SMT. MURUGASAMY LALITHA, TIRUPUR V. ITO, WARD - I (2), TIRUPUR

ITA 2812/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3819 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Set aside
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNALB/SMC BENCH: CHENNAI (CAMP AT COIMBATORE) . . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ I.T.A.NO.2812/CHNY/2019 ( / ASSESSMENT YEAR: 2013-14) SMT. MURUGASAMY LALITHA, NO.163, JEEVA COLONY, GANDHI NAGAR POST, TIRUPUR 641 603. VS INCOME TAX OFFICER, WARD-1(2), TIRUPUR 641602. PAN: ACEPL 7806K ./ I.T.A.NO.2813/CHNY/2019 ( / ASSESSMENT YEAR: 2013-14) G.GUNASEKARAN, NO.8, 4 TH STREET, GANDHI NAGAR, TIRUPUR 641 603 PAN: AHPPG 9205M VS INCOME TAX OFFICER, WARD-1(2), TIRUPUR 641602. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T.S.RAJARAJESWARAN, C.A SHRI S.R. GOKULARAMANAN, C.A /RESPONDENT BY : SHRI A.R.V. SREENIVASAN, ADDL. CIT /DATE OF HEARING : 03.02.2020 /DATE OF PRONOUNCEMENT : 03.02.2020 2 ITA NOS.2812 & 2813/CHNY/2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- 3, COIMBATORE DATED 02.08.2019 AND PERTAINS TO THE ASSESSMENT YEA R 2013-14. 2. SHRI T.S.RAJARAJESWARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SOLD THE PROPE RTY FOR RS. 50,01,000/-. HOWEVER, FOR COMPUTATION OF CAPITAL G AIN, THE ASSESSEE HAS TAKEN THE SALE CONSIDERATION AT RS. 57,00,000/-. T HE ASSESSE HAS ALSO OBTAINED REPORT FROM THE REGISTERED VALUER, HE ESTI MATED THE MARKET VALUE AT RS. 57,00,000/. THE VALUE ESTIMATED BY THE REGIS TERED VALUER IS A DISTRESS SALE VALUE, HOWEVER THE GUIDELINE VALUE OF THE REGISTRATION DEPARTMENT IS RS. 72,50,000/- THE DIFFERENCE OF RS . 15,05,000/- WAS TAKEN AS SALE CONSIDERATION FOR COMPUTING THE CAPIT AL GAIN. ACCORDING TO THE THE LD. REPRESENTATIVE FOR THE ASSESSEE, THE PR OPERTY WAS MORTGAGED TO CATHHOLIC SYRIAN BANK. ONE OF THE ASSESSEE SMT. MURUGASAMY LALITHA WAS SUFFERING DUE TO KIDNEY FAILURE THEREFORE, THEY COULD NOT EFFECTIVELY NEGOTIATE THE SALE OF THE PROPERTY TO OBTAIN THE CO RRECT MARKET VALUE. PLACING RELIANCE ON THE DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF G. ANITHA VS. ITO 55 TAXMANN.COM 538 (HYD), THE LD. COUNSEL FOR THE 3 ITA NOS.2812 & 2813/CHNY/2019 ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE ENCUMBERE D THE PROPERTY, THE MARKET VALUE OF THE PROPERTY NEED NOT BE TAKEN FOR COMPUTING THE CAPITAL GAIN BY APPLYING S. 50C OF THE ACT. IN VIEW OF THE ABOVE DECISION, ACCORDING TO LD. REPRESENTATIVE, THE ASSESSING OFFI CER (AO) IS NOT JUSTIFIED IN ADOPTING THE VALUE U/S. 50C OF THE ACT. 3. ON THE CONTRARY, SHRI A.R.V. SREENIVASAN, THE LD . DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT S. 50C OF THE ACT IS A STATUTORY MANDATE. WHEREVER THE PROPERTY WAS SOLD LESS THAN THE GUIDEL INE VALUE, THE AO IS BOUND TO TAKE THE GUIDELINE VALUE FOR COMPUTING CAP ITAL GAIN. IN THE CASE OF SMT. G. ANITHA (SUPRA) THERE WAS AN ENCUMBRANCE IN THE CAPITAL ASSET THEREFORE, THE DIVISION BENCH OF ITAT, HYDERABAD BE NCH FOUND THAT S. 50C OF THE ACT NEED NOT BE APPLIED. 4. HAVING HEARD THE LD. REPRESENTATIVE FOR THE ASSE SSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE, THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE PROPERTY IS ADMITTEDLY MORTGAGED W ITH CATHOLIC SYRIAN BANK. IT IS ALSO NOT IN DISPUTE THAT ONE OF THE AS SESSEE SMT. MURAGASAMY LALITHA WAS SUFFERING FROM KIDNEY FAILURE. THEREFO RE, THE CONTENTION OF THE ASSESSEE THAT THE PROPERTY COULD NOT BE SOLD FOR TH E MARKET RATE MAY HAVE SOME JUSTIFICATION. MOREOVER, IN THE CASE OF G. ANI THA (SUPRA) DIVISION 4 ITA NOS.2812 & 2813/CHNY/2019 BENCH OF ITAT, HYDERABAD BEHCN FOUND THAT WHEREVER THERE WAS AN ENCUMBRANCE, THE VALUE U/S. 50C OF THE ACT NEED NOT BE APPLIED. THE DECISION OF THE DIVISION BENCH OF ITAT, HYDERABAD ( SUPRA) IS BINDING ON A SINGLE MEMBER. THEREFORE, BY FOLLOWING THE DECISIO N OF DIVISION BENCH OF ITAT, HYDERABAD (SUPRA) THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT WHEN THE ASSESSEE MORTGAGED PROPERTY TO CATHOLIC SY RIAN BANK AND COULD NOT EFFECTIVELY NEGOTIATE FOR SALE OF PROPERTY DUE TO KIDNEY FAILURE OF ONE OF THE ASSESSEE, THE PROVISIONS OF S. 50C OF THE ACT N OT BE APPLICABLE. ACCORDINGLY, THE ORDERS OF THE BOTH THE LOWER AUTHO RITIES ARE SET ASIDE AND THE ADDITION MADE BY THE AO AS CONFIRMED BY THE LD. CIT(A) IS DELETED. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD FEBRUARY, 2020 AT CHENNAI (CAMP AT COIMBATORE). SD/- ( (( ( . .. . . .. . . . . . ) )) ) (N.R.S. GANESAN) / JUDICIAL MEMBER /CHENNAI, /DATED, THE 03 RD FEBRUARY, 2020. EDN, SR. PS !' #$ %$ /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. & ( )/CIT(A) 4. & /CIT 5. $'( ) /DR 6. (* + /GF