Harmeet Khanuja, Pune V. Income-tax Officer, Ward - 13(2), Pune

ITA 1573/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8129 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. ASHOK BABU
• Assessee Lawyers: ROHIT SHAH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 56(2)(vii)(b); 143(3); 50C; 234B; 201; 73; 22; 20

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 15 73 /P U N/201 8 / ASSESSMENT YEAR : 20 1 5 - 1 6 HARMEET KHANUJA, 06, DARSH APARTMENTS, LANE NO.17, PLOT NO.518, MAHATMA SOCIETY, PUNE - 411038 . / APPELLANT PAN: A PEPK7256H VS. THE INCOME TAX OFFICER , WAD 1 3(2) , PUNE . / RESPONDENT / APPELLANT BY : SHRI ROHIT SHAH / RESPONDENT BY : SHRI N. ASHOK BABU / DATE OF HEARING : 1 4 . 0 3 .201 9 / DATE OF PRONOUN CEMENT: 15 . 0 4 .201 9 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) , PUNE - 5, PUNE , DATED 2 3 . 0 5 .201 8 RELATING TO ASSESSMENT YEAR 20 1 5 - 1 6 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1 961 (IN SHORT THE ACT) . ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER OF COMPLETING THE ASSESSMENT U/S 143(3) AND MAKING ADDITION OF RS.518,500 / - BY INVOKING PROVISIONS OF SEC 56(2)(VII)(B) OF THE ACT BY REJECTING CONTENTION OF THE APPELLANT. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ADDED THE DIFFERENCE WITHOUT REFE RRING THE SAID CASE TO THE DEPARTMENTAL VALUATION OFFICER WHEREAS ASSESSEE HAS EVEN PRODUCED HIS OWN VALUATION OFFICER AT CIT(A) LEVEL. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE A SSESSING OFFICER OF CHARGING INTEREST UPON THE SAID AMOUNT AS PER THE PROVISIONS OF SEC 234B AND 234C WHICH IS FURTHER NOT JUSTIFIED. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION OF 5,18,500/ - BY THE AUTHORITIES BELOW UNDER THE PROVISIONS OF SECTION 56(2)(VII)(B) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN EMPLOYEE OF MARATHWADA MITRAMANDALS COLLEGE OF ENGINEERING. THE ASSESSING OFFICER NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY, WHEREIN THE MARKET VALUE WAS 1,60,00,000/ - . HOWEVER, VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY WAS 1,80,74,000/ - . THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. THE ASSESSING OFFICER MENTIONED IN THAT SHOW CAUSE NOTICE THAT THERE WAS DIFFERENCE IN CONSIDERATION MENTIONED IN PURCHASE AGREEMENT AND THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY. THE SECOND RELATED POINT WHICH WAS RAISED WAS THAT THE ASSESSEE CONTENDED THAT IT HAD ONLY 15% SHARE IN THE PROPERTY AND HER HUSBAND HAD 35% SHARE IN THE PROPERTY AND ANOTHER COUPLE HAD 50% SHARE IN THE PROPERTY. HOWEVER, SHARES OF PURCHASERS WERE NOT SPECIFIED ANYWHERE IN THE PURCHASE AGREEMENT. IN VIEW TH EREOF, THE ASSESSEE WAS SHOW CAUSED WHY ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 3 AN ADDITION OF 5,18,500/ - SHOULD NOT BE MADE IN THE HANDS OF ASSESSEE UNDER SECTION 56(2)(VII)(B) OF THE ACT. THE ASSESSEE STRESSED THAT PRICE PAID BY ASSESSEE WAS THE PREVALENT MARKET PRICE IN THE AREA AND VARIOU S OTHER FLATS WERE ALSO SOLD AT THE SAME RATE. IT WAS FURTHER POINTED OUT THAT AT THE TIME OF REGISTRATION, IT WAS POINTED OUT BY THE AUTHORITIES THAT SINCE THE AREA OF DUPLEX FLAT WAS MORE THAN 150 SQ.MTRS., THE ASSESSEE WAS LIABLE TO PAY EXTRA 25% AND H ENCE, DIFFERENCE IN THE STAMP DUTY VALUE. THE ASSESSEE STRESSED THAT THE POINT WHICH NEEDS TO BE APPRECIATED IS THE PRICE AGREED TO, AS PER READY RECKONER ONLY. HOWEVER, THERE WAS ONLY ARTIFICIAL INCREASE DUE TO PECULIAR RULE OF THE RESPECTIVE AUTHORITIE S, FOR WHICH ADDITIONAL STAMP DUTY HAD TO BE PAID. THE ASSESSING OFFICER DID NOT ACCEPT EXPLANATION OF ASSESSEE BEING LIABLE TO PAY 25% ADDITIONAL STAMP DUTY, AS DIRECTED BY THE AUTHORITIES. FURTHER, THE ASSESSING OFFICER ALSO POINTED OUT THAT THERE WAS NO MERIT IN THE PLEA OF ASSESSEE THAT PRICE PAID BY HER WAS IN LINE WITH THE TRANSACTION THAT HAPPENED IN THAT YEAR. IN VIEW THEREOF, ADDITION OF 5,18,000/ - WAS MADE IN THE HANDS OF ASSESSEE. THE ASSESSEE ALSO PLEADED BEFORE THE ASSESSING OFFICER THAT IT CAN FURNISHED THE VALUATION REPORT ON RECORD DEMONSTRATING THE RATE OF FLATS IN THAT AREA BEING SIMILAR TO THE RATE AT WHICH THE ASSESSEE PURCHA SED. HOWEVER, THIS FACT WAS NOT ACCEPTED AND THE ASSESSING OFFICER MADE ADDITION. 5. BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THAT PROVISIONS OF SECTION 56(2)(VII)(B) OF THE ACT WERE INTRODUCED BY THE FINANCE ACT, 2013 W.E.F. 01.04.2014, WHICH PROVIDE D THAT WHERE AN INDIVIDUAL OR HUF RECEIVES ANY IMMOVABLE PROPERTY, FOR CONSIDERATION WHICH WAS LESS THAN THE STAMP DUTY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING 50,000/ - , THE STAMP DUTY VALUE OF SUCH PROPERTY AS EXCEEDING SUCH CONSIDERATION SHALL BE TAXED AS INCOME ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 4 FROM OTHER SOURCES. THE ASSESSEE AGAIN EXPLAINED THAT ONLY REASON FOR INCREASE IN THE VALUE OF PROPERTY FOR THE PURPOSE OF STAMP DUTY WAS BASED ON THE GUIDELINES ISSUED BY THE STATE GOVERNMENT FOR THE PURPOSE OF VALUATION OF PROPERTY ADMEASURING OVER AND ABOVE 120 SQ.FT. ATTENTION WAS DRAWN TO THE ASR (READY RECKONER) GUIDELINES REST OF MAHARASHTRA 2015. THE CIT(A) NOTES THAT THE CASE OF ASSESSE E BEFORE HIM WAS THAT STAMP DUTY VALUATION WAS ON HIGHER SIDE DUE TO PECULIAR RULE OF RESPECTIVE AUTHORITIES, WHICH CAUSED THE ASSESSEE TO PAY ADDITIONAL STAMP DUTY. THE CIT(A) DID NOT AGREE WITH THE SAME AND ALSO DID NOT ACCEPT THE PLEA OF ASSESSEE THAT WHEN COMPARED WITH OTHER TRANSACTIONS IN THE AREA, THE FINALIZED PRICE PER SQUARE METER WAS IN LINE WITH THEM. THE CIT(A) THUS, UPHELD THE ORDER OF ASSESSING OFFICER. 6. THE ASSESSEE IS IN APPEAL AGAINST ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRES ENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE WAS DISPUTING VALUATION DETERMINED BY STAMP VALUATION AUTHORITY BOTH BEFORE THE ASSESSING OFFICER AND CIT(A), EVEN THE VALUATION REPORT WAS FILED. THEN, AS PER PROVISO UNDER SECTION 56(2)(VII)(B) OF THE ACT, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE VALUATION TO THE DVO. IN THIS REGARD, HE PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN K.K. NAG LTD. VS. ADDL.CIT (2012) 22 TAXMANN.COM 37 (PUNE). 8. THE LEARNED DEPARTMENTAL R EPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 5 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS IN RELATION TO APPLICATION OF PROVISIONS OF SECTION 56(2)(VII )(B) OF THE ACT. UNDER THE SAID PROVISIONS OF SECTION 56(2)(VII)(B) OF THE ACT, INCOMES ARE ENLISTED WHICH ARE CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. SECTION 56(2)(VII)(B) OF THE ACT REFERS TO AN IMMOVABLE PROPERTY, WHEREIN (I) IT HAS BEEN RECEIVED WITHOUT CONSIDERATION AND WHERE STAMP DUTY VALUE OF THE SAID PROPERTY EXCEEDS 50,000/ - AND (II) FOR CONSIDERATION WHICH IS LESS THAN STAMP DUTY VALUE OF PROPERTY BY AN AMOUNT EXCEEDING 50,000/ - , THEN THE DIFFERENCE BETWEEN STAMP DUTY VALUE OF PROPERTY AND THE CONSIDERATION IS TO BE ADDED IN THE HANDS OF ASSESSEE. THE PROVISO UN DER SECTION 56(2)(VII)(C) OF THE ACT LAYS DOWN THAT WHERE THE STAMP DUTY VALUE OF IMMOVABLE PROPERTY AS REFERRED TO IN SUB - CLAUSE (B), IS DISPUTED BY THE ASSESSEE ON THE GROUND AS MENTIONED IN SECTION 50C(2) OF THE ACT, THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF SUCH PROPERTY TO THE VALUATION OFFICER AND THE PROVISIONS OF SECTION 50C OF THE ACT AND 155(15) OF THE ACT SHALL APPLY AS FAR AS MAY BE, IN RELATION TO THE STAMP DUTY VALUE OF SUCH PROPERTY FOR THE PURPOSE OF SUB - CLAUSE (B), AS IT APPLIES FOR VALUATION OF CAPITAL ASSET UNDER THOSE SECTIONS. 10. WE MAY NOW REFER TO THE PROVISIONS OF SECTION 50C(1) OF THE ACT, WHICH LAYS DOWN THAT WHERE CONSIDERATION RECEIVED AS A RESULT OF TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH, IS LESS T HAN THE VALUE ADOPTED OR ASSESSED BY STAMP DUTY AUTHORITY, THEN FOR THE PURPOSE OF ADOPTING OR ASSESSING THE CONSIDERATION, THEN SUCH STAMP DUTY VALUATION WOULD BE TAKEN. SUB - SECTION (2) TO SECTION 50C OF THE ACT PROVIDES THAT WITHOUT PREJUDICE TO PROVISI ONS OF SUB - SECTION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 6 THE VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AND (B) SUCH VALUE HAS NOT BEEN DISP UTED IN APPEAL OR REVISION BEFORE ANY AUTHORITY, COURT, THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER AND THE OTHER PROVISIONS OF THE WEALTH TAX ACT WOULD APPLY AS MENTIONED IN THE SAID SECTION . THE SAID PROVISIONS OF SECTION 50C(2) OF THE ACT ARE TO BE APPLIED IN THE HANDS OF SELLER OF CAPITAL ASSET. THE CORRESPONDING PROVISIONS ARE MADE FOR ASSESSING DIFFERENCE BETWEEN THE STAMP DUTY VALUATION AS DONE BY STATE AUTHORITIES AND THE CONSIDERATION MENTIONED IN THE DOCUMENT, IN THE HANDS OF PURCHASER AS PER SECTION 56(2)(VII)(B) & (C) OF THE ACT. HOWEVER, IN RESPECT OF SUB - CLAUSE (B), THE PROVISO VERY CLEARLY PROVIDES THAT THE PROVISIONS OF SECTION 50C(2) OF THE ACT ARE TO BE APPLIED AND WHERE THE A SSESSEE IS AGGRIEVED BY STAMP DUTY VALUATION DONE BY THE STATE AUTHORITIES, THEN IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER MAY REFER THE VALUATION OF SUCH PROPERTY TO VALUATION OFFICER. THE ASSESSEE BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE CIT( A) HAS PLEADED THAT THE VALUE ADOPTED FOR STAMP DUTY PURPOSES EXCEEDED THE FAIR MARKET VALUE OF PROPERTY AS ON THE DATE OF PURCHASE AND HAD SUBMITTED NOT ONLY THE EVIDENCE OF CIRCULAR RATE AT THE RELEVANT TIME BUT ALSO VALUATION REPORT BY THE REGISTERED VA LUER, WHICH WAS FILED BEFORE THE ASSESSING OFFICER AND CIT(A), THEN IN SUCH CIRCUMSTANCES, IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO REFER THE MATTER TO THE DISTRICT VALUATION OFFICER IN ORDER TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY AS ON T HE DATE OF PURCHASE. WE MAY REFER TO PARA 5 OF ORDER OF ASSESSING OFFICER IN THIS REGARD AND POINT NO.6 OF ORDER OF CIT(A) IN THIS REGARD AND VALUATION REPORT FILED AT PAGES 19 TO 26 OF PAPER BOOK. WE ACCORDINGLY, DIRECT THE ASSESSING OFFICER TO REFER TH E MATTER TO DVO, WHO SHALL DETERMINE THE FAIR MARKET VALUE OF THE ITA NO. 15 73 /P U N/201 8 HARMEET KHANUJA 7 PROPERTY AS ON THE DATE OF PURCHASE AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, THE MATTER IS REMITTED BACK TO THE FILE OF ASSESSING OFFICER. THE GROUNDS OF A PPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 15 TH DAY OF APRIL , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 15 TH APRIL , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) , PUNE - 5, PUNE ; 4. THE PR. CIT , PUNE - 4, PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE