PUSHPA J. SHAH, MUMBAI V. ITO WD 21(2)(2), MUMBAI

ITA 163/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4115 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 07-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SATYNARAYAN RAJA
• Assessee Lawyers: R K SHAH
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.163/MUM/2011 ASSESSMENT YEAR:2005-06 SMT. PUSHPA J. SHAH, 10, DUNCAN CAUSEWAY, NEAR TALAO, SION, MUMBAI-400022 / VS. ITO, WARD-21(2)(2), B.K.C. BANDRA, MUMBAI ( /ASSESSEE) ( ! / REVENUE ) PAN. NO . AAOPS4047P / ASSESSEE BY SHRI R.K.SHAH ! / REVENUE BY SHRI B. SATYNARAYAN RAJA # !$ % & / DATE OF HEARING : 21/04/2016 % & / DATE OF ORDER: 21/04/2016 ITA NO.163/MUM/2011 SMT. PUSHPA J. SHAH 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 01/09/2010 OF THE FIRST APPELLATE AUTHORITY, MUMBAI . IN THE PRESENT APPEAL, THE GROUND RAISED BY THE ASSESSEE I S WITH RESPECT TO DELETE THE FMV, DETERMINED AT RS.64,75,0 00/- AND THE ADDITION OF RS.14,70,500/- BEING THE NET LONG T ERM CAPITAL GAINS. 2. DURING HEARING, BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE, SHRI R.K. SHAH, CONTENDED THAT DURING ASS ESSMENT STAGE, THE REQUEST FOR GETTING THE VALUATION FROM D VO WAS REJECTED BY THE ASSESSING OFFICER AND THE REPORT WH ICH WAS SOUGHT FROM DVO AT THE FIRST APPELLATE STAGE, HAS B EEN CHALLENGED ON ACCOUNT OF DEFICIENCY IN THE VALUATIO N REPORT. THE LD. COUNSEL TOOK US TO VARIOUS PAGES OF THE OBS ERVATIONS MADE IN THE ASSESSMENT ORDER AS WELL AS IN THE IMPU GNED ORDER. ON THE OTHER HAND, THE LD. DR, SHRI B. SATYA NARAYAN RAJA, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMP UGNED ORDER. THE ASSESSEE ALSO PLACE RELIANCE UPON THE DE CISION IN ITA NO.163/MUM/2011 SMT. PUSHPA J. SHAH 3 THE CASE OF ITO VS PREM RATAN GUPTA (ITA NO.5803/MUM/2009) ORDER DATED 28/03/2012. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, AN INDIVIDUAL, DECLARED INCO ME OF RS.1,04,794/- IN HER RETURN FILED ON 14/10/2005. AS PER THE ASSESSEE, DURING THE RELEVANT YEAR WAS HAVING DEVEL OPMENT RIGHTS OF HER PROPERTY, BEING FULLY TENANTED, AS PE R DEVELOPMENT AGREEMENT DATED 11/01/2005, WHICH WAS D ULY REGISTERED WITH THE REGISTRAR OF THE DOCUMENT FOR A CONSIDERATION OF RS.50,000/- OUT OF WHICH A SUM OF RS.28,50,000/- WAS TO BE RECEIVED BY THE ASSESSEE A ND THE REMAINING RS.21,50,000/- WAS TO BE DIRECTLY RECEIVE D BY THE TENANT FROM THE DEVELOPER ON SURRENDERING AND HANDI NG OVER THE POSSESSION OF THE FLAT. AS PER THE CLAIM OF TH E ASSESSEE, ONLY RS.28,50,000/- WAS TO BE RECEIVED FOR GRANTING OF DEVELOPMENT RIGHT. THE LD. ASSESSING OFFICER FOUND THAT FAIR MARKET VALUE, AS PER THE REGISTERED DOCUMENT IS RS.86,42,000/-, THUS, HE INVOKED SECTION 50C OF THE ACT. THE LD. ASSESSING OFFICER COMPLETED THE ASSESSMENT AND ASSESSED ITA NO.163/MUM/2011 SMT. PUSHPA J. SHAH 4 THE TOTAL INCOME AT RS.37,45,360/-. ON APPEAL, BEFO RE THE COMMISSIONER OF INCOME TAX (APPEAL), THE MATTER WAS REFERRED TO THE VALUATION CELL, WHEREIN, IT WAS VAL UED AT RS.64,75,000/- WHICH WAS BIFURCATED BETWEEN THE ASS ESSEE AND THE TENANT AT RS.33,75,000/- AND RS.31 LAKH RESPECTIVELY. THE CRUX OF ARGUMENT ON BEHALF OF TH E ASSESSEE IS THAT THE DEVELOPMENT AGREEMENT IS NOT THE AGREEM ENT OF THE SALE AND THUS THE PROVISION OF SECTION 50C OF T HE ACT IS NOT APPLICABLE. THE ASSESSEE, BEFORE US, HAS EXPLAI NED THAT THE VALUATION OFFICER HAS VALUED THE TDR, WHEREAS, THERE WAS NO SUCH ARRANGEMENT TO SELL THE TDR NOR ANY TDR WAS EVER OBTAINED BY THE ASSESSEE. IT WAS ALSO CLAIMED THAT THE RATE OF FSI, AS PER READY RECKONER, IS RS.1403 PER SQ. FT. IT WAS ALSO CLAIMED THAT EVEN THE TDR AS ON THAT DATE IS TO BE RESTRICTED AT 35% OF THE TDR AS PER SOCIETY RULES. CONSIDERIN G THE TOTALITY OF FACTS AND THE ASSERTION MADE BY THE LD. RESPECTIVE COUNSEL, FIRSTLY, WE FIND THAT THE LD. ASSESSING OF FICER, AT THE ORIGINAL STAGE/ASSESSMENT STAGE, WAS EXPECTED TO SE ND THE MATTER TO THE FILE OF THE DVO TO ASCERTAIN THE FACT UAL MATRIX. BEFORE US, THE ASSESSEE HAS CLAIMED THAT THERE WAS DEFICIENCY IN THE RECORD OF THE VALUATION OFFICER, THEREFORE, CONSIDERING ITA NO.163/MUM/2011 SMT. PUSHPA J. SHAH 5 THE AFORESAID DECISION OF THE TRIBUNAL IN THE CASE OF SHRI PREM RATAN GUPTA, WHEREIN, IT HAS BEEN OBSERVED THA T VALUE OF TDR CANNOT BE SUBJECT MATTER OF THE SECTION 50C, WE REMAND THIS APPEAL TO THE FILE OF THE LD. ASSESSING OFFICER. THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE TH E CLAIM OF THE ASSESSEE AND, IF SO DESIRED BY HIM, MAY GET AN OTHER REPORT FROM THE DVO AND CONSIDERING THE TOTALITY OF FACTS, EXAMINE THE CLAIM OF THE ASSESSEE AND AFTER PROVIDI NG DUE OPPORTUNITY TO THE ASSESSEE, DECIDE THE ISSUES IN H AND, IN ACCORDANCE WITH LAW. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 21/04/2016. SD/- SD/- ( ASHWANI TANEJA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ( DATED : 21/04/2016 F{X~{T? P.S/. .. ITA NO.163/MUM/2011 SMT. PUSHPA J. SHAH 6 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 # 1 ( *+ ) / THE CIT, MUMBAI. 4. 0 0 # 1 / CIT(A)- , MUMBAI 5. 2!3 . , 0 *+& * 4 , # $ / DR, ITAT, MUMBAI 6. 5 6$ / GUARD FILE. / BY ORDER, /2+ . //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI