M/S. FEBER CONSTRUCTION, MUMBAI V. ACIT-21(1), MUMBAI

ITA 198/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2820 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 15-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHARM VEER SINGH
• Assessee Lawyers: SHWETA R. SINGH
• Keywords: Capital asset; Retrospective amendment
• Section: 43CA; 201; 43; 20

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) I.T.A. NO. 198 /MUM/ 201 9 (ASSESSMENT YEAR 20 15 - 1 6 ) M/S. FABER CONSTRUCTION 2/B, GROUND FLOOR KAPUR MANSION, 10 MORLAND ROAD, AGRIPADA MUMBAI - 400 011. PAN : AACFF04 36F V S . ACIT - 21(1) PIRAMAL CHAMBERS LALBAUG MUMBAI - 400 012. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY MS. SHWETA R. SINGH - EMPLOYEE DEPARTMENT BY SHR I DHARM VEER SINGH DATE OF HEARING 15.01. 20 20 DATE OF PRONOUNCEMENT 12 . 0 3 . 20 20 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDERS OF LEARNED CIT (A) DATED 26.11.2018 AND PERTAINS TO ASSESSMENT YEAR 2015 - 16. 2. THE GROUNDS OF APPEAL READ AS UNDER : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSION ER (APPEALS) 48, MUMBAI, ERRED IN: 1.1 UPHOLDING THE ADDITIONS MADE BY THE LEARNED AO UNDER THE PROVISIONS OF SECTION 43CA WITHOUT CONSIDERING 1.1 THE FACT THAT THE READY RECKONER RATES ARE FOR READY TO MOVE IN FLATS AND NOT FOR FLATS UNDER CONSTRUCTION AND THE MARGINAL DIFFERENCE OF LESS THAN 1% BETWEEN THE READY RECKONER RATES AND THE SALE CONSIDERATION OUGHT TO HAVE BEEN IGNORED IN CERTAIN FLATS . 1.2 THE FACT THAT IN THE CASE OF FLAT NO. 1902, THE SAID FLAT WAS AGREED TO BE SOLD ON 06.11.2012, WHI CH WAS PRIOR TO INTRODUCTION OF THE PROVISIONS OF SECTION 43CA OF THE ACT, AND THEREFORE, THE DATE OF REGISTRATION SHOULD NOT HAVE BEEN CONSIDERED AS THE DATE OF SALE FOR THE PURPOSE OF INVOKING THE PROVISIONS OF SECTION 43 CA OF THE INCOME TAX ACT, 1961 . 2. HENCE, THE ADDITION OF RS. 16,99,269/ - WRONGLY UPHELD BY LEARNED CIT(A) BE DELETED. M/S. FABER CONSTRUCTION 2 3. BRIEF FACTS OF THE CA SE ARE THAT ASSESSEE IS A BUILDER AND DEVELOPER. DURING THE COURSE OF ASSESSMENT OFFICER INVOKED THE PROVISIONS OF SECTION 43CA. HE MADE THE FOLL OWING DISALLOWANCES BEING DIFF E RE NCE BETWEEN AGREEMENT VALUE FOR SALES AND THE STAMP VALUE FOR THE REGISTRATION. MARKET VALUE AS PER REG ISTRATION DATE ALLOTMENT LETTER DATE DATE OF PAYMENT ON ALLOTMENT AMOUNT RECEIVED ON BOOKING TOTAL AMOUNT RECEIVED RR VA LUE ON ALLOTMENT DIFFERENCE BETWEEN MARKET VALUE ON ALLOTMENT DATE OF ALLOTMENT 4890086 12/10/2014 12/10/2014 300000 4800000 4890086 90086 4399500 06/11/2012 06/11/2012 3000000 3100000 3461040 361040 6416200 03/06/2013 03/06/2013 2000000 4500000 5554 903 1054903 4888800 10/07/2014 10/07/2014 700000 4800000 4888800 88800 5631870 11/02/2015 11/02/2015 5600000 5600000 5631870 31870 5624190 13/03/2014 13/03/2014 100000 5600000 5624190 24190 5624190 04/01/2014 04/01/2014 3500000 5600000 5624190 24190 5906340 07/04/2014 07/04/2014 500000 5600000 5624190 24190 T OTAL DIFFERENCE 1699269 4. A GAINST THE ABOVE ORDER ASSESSEE APPEAL BEFORE THE LEARNED CIT (A) . LEARNED CIT ( APPEALS ) UPHELD THE ACTION OF THE ASSESSING OFFICER. AS REGARDS THE CLAIM OF SALE OF FLAT NO. 1902 LEARNED CIT (A) HELD THAT ASSESSEE CANNOT CLAIM CREDIT THAT THE AGREEMENT FOR THE SAME TOOK PLACE IN 2012 AS THE ASSESSEE HAS DECLARED THE SALE IN THE PRESENT ASSESSMENT YEAR 5. A GAINST THE ORDER ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUN SE L AND PERUSED THE RECORDS. I FIND THAT ASSESSEE S S UBMISSION IS TWOFOLD. THE 1 ST SUBMISSION IS THAT THERE IS ONLY MARGINAL DIFFERENCE BETWEEN THE STAMP VALUE AND THE AGREEMENT VALUE AND HENCE THE DIFFERENCE SHOULD NOT BE ADDED. THE 2 ND SUBMISSION IS REGARDING SALE OF FLAT NO. 1902 ON THE GROUND THAT THE AGREEMENT FOR THE SAME WAS ALREADY ENTERED INTO IN THE YEAR 2012. 7 . UPON CAREFUL CO NSIDERATION AS REGARDS THE ADDITION ON ACCOUNT OF FLAT NO. 1902 IS CONCERNED, THE ASSESSEE'S PLEA THAT AGREEMENT WAS ENTERED INTO IN M/S. FABER CONSTRUCTION 3 2012 CANNOT BE ACCEPTED AS LEARNED CIT (A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS CHOSEN TO DECLARE THE SAME IN THE PRESENT ASSESSMENT YEAR. 8 . AS REGARDS THE SUBMISSION OF THE ASSESSEE FOR GRANTING RELIEF WHEREIN THERE IS ONLY MARGINAL DIFFERENCE, I FIND THAT IT MAY BE GAINFUL TO REFER TO THE FOLLOWING PROVISO WHICH HAS BEEN INSERTED IN SECTION 43CA(1) WITH EFFECT FROM 1.4.20 19. SECTION 43CA (1). WHERE THE CONSIDERATION RECEIVED OR AC QUIRING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF AN ASSET (OTHER THAN A CAPITAL ASSET), BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE V ALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSE OF COMPUTING PROFITS AND GAINS FROM TR ANSFER OF SUCH ASSET, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. PROVIDED THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY DOES NO T EXCEED ONE HUNDRED AND FIVE PERCENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER SHALL, FOR THE PURPOSES OF COMPUTING PROFITS AND GAINS FROM TRANSFER OF SUCH ASSET, BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION. 9 . T HE ABOVE PROVISO HAS BE E N INSERTED BY THE FINANCE A CT , 2018 WITH EFFECT FROM 1/4/2019. A C AR DIN AL PR INCIPLE OF INTERPRETATION IS TO LOOK AT THE MISCHIEF, THE ACT, THE AMENDMENT, THE PROVISO IS AIMED TO REMOVE OR TAKE CARE OF. IN THE PRESENT CASE I FIND THAT PROVISO WAS INSERTED TO GRANT RELIEF WHERE THERE IS ONLY A 5% VARIATION IN THE AGREEMENT VALUE AND STAMP VALUE. IN SUCH CIRCUMSTANCES THE PROVISO GRANT ED RELIEF IN AS MUCH AS THE DIFFERENCE OF 5% IS TO BE IGNORED AND THE DEEMING PROVISION OF SECTION 43 - CA SHALL NOT BE INVOKED. I FIND THAT THIS PROVISO IS AIMED AT MITIGATI NG THE H ARDSHIP OR THE MISCHIEF WHICH WAS CAUSED TO THE TAXPAYER ON THE INVOCATION OF DEEMING PROVISIONS OF SECTION 43 - CA W HERE THERE IS MARGINAL VARIATION UP TO 5%. IN THIS VIEW OF THE MATTER IN MY CONSIDERED OPINION THIS PROVISO SHALL TAKE RETROSPECTIVE EFFECT. HENCE I HOLD THAT IN CASES WHERE THE VARIATION IS UP TO 5% NO ADDITION SHALL BE MADE BY THE ASSESSING OFFICER BY INV OKING THE PROVISIONS OF SECTION 43 - CA. ACCORDINGLY , THE MATTER STANDS REMITTED TO THE FILE OF ASSESSING OFFICER. THE ASSESSING OFFICER M/S. FABER CONSTRUCTION 4 SHALL RESTRICT THE DISALLOWANCES ONLY TO THOSE CASES WHERE THE VARIATION EXCEEDS 105%. NEEDLESS, THE ASSESSEE SHALL BE GR ANTED ADEQUATE PROPORTIONATE BEING HEARD. 10 . IN THE RESULT THIS APPEAL BY THE ASSESSEE STANDS PARTLY ALLOWED . ORDER HAS BE EN PRONOUNCED IN THE COURT ON 12 . 0 3 . 20 20 . SD/ - (SH A MIM YAHYA ) ACCOUNTANT MEMBER MUMBAI ; DATED : 12 / 0 3 / 20 20 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT RE GISTRAR ) PS ITAT, MUMBAI