ITO, WARD-6(1), Nagpur V. SMT. PREETI AGRAWAL , Nagpur

ITA 205/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1913 (ITAT-NAGPUR)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B RAJARAM SANO
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Application of stay; Valuation report
• Section: 50C; 10

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M SA NO. 10 / N AG / 20 1 2 (ARISING OUT OF ITA NO.233/NAG/2012 ) ( ASSESSMENT YEAR : 200 5 - 0 6 ) PREETI AGRAWAL, 101, VAKRATUND APARTMENT,RISALDAR LANE, CHITAR OLI , NAGPUR - 440 002 . VS. AO WARD 6(1) , NAGPUR - 440 001 PAN/GIR NO. : A A JPA 8049 E ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 233 / NAG /20 1 2 ( ASSESSMENT YEAR :200 5 - 0 6 ) PREETI AGRAWAL, C/O M.S.GUPTA, ADVOCATE, 54 - A, WHOLSALE CLOTH MARKET, GANDHIBAG, N AGPUR - 440 002. VS. AO WARD 6(1), NAGPUR - 440 001 PAN/GIR NO. : A B JPA 8049 E ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 205 / NAG /20 12 ( ASSESSMENT YEAR :2005 - 06 ) ITO, WARD - 6(1 ), NAGPUR - 440 001 VS. PREETI AGRAWAL, A - 1, 1 ST FLOOR, VAKRATUND APTT., NAGOBA GALI, CHITAR OLI, NAGPUR - 440 002 . PAN/GIR NO. : A B JPA 8049 E ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. K.M.GUPTA /REVENUE BY : MR. B. RAJARAM SANO.10/2012 & ITA NO S . 233&205 /20 1 2 2 DATE OF HEARING : 21 ST DEC ., 2012 DATE OF PRONOUNCEMENT : 2 ND JAN . ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E ASSESSEE HAS PREFERRED STAY APPLICATION NO. 10/NAG/2012 ALONG WITH ITA NO. 233/NAG/2012, WHEREAS THE DEPARTMENT HAS PREFERRED ITA NO. 205/NAG/2012 , AGAINST THE ORDER OF LEANED CIT (A) - I I , NAGPUR (MAHARASHTRA) , RELATING TO THE ASSESSMENT YEAR 200 5 - 0 6 , WHICH HAS BEEN HEA RD THROUGH E - COURT, MUMBAI . 2 . THE STAY APPLICATION OF THE ASSESSEE WAS FIXED FOR HEARING ON 10 - 12 - 2012. ON 10 - 12 - 2012 IT WAS OBSERVED BY THE BENCH THAT THE STAY APPLICATION AS WELL AS APPEAL OF THE ASSESSEE WILL BE HEARD ON 21 - 12 - 2012 . SINCE, WE HAVE TAK EN THE APPEAL OF THE ASSESSEE ON MERIT, THEREFORE, WE THINK PROPER NOT TO DISPOSE OF THE STAY APPLICATION FOR THE REASON THAT SINCE THE APPEAL OF THE ASSESSEE AND DEPARTMENT WILL BE HEARD, THEN THE STAY APPLICATION WILL BE INFRUCTUOUS AUTOMATICALLY. THIS W AS PRONOUNCED IN THE OPEN COURT. ACCORDINGLY, THE STAY APPLICATION OF THE ASSESSEE IS DISMISSED AS HAS BECOME INFRUCTUOUS IN VIEW OF THE ABOVE FACTS. 3 . FIRST WE SHALL TAKE UP APPEAL OF THE ASSESSEE I.E. ITA NO. 233/ NAG/2012 (AY 2005 - 06) . IN THE APPEAL OF THE ASSESSEE, SANO.10/2012 & ITA NO S . 233&205 /20 1 2 3 GROUNDS NO.1 & 2 ARE AGAINST HOLDING THAT PROVISION OF SECTION 50C IN RESPECT OF SALE OF PLOT NOS.35 AND 65 ARE JUSTIFIED. 3.1 THE ASSESSEE SOLD THESE TWO PLOTS THROUGH AN AGREEMENT HOWEVER, SALE DEEDS WERE NOT REGISTERED BEFORE THE STAMP VALUATION OFFICER. THE AO BY OBSERVING THAT SINCE THE PROVISION OF SECTION 50C ARE APPLICABLE, THEREFORE, TAKING MARKET VALUE IN RESPECT TO PLOT NOS. 35 & 65, HE MADE AN ADDITION OF RS .9,70 540/ - AND RS. 16,74,337/ - , RESPECTIVELY. THE CONTENTION OF THE ASSES SEE WAS NOT ACCEPTED ON THE GROUND THAT PROVISION OF SECTION 50C ARE NOT APPLICABL E IN RESPECT OF SALE OF THESE TWO PLOTS AS THE ASSESSEE HAS NOT EXECUTED SALE DEEDS IN FOVOUR OF THE PURCHASER BUT THE SAME HAS NOT BEEN REGISTERED WITH THE REGISTRAR. AS STA TED ABOVE, THE AO WAS NOT SATISFIED, THEREFORE, HE MADE THE IMPUGNED ADDITIONS. 3. 2 BEING AGGRIEVED WITH THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) BEFORE WHOM, THE ASSESSEE FILED VALUATION REPORT IN RESPECT TO PLOT NO. 19 AND IT WAS SUBMITTED THAT IN RESPECT TO PLOT NOS. 65 & 35, THE RATE OF RS. 2000/ - PER SQ.FT. MAY BE ADOPTED IN STEAD OF RS. 7,500/ - ADOPTED BY THE AO. THIS CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE CIT(A) AND THE AO WAS DIRECTED TO ADOPT THE VALUATION AT RS. 2,7 00/ - PER SQ.FT. INSTEAD OF RS. 7500/ - . NOW, THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. SANO.10/2012 & ITA NO S . 233&205 /20 1 2 4 3. 3 AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED ON THE GROUND THAT PROVISION OF SECTION 50C ARE NOT APPLICABLE WHERE SALE DEEDS EXECUTED BY THE ASSESSEE WERE NOT REGISTERE D. THIS ISSUE HAS BEEN DECIDED IN VARIOUS CASES BY THE BENCHES OF THE TRIBUNAL AND SOME OF THE DECISIONS ARE REPORTED IN 21 DTR 165, 20 DTR 365 & 112 TTJ 76 . IN ALL THESE D ECISION, IT HAS BEEN HELD BY VARIOUS BENCHES OF THE TRIBUNAL THAT WHERE SALE DEED IS NOT REGISTERED WITH THE REGISTRAR OR THE SUB REGISTRAR OF STAMP DUTY, THEN PROVISION OF SECTION 50C ARE NOT APPLICABLE. THE PROVISIONS OF SECTION 50C ARE ALSO VERY CLEAR W HICH PROVIDES THAT, WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNM ENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. IN THE PRESENT CASE, THE PROPERTY HAS NOT BEEN REGISTERED WITH THE STAMP VALUATION OFFICER. THEREFORE, IN OUR CONSIDERED VIEW , THE PROVISION S OF SECTION 50C ARE NOT APPL ICABLE IN THE FACTS OF THE PRESENT CASE. THE PROVISIONS OF SECTION 50C HAVE BEEN AMENDED BY THE SANO.10/2012 & ITA NO S . 233&205 /20 1 2 5 FINANCE (NO. 2) ACT, 2009, W.E.F. 1 - 10 - 2009 , BY WHICH IT HAS BEEN PROVIDED THAT PROVISIONS OF SECTION 50C CAN BE APPLIED WHERE THE SALE DEED IS NOT EXECUTED . AM ENDMENT IS PROSPECTIVE. THE YEAR UNDER CONSIDERATION IS FOR THE ASSESSMENT YEAR 2005 - 06 , THEREFORE, THE AMENDED PROVISIONS OF SECTION 50C ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN RESPECT TO PLOT NOS. 35 & 65 . 3.4 HOWEVER, WE FIND THAT THE ASSESSEE HIMSELF HAS GIVEN RATE OF RS. 2700/ - PER SQ.FT. IN RESPECT TO PLOT NO.65 & 35 BY WHICH THE VALUE OF PLOT NO. 35 COMES TO RS. 3,76,256/ - AND VALUE OF P LOT NO. 65 COMES TO RS. 6,33,361/ - . THIS CONTENTION OF THE ASSESSEE WAS ACCEPTED BY LEARNED CIT(A) AND THE AO WAS DIRECTED TO ADOPT THE VALUE OF RS. 2700/ - PER SQ.FT. INSTEAD OF RS. 7500/ - AS ADOPTED BY THE AO IN THE CASE OF THESE TWO PLOTS. THEREFORE, IN VIEW OF THE ACCEPTANCE BY THE ASSESSEE HERSELF BEFORE THE LEARNED CIT(A) , WE SEE NO REASON TO INTERFERE IN THE DIRECTION OF THE LEARNED CIT(A) . THEREFORE, FOR THESE REASONS, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE I.E. IN RESPECT TO PLOT NO. 35 & 65 . WE ORDER ACCORDINGLY. 4. G ROUND NO. 3 RELATES TO SALE OF PLOT NO. 19 . IN THIS CASE, THE ASSESSEE SOLD THE PLOT FOR RS. 1,27,000/ - , HOWEVER, AGAIN THE ASSESSING SANO.10/2012 & ITA NO S . 233&205 /20 1 2 6 OFFICER APPLIED THE PROVISION OF SECTION 50C AND MADE AN ADDITION OF RS. 3,9 1,000/ - . 4.1 BEFORE THE CIT(A), THE ASSESSEE FILED REPORT OF DVO, WHICH WAS OBTAINED BY THE DEPARTMENT AND IT WAS STATED THAT IN VIEW OF PROVISION OF SECTION 50C (2), THE ASSESSEE HAS RIGHT TO CHALLENGE THE VALUATION ADOPTED BY THE STAMP VALUATION OFFICER DURING TH E ASSESSMENT PROCEEDING. SINCE THE DVOS REPORT WAS NOT AVAILABLE DURING THE ASSESSMENT PROCEEDING, THEREFORE, IT WAS REQUESTED THAT THE DVOS REPORT SHOULD BE CONSIDERED AND A FAIR VALUATION SHOULD BE ADOPTED, HOWEVER, LEARNED CIT(A) WAS NOT SATISFIED WI TH THE CONTENTION. IN HIS VIEW THE PROVISIONS OF SECTION 50C ARE APPLICABLE. ACCORDINGLY, HE CONFIRMED THE ACTION OF THE AO IN RESPECT TO SALE OF PLOT NO.19 ALSO. 4.2 AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE ARE OF THE VIE W THAT THIS MATTER SHOULD GO BACK TO THE FILE OF THE AO TO DETERMINE THE VALUATION OF PLOT UNDER SECTION 50C AFRESH. AS PER SECTION 50C (2), THE ASSESSEE HAS A RIGHT TO CHALLENGE THE VALUATION ADOPTED BY THE STAMP VALUATION OFFICER DURING THE ASSESSMENT PR OCEED ING. DURING ORIGINAL ASSESSMENT PROCEEDINGS THE DVOS REPORT WAS NOT AVAILABLE. NOW, THE DVOS REPORT IS AVAILABLE, THEREFORE, TO MEET THE END OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO TO CONSIDER THE DVOS REPORT AFTER AFFORDING REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE THEN PASS A FRESH ORDER IN RESPECT TO PLOT NO. 19 . WE ORDER ACCORDINGLY. SANO.10/2012 & ITA NO S . 233&205 /20 1 2 7 5. WE SHALL NOW TAKE UP APPEAL OF THE DEPARTMENT I.E. ITA NO. 2 05 / NAG/2012 (AY 2005 - 06) . 5 .1 THE DEPARTMENT IN ITS APPEAL RAISES THE INA CTION ON THE PART OF THE LEARNED CIT(A) IN HOLDING THAT THE AMENDMENT IN SECTION 50C INSERTED W.E.F. 1 - 10 - 2009 WAS NOT AVAILABLE TO THE CASE UNDER CONSIDERATION. 5 .2 LEARNED COUNSEL OF THE ASSESSEE STA TED THAT LEARNED CIT(A) HAS NOT ALLOWED ANY RELIEF TO THE ASSESSEE BY HOLDING THAT AMENDED PROVISION OF SECTION 50C ARE NOT APPLICABLE, THEREFORE, THE APPEAL OF THE DEPARTMENT IS WITHOUT ANY SUBSTANCE. 5 .3 ON THE OTHER HAND, LEARNED DR FAIRLY STATED THAT THE APPEAL MAY BE DISPOSED OF ON MERIT. 5 .4 AFTER CON SIDERING THE SUBMISSIONS OF BOTH THE PARTIES, WE FIND THAT THE APPEAL OF THE DEPARTMENT HAS BECOME INFRUCTUOUS. LEARNED CIT(A) HAS NOWHERE STATED IN HIS ORDER THAT AMENDED PROVISION OF SECTION 50C ARE NOT AVAILABLE, THEREFORE, APPEAL OF THE DESERVES TO BE DISMISSED. ACCORDINGLY, WE DISMISS THE SAME. 6 . RESULTANTLY , APPEAL OF THE ASSESSEE I.E. ITA NO. 233/NAG/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, WHEREAS SA NO. 10/NAG/2012 FILED BY THE ASSESSEE AND ITA NO. 205/NAG/2012 FILED BY THE DEPARTMENT ARE D ISMISSED, RESPECTIVELY. SANO.10/2012 & ITA NO S . 233&205 /20 1 2 8 ITA NO.233/NAG/2012 ( SAN O.10/NAG/2012 ) ITA NO.2 05 /NAG/2012 ORDER PRONOUNCED IN THE E - COURT ON THIS 2 ND DAY OF JAN . 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 02 / 01 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI