Smt. Madhu Goyal, Agra V. I.T.O., Ward-4(2), Agra

ITA 315/AGR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9977 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 17-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value
• Section: 50C; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBE R AND MRS. ANNAPURNA MEHROTRA, ACCOUNT ANT MEMBER ITA NO. 315/AGRA/2014 ASSTT. YEAR : 2005-06 SMT. MADHU GOYAL, VS. INCOME-TAX OFFICER, A-624, KAMLA NAGAR, AGRA. WARD 4(2), AGRA. [PAN: AAJPI7496 M] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PANKAJ GARGH, ADVOCATE RESPONDENT BY : SH. WASEEM ARSHAD, SR. DR DATE OF HEARING : 04.02.2016 DATE OF PRONOUNCEMENT : 08.02.2016 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED A GAINST THE ORDER OF LD. CIT(A)-II, AGRA DATED 10.03.2014 FOR THE ASSESSMENT YEAR 2005-06. 2. IN THE PRESENT APPEAL, THE ASSESSEE CHALLENGED T HE REOPENING OF ASSESSMENT U/S. 147 OF THE IT ACT AND ENHANCING OF ASSESSMENT BY RS.1,92,52,303/- ON ACCOUNT OF COMPUTATION OF CAPIT AL GAIN WITH THE AID OF SECTION 50C OF THE IT ACT. ITA NO.315/AGRA/2014 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT PROCEEDINGS IN THIS CASE WERE REOPENED AFTER THE AO FOUND THAT VALUE OF THE PROPERTY BEING LAND, SOLD BY THE ASSESSEE IS SHOWN IN THE REGISTERED DEE D FOR STAMP DUTY PURPOSE AT RS.71,46,000/- AS AGAINST THE AMOUNT OF SALE CONSID ERATION DECLARED AT RS.68 LACS. THE ASSESSEE IN THIS PROPERTY WAS HOLDING 1/4 TH SHARE AND HENCE, SHE DECLARED CAPITAL GAIN ON SALE OF PROPERTY BY TAKING SALE CONSIDERATION AT RS.17,00,000/-, BEING OF RS. 68 LACS. AS PER THE FINDINGS OF THE AO, THE SALE CONSIDERATION AS PER PROVISION OF SECTION 50C SHOUL D HAVE BEEN TAKEN AT RS.17,86,500/- BEING OF RS.71,46,000/-. THE AO AF TER RECORDING THE REASONS FOR REOPENING OF ASSESSMENT AND ISSUING SUCH NOTICE , FRAMED EXPARTE ASSESSMENT ORDER DETERMINING THE LONG TERM CAPITAL GAIN AT RS.2,43,157/- AND COMPUTED THE TOTAL INCOME AT RS.3,72,630/-. 4. THE ASSESSEE CHALLENGED THE REOPENING OF ASSESSM ENT AS WELL AS ADDITION ON MERITS BEFORE THE LD. CIT(A). THE IMPUGNED ORDER REVEALED THAT IT HAS BEEN INFORMED BY THE AO THAT INCOME OF THE ASSESSEE IS T O BE ENHANCED BECAUSE OF THE REVISION IN THE VALUE OF PROPERTY MADE BY THE A DM(F&R) AT RS.8,51,10,000/- THAT WAS CONSIDERED WHILE MAKING A SSESSMENT IN THE HANDS OF THE ERSTWHILE PARTNERSHIP FIRM M/S. SETWELL ASSO CIATES, SANJAY PLACE, AGRA, BUT THE ASSESSMENT MADE IN THE HAND OF PARTNERSHIP FIRM TAXING THE CAPITAL ITA NO.315/AGRA/2014 3 GAIN ON SALE OF THE ABOVE MENTIONED PROPERTY WAS QU ASHED BY THE LD. CIT(A)-I, AGRA VIDE ORDER DATED 21.03.2012 BECAUSE ON THE DA TE OF SALE OF THE PROPERTY, THE SAID FIRM HAD ALREADY BEEN DISSOLVED AND THE PR OPERTY WAS JOINTLY HELD BY THE ERSTWHILE FOUR PARTNERS OF THE DISSOLVED FIRM A ND THE ASSESSEE WAS ONE OF THE ERSTWHILE FOUR PARTNERS. THE LEARNED CIT(A) HEL D TAXABILITY OF CAPITAL GAIN ARISING ON SALE OF PROPERTY SHOULD BE CONSIDERED IN THE HANDS OF PARTNERS AS PER THEIR SHARE IN THE SAID PROPERTY. THE AO, THERE FORE, REQUESTED THAT THE INCOME OF THE ASSESSEE MAY BE ENHANCED AS PER THE V ALUE OF PROPERTY DETERMINED BY ADM, AGRA. 5. THE LEARNED CIT(A) CONSIDERING THE REPORT OF THE AO, ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE FOR ENHANCEMENT OF INC OME BY RS.1,93,53,303/- ON ACCOUNT OF COMPUTATION OF CAPITAL GAIN ON SALE O F PROPERTY. THE ASSESSEE WAS SERVED THROUGH SUBSTITUTED SERVICE AND THE LD. CIT(A) ALSO PASSED EXPARTE ORDER. THE LD. CIT(A) DECIDED THE ISSUE OF REOPENIN G OF ASSESSMENT AGAINST ASSESSEE AND ALSO COMPUTED THE TAXABLE INCOME OF AS SESSEE ON ACCOUNT OF CAPITAL GAINS BY MAKING THE VALUATION OF THE PROPER TY AS PER ORDER OF ADM AND COMPUTED THE TOTAL INCOME AT RS.1,97,24,928 AND BY GIVING BENEFIT OF INCOME COMPUTED BY THE AO ENHANCED THE ASSESSMENT BY RS.1, 92,52,303/-. ITA NO.315/AGRA/2014 4 6. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS T HE ISSUE OF REOPENING OF ASSESSMENT. THE SAME IS, THEREFORE, DISMISSED BEING NOT PRESSED. 7. THE LD. COUNSEL FOR THE ASSESSEE FILED LETTER DA TED 03.02.2016 ON RECORD, EXPLAINING THEREIN THAT THE FACTS HAVE ALREADY BEEN EXPLAINED IN NUMBER OF SYNOPSIS AND IN THIS CASE, THE ASSESSMENT IS ENHANC ED BY THE LD. CIT(A) AS PER ORDER PASSED BY ADM. THE MATTER IS SUBJUDICE BEFORE THE ALLAHABAD HIGH COURT. HE HAS REQUESTED THAT THE MATTER BE RESTORED TO THE FILE OF AO WITH DIRECTION TO KEEP THE MATTER IN ABEYANCE TILL THE F INAL OUTCOME OF THE PETITION PENDING BEFORE THE HONBLE HIGH COURT. THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT THE FINAL VALUATION DETERMINED BY HO NBLE HIGH COURT MAY BE DIRECTED TO BE ADOPTED BY THE AO FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS. 8. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT THE ASSESSEE WAS ONE OF THE PARTNERS IN THE FIRM, M/S. SETWELL ASSOCIATES AND ON DISSOLUTION OF THIS FIRM, THE SALE PROCEEDS WERE DI STRIBUTED BY ALL THE FOUR PARTNERS IN WHICH THE ASSESSEE HAS HAVING SHARE. THE MATTER AGAINST THE ORDER OF ADM (FINANCE) WAS PENDING BEFORE THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF BUYERS. THE ORDER OF THE ADM, FINANC E AGRA DATED 29.07.2005 IN ITA NO.315/AGRA/2014 5 THE NAME OF SETWELL ASSOCIATES AND SMT. MANJU AGARW AL VS. SUNIL ARORA AND JAGDISH ARORA (BUYERS), DETERMINED THE CIRCLE RATE AT RS.8,51,10,000/-, WHICH WAS SET ASIDE BY HIGH COURT VIDE ORDER DATED 03.03. 2008 REMANDING THE ISSUE TO ADM. THE ADM, AGRA AGAIN DETERMINED SAME VALUE V IDE ORDER DATED 11.06.2008. HE HAS FURTHER SUBMITTED THAT AGAIN THE BUYERS HAD FILED WRIT PETITION BEFORE THE HONBLE ALLAHABAD HIGH COURT, C HALLENGING THIS ORDER OF ADM(FINANCE), AGRA (PB-31) AND THE MATTER IN ISSUE IS PENDING BEFORE THE HONBLE ALLAHABAD HIGH COURT. THE ASSESSEE SMT. MAD HU GOYAL ALSO CHALLENGED THE ASSESSMENT ORDER OF ADM(FINANCE) AND FILED CIVI L MISC. APPLICATION BEFORE THE CHIEF CONTROLLER, REVENUE AUTHORITY OF U.P.-ALL AHABAD (PB-63). 9. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT THE LD. CIT(A) IN THE CASE OF FIRM M/S. SETWELL ASSOCIATES PASSED ORD ER DATED 21.03.2013 AND HELD THAT NO INCOME CAN BE TAXED IN THE HANDS OF DI SSOLVED FIRM AND ALSO DIRECTED TO MAKE ASSESSMENT OF CAPITAL GAINS IN THE HANDS OF ALL THE FOUR PARTNERS AND ALSO DIRECTED THAT SALE CONSIDERATION SHOULD BE DETERMINED BY THE STAMP VALUATION AUTHORITY IN THE SALE DEED SUBJ ECT TO THE ORDER OF HONBLE ALLAHABAD HIGH COURT AND AFTER COMPUTING THE SHARE OF SALE CONSIDERATION OF EACH PARTNER, CAPITAL GAIN IN THE HANDS OF PARTNERS SHOULD BE ADDED TO THEIR RESPECTIVE INCOME. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. ITA NO.315/AGRA/2014 6 CIT(A) IN THE SAME ORDER IN THE CASE OF M/S. SETWEL L ASSOCIATES IN PARA 18 OF THE APPELLATE ORDER HELD THAT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN IN THE HANDS OF THE PARTNERS, THE SALE CONSIDERATION S HOULD BE TAKEN AS DETERMINED BY THE STAMP VALUATION AUTHORITY IN THE SALE DEED S UBJECT TO ORDER OF HONBLE ALLAHABAD HIGH COURT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMI TTED THAT SINCE THE VALUATION DEPENDS UPON THE ORDER OF THE ADM (FINANCE), AGRA WHOSE ORDER IS UNDER CHALLENGE BEFORE THE HONBLE A LLAHABAD HIGH COURT, THEREFORE THE MATTER MAY BE REMANDED BACK TO THE AO WITH THE DIRECTION TO COMPUTE THE CAPITAL GAIN ON THE VALUATION AS MAY BE ULTIMATELY DETERMINED BY THE HONBLE ALLAHABAD HIGH COURT. 10. THE LD. DR ALSO SUBMITTED THAT THE VALUATION OF THE PROPERTY FOR THE PURPOSE OF SECTION 50C CAN BE DETERMINED ON THE BAS IS OF VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY, THEREFORE, FINAL DETERMINATION OF THE SAME MAY BE MADE AFTER THE DECISION OF HONBLE ALLAHABAD HIGH COURT. 11. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW THAT SINCE THE VALUATION OF THE PROPERTY FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN IS DEPENDENT UPON THE VALUATION ADOPTED BY ADM (FINANCE), AGRA WHOSE DECI SION IS UNDER CHALLENGE ITA NO.315/AGRA/2014 7 BEFORE THE HONBLE ALLAHABAD HIGH COURT. THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR ARE JUSTIFIED IN CONTENDING THAT SUCH VALUATION COULD BE ADOPTED BY THE AO AS PER FINAL DECISION OF HONBLE ALLAHABAD HIGH COURT. THE LD. CIT(A) ALSO IN THE CASE OF FIRM, M/S. SETWELL A SSOCIATES (SUPRA) DIRECTED THAT ULTIMATELY, THE VALUE WOULD BE FINALLY DETERMINED B Y THE HONBLE ALLAHABAD HIGH COURT. THEREFORE, THE CAPITAL GAINS IN THE HAN DS OF THE PARTNERS INCLUDING THE ASSESSEE, CAN BE COMPUTED ON THE SALE CONSIDERA TION DETERMINED BY THE STAMP VALUATION AUTHORITY SUBJECT TO DECISION OF HO NBLE ALLAHABAD HIGH COURT. IN PRINCIPLE, THE APPLICABILITY OF PROVISIO N OF SECTION 50C OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, HAS NOT BE EN DISPUTED AND SUCH FINDINGS OF THE AUTHORITIES BELOW TO THAT EXTENT AR E CONFIRMED. 12. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND RESTORE THE ISSUE TO THE FILE OF AO WITH DIRECT ION TO RE-COMPUTE THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AS PER SALE VALUA TION DETERMINED BY THE STAMP VALUATION AUTHORITY AS PER DIRECTIONS OF THE HONBLE ALLAHABAD HIGH COURT. THE AO SHALL RECOMPUTE THE CAPITAL GAIN BY F OLLOWING THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THIS REGARD, AS IS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE. ITA NO.315/AGRA/2014 8 13. WE CLARIFY THAT THE RECOMPUTATION OF INCOME ON ACCOUNT OF CAPITAL GAIN SHALL BE MADE BY THE AO U/S. 153(3)(III) OF THE IT ACT AS PER FINAL AMOUNT DETERMINED BY THE HONBLE ALLAHABAD HIGH COURT OF S ALE VALUE OF PROPERTY UNDER CONSIDERATION AS PER STAMP VALUATION, AS WOUL D BE DECIDED IN THE CASE OF BUYER. 14. NO OTHER POINT IS ARGUED OR PRESSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 08.02.16 *AKS/- COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR