M/S SPYTECH REALTORS PVT. LTD., JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR

ITA 254/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9686 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 26-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA JCIT DHK
• Keywords: Sale consideration of property below Jantri Value
• Section: 43CA; 43B; 50C; 43

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH A, JAIPUR JH JES'K LH- 'KEKZ] YS[KK LNL; ,O A H JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 254/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. M/S. SPYTECH REALTORS PVT. LTD., 501, GEETANSH CLASS OF PEARL, K-48-49, INCOME TAX COLONY, TONK ROAD, JAIPUR. CUKE VS. THE ACIT, CIRCLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAKCS 9635 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ROHAN SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.11.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02/01/2020. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 25.01.2019 OF LD. CIT (A)-2, JAIPUR FOR THE ASSESSMENT YEAR 2014- 15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD.AO IN MAKING ADDITION OF RS. 13,60,059/- U/S 43CA OF THE INCOME TAX ACT, 1961. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUSTI FIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEA SE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 13,60,059/-. 2. THE ASSESSEE CRAVES ITS RIGHT TO ADD, AMEND, OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. THE ASSESSEE COMPANY IS IN THE BUSINESS OF REAL ESTATE DEVELOPMENT AND FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 22.09.2014 DECLARING 2 ITA NO. 254/JP/2019. M/S. SPYTECH REALTORS PVT. LTD., JAIPUR. TOTAL INCOME OF RS. 43,16,610/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAS SOLD ONE OFFICE FOR LESS THAN THE VALUE AS PER STAMP VALUATION AUTHORITY FOR WHICH AGREEMENT AND DATE O F REGISTRATION IS NOT SAME. THE AO PROPOSED TO MAKE ADDITION UNDER SECTION 43CA ON THE DIFFERENTIAL AMOUNT OF CONSIDERATION SHOWN IN THE DOCUMENT AND THE STAMP D UTY VALUATION. THE ASSESSEE CONTENDED BEFORE THE AO THAT THE AGREEMENT OF SALE OF THE OFFICE IN QUESTION WAS ENTERED INTO WITH THE CUSTOMER ON 28 TH FEBRUARY, 2013 AND AT THAT POINT OF TIME SECTION 43CA WAS NOT IN THE STATUTE BOOK. THUS THE ASSESSEE CONTENDED THAT THE PROVISIONS OF SECTION 43CA ARE NOT APPLICABLE WHEN THE ASSESSEE HAS ALREADY ENTERED INTO THE AGREEMENT. THE AO DID NOT ACCEPT THIS CON TENTION OF THE ASSESSEE AND MADE THE ADDITION OF THE DIFFERENTIAL AMOUNT OF RS. 13,60,059/- UNDER SECTION 43CA OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE SUBMITTED THAT AT THE TIME OF BOOKING OF THE OFFICE IN QUESTION THE PROVISIONS OF SECTION 43CA WERE NOT IN THE STATUTE AS IT HAS BEEN BROUGHT ON THE STATUTE WITH EFFECT FROM 01 .04.2013. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HON BLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. SHIMBHU MEHRA, 65 TAXMANN.COM 142 (ALLAH ABAD) AS WELL AS DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF AS HUTOSH BHARGAVA, 43 SOT 237 (JP). THUS THE LD. A/R HAS SUBMITTED THAT THE ADDI TION MADE BY THE AO IS NOT SUSTAINABLE AND LIABLE TO BE DELETED. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T BOTH THE AGREEMENT TO SELL IN QUESTION AS WELL AS THE SALE DEED TOOK PLACE AFT ER THE PROVISIONS OF SECTION 43CA WAS BROUGHT INTO STATUTE. THUS THE LD. D/R HAS CON TENDED THAT THE AO HAS RIGHTLY 3 ITA NO. 254/JP/2019. M/S. SPYTECH REALTORS PVT. LTD., JAIPUR. MADE THE ADDITION UNDER SECTION 43CA WHEN THE ASSES SEE HAS SHOWN THE SALE CONSIDERATION LESS THAN THE STAMP DUTY VALUATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. AS FAR AS THE FACT REGARDING THE SALE CONS IDERATION SHOWN BY THE ASSESSEE AT RS. 62,00,000/- AND STAMP DUTY VALUATION OF THE OFF ICE IN QUESTION AT RS. 75,60,059/- ARE NOT IN DISPUTE. THE ASSESSEE HAS D ISPUTED THE APPLICABILITY OF THE PROVISIONS OF SECTION 43CA ON THE GROUND THAT THE B OOKING FOR SALE OF THE OFFICE IN QUESTION WAS MADE ON 28 TH FEBRUARY, 2013 WHICH IS PRIOR TO THE DATE ON WHICH THE PROVISIONS OF SECTION 43CA ARE APPLICABLE I.E. 01.0 4.2013. IT IS PERTINENT TO NOTE THAT THE LEGISLATURE HAS SPECIFICALLY PROVIDED THE REMED Y FOR A SITUATION WHERE THE PROPERTY IS SOLD BY AN AGREEMENT AND SUBSEQUENTLY A SALE DEED IS EXECUTED. THUS IN CASE OF ANY DIFFERENCE OF DATE OF REGISTRATION OF T HE TRANSFER OF ASSET AND DATE OF AGREEMENT, THEN THE VALUE ASSESSABLE BY THE STAMP D UTY AUTHORITY IN RESPECT OF SUCH TRANSFER, THE DATE OF THE AGREEMENT SHALL BE T AKEN. FOR READY REFERENCE, THE PROVISIONS OF SECTION 43CA ARE REPRODUCED AS UNDER :- 43CA. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING A S A RESULT OF THE TRANSFER BY AN ASSESSEE OF AN ASSET (OTHER THAN A C APITAL ASSET), BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE 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 ADOP TED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF COMPUTING PROFITS AND GA INS FROM TRANSFER OF SUCH ASSET, BE DEEMED TO BE THE FULL VALUE OF THE CONSID ERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER: 43A [ PROVIDED THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESS ABLE BY THE AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY DOES NOT EXCEED ONE HUNDRED AND FIVE PER CENT OF THE CONSIDERATION RECE IVED OR ACCRUING AS A RESULT OF THE TRANSFER, THE CONSIDERATION SO RECEIVED OR A CCRUING AS A RESULT OF THE TRANSFER SHALL, FOR THE PURPOSES OF COMPUTING PROFI TS AND GAINS FROM TRANSFER OF SUCH ASSET, BE DEEMED TO BE THE FULL VALUE OF THE C ONSIDERATION. ] 4 ITA NO. 254/JP/2019. M/S. SPYTECH REALTORS PVT. LTD., JAIPUR. (2) THE PROVISIONS OF SUB-SECTION (2) AND SUB-SECTI ON (3) OF SECTION 50C SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO DETERMINATIO N OF THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE UNDER SUB-SECTION (1). (3) WHERE THE DATE OF AGREEMENT FIXING THE VALUE OF CONSIDERATION FOR TRANSFER OF THE ASSET AND THE DATE OF REGISTRATION OF SUCH T RANSFER OF ASSET ARE NOT THE SAME, THE VALUE REFERRED TO IN SUB-SECTION (1) MAY BE TAKEN AS THE VALUE ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT F OR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER ON THE DA TE OF THE AGREEMENT. (4) THE PROVISIONS OF SUB-SECTION (3) SHALL APPLY O NLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION OR A PART THEREOF HAS BEEN RECEIVED 43B [ BY WAY OF AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT ] 43C [ OR THROUGH SUCH OTHER ELECTRONIC MODE AS MAY BE PRESCRIBED ] ON OR BEFORE THE DATE OF AGREEMENT FOR TRANSFER OF THE ASSET.] AS PER SUB-SECTION (3) AND (4) OF SECTION 43CA, THE BENEFIT OF PRIOR AGREEMENT IS GRANTED IF THE CONSIDERATION IS RECEIVED AT THE TIM E OF AGREEMENT OTHER THAN CASH. IN THE CASE IN HAND, THE BOOKING IS CLAIMED TO HAVE BE EN MADE ON 28 TH FEBRUARY, 2013 WHEREAS THE SALE DEED IS EXECUTED ON 01.04.2013 WHI CH FALLS IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND PROVISIONS OF SECTION 43CA ARE APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSID ERATION. THUS ONCE THE PROVISION ITSELF HAS TAKEN CARE OF SUCH A SITUATION OF DIFFER ENCE IN DATE OF PRIOR AGREEMENT, THEN THE APPLICABILITY OF PROVISION CANNOT BE QUEST IONED BASED ON MERE EXISTENCE OF PRIOR AGREEMENT. THE TRANSFER UNDER THE PROVISIONS OF SECTION 43CA IS RECOGNIZED ONLY WHEN A REGISTERED DOCUMENT IS EXECUTED AND, TH EREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE TRANSFER THR OUGH SALE DEED IS MADE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR U NDER CONSIDERATION FOR WHICH THE PROVISIONS OF SECTION 43CA ARE APPLICABLE, THEN MER ELY BECAUSE AN AGREEMENT I.E. BOOKING WAS MADE ON 28 TH FEBRUARY, 2013 WOULD NOT TAKE AWAY THE TRANSACTION FROM 5 ITA NO. 254/JP/2019. M/S. SPYTECH REALTORS PVT. LTD., JAIPUR. THE AMBIT OF THE PROVISIONS OF SECTION 43CA OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDERS OF T HE AUTHORITIES BELOW. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 02/01/2 020. SD/- SD/- ( JES'K LH- 'KEKZ ) ( FOT; IKY JKWO (RAMESH C. SHARMA ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 02/01/2020. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SPYTECH REALTORS PVT. LTD. , JAIPUR. 2. THE RESPONDENT THE ACIT,CIRCLE-6, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 254/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR