KHUSHAL MURJI GALA, VASAI V. ITO 23(2)(4), MUMBAI

ITA 264/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93262 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 30-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.264/M/2014 (AY:2009 - 2010 ) KHUSHAL MURJI GALA, B - 603, IRIS, MIRCHANDANI NAGAR, SUNCITY 100 FEET ROAD, DEEWANMAN, VASAI 401 202. / VS. INCOME TAX OFFICER - 23(2)(4), MUMBAI. ./ PAN : AABPG9167H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 30.06.2015 / DATE OF PRONOUNCEMENT : 22 .07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 9.1.2014 IS AGAINST THE ORDER OF THE CIT (A) - 33, MUMBAI DATED 31.10.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. LD CIT (A) WITHOUT REACHING TO THE ACTUAL FACT OF THE CASE, MECHANICALLY ACCEPTED THE VALUATION REPORT THEREBY MAKING ADDITIONAL LONG TERM CAPITAL GAIN OF RS. 4,54,360/ - . 2. LD CIT (A) IGNORED THE MATERIAL EVIDENCES BROUGHT ON RECORD IN RESPECT OF THE CASH DEPOSIT IN BANK ACCOUNT, THEREBY MECHANICALLY CONFIRMING THE DISALLOWANCE OF CASH DEPOSITED IN BANK ACCOUNT AMOUNTI NG TO RS. 5,10,000/ - . 2. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, NONE APPEARED TO REPRESENT THE ASSESSEES CASE DESPITE THE REPEATED NOTICES I.E., 4.6.2015; 16.5.2015. NOTICE FOR TODAYS HEARING WAS ISSUED ON 5.6.2015 THROUGH RPAD. CONSIDERING THE ASSESSEES CONTINUOUS NON - REPRESENTATION, I PROCEED TO ADJUDICATE THE APPEAL ON MERITS WITH THE HELP OF THE LD DR FOR THE REVENUE. 3. BEFORE ME, LD DR FOR THE REVENUE EXPLAINED THE FACTS OF THE CASE AND SUBMITTED THAT THE ADDITION OF RS. 4,54,360/ - WAS ORI GINALLY ADDED BY THE AO IN THE ASSESSMENT RELYING ON THE STAMP DUTY AUTHORITIES AND THE FAIR MARKET VALUE FIGURES. 2 OTHERWISE, AS PER THE ASSESSEE, THE VALUE OF THE PROPERTY IS RS. 45 LAKHS AND THE ASSESSEES SHARE WORKS OUT TO RS. 22,50,000/ - . ACCORDING TO THE ASSESSEE, CAPITAL GAINS WORKS OUT TO RS. 2,26,959/ - AND THE SAID WORKING IS AS UNDER: FULL VALUE OF CONSIDERATION - RS. 22,50,000/ - LESS: INDEXED COST OF ACQUISITION (RS. 14,18,487.06 X 582 / 480) RS. 17,19,916/ - LESS: INDEXED COST OF IMPROV EMENT (RS. 2,50,000 X 580 / 480) RS. 3,03,125/ - RS . 20,23,041/ - LTCG ON SALE OF RESIDENTIAL HOUSE PROPERTY LESS RS. 2,26,959/ - 4. DURING THE ASSESSMENT PROCEEDINGS, AFTER CONSIDERING THE PROVISIONS OF SECTION 50C OF THE ACT, AS PER WHIC H THE FAIR MARKET VALUE OF THE PROPERTY IS MENTIONED BY THE STAMP DUTY AUTHORITIES AT RS. 54,08,720/ - AND THE ASSESSEES SHARE WORKS OUT TO RS. 27,04,360/ - . CONSIDERING THE SAME, THE CAPITAL GAINS ON THE ASSESSEES SHARE WORKS OUT AS UNDER: FULL VALUE OF CONSIDERATION - RS. 27,04,360 / - LESS: INDEXED COST OF ACQUISITION (RS. 14,18,487.06 X 582 / 480) RS. 17,19,916/ - LESS: INDEXED COST OF IMPROVEMENT (RS. 2,50,000 X 580 / 480) RS. 3,03,125/ - RS . 20,23,041/ - LTCG ON SALE OF RESIDENTIAL HOUSE PROPERTY LESS RS. 6,81,319/ - 5. AFTER CONSIDERING THE CAPITAL GAINS REFLECTED IN THE RETURN OF INCOME OF RS. 2,26,959/ - , AO MADE ADDITION OF RS. 4,54,360/ - . FURTHER, ASSESSEE ALSO MENTIONED THAT ANOTHER ADDITION OF RS. 5,10,000/ - WAS ALSO MADE BY THE REVENUE AUTHORITIES , AS THE SAME WAS A CASH DEPOSIT MADE IN THE BANK ACCOUNT OF THE ASSESSEE ON 5.3.2009 AND 6.11.2008. IN THIS REGARD, IT IS THE EXPLANATION OF THE ASSESSEE THAT THE SAID DEPOSITS IN CASH RELATES TO THE REALIZATION O F OLD ASSETS (M/S. SWASTIK ENTERPRISES, THE ASSESSEES PROPRIETORSHIP CONCERN) AND THE OUTSTANDING LIABILITIES. ASSESSEE COULD NOT DEMONSTRATE THE DETAILS OF THE LIABILITIES RECOVERED. ON APPEAL, CIT (A) CONFIRMED THE DECISION OF THE AO. HOWEVER, CIT (A ) GRANTED A PART RELIEF IN RESPECT OF THE ADDITION MADE U/S 50C OF THE ACT. REGARDING THIS RELIEF, THE FACTS INCLUDE THAT DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE FILED A VALUATION REPORT FROM THE REGISTERED VALUERS DATED 16.7.2012, ACCORDING TO WHICH THE MARKET VALUE OF THE PROPERTY IS PEGGEDAT RS. 52,91,000/ - AND THE ASSESSEES 50% SHARE WORKS OUT TO RS. 26,45,500/ - AGAINST 3 RS. 27,04,360/ - . THE DIFFERENCE OF RS. 58, 860/ - IS THE RELIEF GRANTED BY THE CIT (A). AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. IN THE GROUNDS OF APPEAL, ASSESSEE DID NOT RECOGNISE THE RELIEF WAS GRANTED BY THE CIT (A) AND THE SAME IS EVIDENT FROM GROUND NO.1, WHERE THE ORIGINAL ADDITION OF RS. 4,54,360/ - WAS APPEARING. 6. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, THERE IS NONE TO REPRESENT THE ASSESSEE DESPITE THE NOTICED AS DETAILED ABOVE. HOWEVER, CONSIDERING THE SMALLNESS OF THE ISSUE, LD DR EXPLAINED THAT BOTH THE GROUNDS MAY BE REMANDED TO THE FILE OF THE AO FO R ONE MORE ROUND OF THE PROCEEDINGS. AFTER HEARING THE LD DR AND ON PERUSAL OF THE RELEVANT RECORD PLACED ON TO THE RECORD, I AM OF THE OPINION THAT THE MATTER SHOULD BE REMANDED ON BOTH THE ISSUES WITH CERTAIN DIRECTIONS. SO FAR AS GROUND NO.1 IS CONC ERNED, WHICH RELATES TO THE INVOKING OF PROVISIONS OF SECTION 50C OF THE ACT, IT APPEARS THAT ASSESSEE HAS OBJECTION FOR CONSIDERING THE MARKET VALUE AS PER THE GUIDELINES FOLLOWED BY THE REGISTRATION AUTHORITIES. WHEN SUCH OBJECTIONS ARE RAISED, ASSESSIN G AUTHORITY IS BOUND TO REFER THE MATTER TO THE VALUATION AUTHORITIES IN ORDER TO ASCERTAIN THE MARKET VALUE OF THE SPECIFIED PROPERTY UNDER CONSIDERATION. THE ASSESSING AUTHORITIES HAVE NOT MADE REFERENCE TO THE DVO FOR ASCERTAINING THE SAME. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE HIMSELF FILED A VALUATION REPORT DATED 16.7.2012 FROM THE REGISTERED VALUERS AS PER PARA 3.2 OF THE IMPUGNED ORDER. IT IS MY INFERENCE THAT TO THIS EXTENT, ASSESSEE HAS NO OBJECTION. ACCORDINGLY, ASSESSEES SHARE OF RS . 26,45,500/ - SHOULD NOT BE INTERFERED WITH. ACCORDINGLY, THE DECISION GIVEN BY THE CIT (A) IN THE SAID PARA 3.2 OF HIS ORDER IS PROPER AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 7. REGA RDING THE ADDITION OF RS. 5,10,000/ - MADE ON ACCOUNT OF EXPLANATION OF THE ASSESSEE FOR THE COUPLE OF CASH ENTRIES APPEARING IN THE BANK ACCOUNT, PRIMA FACIE, I FIND ASSESSEE ADMITTED TO EXPLAIN T HE SOURCES FOR THE SAID ENTRIES OUT OF THE REALIZATION OF THE SALE OF BUSINESS ASSETS, FOR HIS PROPRIETORSHIP CONCERNS PARTICULARLY, AND ALSO RECOVERIES OF THE OUTSTANDING LIABILITIES. THIS IS A MATTER OF FACT THAT THE ONUS IS ON THE ASSESSEE TO DEMONSTRA TE WITH THE EVIDENCES THE DETAILS OF THE 4 BUSINESS ASSETS SO SOLD AND ALSO THE DETAILS OF THE DATES RECOVERED BY THE ASSESSEE. IN MY OPINION, THE ASSESSEE IS REQUIRED TO DISCHARGE THE ONUS. FOR THIS PURPOSE, I GRANT ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE RELEVANT DETAILS TO THE AO IN THE REMAND PROCEEDINGS. ACCORDINGLY, THIS PART OF THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 22 ND JULY, 2015 . SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 22 .7 .2015 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI