THE EXECUTORS OF ESTATE OF LATE SMT. MANJULA AMRATLAL SHAH, MUMBAI V. DCIT 13(2), MUMBAI

ITA 3023/MUM/2010

• Counselvise Citation: 302319914 RSA 2010
• Duration Of Justice: 5 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 22-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 16-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2671/MUM/2010 ASSESSMENT YEAR: 2005-06 DY. COMMISSIONER OF INCOME TAX, CIRCLE-13(2), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. THE EXECUTOR OF ESTATE OF LATE SMT. MANJULA AMRATLAL SHAH, C/O- BHAWANDAS T. DOSHI & DHARAMDAS T.SHAH (ALIAS) DOSHI, 3/1 ALANKAR, 3 RD FLOOR, J.MEHTA ROAD, MUMBAI-400006 ( / REVENUE) ( !'# $ /ASSESSEE) P.A. NO.ANJPS3167J ITA NO.3023/MUM/2010 ASSESSMENT YEAR: 2005-06 THE EXECUTOR OF ESTATE OF LATE SMT. MANJULA AMRATLAL SHAH, C/O- BHAWANDAS T. DOSHI & DHARAMDAS T.SHAH (ALIAS) DOSHI, 3/1 ALANKAR, 3 RD FLOOR, J.MEHTA ROAD, MUMBAI-400006 / VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-13(2), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( !'# $ /ASSESSEE) ( / REVENUE) P.A. NO.ANJPS3167J / REVENUE BY SHRI JEETENDRA KUMAR-DR !'# $ / ASSESSEE BY SHRI NITESH JOSHI & APURVA SHAH EXECUTORS OF ESTATE OF LT. MANJULABEN AMRATLAL SHAH ITA NOS.2671 & 3023/MUM/2010 2 % & ' $ ( / DATE OF HEARING : 30/06/2015 ' $ ( / DATE OF ORDER: 31/07/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THESE ARE CROSS APPEALS BY THE ASSESSEE AS WELL AS BY THE REVENUE FOR ASSESSMENT YEAR 2005-06 AGAINST THE IMPUGNED ORDER DATED 29/01/2010 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI. IN THE APPEAL OF THE R EVENUE, THE GROUND RAISED PERTAINS TO ALLOWING THE APPEAL O F THE ASSESSEE AND CONSEQUENT DELETING THE ADDITION AS PE R THE PROVISIONS OF SECTION 50C OF THE ACT WITHOUT APPREC IATING THAT REGISTRATION AUTHORITY VALUED THE PROPERTY FOR STAMP DUTY PURPOSES AT RS.4,63,73,500/- AGAINST THE CLAI MED VALUE BY THE ASSESSEE AT RS.2,51,00,000/-. 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI JEETENDRA KUMAR, LD. DR, IS IDENTICAL TO THE GROUND RAISED BY CONTENDING THAT THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE CORRECT FACT THAT NOWHERE IN THE SAL E DEED TDR OF 3772 SQ. MT. HAS BEEN INCORPORATED AND THERE SHOULD HAVE BEEN SEPARATE AGREEMENT FOR PURCHASE OF TDR AND THE SAME CANNOT BE INCORPORATED IN THE DEVELOPM ENT AGREEMENT WITH THE ASSESSEE AS PROVIDED IN CLAUSE-2 8 OF THE AGREEMENT TO CONSUME THE UNUTILIZED TDR AVAILAB LE IN RESPECT OF OTHER PLOTS ON THE SAID PROPERTIES. ON THE OTHER HAND, SHRI NITESH JOSHI, ALONG WITH APURVA SHAH DEF ENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. EXECUTORS OF ESTATE OF LT. MANJULABEN AMRATLAL SHAH ITA NOS.2671 & 3023/MUM/2010 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ESTATE WAS THE OWNER OF THE PRO PERTY KNOWN AS VIJAY MAHAL LOCATED AT MALAD. THE ASSESSEE ENTERED INTO A MOU WITH MAHAVIR BUILDERS PROVIDING THEM WITH DEVELOPMENT RIGHTS IN RESPECT OF PROPERTY FOR A CONSIDERATION OF RS.2,51,00,000/-. THE APPROPRIATE AUTHORITY (INCOME TAX DEPARTMENT) GAVE NO OBJECTION TO GRANT OF DEVELOPMENT RIGHTS AT THE AGREED CONSIDERA TION OF RS.2,51,00,000/- U/S 269UL(3) DATED 12/06/2001. TH E SAID MOU WAS CONVERTED INTO A FORMAL DEVELOPMENT AGREEMENT IN SEPTEMBER 2004 ON THE SAME TERMS AND CONDITIONS. THE STAMP DUTY AUTHORITIES STAMPED/ASS ESSED THE VALUE AT RS.4,63,73,500/-. THE ASSESSING OFFICE R INVOKED SECTION 50C OF THE ACT ON THE BASIS OF VAL UATION MADE BY THE STAMP DUTY AUTHORITIES. THE CLAIM OF T HE ASSESSEE WAS THAT THE FAIR MARKET VALUE SHOULD HAVE BEEN TAKEN WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT U/S 269UL(3) OF THE ACT. RELIANCE WAS PLACED UPON THE DECISION IN MEGHRAJ VAID 114 TTJ 841 (JODH.) AND NA TIONAL THERMAL POWER CORPORATION 229 ITR 383 AND JUTE CORPORATION OF INDIA 187 ITR 688 (SC). 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THERE IS NO DISPUTE TO THE FACT THAT THE TRANSACTION PRICE AS M ENTIONED EXECUTORS OF ESTATE OF LT. MANJULABEN AMRATLAL SHAH ITA NOS.2671 & 3023/MUM/2010 4 IN THE AGREEMENT IS RS.2,51,00,000/- FOR THE LAND MEASURING 4630 SQ. YARDS. IT IS ALSO A FACT THAT T HE DEPARTMENT IN ORDER U/S 269UL(3) OF THE ACT ACCEPTE D THE SAME VALUE. THE ASSESSEE SOLD/GIVEN DEVELOPMENT RI GHT OF THE SAME PROPERTY WHICH WAS OWNED BY IT. THE ASSES SEE WAS UNABLE TO SALE MORE THAN THE LAND WHICH WAS NOT OWNED BY THE ASSESSEE. THE ASSESSEE CAN BE TAXED O NLY ON THE GAIN WHICH IS OOZING OUT FROM THE SALE CONSIDER ATION, THUS, NO ADVERSE INFERENCE CAN BE DRAWN WHILE INVOK ING THE PROVISION OF SECTION 50C OF THE ACT. NO EVIDENCE H AS BEEN PRODUCED BY THE REVENUE AT ANY STAGE THAT THE ASSES SEE ACTUALLY RECEIVED THE VALUE WHICH WAS ADOPTED BY TH E STAMP VALUATION AUTHORITY. EVEN THE DEVELOPMENT AGREEMENT CLEARLY MENTION THE AREA AND THE ASSESSEE IS NOT THE OWNER OF THE TDR, THUS, CANNOT BE SADDLED WITH THE VALUE ADOPTED BY THE STAMP DUTY PURPOSES AS THE ASS ESSEE IS ONLY THE OWNER OF 3872 SQ. MTS. FOR WHICH HE REC EIVED THE CONSIDERATION OF RS.2,51,00,000/-, THUS, THE CAPITA L GAIN HAS TO BE COMPUTED ON THE AMOUNT WHICH THE ASSESSEE ACTUALLY RECEIVED, CONSEQUENTLY, WE ARE IN AGREEMEN T WITH THE FINDING OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS) THAT ON THE BASIS OF DEEMING PROVISION OF SECTION 5 0C, NO ADDITION CAN BE MADE. WE AFFIRM THE STAND OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS), THUS, APPEAL OF THE REVENUE IS DISMISSED. 3. SO FAR AS, THE APPEAL OF THE ASSESSEE (3023/MUM/2010) IS CONCERNED. THE LD. COUNSEL CONTENDED THAT IF THE APPEAL OF THE DEPARTMENT IS EXECUTORS OF ESTATE OF LT. MANJULABEN AMRATLAL SHAH ITA NOS.2671 & 3023/MUM/2010 5 DISMISSED THEN THE APPEAL OF THE ASSESSEE WILL BECO ME IN- FRUCTUOUS. SINCE, WE HAVE DISMISSED THE APPEAL OF T HE REVENUE, THEREFORE, THE APPEAL OF THE ASSESSEE HAS REMAINED FOR ACADEMIC INTEREST ONLY, CONSEQUENTLY, DISMISSED AS IN-FRUCTUOUS. FINALLY, THE APPEAL OF THE REVENUE AS WELL AS OF TH E ASSESSEE, BOTH ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 30/06/2015. S D/ - (RAJENDRA) S D/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; * DATED :31/07/2015 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 % 3$ ( ,- ) / THE CIT, MUMBAI. 4. 2 2 % 3$ / CIT(A)- , MUMBAI 5. 56 0$ ! , 2 ,-( ,! 7 , % & / DR, ITAT, MUMBAI 6. 8' 9& / GUARD FILE. / BY ORDER, 15-$ 0$ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI