Mr .John Ettimootil Samuel, Coimbatore V. ITO, Coimbatore

ITA 1703/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64597 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR STAND ING
• Assessee Lawyers: K RAGHU
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Reason to believe
• Section: 50C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1703(MDS)/2012 ASSESSMENT YEAR : 2005-06 MR.JOHN ETTIMOOTIL SAMUEL, 202, RATHNA MOUNT ENCLAVE, RACE COURSE ROAD, COIMBATORE-641 018. PAN ALMPS6292B. VS. THE INCOME-TAX OFFICER, WARD III(1), COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.RAGHU, C.A. RESPONDENT BY : SHRI KEB RENGARAJAN, JR.STAN DING COUNSEL DATE OF HEARING : 22 ND NOVEMBER, 2012 DATE OF PRONOUNCEMENT : 26 TH NOVEMBER, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I AT COIMBATORE, DATED 1-6-2012. THE APPEAL ARISES OUT OF THE - - ITA 1703 OF 2012 2 ASSESSMENT COMPLETED UNDER SECTION 143(3), READ WIT H SECTION 147 OF THE INCOME-TAX ACT, 1961. 2. THE RELEVANT GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED BELOW:- 1. THE LEARNED CIT (APPEALS) OUGHT TO HAVE HELD T HAT THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, AS RECORDED AND COMMUNICATED BY THE AO, FOR AVAILING THE EXTENDED TIME LIMIT, U/S 147, HAS NOT MADE OUT A CASE OF ANY FAILURE ON THE PART OF T HE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE ASSESSMENT YEA R 2008-09, AS STIPULATED IN THE PROVISO AND THE IMPUGNED RE-ASSESSMENT IS BARRED BY LIMITATION AND INVALID IN LAW, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A), HAS, GROSSLY ERRED, IN HO LDING THAT MERE FILING OF XEROX COPY OF THE SALE DEED BY THE APPELLANT, IN THE COURSE OF THE PROCEEDINGS U/S 143 (3), CANNOT BE CONSTRUED AS FULL AND TRUE DISCLOSURE - - ITA 1703 OF 2012 3 REQUIRED FOR PURPOSE OF COMPUTATION OF CAPITAL GAIN S, AND UPHOLDING THE JURISDICTION OF THE AO, FOR AVAIL ING EXTENDED TIME LIMIT UNDER THE PROVISO TO SECTION 14 7, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. 3. THE LEARNED CIT(APPEALS) OUGHT TO HAVE HELD TH AT THE CONSTITUTIONAL OF VALIDITY OF SECTION 50C, HAD BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT, ON THE BAS IS OF THE OBLIGATION CAST ON THE AO, UNDER SUB-SECTION (2 ) OF SECTION 50C, AND THE APPELLANT CLAIMING THE VALUATI ON ADOPTED BY THE STAMP DUTY AUTHORITY, AS BEING IN EXCESS OF FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFER, BY COMPUTING THE CAPITAL GAINS, ON THE BASIS OF ACTUAL CONSIDERATION RECEIVED BY HIM, AS T HE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFER, WAS SUFFICIENT FOR THE AO TO ACT, U/S 50C (2) AND AOS FAILURE TO ACT ACCORDINGLY, CANNOT BE A CA SE OF FAILURE, ON THE PART OF THE APPELLANT TO FULLY A ND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR HIS - - ITA 1703 OF 2012 4 ASSESSMENT, IN THE FACTS AND THE CIRCUMSTANCES OF T HE CASE AND IN LAW. 4. THE ORDER OF THE LEARNED CIT(A), CONFIRMING THE IMPUGNED PROCEEDINGS AND THE RE-COMPUTATION OF LONG TERM CAPITAL GAINS, AS PER THE IMPUGNED ORDER, IS CLEARLY CONTRARY TO LAW, EXCESSIVE AND UNSUSTAINABL E IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE. 3. WE HEARD BOTH SIDES IN DETAIL. IN THE PRESENT CASE THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3). THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 AFTER A PERIOD OF THREE YEARS TO REOPEN THE ASSESSMENT UNDE R SECTION 147. THE CASE OF THE ASSESSING OFFICER IS THAT THE ASSESSEE HAD PAID ADDITIONAL STAMP DUTY AND TO THAT EXTENT THE S ALE CONSIDERATION OF THE PROPERTY UNDER SECTION 50C IS TO BE ENHANCED. ACCORDING TO THE ASSESSING OFFICER THE A DDITIONAL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS PER SECTION 50C SHOULD HAVE BEEN ADOPTED AT ` 1,83,89,000/-, WHEREAS AN AMOUNT OF ` 1,74,00,000/- ALONE WAS ADOPTED IN THE ORIGINAL - - ITA 1703 OF 2012 5 ASSESSMENT. THE INCOME-ESCAPING ASSESSMENT WAS COM PLETED TREATING THE SALE CONSIDERATION AT ` 1,83,89,000/-. THE SAME WAS CONFIRMED IN FIRST APPEAL. THEREFORE, THE SECOND B EFORE US. 4. THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3), AS ALREADY STATED. THE ASSESSEE HA D FURNISHED ALL THE NECESSARY DETAILS REQUIRED FOR COMPLETING T HE ASSESSMENT. THE ASSESSEE HAS ALSO FURNISHED PHOTOSTAT COPIES OF THE SALE DEED. THIS DISCLOSURE CANNOT BE IGNORED ONLY FOR T HE REASON THAT THE ASSESSEE HAD FILED ONLY PHOTOSTAT COPIES OF THE SALE DEED. THE ORIGINAL SALE DEED WILL ALWAYS BE WITH THE BUYE R OF THE PROPERTY. THE ASSESSEE WILL HAVE ONLY THE CERTIFIE D COPY. IF THE ASSESSING AUTHORITY HAD INSISTED AT THE TIME OF ORI GINAL ASSESSMENT, THE ASSESSEE COULD HAVE PRODUCED THE OR IGINAL CERTIFIED COPY OF THE SALE DEED AFTER OBTAINING THE SAME FROM THE BUYER OF THE PROPERTY. THEREFORE, THERE IS NO GROU ND TO SAY THAT THE ASSESSEE HAS NOT FURNISHED THE NECESSARY DETAIL S. 5. THEREFORE WE FIND THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY TH E DETAILS AND PARTICULARS NECESSARY FOR COMPLETING THE ASSESSMENT UNDER SECTION 143(3). WHEN THERE IS NO SUCH FAILURE ON T HE PART OF THE - - ITA 1703 OF 2012 6 ASSESSEE, THERE CANNOT BE AN INCOME-ESCAPING ASSESS MENT UNDER SECTION 147 AFTER THE EXPIRY OF A PERIOD OF F OUR YEARS. THEREFORE, WE HAVE TO HOLD THAT THE IMPUGNED ASSESS MENT IS BARRED BY LIMITATION. 6. ACCORDINGLY, THE IMPUGNED ASSESSMENT IS SET ASI DE AND AS SUCH THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) IS VACATED. 7. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDERS PRONOUNCED ON MONDAY, THE 26 TH OF NOVEMBER, 2012 AT CHENNAI. SD/- SD/- (S.S.GODARA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 26 TH NOVEMBER, 2012. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.