SSJ MODULAR SYSTEMS P.LTD, MUMBAI V. ITO 7(2)(4), MUMBAI

ITA 1535/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4982 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 10-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAHUL R SARDA
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 1535/MUM/2012 ASSESSMENT YEAR : 2007-08 SSJ MODULAR SYSTEMS PVT. LTD. 305 , SUN INDUSTRIAL ESTATE SUN MILL COMPOUND LOWER PAREL MUMBAI-400 013. PAN NO.AAECS 0944 C VS. INCOME TAX OFFICER WARD 7(2)(4) AAYAKAR BHAVAN CHURCHGATE MUMBAI-400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAHUL R. SARDA REVENUE BY : SHRI MANOJ KUMAR DATE OF HEARING : 10/09/2013 DATE OF PRONOUNCEMENT : 13 / 0 9 /2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS AN ASSESSEE APPEAL AGAINST THE ORDER OF LD. CIT(A)-13, MUMBAI DATED 24.11.2011. ASSESSEE RAISED TWO GROUND S IN ITS APPEAL. GROUND NO.2 WITH REFERENCE TO RE-OPENING OF ASSESSM ENT UNDER SECTION 147 OF THE ACT WAS NOT PRESSED. IT IS TREATED AS WI THDRAWN. 2. THE ISSUE IN GROUND 1 RAISED IS ON ADOPTION OF S TAMP DUTY VALUATION UNDER SECTION 50C ON DEPRECIABLE ASSET. D URING THE YEAR ASSESSEE SOLD ITS PROPERTY FOR A CONSIDERATION OF R S.90.00 LACS AND OFFERED SHORT TERM CAPITAL GAIN, AS THE ASSESSEE CLAIMED DE PRECIATION IN EARLIER ITA NO.1535/M/12 A.Y.07-08 2 YEARS ON THE PROPERTY. THE MARKET VALUE OF THE PROP ERTY AS ADOPTED BY THE STAMP VALUE AUTHORITY WAS RS.1,29,79,243/-. AO ADOPTED THE SALE VALUE AT RS.1,22,37,243/- INSTEAD OF RS.90.00 LACS AS PER PROVISION OF SECTION 50C OF THE IT ACT AND WORKED OUT SHORT TERM CAPITAL GAIN ACCORDINGLY. 2.1 FOLLOWING THE SPECIAL BENCH DECISION IN THE CA SE OF INCOME TAX OFFICER VS . UNITED MARINE ACADEMY 130 ITD 113 , LD. CIT(A) CONFIRMED THE ACTION OF THE AO. 3. IT WAS FAIRLY ADMITTED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF SPECIAL BENCH OF ITAT IN THE CAS E OF UNITED MARINE ACADEMY (SUPRA), WHICH THE LD. CIT(A) FOLLOWED. IN THAT CASE IT WAS HELD : THE MAIN ISSUE WHICH FOR CONSIDERATION IN THE INST ANT CASE WAS AS TO WHETHER IN A CASE WHERE CAPITAL GAIN ARISING FRO M THE TRANSFER OF DEPRECIABLE ASSET IS COMPUTED AS PER THE SPECIAL PR OVISIONS CONTAINED IN SECTION 50, THE PROVISIONS OF SECTION 50C CAN BE APPLIED SO AS TO ADOPT THE VALUE ASSESSED FOR THE PURPOSE O F PAYMENT OF STAMP DUTY TO BE THE FULL VALUE OF THE CONSIDERATIO N RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. THERE ARE TWO DEEMING FICTIONS CREATED IN SECTION 5 0 AND SECTION 50C. THE FIRST DEEMING FICTION MODIFIES THE TERM 'C OST OF ACQUISITION' USED IN SECTION 48 FOR THE PURPOSE OF COMPUTING THE CAPITAL GAINS ARISING FROM TRANSFER OF DEPRECIABLE ASSETS WHEREAS THE DEEMING FICTION CREATED IN SECTION 50C MODIFIES THE TERM 'F ULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER OF THE CAPITAL ASSET' USED IN SECTION 48 FOR THE PURPOSE O F COMPUTING THE CAPITAL GAINS ARISING FROM THE TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH. THE DEEMING FICTION CREATED IN SE CTION 50C THUS OPERATES IN A SPECIFIC FIELD WHICH IS DIFFERENT FRO M THE FIELD IN WHICH SECTION 50 IS APPLICABLE. IT IS THUS NOT A CASE WHE RE ANY SUPPOSITION HAS BEEN SOUGHT TO BE IMPOSED ON OTHER SUPPOSITION OF LAW. THERE ARE TWO DIFFERENT FICTIONS CREATED INTO TWO DIFFERE NT PROVISIONS AND GOING BY THE LEGISLATIVE INTENTIONS TO CREATE THE S AID FICTIONS, THE SAME OPERATE IN DIFFERENT FIELDS. THE HARMONIOUS IN TERPRETATION OF THE RELEVANT PROVISIONS MAKES IT CLEAR THAT THERE IS N O EXCLUSION OF APPLICABILITY OF ONE FICTION IN A CASE WHERE OTHER FICTION IS APPLICABLE. AS A MATTER OF FACT, THERE IS NO CONFLICT BETWEEN T HESE TWO LEGAL ITA NO.1535/M/12 A.Y.07-08 3 FICTIONS WHICH OPERATE IN DIFFERENT FIELDS AND THEI R APPLICATION IN A GIVEN CASE SIMULTANEOUSLY DOES NOT RESULT IN IMPOSI TION OF SUPPOSITION ON OTHER SUPPOSITION OF LAW. THE ASSESS ING OFFICER THUS WAS RIGHT IN APPLYING THE PROVISION OF SECTION 50C TO THE TRANSFER OF DEPRECIABLE CAPITAL ASSETS COVERED BY SECTION 50 AN D IN COMPUTING THE CAPITAL GAIN ARISING FROM THE SAID TRANSFER BY ADOPTING THE STAMP DUTY VALUATION. 3.1 HAVING REGARD TO DECISION OF THE SPECIAL BENCH OF THE ITAT, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A ). THEREFORE, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 4. IN THE RESULT, ASSESSEE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2013. SD/- SD/- (SANJAY GARG) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 13/09/2013. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.