Income Tax Officer, Bangalore V. Smt.Vimalamma.C, Bangalore

ITA 193/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7661 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: VANI H
• Keywords: Fair market value; Valuation report; Tax effect
• Section: 143(3); 54F; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 193 /BANG/201 7 ASSESSMENT YEAR : 20 07 - 08 INCOME-TAX OFFICER, WARD 1(2)(1), BENGALURU. VS. SMT. VIMALAMMA C. NO.40/5, MUKAMBIKA NILAYA, APPAREDDY PALAYA, INDIRANAGAR, BENGALURU 560 038. PAN : A C DPV 0528 M APPELLANT RESPONDENT REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT ASSESSEE BY : SMT. VANI. H , ADVOCATE DATE OF HEARING : 1 7 . 0 7 .201 8 DATE OF PRONOUNCEMENT : 27 . 0 7 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), INTER ALIA , ON FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(APPEALS), IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD.CIT(A) ERRED IN ACCEPTING THE ASSESSEE'S CONTENTION THAT THE VALUE OF CONSIDERATION RECEIVED FROM THE JDA IS TO BE COMPUTED WITH REFERENCE TO GUIDANCE VALUE OF THE LAND WHICH RELATES TO THE A.Y 2007-08 AT RS.900 PER SQ.FT OF THE EXTENT OF LAND GIVEN UP TO THE DEVELOPER AND NOT ON THE BASIS OF THE COST OF CONSTRUCTION OF THE EXTENT OF SUPER BUILT-UP AREA TO BE RECEIVED, AS THE HON'BLE ITAT BANGALORE BENCH 'A' IN THE CASE OF N.S ITA NO. 193/BANG/2017 PAGE 2 OF 4 NAGARAJ (ITA NO.676 (BANG) OF 2011 AND C. 0 NO.45 (BANG) OF 2013 DTD.1/12/2014 HAS HELD THAT SECTION 48 NOWHERE TALKS OF FMV AND IT TALKS OF FULL CONSIDERATION. IT IS FURTHER HELD IN THE CASE SUPRA THAT FULL CONSIDERATION IS THE COST OF CONSTRUCTION INCURRED BY THE BUILDER ON THE ASSESSEE'S SHARE OF CONSTRUCTED AREA, BECAUSE THE ASSESSEE WOULD RECEIVE CONSTRUCTED AREA IN LIEU OF THE LAND SHARE. 3. THE LD.CIT(A) ERRED IN ACCEPTING THE ASSESSEE'S CONTENTION THAT THE VALUE OF CONSIDERATION RECEIVED FROM THE JDA IS TO BE COMPUTED WITH REFERENCE TO GUIDANCE VALUE OF THE LAND WHICH RELATES TO THE A.Y 2007-08 AT RS.900 PER SQ.FT OF THE EXTENT OF LAND GIVEN UP TO THE DEVELOPER AND NOT ON THE BASIS OF THE COST OF CONSTRUCTION OF THE EXTENT OF SUPER BUILT-UP AREA TO BE RECEIVED, AS THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF SALORA INTERNATIONAL LTD. (386 ITR 580) DTD 13/05/2016 HAS HELD THAT THE EXPRESSION 'ACCRUING' AS USED IN SECTION 48 IS SYNONYMOUS TO ENTITLEMENT AND IF THE ASSESSEE IS ENTITLED TO THE CONSIDERATION, THEN THE SAME MUST BE TAKEN INTO ACCOUNT FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS IN TERMS OF SECTION 48. 4. THE LD.CIT(A) ERRED IN ALLOWING RELIEF ON THE ASSESSEE'S CLAIM OF EXPENDITURE IN RESPECT OF KEB/BESCOM DEPOSIT WHILE COMPUTING THE LTCG BECAUSE THE SAME IS NOT SUBSTANTIATED BY THE ASSESSEE WITH PROPER DOCUMENTARY EVIDENCE EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING APPELLATE PROCEEDINGS. 5. THE LD.CIT(A) ERRED IN HOLDING THAT THE CLAIM U/S 54F IS JUSTIFIABLE BY PLACING RELIANCE ON THE ASSESSEE'S SON'S CASE, AS THE ASSESSMENT ORDER DTD.7/3/2013 PASSED BY THE AO IN THE ASSESSEE'S SON'S CASE FOR THE A.Y.2007- 08 ALLOWING DEDUCTION U/S 54F WAS SET ASIDE BY THE PR.CIT BY INVOKING THE PROVISIONS OF SECTION 263 DTD. 18/3/2015 AND THE AO HAS PASSED FRESH ASSESSMENT ORDER IN THAT CASE THEREBY DISALLOWING THE CLAIM U/S 54F VIDE ORDER U/S 143(3) R.W.S. 263 DTD.30/3/2016. 6. THE LD.CIT(A) ERRED IN HOLDING THAT THE CLAIM U/S 54F IS JUSTIFIABLE BECAUSE AS PER THE ABSOLUTE SALE DEED DTD.30.06.2004 AND VALUATION REPORT DTD.9.2.2013 THE ASSESSEE'S SON I.E., SHRI M.G. SHANKAR, IS THE SOLE OWNER OF THE PROPERTY (NEW ASSET) AND HENCE THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 54F. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE LD.CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL. 2. AT THE OUTSET, IT IS OBSERVED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS BELOW RS.20 LAKHS. THE CBDT, WITH A VIEW TO REDUCE UNNECESSARY LITIGATION ON THEIR PART, ITA NO. 193/BANG/2017 PAGE 3 OF 4 HAS ISSUED A CIRCULAR NO. 3/2018 DATED 11 TH JULY, 2018, WHEREIN THEY HAVE REVISED THE MONETARY LIMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS AND SUPREME COURT. INSOFAR AS THE TRIBUNAL IS CONCERNED, THE MONETARY LIMIT SPECIFIED THEREIN IS RS.20 LAKHS AND THE CONCERNED AUTHORITY HAS TO WITHDRAW ITS APPEAL OR IT NEED NOT PRESS THE SAME IF TAX EFFECT IS LESS THAN RS.20 LAKHS. IT IS FURTHER SPECIFIED THAT THE TAX EFFECT INDICATED THEREIN IS APPLICABLE TO ALL PENDING APPEALS, THOUGH THEY ARE FILED BY THE REVENUE PRIOR TO THE ISSUANCE OF THE SAID CIRCULAR. IT WAS ALSO CLARIFIED THAT THE ASSESSING OFFICER HAS TO CALCULATE THE TAX EFFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUE/S IN THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUE ARISES IN MORE THAN ONE YEAR(S), APPEAL(S) CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR(S) IN WHICH TAX EFFECT IN RESPECT OF THE DISPUTED ISSUE EXCEEDS THE MONETARY LIMIT SPECIFIED. IN OTHER WORDS, IF THERE ARE A NUMBER OF YEARS, IF THE TAX EFFECT IS LESS THAN THE SPECIFIED LIMIT IN ONE YEAR, APPEAL CANNOT BE FILED OR THE SAME HAS TO BE WITHDRAWN FOR THAT YEAR, FOR WANT OF TAX EFFECT. HOWEVER, AN EXCEPTION IS MADE TO THIS DIRECTION WITH REGARD TO A COMBINED ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. IF IN ONE OF THE YEARS THE TAX EFFECT IS MORE THAN RS.20 LAKHS AND THE REVENUE DECIDES TO FILE AN APPEAL, IN RESPECT OF OTHER YEARS COVERED BY THE SAID ORDER ALSO, REVENUE IS ELIGIBLE TO FILE APPEAL, EVEN THOUGH THE TAX EFFECT IN EACH OF THOSE YEARS IS LESS THAN RS.20 LAKHS. IT WAS ALSO CLARIFIED THAT MERELY BECAUSE THE APPEAL IS DISMISSED FOR WANT OF TAX EFFECT, IT DOES NOT COME IN THE WAY OF THE DEPARTMENT IN FILING APPEAL FOR OTHER YEARS(S), AND IT DOES NOT MEAN THAT THE DEPARTMENT HAS ACQUIESCED THE ISSUE. 3. THE ABOVE CIRCULAR WAS SPECIFICALLY MADE APPLICABLE TO ALL PENDING APPEALS. IN THE PRESENT CASE, THE TAX EFFECT ON THE ADDITION IN DISPUTE, WHICH WAS DELETED BY THE CIT(A) BY THE IMPUGNED ORDER IS INDISPUTABLY BELOW 20LAKHS. 4. THE LEGISLATURE IN ITS WISDOM HAS INTRODUCED SECTION 268A OF THE INCOME TAX ACT, 1961, WHEREBY THE BOARD IS EMPOWERED TO ISSUE ORDERS/INSTRUCTIONS/DIRECTIONS TO THE INCOME-TAX AUTHORITIES, FIXING THE MONETARY LIMITS FOR THE PURPOSE OF REGULATING THE FILING OF APPEALS. IN THE LIGHT OF THE CIRCULAR DATED 11.07.2018, ISSUED BY THE ITA NO. 193/BANG/2017 PAGE 4 OF 4 CBDT IN EXERCISE OF THE POWERS CONFERRED IN IT BY SUBSECTION (1) OF SECTION 268A, WE ARE OF THE VIEW THAT THE APPEAL FILED HEREIN SHOULD NOT HAVE BEEN PRESSED BY THE REVENUE. THE LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMITTED THAT THE REVENUE EFFECT IN THIS APPEAL IS LESS THAN THE PRESCRIBED LIMIT IN PARA-3 OF THE ABOVE CIRCULAR ISSUED BY THE CBDT. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE DISMISS THE APPEALS OF THE REVENUE. 5. HOWEVER, THE REVENUE IS AT LIBERTY TO MOVE APPROPRIATE APPLICATION/PETITION IN CASE IT IS FOUND THAT THE CASE IS COVERED BY ONE OF THE EXCEPTION(S) CARVED OUT IN THE SAID CIRCULAR. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JULY, 2018. SD/- SD/- BANGALORE. DATED: 27 TH JULY, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. 5. CIT GUARD FILE 4. DR BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER