G M Kenjale Construction Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 1(2), Pune

ITA 1930/PUN/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1477 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Capital Gains
• Section: 43CA; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1930/PUN/2017 / ASSESSMENT YEAR : 2014-15 G M KENJALE CONSTRUCTIONS PVT. LTD., 22, PARVATI, PUNE 411 009 PAN : AAACG6186E VS. DCIT, CIRCLE-1(2), PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 05-04-2017 PASSED BY THE CIT(A)-1, PUNE IN RELATION TO THE ASSESSMENT YEAR 2014-15. 2. THE ONLY ISSUE RAISED IN THE APPEAL IS AGAINST THE CONFIRMATION OF ADDITION OF RS.26,47,290/- MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 43CA OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). APPELLANT BY SHRI KISHOR PHADKE RESPONDENT BY SHRI ASHOK PRASAD JAKHANWAL DATE OF HEARING 10-12-2019 DATE OF PRONOUNCEMENT 16-12-2019 ITA NO. 1930/PUN/2017 G M KENJALE CONSTRUCTIONS PVT. LTD., 2 3. BRIEFLY, STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS AS BUILDER AND DEVELOPER. THE ASSESSEE RECORDED SALE TRANSACTIONS OF CERTAIN FLATS AND COMPUTED INCOME FOR THE YEAR ACCORDINGLY WITH SUCH AGREED VALUES. THE AO INVOKED THE PROVISIONS OF SECTION 43CA O F THE ACT, INTRODUCED BY THE FINANCE ACT, 2013 W.E.F. 2014-15. HE ASCERTAINED THE VALUE IN INDEX/MARKET VALUE OF FLATS SOLD BY TH E ASSESSEE. THE DIFFERENCE BETWEEN THE AMOUNT AS PER THE AGREEMENTS AND THE VALUE IN INDEX/MARKET VALUE OF THE FLATS SOLD BY THE ASSESSEE AT RS.29,65,290/-, WAS ADDED. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. 4. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND, WHICH R EADS AS UNDER : ALTERNATIVELY AND WITHOUT PREJUDICE TO GROUND NO.1 TO 3, APPELLANT CONTENDS THAT THE LD. I.T. AUTHORITIES ERRED IN LAW AND ON FACTS IN ADOPTING STAMP DUTY VALUATION AS FULL VALUE OF CONSIDERATION INSTEAD OF ACTUAL SALES CONSIDERATION; WITHOUT REFERRING THE MATTER TO THE VALUATION OFFICER AS PRESCRIBED IN SECTION 43CA OF THE ITA, 1961. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH T HE RELEVANT MATERIAL ON RECORD ON THE ADMISSION OF THE ADDITIONAL GROUND. THE INSTANT ADDITIONAL GROUND RAISES A PURE QUESTION OF ITA NO. 1930/PUN/2017 G M KENJALE CONSTRUCTIONS PVT. LTD., 3 LAW, WHICH DOES NOT REQUIRE ANY FRESH INVESTIGATION OF FACTS. THE SAME IS ADMITTED IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN NATIONAL THERMAL POWER COMPANY LTD. VS. CIT (1998) 229 ITR 383 (SC). 6. TURNING TO THE ADDITIONAL GROUND FIRST, IT IS SEEN THAT THE ASSESSEES CLAIM IS THAT THE AUTHORITIES BELOW ERRED IN ADOPTIN G THE STAMP DUTY VALUATION AS FULL VALUE OF CONSIDERATION U/S.43CA OF THE ACT WITHOUT REFERRING THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER AS PRESCRIBED U/S.43CA. SECTION 43CA IS ANALOGOUS TO SECTION 50C OF THE ACT WITH THE ONLY DIFFERENCE THAT WHEREAS THE FORMER APPLIES TO THE COMPUTATION OF COST OF ACQUISITION OF CERTAIN ASSETS OTHER THAN CAPITAL GAINS, THE LATER PROVISION APPLIES IN THE COMPUTATION OF INCOME UNDER THE HEAD `CAPITAL GAINS. SECTION 43CA PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS THE RES ULT OF TRANSFER OF AN ASSET (OTHER THAN CAPITAL ASSET), BEING, LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSE D OR ASSESSABLE FOR STAMP DUTY, THEN SUCH VALUE SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER. SUB-SECTION (2) PROVIDES THAT THE PROVIS IONS ITA NO. 1930/PUN/2017 G M KENJALE CONSTRUCTIONS PVT. LTD., 4 OF SUB-SECTIONS (2) AND (3) OF 50C SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE DETERMINATION OF THE VALUE ADOPTED OR ASSESSE D OR ASSESSABLE UNDER SUB-SECTION (1) OF 43CA. THUS IT IS EVIDENT THAT SUB-SECTION (2) OF SECTION 50C HAS BEEN BODILY INCORPOR ATED IN SECTION 43CA, WHICH PROVIDES THAT WITHOUT PREJUDICE TO PROVISIONS OF SUB-SECTION (1), WHERE THE ASSESSEE CLAIMS BEFORE THE AO THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE B Y THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF TH E PROPERTY AS ON THE DATE OF TRANSFER, THE AO MAY REFER THE MATTER TO THE DVO, WHICH SHALL THEN BE APPLIED AS FULL VALUE OF CONSIDERATION. 7. HERE IS A CASE IN WHICH THOUGH, LEGALLY, THE MANDATE OF SECTION 50C(2) IS APPLICABLE BUT THE ASSESSEE DID NOT MAKE AN Y REQUEST TO THE AO FOR MAKING REFERENCE TO THE DVO. IN THIS REGARD, THE LD. AR HAS RELIED ON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT (2014) 47 TAXMANN.COM 158 (CAL.) IN WHICH IT HAS BEEN HELD IN PARA 8 THAT: EVEN IN A CASE WHERE NO SUCH PRAYE R IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, W HO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING ITA NO. 1930/PUN/2017 G M KENJALE CONSTRUCTIONS PVT. LTD., 5 OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUN DEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM A N OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. ON A CONSIDERATION OF THE ABOVE PRECEDENT IN JUXTAPOSITION TO THE ADDITIONAL GROUND RAISED BEFORE THE TRIBUNAL, WE ARE OF THE CONSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER IS SET-ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO. WE ORDER ACCORDINGLY AND D IRECT THE AO TO FRAME THE ASSESSMENT AFRESH AS PER LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN SU CH ASSESSMENT, HE WILL TAKE INTO CONSIDERATION THE DISCUSSION MAD E ABOVE QUA THE MAKING OF A REFERENCE TO THE DVO FOR DETERMINATION OF THE FAIR MARKET VALUE OF THE PROPERTY TRANSFERRED BY THE ASSESSEE, WHICH IS NOT A CAPITAL ASSET. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S.SYAL ) JUDICIAL MEMBER VICE PR ESIDENT PUNE; DATED : 16 TH DECEMBER, 2019 ITA NO. 1930/PUN/2017 G M KENJALE CONSTRUCTIONS PVT. LTD., 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, PUNE 4. THE PR. CIT -1, PUNE 5. , , / DR B, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 10-12-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 11-12-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *