Shri Harbhajan Singh Khanuja, Indore V. The ITO Ward 3(1), Indore

ITA 324/IND/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70009 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S S SHEETAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 54F; 54; 2

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 324/IND/2013 A.Y. 2005-06 HARBHAJAN SINGH KHANUJA INDORE PAN AGTPS 4859A :: APPELLANT VS INCOME TAX OFFICER 3(1) INDORE :: RESPONDENT APPELLANT BY SHRI S.S. SHEETAL RESPONDENT BY SHRI G.S.GAUTAM DATE OF HEARING 21.8.2013 DATE OF PRONOUNCEMENT 21.8.2013 O R D E R PER JOGINDER SINGH , JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER D ATED 15.3.2013 OF THE LEARNED FIRST APPELLATE AUTHORITY. THE FIRST GROUND RAISED PERTAINS TO HOLDING THAT THE PROVISIO NS OF SECTION 2 50C ARE APPLICABLE TO THE CASE OF THE ASSESSEE MORE SPECIFICALLY WHEN THE PROVISION OF SECTION 54F IS APPLICABLE AND THE CONSEQUENT ADDITION IS CHALLENGED. THE CRUX OF ARGU MENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT THE ACTU AL SALE CONSIDERATION IS RS. 7,50,000/- AND THE GUIDELINE V ALUE IS MERELY IMAGINARY FOR STAMP DUTY PURPOSES. THEREFORE, IT W AS CONTENDED THAT SECTION 50C IS NOT APPLICABLE TO THE FACTS OF THE CASE. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE DEPARTMENT STRONGLY DEFENDED THE ORDER OF THE LEARNED CIT(A) BY CONTEND ING THAT THE SALE CONSIDERATION OF THE PLOT WAS DETERMINED BY TH E VALUATION AUTHORITY AT RS. 14,23,000/-, THEREFORE, THIS IS TH E REAL VALUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DECLARED INCOME OF RS.1,07,590/- IN ITS RE TURN FILED ON 21 ST NOVEMBER, 2005. THE ASSESSEE SOLD PLOT NO. 53 OF S CHEME NO. 71 ON A SALE CONSIDERATION OF RS.7,50,000/- WHE REAS THE REGISTRATION AUTHORITIES FOR STAMP DUTY PURPOSES TO OK THE VALUE OF THE PROPERTY AT RS. 14,23,000/- AS MARKET VALUE AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. THE ASSESSEE CLAIMED EXEMPTION U/S 54F OF THE ACT AT RS. 8,31,905/- WHIC H INCLUDES STAMP DUTY CHARGES OF RS. 74,405/-. DURING ASSESSME NT STAGE, 3 THE ASSESSEE PRODUCED THE COPY OF THE SALE DEED WHI CH IS AVAILABLE AT PAGE 14 TO 31 OF THE PAPER BOOK. THE L EARNED ASSESSING OFFICER ADOPTED THE MARKET VALUE OF THE P ROPERTY AND CALCULATED THE GAIN ACCORDINGLY. ON APPEAL, THE LE ARNED CIT(A) AFFIRMED THE CONCLUSION DRAWN IN THE ASSESSMENT ORD ER WHICH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. WE HAVE PERUS ED THE SALE DEED WHICH CLEARLY STATES THAT THE SALE TRANSACTION WAS CARRIED OUT FOR AN AMOUNT OF RS. 7,50,000/- AND STAMP CHARG ES TO THE TUNE OF RS. 74,500/- WERE ALSO PAID WHICH INCLUDE C ORPORATE DUTY AND PANCHAYAT DUTY, ETC. THE VALUATION AUTHORITIES VALUED THE PROPERTY FOR STAMP DUTY PURPOSES AT RS. 14,23,000/- WHICH IS UNDER DISPUTE FOR CALCULATING CAPITAL GAINS. THE AS SESSEE WHILE CLAIMING THE LONG TERM CAPITAL GAIN TOOK THE ACTUAL SALE CONSIDERATION WHICH IS RS.7,50,000/-. THE ASSESSEE , DURING ASSESSMENT PROCEEDINGS, ALSO PRODUCED THE COPY OF T HE REGISTERED SALE DEED REGISTERED ON 2.12.2005 ALONG WITH THE DE TAILS OF PAYMENT MADE ON VARIOUS DATES FOR CONSTRUCTION OF A FLAT IN PREM NAGAR, INDORE. IN ITS OWN CALCULATION THE ASSESSEE ALSO WORKED OUT THE CAPITAL GAIN AT RS. 28,475/- AND OFFERED TH E SAME FOR TAXATION. IN THE ASSESSMENT ORDER THE ASSESSING OF FICER WHILE COMING TO A PARTICULAR CONCLUSION HAS NOT MENTIONED ANY 4 PROPERTY EITHER ADJOINING OR SITUATED IN THE SAME L OCALITY EVIDENCING THAT THE PROPERTY IN QUESTION IS OF THE VALUE AS ADOPTED FOR STAMP DUTY PURPOSES. THE FACT REMAINS T HAT THE ACTUAL SALE CONSIDERATION MENTIONED IN THE SALE DEE D IS RS. 7,50,000/- ONLY. IT IS AN ADMITTED FACT THAT THE SA LE PROCEEDS/SALE CONSIDERATION WAS INVESTED FOR ACQUIRING THE NEW AS SET WITHIN THE PRESCRIBED TIME ALLOWED U/S 139(4). IF THE PROVISI ONS OF SECTION 54 ARE ANALYSED, IT MERELY SPEAKS ABOUT CONSTRUCTIO N OF A NEW HOUSE/ACQUIRING NEW ASSET WITHIN THE STIPULATED PER IOD ON THE SALE OF THE EXISTING ASSET. UNDER THE FACTS AVAILAB LE ON RECORD, WE ARE OF THE VIEW THAT SECTION 50C WAS WRONGLY INVOKE D BY THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECT ED TO CALCULATE THE GAIN ON THE BASIS OF SALE CONSIDERATION OF RS. 7,50,000/- WHICH IS THE NET CONSIDERATION OF THE ORIGINAL ASSE T AS HAS BEEN MENTIONED IN SUB-CLAUSE (A) OF SECTION 54F(1) OF TH E ACT. THIS GROUND OF THE ASSESSEE IS, THEREFORE, ALLOWED. 4. THE NEXT GROUND PERTAINS TO COMPUTATION OF EXEMP TION U/S 54F ON THE BASIS OF AMOUNT OF RS. 1,82,500/- PAID A S ADVANCE UPTO 31.7.2005. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE AMOUNT WAS PAID WITHIN THE TIME PRESCRI BED. ON THE OTHER HAND, THE LEARNED SENIOR DR DEFENDED THE ADDI TION. 5 4.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED EXEMPTION FOR AN AMOUNT OF RS.1,8 2,500/- PAID AS ADVANCE TO THE SELLER OF THE NEW PROPERTY WHICH WAS DENIED BY THE DEPARTMENT. IF THE LANGUAGE ENSHRINED IN SECTIO N 54F IS ANALYSED, IT PROVIDES AN OPTION TO THE ASSESSEE TO INVEST WITHIN A PERIOD OF ONE YEAR OR (TWO YEARS) AFTER THE DATE ON WHICH TRANSFER TAKES PLACE PURCHASED OR HAS WITHIN A PERIOD OF THR EE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (NEW ASS ET) AS APPLICABLE TO THE FACTS. SECTION 54F ENCOURAGES IN VESTMENT IN A RESIDENTIAL HOUSE AND THE SAME IS REQUIRED TO BE IN TERPRETED IN A MANNER NOT TO NULLIFY THE OBJECT. IN VIEW OF THESE FACTS, THIS GROUND OF THE ASSESSEE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 21.8.2013. SD SD (R.C.SHARMA) (JOGINDER SINGH ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 23.8.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-2123 2323 6