ITO, Non Corporate Ward 10(2), Chennai V. A Indu, Chennai

ITA 2266/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5765 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S PANDIAN
• Assessee Lawyers: N DEVANATHAN; BABU PERAM
• Keywords: Sale consideration of property below Jantri Value; Retrospective amendment; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . , ' , % & BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.2263/MDS/2017 %' ' /ASSESSMENT YEAR: 2011-12 THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(3), ROOM NO.617, 6 TH FLOOR, WANAPARTHY BLOCK, 121, M.G.ROAD, CHENNAI-600 034. VS. SHRI A.LOKAMITRA, OLD NO.77, NEW NO.181, ANJAN VILLA, MEDAVAKKAM TANK ROAD, KELLYS, CHENNAI-600 010. [PAN: ADIPL 7268 A ] ( ( /APPELLANT) ( )*( /RESPONDENT) ./ ITA NO.2264/MDS/2017 %' ' /ASSESSMENT YEAR: 2011-12 THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(4), 6 TH FLOOR, NEW BLOCK, 121, M.G.ROAD, CHENNAI-600 034. VS. SMT.P.S.SETHU RATHINAM, OLD NO.77, NEW NO.181, ANJAN VILLA, MEDAVAKKAM TANK ROAD, KELLYS, CHENNAI-600 010. [PAN: BIJPS 1842 N ] ( ( /APPELLANT) ( )*( /RESPONDENT) ./ ITA NO.2265/MDS/2017 %' ' /ASSESSMENT YEAR: 2011-12 THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(1), ROOM NO.619, 6 TH FLOOR, WANAPARTHY BLOCK, 121, M.G.ROAD, CHENNAI-600 034. VS. SMT.ANJAN DRISHYA BHAVANI, OLD NO.77, NEW NO.181, ANJAN VILLA, MEDAVAKKAM TANK ROAD, KELLYS, CHENNAI-600 010. [PAN: AKGPD 2917 D ] ( ( /APPELLANT) ( )*( /RESPONDENT) ITA NOS.2263 TO 2266/MDS/2017 :- 2 -: ./ ITA NO.2266/MDS/2017 %' ' /ASSESSMENT YEAR: 2011-12 THE INCOME TAX OFFICER, NON-CORPORATE WARD-10(2), ROOM NO.618, 6 TH FLOOR, NEW BLOCK, 121, M.G.ROAD, CHENNAI-600 034. VS. SMT.A. INDU, OLD NO.77, NEW NO.181, ANJAN VILLA, MEDAVAKKAM TANK ROAD, KELLYS, CHENNAI-600 010. [PAN: AASPI 4933 J ] ( ( /APPELLANT) ( )*( /RESPONDENT) DEPARTMENT BY : DR.S.PANDIAN, JCIT ASSESSEE BY : MR.N.DEVANATHAN, ADV. & MR.BABU PERAM, CA , /DATE OF HEARING : 07.12.2017 , /DATE OF PRONOUNCEMENT : 08.12.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.2263/MDS/2017 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-12, CHENNAI, IN ITA NO.30/CIT(A)-12/2014-15 DATED 28.06.2017 FOR TH E AY 2011-12, ITA NO.2264/MDS/2017 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNA I, IN ITA NO.17/CIT(A)-12/2015-16 DATED 28.06.2017 FOR THE AY 2011-12, ITA NO.2265/MDS/2017 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNA I, IN ITA NO.29/CIT(A)-12/2014-15 DATED 28.06.2017 FOR THE AY 2011-12 & ITA NO.2266/MDS/2017 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNA I, IN ITA NO.18/CIT(A)-12/2015-16 DATED 28.06.2017 FOR THE AY 2011-12. ITA NOS.2263 TO 2266/MDS/2017 :- 3 -: 2. DR.S.PANDIAN, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR. N.DEVANATHAN, ADV & MR.BABU PERAM, CA, REPRESENTED ON BEHALF OF THE ASSESSEES. 3. THESE ARE FOUR APPEALS FILED BY THE REVENUE. AS ALL THE ISSUES ARE IDENTICAL, INTERCONNECTED AND RELATES TO THE SAME T RANSACTION, ALL THESE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER. 4. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS, WHICH ARE COMMON IN ALL THE FOUR APPEALS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS IN L AW AND FACTS AND OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE: 2.1 THE LD.CIT(A) ERRED IN HOLDING THAT THE GUIDELIN E VALUE AS ON THE DATE OF SALE AGREEMENT DATED 26.11.2006 SHOULD BE APPLIED TO DET ERMINE THE FULL VALUE OF CONSIDERATION U/S.50C(1) INSTEAD OF GUIDELINE VALUE AS ON THE DATE OF SALE DEED DATED 5.4.2010 THOUGH THE ASSESSEE HAS OFFERED THE INCOME FROM CAPITAL GA INS IN FY 2010-11 RELEVANT TO AY 2011- 12. 2.2 THE LEARNED CIT(A) ERRED IN DIRECTING THE AO ADOP T THE GUIDELINE VALUE AS ON THE DATE OF AGREEMENT AS PER NEWLY INSERTED FIRST AND SECOND PR OVISO TO SEC.50C(1) HOLDING THAT THE SAME HAS RETROSPECTIVE EFFECT THOUGH THE PROVISOS A RE INSERTED IN FINANCE ACT, 2016 APPLICABLE WITH EFFECT FROM 1.4.2017. 2.3 THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE C BDT HAS ISSUED CIRCULAR NO.3 OF 2017 EXPLAINING THE PROVISIONS OF SECTION WHEREIN THE BO ARD HAS STATED THAT FIRST PROVISO DOES PROVIDE ANY RELIEF WHERE THE SELLER HAS ENTERED INT O AN AGREEMENT TO SELL THE PROPERTY MUCH BEFORE THE ACTUAL DATE OF TRANSFER OF THE IMMOVABLE PROPERTY. 2.4 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT HAV ING UPHELD THAT THE CAPITAL GAIN IS ASSESSABLE IN AY 2011-12, THE PROVISION OF SEC.50C SHOULD BE APPLIED WITH RESPECT TO THE DATE OF SALE DEED AND NOT THE DATE OF AGREEMENT. 3.1 THE LEARNED CLT(A) ERRED IN CALCULATING THE COST OF ACQUISITION BY CONSIDERING THE MARKET VALUE OF LAND AT RS.1,00,000/- WHEREAS THE SUB-REGI STRAR REPORTED VIDE HIS LETTER DATED 5.3.2014 THAT THE GUIDELINE VALUE OF IMPUGNED LAND AS ON 1.4.1981 IS RS.40,000/- PER GROUND. 3.2 THE LEARNED C1T(A) ERRED IN ADOPTING THE VALUE O F LAND AT RS.1,00,000/- HAS AS CLAIMED BY THE ASSESSEE WHILE COMPUTING COST OF ACQ UISITION WITHOUT OF ANY SUPPORTING DOCUMENTS TO PROVE THAT THE MARKET VALUE OF THE PRO PERTY IS RS.1,00,000/- AS ON 1.4.1981. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT (A) MAY BE SET ASI DE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA NOS.2263 TO 2266/MDS/2017 :- 4 -: 5. IT IS SUBMITTED BY THE LD.DR THAT THE FACTS IN T HE FOUR APPEALS ARE THAT ONE SHRI S.ANJAN HAD ACQUIRED 13,390 SQ.FT. OF LAND AT POLICE COMMISSIONER OFFICE ROAD, EGMORE BEFORE 1981. HE H AD PUT UP CONSTRUCTION OF TWO FLOORS OF 1000 SQ.FT EACH AND T HE SAME WAS LET OUT. THE SAID SHRI A.ANJAN EXPIRED IN APRIL, 2006 AND TH E PROPERTY DEVOLVED TO HIS MOTHER SMT.SETHU, WIFE SMT.INDU, DAUGHTER SMT.D RISHYA BHAVANI AND ANOTHER SON SHRI A.LOKAMITRA EQUALLY. THE FOUR PER SONS HAD JOINTLY ENTERED INTO AN AGREEMENT FOR SALE OF THE SAID LAND & BUILDING FOR A CONSIDERATION OF RS.2.05 CRS. WITH MR.SELVAKUMAR AN D MR.SARVANAN IN NOVEMBER, 2006. THE SALE AGREEMENT WAS OF THE PROP ERTY AS IS WHEREAS INCLUDING THE TENANTS. THE REGISTRATION OF THE SAI D SALE AGREEMENT TOOK PLACE IN APRIL, 2010. THUS, EACH OF THE CO-OWNERS RECEIVED RS.51.29 LAKHS IN NOVEMBER, 2006 AND ADMITTEDLY HANDED OVER THE PO SSESSION OF THE PROPERTY ALONG WITH THE DISPUTED TENANTS IN 2006 IT SELF. IT WAS A SUBMISSION THAT IN THE COURSE OF THE ASSESSMENT, TH E AO HAS HELD THAT CAPITAL GAINS IN RESPECT OF THE SALE OF THE IMMOVAB LE PROPERTY WAS ASSESSABLE IN THE ASSESSMENT YEAR 2010-11 AS THE RE GISTRATION TOOK PLACE IN 2010-11 AND THE ASSESSEES HAD ALSO DISCLOSED THE TRANSACTION IN 2010- 11 IN THEIR RETURNS. FURTHER, THE AO APPLIED THE P ROVISIONS OF SEC.50C AND AS AGAINST THE DISCLOSED CONSIDERATION OF RS.2.05 C RS. AND ADOPTED THE SALE CONSIDERATION OF THE PROPERTY AT RS.4,89,42,75 5/- WHICH HAS BEEN DISPUTED BY THE ASSESSEES. FURTHER, THE AO DID NOT GRANT THE ASSESSEES THE BENEFIT OF INDEXATION ON THE GROUND THAT THE PR OPERTY DEVOLVED ON THE ASSESSEE IN 2006. IT WAS A SUBMISSION THAT ON APPE AL, THE LD.CIT(A) HELD ITA NOS.2263 TO 2266/MDS/2017 :- 5 -: THAT THE PROVISIONS OF THE AMENDMENT TO SEC.50C(1) BY THE INSERTION OF THE TWO PROVISOS APPLIED AND HAD CONSEQUENTLY DIREC TED THAT FOR THE PURPOSE OF SEC.50C, THE VALUE AS DISCLOSED BY THE A SSESSEES WERE LIABLE TO BE TAKEN I.E. RS.2.05 CRS. IT WAS A FURTHER SUBMISS ION THAT THE LD.CIT(A), FURTHER, GRANTED THE ASSESSEES THE BENEFIT OF INDEX ATION OF COST OF ACQUISITION FROM 01.04.1981 ON THE GROUND THAT THE ORIGINAL OWNER HELD THE PROPERTY AS ON 1981. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF MANJULA J. SHAH (2012) 204 TAXMAN 691 (BOM). IT WA S A FURTHER SUBMISSION THAT FOR DETERMINING THE COST OF ACQUISI TION, THE LD.CIT(A) HAD DIRECTED THE AO TO ADOPT RS.6,74,553/- AS ON 01.04. 1981 AS AGAINST RS.1,00,000/- DETERMINED BY THE AO. IT WAS A SUBMI SSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE REVERSED AND THAT OF THE AO RESTORED. 6. IN REPLY, THE LD.AR SUBMITTED THAT THE 1 ST AND 2 ND PROVISO TO SEC.50C WAS LIABLE TO BE TREATED AS RETROSPECTIVE IN OPERAT ION, IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, HYDERABAD BENCH, IN THE CASE OF SHRI MOHD. IMRAN BAIG & OTHERS IN ITA N O.1942/HYD/2014 DATED 27.11.2015 WHEREIN THE CO-ORDINATE BENCH OF T HIS TRIBUNAL HAS FOLLOWED THE PRINCIPLES LAID DOWN BY THE HONBLE SU PREME COURT IN THE CASE OF M/S.ALOM EXTRUSIONS LTD., REPORTED IN 319 I TR 306 AND HAVE HELD THAT THE AMENDMENTS ARE CURATIVE IN NATURE AND THEY ARE EFFECTIVE RETROSPECTIVELY. IT WAS A FURTHER SUBMISSION THAT THE LD.CIT(A) HAS EXTRACTED THE SALE AGREEMENT IN ANNEXURE-A TO HIS O RDER WHEREIN THE ITA NOS.2263 TO 2266/MDS/2017 :- 6 -: DETAILS OF THE PAYMENT OF THE SALE CONSIDERATION IS ENTIRELY BY CHEQUE HAS BEEN DISCLOSED AND CONSEQUENTLY, THE SECOND PROVISO TO SEC.50C(1) WAS ALSO COMPLIED WITH. IT WAS A FURTHER SUBMISSION TH AT IN RESPECT OF THE INDEX COST OF ACQUISITION, THE SALE AGREEMENT ITSE LF VERY CLEARLY SHOWS THAT SHRI ANJAN WAS THE OWNER OF THE PROPERTY AS ON 01.04.1981 AND THE SAID PROPERTY DEVOLVED ON THE ASSESSEES ON HIS DEMI SE. THUS, IT WAS A SUBMISSION THAT THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MANJULA J. SHAH SQUARELY APPLIED TO THE ASSESSEE S CASE AND THE BENEFIT OF INDEXATION WAS LIABLE TO BE GIVEN RIGHT FROM 198 1. 7. IN REGARD TO THE ISSUE OF THE COST OF ACQUISITIO N AS ON 01.04.1981, THE LD.AR DREW OUR ATTENTION TO PARA NO.52 OF THE O RDER OF THE LD.CIT(A) WHEREIN HE HAS MENTIONED THAT THE DEPARTMENT VALUAT ION OFFICER (IN SHORT DVO) HAS ESTIMATED THE COST OF CONSTRUCTION AT RS .1,33,000/- AND THE LAND RATE OF RS.41.66/- PER SQ.FT. AS HAS BEEN DISC LOSED BY THE ASSESSEE HAS ALSO BEEN CONSIDERED TO ARRIVE AT THE COST OF A CQUISITION OF RS.6,74,553/- AS AGAINST RS.7,00,000/- CLAIMED BY T HE ASSESSEES. THE LD.AR VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT( A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ANNEXURE-A OF THE ORDER OF THE LD.CIT(A) WHICH IS A SALE AGREEMENT CLEARLY SHOWS THAT THE AGREEMENT HAS BEEN ENTERED I NTO ON 27.11.2006 BETWEEN THE FOUR ASSESSEES AND THE PURCHASERS FOR A SALE CONSIDERATION OF ITA NOS.2263 TO 2266/MDS/2017 :- 7 -: RS.2,05,38,040/-. THE SALE AGREEMENT DISCLOSES THE OWNERSHIP OF THE SAID LAND & BUILDING AND HOW THE PROPERTY DEVOLVED ON THE FOUR ASSESSEES AS THE LEGAL HEIRS OF SHRI S.ANJAN. THE PROPERTY A DMITTEDLY, CAME INTO POSSESSION OF SHRI S.ANJAN ALSO BY SETTLEMENT. THIS CLEARLY SHOWS THAT THE PROPERTY HAS BEEN IN THE HANDS OF THE FAMILY RIGHT FROM 1966. THIS BEING SO, WE ARE OF THE VIEW THAT THE PRINCIPLES LAID DOW N BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MANJULA J. SHAH RE FERRED TO SUPRA APPLIES WHICH HAS ALSO BEEN FOLLOWED BY THE LD.CIT( A). THUS, THE ASSESSEES ARE ENTITLED TO THE BENEFIT OF INDEXATION RIGHT FROM 1981. 9. A PERUSAL OF THE SALE AGREEMENT OF NOVEMBER, 200 6 ALSO CLEARLY SHOWS THAT THE AGREED SALE CONSIDERATION HAS BEEN P AID IN ITS ENTIRETY BY CHEQUE TO THE BANK ACCOUNTS OF THE RESPECTIVE CO-OW NERS. THIS BEING SO, AND ALSO IN VIEW OF THE FACT THAT THE TWO PROVISOS TO SEC.50C(1) HAS BEEN HELD TO OPERATE RETROSPECTIVELY, IN VIEW OF THE DEC ISION OF THE HONBLE CO- ORDINATE BENCH OF THIS TRIBUNAL, HYDERABAD BENCHES IN THE CASE OF SHRI MOHD. IMRAN BAIG & OTHERS REFERRED TO SUPRA, THE DA TE OF AGREEMENT AND THE DATE OF REGISTRATION OF THE SALE AGREEMENT BEIN G TWO DIFFERENT AYS, THE VALUE RELEVANT TO THE AY, IN WHICH THE AGREEMENT FO R SALE, HAS TAKEN PLACE, IS TO APPLY. CONSEQUENTLY, THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE STANDS CONFIRMED. 10. COMING TO THE ISSUE OF THE COST OF ACQUISITION AS ON 01.04.1981, AS IT IS NOTICED THAT THE REVENUE HAS NOT BEEN ABLE TO DI SLODGE THE FINDINGS NOR ITA NOS.2263 TO 2266/MDS/2017 :- 8 -: POINT OUT ANY DEFECT IN THE FINDINGS OF THE LD.CIT( A) AS ALSO TAKING INTO CONSIDERATION THE FACT THAT THE LD.CIT(A) HAS APPLI ED THE RATES ARRIVED AT BY THE DVO IN RESPECT OF THE COST OF CONSTRUCTION, THE FINDINGS OF THE LD.CIT(A) ON THIS ISSUE STANDS CONFIRMED. 11. IN THE RESULT, THE APPEALS FILED BY THE REVENU E IN ITA NOS.2263 TO 2266/MDS/2017 STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 08, 2017, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P GEORGE ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) % /JUDICIAL MEMBER /CHENNAI, 1 /DATED: DECEMBER 08, 2017. TLN , )%23 43 /COPY TO: 1. ( /APPELLANT 4. 5 /CIT 2. )*( /RESPONDENT 5. 3 )%% /DR 3. 5 ( ) /CIT(A) 6. ' /GF