DINESH GUPTA, GAUTAM BUDH NAGAR V. ITO, WARD-1(1) NOIDA, NOIDA

ITA 2554/DEL/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2021 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-04-2024
• Assessment Year: 2008-2009
• Appeal Filed On: 07-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital Gains
• Section: 50C; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’, NEW DELHI Before Sh. Kul Bharat, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 2554/Del/2023 : Asstt. Year : 2008-09 Dinesh Gupta, C-31, Sector-30, G.B. Nagar, Noida, Uttar Pradesh-201301 Vs. Income Tax Officer, Ward-1(1), Nodia, Uttar Pradesh-201301 (APPELLANT) (RESPONDENT) PAN No. ACTPG1607J Assessee by : Sh. Madhav Kapoor, Adv. Revenue by : Sh. Om Prakash, Sr. DR Date of Hearing: 16.04.2024 Date of Pronouncement: 30.05.2024 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 10.07.2023. 2. Following grounds have been raised by the assessee: “1. Th at th e Ld . C I T( A) h a s erred in l aw b y u ph ol din g t h e a cti on of Ld . A . O. in c on fi rm in g t h e add it i on s mad e b y th e Ld . A O fo r Rs. 45 ,08 ,0 00/ - on ac cou n t of di f f erenc e b et wee n t he a ctu a l sal e c on si d erat ion a n d valu e ad opt ed u n der S ect i on 50 C wi t hou t app reciat in g th e p revail in g fa ct s an d c ircum st an ces of th e ca s e vid e CIT( A ) ’s o rd er da t ed 10 .07. 202 3. 2. Th at th e Ld . CIT( A ) in vi ew of t h e p reva i li ng fa ct s and ci rcum sta n c es of t h e ca se h as erred i n law in c onfi rmi n g t h e act i on of t h e Ld . A O by w ron gl y ad op t i ng t h e ci rcl e rat e val u e u /s 5 0C f or th e A .Y. 2008- 09 i . e. at t h e ti m e of ex ecu t i on of t h e leas e d eed i n st ead of c orrec tly ad opt in g t he ci rc l e rat es f or A. Y . 2002- 03 i . e. a t t h e tim e of ex ecu ti on of th e A g reem en t t o s ell . Th u s, th e sa i d ad d it ion on a c c oun t of d i ff eren c e b et w een a ctu a l sal e con si d erati on an d v alu e ad o pt ed u / s 50C f or Rs . 45, 08 ,00 0/- d eserv es to b e d el et ed. ITA No. 2554/Del/2023 Dinesh Gupta 2 3. Th at on t h e f act s and ci rcu m sta nc es of th e ca s e and i n l aw , th e Ld . CI T(A ) ord er p a s s ed on 10 .07. 2023 i s i n g ross v i ol ati on of p rin cipl es of n a t ural j u st i c e an d t h at t oo wit h ou t p rop er app li ca ti on o f m in d, i s i l l eg a l an d b ad in la w. 4. Th at th e Ld. C IT( A ) ha s erred i n l aw in u ph ol di n g t h e As s es sm ent Ord er d at ed 18 .03 .20 14 ha vi ng b een p a ssed b y t h e Ld . A O wi t h out ad eq uat e ju ri sd i cti on u n der S ect io n 143 ( 3) /147 vid e CI T(A ) ’ s o rd er dat ed 10 .07 .2 023 in vi ew of th e p rev ai li ng fa ct s and c i rcu m st an c e of th e ca se. Thu s , th e en t i r e Re- as s ess m en t p roceed in gs i s b ad i n l a w a nd vo id- a b -i ni ti o. 5. Th at th e Ld. C IT( A ) ha s erred i n l aw in u ph ol di n g t h e As s es sm ent Ord er d at ed 18 .03 .20 14 ha vi ng b een p a ssed b y t h e Ld . AO w i th ou t t h e st at u t or y an d c om pu l sory n ot i c e un der Sect i on 143( 2) of t he In c om e Ta x A ct , 1961 vid e C I T(A ) ’s ord er dat ed 1 0. 07 .202 3 wh ic h ma kes th e en ti re R e- a sses sm en t pr oc eed in g s i s bad i n la w an d v oid -a b- i n it i o. 6. Th at on t h e f act s and ci rcu m sta nc es of th e ca s e and i n l aw , th e Ld . CI T( A) h as er red in l a w in c on f i rmi ng th e ad d i ti on mad e by t h e Ld . A O f or Rs . 4 5, 08 ,000 /- wit h out f ol l owi ng th e p rop er pr oc ed u re lai d down u nd er t h e provi si on s of S ect i on 147 t o 151 of t he Inc om e Ta x Act , wh i ch m ak es th e en ti re p roc eedin g s bad in la w an d v oi d- ab- i n it i o. 7. Th at on t h e f act s and ci rcu m sta nc es of th e ca s e and i n l aw , th e Ld . CI T( A) fa il ed t o app reci at e th e fa ct th at th e im pu g ned as s ess m en t ord er h avin g b een p as sed i n g ros s vi ol at i on of pri n ci pl es of nat u ral ju sti c e an d w it h ou t a ff ord in g reas on abl e opp ort u ni t y, i s il l eg al an d bad in l aw . 8. Th at t h e Ld . A. O . h as erred in l aw an d on fa ct s of th e ca s e in cha rg i n g i nt erest u / s 23 4A , 234 B an d 2 34 C o f t h e In c om e Ta x Act , 196 1. ” 3. The only issue in the present appeal relates to the addition of Rs. 45,08,000/- (Rs. 54,34,000 – Rs.9,26,000) made u/s 48 of the Income Tax Act, 1961 on account of alleged difference between the actual sale consideration i.e. Rs. 9,26,000/- and value adopted u/s 50C after deeming the sale consideration to be at Rs. 54,34,000/- as per the stamp value rates as on the execution of Lease deed between the assessee and the buyer as on 16.10.2007 instead of the stamp value rates as on the date of agreement to sell i.e. 07.02.2003. ITA No. 2554/Del/2023 Dinesh Gupta 3 4. Brief facts of the case are that the assessee had been allotted a residential plot under the category of 250-300 sq. mtr. by the Noida Authority vide allotment letter no. NOIDA/AGMR/SCJ.2001(1)/2002/11605 dated 30.03.2002. Accordingly, Noida Authority allotted Plot no. 122, Block-C, Sector-122, Noida to the assessee. Copy of the said Allotment Letter dated 30.03.2002 is on record. 5. Thereafter, the assessee entered into an 'Agreement to sell' dated 07.02.2003 with Smt. Savita Sharma (Buyer) wherein he has transferred and relinquished all his legal rights in Plot no. 122, Block-C, Sector-122, Noida for a sale consideration of Rs. 9,26,000/- out of which he received a sum of Rs. 4,50,000/- by cheques nos. 260769, 227522 and 227523 dated 07.02.2003 and the remaining balance was to be paid by the said buyer directly to the Noida Authority as per the schedule of the Noida Authority. Copy of the said Agreement to Sell dated 07.02.2003 is on record. 6. Subsequently, after the execution of lease deed in favour of the assessee by the Noida Authority vide Lease deed dated 10.09.2007, the assessee and the buyer (Smt. Savita Sharma) executed a Lease deed dated 16.10.2007, mentioning the details of the Agreement to Sell dated 07.02.2003 vide Page no. 9 to 14 of the said Lease deed executed on 16.10.2007. Copy of the said Lease Deed dated 10.09.2007 and copy of the said Lease Deed dated 16.10.2007 executed in favour of the buyer (Smt. Savita Sharma) by the assessee is on record. 7. The assessment for the year under consideration in the case of the assessee was completed vide Assessment Order ITA No. 2554/Del/2023 Dinesh Gupta 4 dated 18.03.2014 under section 143(3)/147 by making an addition of Rs. 45,08,000/- (Rs. 54,34,000 - 9,26,000) made under section 48 after considering the sale consideration at Rs. 54,34,000/- under section 50C instead of the actual sale consideration for Rs. 9,26,000/-, by adopting the circle rates at the time of execution of Lease deed between the assessee and the buyer i.e. 16.10.2007, by ignoring the Agreement to Sell executed between the assessee and buyer on 07.02.2003 for a consideration of Rs. 9,26,000/-. 8. Aggrieved, the assessee filed appeal before the ld. CIT(A) who confirmed the order of the Assessing Officer. 9. Aggrieved, the assessee filed appeal before the Tribunal. 10. Heard the arguments of both the parties and perused the material available on record. 11. The provisions of Section 50C being reproduced here under: “Sp eci a l p rovi si on f or ful l valu e of c on s i derat i on in c ert ai n ca s es. 50C . ( 1) Wh ere t h e c on sid erati on rec ei v ed or a cc ru in g as a res u lt o f th e tra ns f er b y an a s s es see of a ca p it a l a s set , b ei ng l an d or b ui ld in g or b oth , is l es s th an th e va l u e ad opt ed or a ss es sed o r a s s ess abl e b y a n y au th ori t y of a St at e Gov ern m ent (h erea ft er i n t hi s secti on ref erred t o a s t h e "s tam p valu at i on au t hori ty " ) f or t h e pu rp os e of p ay men t o f st a m p d u ty i n resp ect of su ch t ran sf er, th e va lu e s o ad op t ed or as ses s ed or a ss essabl e sh al l , f or th e p u rp os es of secti on 48, b e d eemed to b e th e fu ll valu e of th e c ons i d erat i on rec ei v ed or acc ru in g as a resul t of su c h t ran sf er: Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or ITA No. 2554/Del/2023 Dinesh Gupta 5 assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer.” 12. The rate adopted for working out the taxable sale consideration under Section 50C for the purpose of calculating taxable capital gains for the year under consideration, shall be that of the date on which the agreement fixing the amount of consideration i.e. agreement to sell was executed which is 07.02.2003 and not be that of the date of which the Lease deed was executed i.e. on 16.10.2007. Moreover, it is also not out place to mention here that the payment made by the buyer to the seller in lieu of the said Agreement to Sell dated 07.02.2003, and payments were also made vide cheques dated 07.02.2003 itself. 13. Thus, it can be found that the assessee was allotted a plot by Noida Authorities. He entered into an agreement to sell on 07.02.2003 and the amount of Rs. 4,50,000/- have been duly received by the assessee. The remaining amount of Rs.4,76,000/- has to be paid to the Noida Authorities as per the payment schedule of Noida Authorities. The assessee has paid the remaining amount to Noida Authorities in 2007 and the Noida Authorities had duly executed the lease deed in favour of the buyer. Thus, the transaction between the buyer and the assessee was concluded in 2003 itself. The buyer has not paid the remaining amounts to the assessee but to the Noida Authorities who inturn transferred the lease to the buyer and since, the amount of Rs.9,26,000/- the circle rate as on the date of agreement and since the remaining amounts have been paid not to the assessee but to the Noida Authorities, keeping in ITA No. 2554/Del/2023 Dinesh Gupta 6 view the fact that the transaction between the assessee and the buyer was concluded 2003 itself as per the prevailing circle rate, in the specific facts of the instant case, it is hereby held that no addition is called for u/s 50C of the Income Tax Act, 1961. 14. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 30/05/2024. Sd/- Sd/- (Kul Bharat) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 30/05/2024 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR