAS ALLOWED IN FAVOR OF THE REVENUE. BUT AGAINST THE ORDER OF THE HONBLE CALCU TTA HIGH COURT THE ASSESSEE PREFERRED AN APPEAL TO THE APEX COURT WHO HAS STAYE D THE ORDER AGAINST THE HONBLE CALCUTTA HIGH COURT (SUPRA) VIDE SLP NO.17138/2013 VIDE ORDER DATED 10.05.2013. IN VIEW OF THE ABOVE, THE LD. AR SUBMITTED THAT THE JU DGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IS NO MORE IN FORCE AND T HEREFORE THE SAME CANNOT BE RELIED ON THE INSTANT CASE. THE LD. AR FURTHER SUBMITTED T HAT SINCE THE MATTER IS PENDING BEFORE THE HONBLE SUPREME COURT, THE INSTANT CASE CAN BE RESTORED BACK TO THE AO FOR FRESH ADJUDICATION AS PER LAW AND IN TERMS OF T HE DIRECTIONS TO BE ISSUED BY THE HONBLE SUPREME COURT. ON THE OTHER HAND, THE LD. DR RAISED NO OBJECTION I F THE MATTER IS RESTORED TO THE FILE OF AO FOR FRESH ADJUDICATION. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT TH E APEX COURT HAS STAYED THE ORDER OF BAGRI IMPEX (P)LTD (SUPRA) VIDE ITS ORDER DATED 10. 05.2013 WHICH READS AS UNDER :- ISSUE NOTICE RETURNABLE IN THE LAST WEEK OF AUGUST , 2012. IN THE MEANTIME, THERE SHALL BE STAY OF IMPLEMENTAT ION OF THE ORDER DATED 16.1.2013 PASSED BY THE HIGH COURT AT CALCUTTA IN ITAT NO.277 OF 2012. AS THE MATTER IS PENDING IN THE COURT OF LAW THEREF ORE WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION WITH THE DIRECTION TO PASS FRESH ORDER IN THE LIGHT OF THE DIRECTIONS TO BE ISSUED IN THE AFO RESAID JUDGMENT BY HONBLE SUPREME COURT. HENCE THE APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. ITA NO.1667/KOL/2011 (M/S.BAGRI SYNTHETICS PVT. LTD .) 9. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CLT(A) ERRED IN ACCEPTING FRESH EVIDENCE WHICH IS IN VIOLATION OF R ULE 46A OF THE LT. RULE, 1962. ITA NO.1335 & 1667/KOL/2011 M/S. BAGRE ES INVESTMENTS P.LTD & M/S. BAGRI SYNTHETICS P.LTD. A..Y. 2006-07 4 2. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO DELETE THE ADDITION OF RS. 57 ,63,560/- IN THE SALE VALUE CONSIDERATION FOR COMPUTING AS LONG TERM CAPITAL GA IN. 3. THAT 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSING OFFICER IS WITHIN HIS RIGHT TO ADOPT THE SALE CONSIDERATION AS PER THE VALUATION OF STAMP DUTY AU THORITY WHICH IS HIGHER THAN THE VALUE DECLARED BY THE ASSESSEE.' 10. AS STATED EARLIER, THE ISSUES UNDER CONSIDERATI ON FOR THE SAME ASSESSMENT YEAR, ARE EXACTLY IDENTICAL, BOTH PARTIES ARE AGREED WHAT EVER VIEW TAKEN IN THE ABOVE APPEAL IN ITA NO.1335/KOL/2011 OF REVENUES APPEAL MAY BE TAKEN IN THIS APPEAL ITA NO.1667/KOL/2011 OF REVENUE ALSO. WE HOLD ACCORDING LY. 11. IN THE RESULT, BOTH APPEAL OF REVENUE STAND ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 11/1/2017. SD/- SD/- [S.S.VISWANETHRA RAVI] [WASEEM AHMED] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 11 /01/2017 R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . M/S. BAGREES INVESTMENTS PVT. LTD., 207, MAHARSHI D EBENDRA ROAD, ROOM NO.65, KOLKATA-700007. 2 M/S. BAGRI SYNTHETICS PVT. LTD., 207, MAHARSHI DEBE NDRA ROAD, ROOM NO.65, KOLKATA-700007. 3. D.C.I.T., CIRCLE-9, KOLKATA. 4 . THE CIT(A)-VIII, KOLKATA 5. THE CI T-III, KOLKATA. 6 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES