M/s Afzal Cold Storage & Ice factory, Nagpur V. Dy.C.I.T ,Circle-4, Nagpur

ITA 280/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3894 (ITAT-NAGPUR)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 09-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR MILIND BHUSARI
• Assessee Lawyers: M MANI
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.280/NAG/2012 (AY: 2006-07) M/S AFZAL COLD STORAGE & ICE FACTORY, BEHIND APMC MARKET, KALAMNA, NAGPUR-440 008 PAN:AACCA 0574 G VS. DY COMMISSIONER OF INCOME TAX CIRCLE-4, NAGPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. MANI RESPONDENT BY : DR. MILIND BHUSARI (CIT DR) DATE OF HEARING: 15.03.2013 DATE OF PRONOUNC EMENT : 03.04.2013 O R D E R PER R.K. GUPTA (JM): THIS IS AN APPEAL BY ASSESSEE RELATING TO AY 2006-0 7. THE ASSESSEE OBJECTING IN CONFIRMING THE ORDER OF AO DETERMINING THE INCOME UNDER SECTION 50C AT RS. 3,44,36,161/- VARIOUS OTHERS GROUNDS HAV E ALSO BEEN TAKEN BY ASSESSEE, HOWEVER ISSUES REVOLVES AGAINST THE ORDER OF AO WHO MADE ADDITION IN VIEW OF PROVISION OF SECTION 50C. 2. THE ASSESSEE SOLD ITS ENTIRE LAND, BUILDING ALO NG WITH PLANT AND MACHINERY FOR A TOTAL CONSIDERATION OF RS. 3,01,00, 000/-. MARKET VALUATION OF THE LAND AND BUILDING MENTIONED IN THE SALE-DEED WAS RS . 7,09,02,000/-. THE ASSESSEE HAS NOT COMPUTED THE CAPITAL GAIN ON THE A BOVE AMOUNT MENTIONED IN THE SALE-DEED, HOWEVER HAS COMPUTED THE CAPITAL GAI N ON AMOUNT OF RS. 3.01,00,000/-. PROCEEDING UNDER SECTION 148 WAS INI TIATED AND THEREAFTER THE AO COMPUTED THE CAPITAL GAIN ON THE AMOUNT OF RS. 7,09 ,02,000/- OR ODD IN VIEW OF THE PROVISION OF SECTION 50C OF THE ACT. ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). DETAILED SUBMISSIONS WERE FILED. IT WAS EXP LAINED THAT IN FACT THE 2 ITA NO.280/NAG/2012 M/S.AFZAL COLD STORAGE & ICE FACTORY ASSESSEE TOOK LOAN FROM NAGPUR NAGRIK SAHAKARI BANK . ENTIRE PLANT AND MACHINERY WERE MORTGAGED TO THE BANK. DUE TO CONSTA NT BUSINESS LOSSES THE ASSESSEE WAS UNABLE TO REPAY THE LOAN TAKEN FROM BA NK. THE BANK INITIATED COURT PROCEEDINGS TO PUT THE COLD STORAGE TO PUBLIC AUCTI ON AND IN THE PUBLIC AUCTION THE ENTIRE LAND AND BUILDING INCLUDING PLANT AND MA CHINERY WAS SOLD FOR RS. 3,01,00,000/-. ACCORDINGLY IT WAS SUBMITTED THAT TH IS IS A SLUM SALE AND PROVISION OF SECTION 50C WERE NOT ATTRACTED. HOWEVER, CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. REMIND REPORT WAS ALSO SOUGHT FROM THE AO IN THE REMIND REPORT ALSO THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO. THEREAFTER CONSIDERING THE REMIND REPORT THE SUBMIS SION OF THE ASSESSEE, THE CIT(A) CONFIRMED THE ACTION OF THE AO. NOW THE, ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. CONTENTIONS RAISED BEFORE THE LOWER AUTHO RITY WERE REITERATED HERE BEFORE THE TRIBUNAL BY LD. AR OF THE ASSESSEE ON TH E OTHER HAND LD. DR STATED THAT THE ISSUE IN RESPECT TO SLUM SALE WAS NOT RAIS ED BEFORE AO AS IT WAS RAISED ONLY BEFORE CIT(A). IN REPLY THE LD. AR STATED THAT IN FACT THE ASSESSEE HAS SOLD THE ENTIRE BUSINESS CONCERNED AS IT IS THEREFORE, T HIS IS NOTHING BUT A SLUM SALE AND IN CASE OF SLUM SALE PROVISION OF SECTION 50C A RE NOT ATTRACTED. IT WAS ALSO SUBMITTED THAT THE SALE WAS AFFECTED BY THE BANK AN D IN VIEW OF PROVISION OF SECTION 50C (2) NO OTHER CONSIDERATION CAN BE TAKEN INTO CONSIDERATION OTHER THAN THE CONSIDERATION RECEIVED BY BANK THROUGH AUCTION. LD. DR IN REJOINDER STATED THAT THIS CONTENTION WAS NOT RAISED EITHER BEFORE A O OR BEFORE CIT(A) THEREFORE, MATTER CAN BE SENT BACK EITHER TO THE FILE OF AO OR TO THE FILE OF LD. CIT(A), LD. AR DO NOT OBJECTED THESE CONTENTION OF LD. DR. 3. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, W E SET ASIDE THE ORDER OF LD. CIT(A) AND SEND BACK THE MATTER TO THE FILE OF THE AO TO PASS THE FRESH ORDER AFTER ASCERTAINING THE FACTUAL MATRIX O F THE CASE IN RESPECT TO THE CONTENTION OF LD. AR THAT THE ENTIRE BUSINESS WAS S OLD AND THEREFORE, THE SALE WAS A SLUM SALE. THE AO ALSO WILL TAKE INTO CONSIDERATI ON THE PROVISION OF SECTION 50C(2) AND AFTER ALLOWING OPPORTUNITY TO THE ASSESS EE THEN WILL PASS A FRESH ORDER. WE ORDER ACCORDINGLY. 3 ITA NO.280/NAG/2012 M/S.AFZAL COLD STORAGE & ICE FACTORY 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 RD DAY OF APRIL 2013. SD/- SD/- (D. KARUNAKARA RAO) (R.K. GUPTA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI : DATE : 3 RD APRIL, 2013 SK COPY TO: 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE DCIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR NAGPUR, BENCH, ITAT, NAGPUR. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI