Shri Tej Kumar Jain S/o Samirmal Jain, Indore V. The ACIT- Circle 2(1), Indore

ITA 287/IND/2013

• Counselvise Citation: 28722714 RSA 2013
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 13-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: PAVITRAN NAMBIAR; S VS T N UNNI
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Valuation report
• Section: 143(3); 50C; 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AFFPJ 3625 M I.T.A.NOS. 287/IND/2013 A.Y. : 2007-08 SH. TEJ KUMAR JAIN APPELLANT S/O SAMIRMAL JAIN 33/1, RACE COURCE ROAD INDORE VS ACIT 2 (1) RESPONDENT INDORE PAN NO. : ABTPJ 0549 D I.T.A.NOS. 288 /IND/2013 A.Y. : 2007-08 SH. DEO KUMAR JAIN APPELLANT S/O SAMIRMAL JAIN 103, RUKHMAL PLAZA 14, OLD PALASIA INDORE VS ACIT 2(1) RESPONDENT INDORE APPELLANT BY : S VS. T.N. UNNI & PAVITRAN NAMBIAR RESPONDENT BY : SHRI R.A. VERMA, SR DR DATE OF HEARING : 19.11.2013 DATE OF PRONOUNCEMENT : 20. 11 .201 3 TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 2 PAGE 2 OF 7 O R D E R PER R. C. SHARMA, A.M. BOTH THESE APPEALS HAVE BEEN FILED BY DIFFERENT AS SESSEES AGAINST TWO DIFFERENT ORDERS PASSED BY THE CIT(A) D ATED 21-02-2013 FOR THE ASSESSMENT YEAR 2007-08, IN THE MATTER OF ORDER PASSED U/S 143(3) READ WITH SECTION 147 OF THE INCOME-TAX ACT, 1961. 2.1 IN BOTH THE APPEALS, THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO COMPUTATION OF CAPITAL GAINS BY APPLYING THE PRO VISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961. 2.2 AT THE OUTSET, THE LD. AR PLACED ON RECORD THE ORDER DATED 26- 11-2012 OF THE I.T.A.T. IN THE CASE OF GAMBHIRMAL J AIN IN ITA NO. 179/IND/2012 FOR THE ASSESSMENT YEAR 2007-08, WHERE IN EXACTLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND IT IS A MATTER ON RECORD THAT SHRI GAMBHIRMAL JAIN WAS THE CO-OWNE R OF THE SAME PROPERTY AND THE PROFIT ON SALE OF THE VERY SAME PR OPERTY ATTRIBUTABLE TO SHARE OF THE ASSESSEE WAS BROUGHT TO TAX BY THE AO IN THE IMPUGNED ORDER. 2.3 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTS IN BRIEF ARE THAT THE TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 3 PAGE 3 OF 7 ASSESSEE WAS ONE OF THE CO-OWNER OF PROPERTY SITUAT ED AT 567/1, KISHAN COLONY, M.G. ROAD, INDORE. THIS PROPERTY WAS PURCHASED DURING 1972. THE BUILDING CONSTRUCTED THEREON WAS R ENTED TO STATE BANK OF INDIA. THIS PROPERTY WAS SUBJECTED TO DISTR ESS SALE ON 09-06-2006 FOR RS. 1.8 CRORES. THE SUB-REGISTRAR VA LUED THE PROPERTY FOR THE PURPOSE OF STAMP DUTY AT RS. 2,88, 56,000/-. AGAINST THE ORDER OF THE SUB-REGISTRAR, BOTH THE PU RCHASER AND SELLER FILED THE APPEAL BEFORE THE DIVISIONAL COMMISSIONER . DURING THE PENDENCY OF APPEAL, THE AO PASSED THE ORDER TAKING THE VALUE AT RS. 2,88,56,000/-. ALL THESE 06 CO-OWNERS FILED THE APP EAL BEFORE THE LD. CIT(A). IN CASE OF TWO CO-OWNERS, THE APPEAL WAS DE CIDED BY THE LD. CIT(A) ON 20-01-2012 ON THE BASIS OF DIVISIONAL COM MISSIONERS ORDER. WE FOUND THAT THE DIVISIONAL COMMISSIONER CO NFIRMED THE ORDER OF THE COLLECTOR OF STAMPS AGAINST WHICH APP EAL WAS FILED BEFORE BOARD OF REVENUE. THE BOARD OF REVENUE ALLOW ED THE APPEAL VIDE ORDER DATED 04-09-2012. BY FOLLOWING THE VERDI CT OF BOARD OF REVENUE, WHEREIN IT WAS DIRECTED TO TAKE THE VALUE DECLARED BY THE ASSESSEE IN THE SALE DEED, IN THE APPEAL FILED BY S HRI MANGILAL JAIN AND SHRI GAMBHIRMAL JAIN, I.T.A.T. ALLOWED THE APPE AL ON THE BASIS TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 4 PAGE 4 OF 7 OF THE BOARD OF REVENUES ORDER. THE PRECISE OBSERV ATION OF THE TRIBUNAL WAS AS UNDER:- BOTH THESE APPEALS ARE BY DIFFERENT ASSESSEES FOR THE A.Y. 2007-08 CHALLENGING THE RESPECTIVE ORDERS BOTH DATED 20.1.2012 PASSED BY THE LEARNED FIRST APPELLATE AUT HORITY ON THE ADOPTION OF MARKET VALUE OF THE PROPERTY SOLD B Y THESE ASSESSEES AND APPLICABILITY OF SECTION 50C OF THE A CT. REOPENING OF ASSESSMENT U/S 147 IN THE CASE OF SHRI GAMBHIRMAL JAIN HAS ALSO BEEN TAKEN, HOWEVER, THIS GROUND WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSE SSEE, THEREFORE, THIS GROUND IS DISMISSED AS SUCH. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD S HRI H.P. VERMA ALONG WITH MISS SAKSHI VERMA AND MANISH JOSHI IN THE CASE OF SHRI MANGILAL JAIN WHEREAS SHRI T.N. UNNI ALONG WITH P. NAMBIAR, LEARNED COUNSEL FOR THE ASS ESSEE IN THE CASE OF SHRI GAMBHIRMAL JAIN. SHRI R.A. VERMA, LEARNED SENIOR DR WAS ALSO HEARD FOR THE REVENUE. DURING HE ARING, THE LEARNED REPRESENTATIVES FROM BOTH THE SIDES CON TENDED THAT SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS I S IDENTICAL, ARISING OUT OF THE SAME PROPERTY, THEREFORE, THESE APPEALS CAN BE HEARD TOGETHER. THE LEARNED SENIOR DR DID NO T OPPOSE THE ASSERTION OF THE LEARNED COUNSELS. 3. THE CRUX OF ARGUMENTS ON BEHALF OF THESE ASSESSE ES IS THAT THE BUILDING IN ISSUE WAS CONSTRUCTED IN THE Y EAR 1972- 73 ON A PLOT AND WAS RENTED TO STATE BANK OF INDIA. THE CONDITION OF THE BUILDING WAS CLAIMED TO BE VERY BA D, HOWEVER, IN SPITE OF REPEATED REQUESTS, THE BANK WA S NOT READY TO VACATE THE BUILDING, THEREFORE, KEEPING IN VIEW THE NECESSITY AND THE CIRCUMSTANCES, ALL THE SHARE HOLD ERS DECIDED TO SELL THE BUILDING. UNDER THE CIRCUMSTANC ES, THE SALE VALUE WAS CONSIDERABLY LOW. IT WAS ALSO CONTE NDED THAT TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 5 PAGE 5 OF 7 THE BUILDING WAS FETCHING RENT OF RS. 28,750/- PER MONTH FROM THE BANK. IT WAS FURTHER CONTENDED THAT THE SA LE VALUE OF RS.1,80,00,000/- WAS WRONGLY ADOPTED AT RS.2,88,56,000/- BY THE OFFICE OF THE REGISTRAR FOR STAMP DUTY PURPOSES. IT WAS POINTED OUT THAT ULTIMATELY T HE M.P. BOARD OF REVENUE, GWALIOR, QUASHED THE ORDER OF THE DIVISIONAL COMMISSIONER DATED 18.10.2011/COLLECTOR OF STAMPS DATED 10.10.2006, THEREFORE, AS ON DATE THE VALUE ADOPTED BY THE M.P. BOARD OF REVENUE STANDS. HOWEVE R, MR. VERMA, THE LEARNED SENIOR DR DEFENDED THE VALUATIO N OF PROPERTY AT RS. 2,88,56,000/-. 4. WE HAVE CONSIDERED THE ASSERTION MADE BY THE LEA RNED RESPECTIVE COUNSEL AND PERUSED THE MATERIAL AVAILAB LE ON RECORD. SINCE THE IDENTICAL ISSUE IS INVOLVED IN BO TH THESE APPEALS, ARISING OUT THE SAME PROPERTY, THEREFORE, BOTH THE APPEALS CAN BE DISPOSED OF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF BREVITY. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE CONSTRUCTED A BUILDING IN THE YEAR 1972-73 AND RENT ED OUT THE SAME TO STATE BANK OF INDIA. THE MARKET VALUE O F THE PROPERTY WAS CLAIMED TO BE ABNORMALLY LOW ON THE GR OUNDS THAT FIRSTLY THERE WERE SIX CO-OWNERS, IT WAS IN A BAD CONDITION AS THE BANK WAS NOT GETTING THE SAME REPA IRED AND WAS MERELY PAYING RS. 28,750/- PER MONTH AS RENT. F INALLY, ALL THE CO-SHARERS OF THE PROPERTY SOLD THE SAME AT RS.1,80,00,000/-. SHRI MANGILAL JAIN AND SHRI GAMBH IRMAL JAIN ARE OWNERS OF 1/3 RD SHARE EACH WHEREAS SMT. SUSHILABAI JAIN,SHRI NARENDRAKUMAR JAIN, SHRI TEJKU MAR JAIN AND SHRI DEVKUMAR JAIN ARE OWNERS OF 1/12 TH SHARES EACH. THE ASSESSING OFFICER APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT RESULTING INTO ADDITIONS IN THE RESP ECTIVE HANDS. THE OFFICE OF THE REGISTRAR STAMPS VALUED TH E PROPERTY AT RS.2,88,56,000/-.THE STAMP DUTY WAS PAI D IN PROTEST. AFTER LOSING THE CASE BEFORE THE COLLECTOR AND TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 6 PAGE 6 OF 7 DIVISIONAL COMMISSIONER, THE ASSESSEE FILED APPEAL BEFORE THE M.P. BOARD OF REVENUE WHO VIDE ORDER DATED 4.9. 2012 (APPEAL NO. 2152 PBR/2011) QUASHED THE ORDERS OF BO TH THE LOWER AUTHORITIES BY ACCEPTING THE FAIR MARKET VALU E AT RS.1,80,000/-(COPY OF THE ORDER IS AVAILABLE ON REC ORD). NO CONTRARY DECISION WAS BROUGHT ON RECORD BY EITHER S IDE AND MORE SPECIFICALLY THE REVENUE. IF THE TOTALITY OF F ACTS AVAILABLE ON RECORD AND THE ASSERTION MADE BY THE LEARNED RES PECTIVE COUNSEL ARE KEPT IN JUXTAPOSITION, WE ARE OF THE CO NSIDERED OPINION THAT THE SALE VALUE FINALLY ADOPTED BY THE M.P. BOARD OF REVENUE WILL PREVAIL AS NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE. THE M.P. REVENUE BOARD WHICH IS THE CHIEF CONTROLLING REVENUE AUTHORITY FOR THE STATE OF M.P. CONSIDERED THE TOTALITY OF FACTS BY OBSERVING THAT THE COLLECT OR OF STAMPS NEITHER MADE ANY INQUIRY NOR PASSED A REASONED ORDE R AND MERELY ACCEPTED THE PROPOSED VALUE OF SUB-REGISTRAR . THE STAMP FEE WAS ALSO DEPOSITED UNDER PROTEST MEANING THEREBY THAT THE ASSESSEE NEVER AGREED TO THE PROPOSED VALU ATION. THE VALUATION REPORT PREPARED BY THE APPROVED VALUE R WAS DULY CONSIDERED ALONG WITH THE LETTER FROM STATE BA NK OF INDIA ESTABLISHING THAT THE BUILDING WAS IN WORSE C ONDITION. EVEN THE SUB-REGISTRAR WAS HELD TO HAVE REACHED TO A CONCLUSION WITHOUT CONSIDERING THE DILAPIDATED COND ITION OF THE BUILDING. ULTIMATELY VIDE ORDER DATED 4.9.2012 THE REVENUE BOARD DECIDED IN FAVOUR OF THE ASSESSEE. SI NCE THE CHIEF CONTROLLING REVENUE AUTHORITY FOR THE STATE O F M.P. HAS AFFIRMED THE VALUATION OF THE PROPERTY AS TAKEN BY THE ASSESSEE, SECTION 50C, WHICH IS A DEEMING PROVISION , DOES NOT COME INTO PLAY. IN VIEW OF THESE UNCONTROVERTE D FACTS, BOTH THE APPEALS OF THE ASSESSEE DESERVE TO BE ALLO WED. THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE VALUE AS DECIDED BY THE BOARD OF REVENUE AND WORK OUT THE CAPITAL GA INS, AS PER RESPECTIVE SHARES OF EACH OF THESE ASSESSEES, A S PER LAW. TEJKUMAR JAIN,INDORE. I.T.A.NO.287/IND/2013 A.Y.2007-08 7 PAGE 7 OF 7 FINALLY, THE APPEAL IN ITA NO. 187/IND/2012 IS ALLOWED WHEREAS APPEAL IN ITA NO. 179/IND/2012 IS P ARTLY ALLOWED AS THE ISSUE OF REOPENING OF ASSESSMENT U/S 147 WAS NOT PRESSED BEFORE THE TRIBUNAL . 2.4 WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL IN THE CASE OF OTHER TWO CO-OWNERS, WHEREIN UNDER THE SIMI LAR FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSUE OF COMPUTATION OF CAPITAL GAINS WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE AO WA S DIRECTED TO ADOPT THE VALUE AS DECIDED BY THE BOARD OF REVENUE AND WORK OUT THE CAPITAL GAINS ON RESPECTIVE SHARES OF EACH OF T HE CO-OWNERS. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, W E DIRECT THE AO TO COMPUTE THE CAPITAL GAINS ON THE BASIS OF THE VALUE ADOPTED BY THE BOARD OF REVENUE. WE DIRECT ACCORDINGLY. 3.0 IN THE RESULT, THE APPEALS FILED BY BOTH THE ASSESS EES ARE ALLOWED IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH NOVEMBER, 2013. RNM*