Shri Arum Kumar Deshari, Jhabua V. The ITO-2, Ratlam

ITA 334/IND/2013

• Counselvise Citation: 33422714 RSA 2013
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHEEM KUNWAR
• Assessee Lawyers: S S DESHPANDE
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

PAGE 1 OF 6 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. : ABWPD7779A I.T.A.NO. 334/IND/2013 A.Y. : 2009-10 SHRI ARUN KUMAR DERASHRI, 46, CHANDRA SHEKHAR, AZAD MARG, JHABUA VS. ITO - 2 RATLAM APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.DESHPANDE, C. A. RESPONDENT BY : SHRI BHEEM KUNWAR, SR. DR DATE OF HEARING : 28 . 10 .201 3 DATE OF PRONOUNCEMENT : 29 . 10 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 14.3.2013, FOR TH E ASSESSMENT YEAR 2009-10. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE PROPERTY SOLD DID NOT BELONG TO THE ASSESSEE AND THE SAME WAS SOL D ONLY AS A POWER OF ATTORNEY-HOLDER. IT WAS ALSO PLEA OF THE SHRI ARUN KUMAR DERASHRI, JHABUA I.T.A.NO. 334/IND/2013 A.Y. 2009-10 2 PAGE 2 OF 6 ASSESSEE THAT WHILE INVOKING PROVISIONS OF SECTION 50C, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER T O THE DVO. 3. THE RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PROFESSOR IN AYURVEDIC MEDICINES AND WAS IN GOVERNMENT JOB. T HE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF CAPIT AL GAINS IN RESPECT OF PROPERTY SOLD BY THE ASSESSEE AS POWE R OF ATTORNEY-HOLDER. THE ASSESSING OFFICER ADOPTED THE VALUE TAKEN BY STAMP DUTY AUTHORITY AS A SALE CONSIDERATI ON AND MADE AN ADDITION OF RS. 70,98,217/- BEING CAPITAL G AIN ON SALE OF PROPERTY. DURING COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO TH E ANCESTRAL NATURE OF PROPERTY AND ITS DISTRIBUTION A MONGST VARIOUS BENEFICIARIES AFTER DEATH OF PARENTS. WE FO UND THAT THERE WERE VARIOUS COURTS DISPUTES WITH REGARD TO SHARE OF PROPERTY AND SALE OF PART OF PROPERTY BY RESPECTIVE BENEFICIARIES. DISPUTES WERE GOING ON IN THE DISTRI CT COURTS AT VARIOUS LEVELS. IN THE SUIT 3A/96, IT WAS FOUND THAT ADVOCATE MALTARE WAS NOT TAKING ANY STEP IN THE EXE CUTION OF THE DECREE, AN APPLICATION BEFORE THE ADJ WAS MADE TO SHRI ARUN KUMAR DERASHRI, JHABUA I.T.A.NO. 334/IND/2013 A.Y. 2009-10 3 PAGE 3 OF 6 DEMARK THE PROPERTY WITH THE SPECIFIC SHARES WHICH WAS DONE VIDE EXECUTION DATED 25.04.2008. IN THE SAID D ECREE, SHRI ARUN KUMAR DERASHRI WAS AUTHORIZED TO SELL THE SAID PROPERTY AND DISTRIBUTE THE PROCEEDS AS PER SHARES OF EACH BRANCH. ON THE BASIS OF THE DECREE IN SUIT NO. 3A/9 6, SHRI ARUN KUMAR DERASHRI SOLD THE PROPERTY WHICH CAME TO THE SHARE OF SHRI BASANTILALJI AND SHRI AMBALALJI FOR A CONSIDERATION OF RS. 31,00,000/- VIDE REGISTRY DATE D 26.06.2008 AND RECEIVED RS. 19,60,000/- IN CASH AND THE CHEQUES OF RS.11,40,000/-. THE SAID CHEQUES COULD N OT BE ENCASHED AND ARE SHOWN AT PAGE 143 OF PAPER BOOK. T HE STAMP DUTY AUTHORITY, HOWEVER, VALUED THE PROPERTY AT RS. 82,72,000/- AND ASKED THE PURCHASER TO AFFIX THE AD DITIONAL STAMP WHICH THE PURCHASER HAS AFFIXED. IN THIS SALE DEED, IT WAS STATED THAT THE SAID PROPERTY BELONGS TO THE SE LLER AND THERE IS NO OTHER OWNER IN THE SAID PROPERTY. THE M AP WAS ENCLOSED TO THE SAID REGISTRY WHEREIN THE SHARE OF THE ASSESSEE FAMILY WAS NOT SOLD. IT WAS MENTIONED THAT THE UNSOLD PROPERTY REMAINING IS SHOWN IN THE ANNEXED M AP. SHRI AMBALALJI GAVE A NOTICE TO THE PURCHASING PART Y FOR SHRI ARUN KUMAR DERASHRI, JHABUA I.T.A.NO. 334/IND/2013 A.Y. 2009-10 4 PAGE 4 OF 6 MAKING THE BALANCE PAYMENT FOR THE CHEQUES GIVEN WH ICH REMAINED UNENCASHED. 4. ON THE BASIS OF THIS REGISTRY, THE LD. ASSESSING OFFICER HAS CALCULATED THE CAPITAL GAINS IN THE HAN DS OF THE ASSESSEE ON THE BASIS OF THE REGISTERED SALE DEED B Y INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT , 1961. IT WAS SUBMITTED BEFORE THE LD. ASSESSING OFFICER THAT THE ASSESSEE HAS NOT RECEIVED THE CONSIDERATION IN HIS INDIVIDUAL CAPACITY. THE LD. ASSESSING OFFICER, HOWEVER, STATE D THAT SINCE IN THE SALE DEED IT HAS BEEN MENTIONED THAT T HE ASSESSEE IS THE OWNER OF THE PROPERTY AND HAS RECEI VED THE SALE CONSIDERATION IN CASH AND HAS GIVEN THE POSSES SION OF THE SAID PROPERTY TO THE PURCHASER, THEREFORE, THE PROPERTY WILL BE HELD TO BE BELONGING TO THE ASSESSEE. SINCE THE ASSESSEE IS THE TRANSFEROR AND AS SUCH HE WOULD BE LIABLE TO PAY THE CAPITAL GAINS. THE LD. ASSESSING OFFICER AL SO RELIED ON THE STATEMENT OF THE ASSESSEE WHEREIN HE ADMITTED T O PAY THE CAPITAL GAINS TAX OF RS. 12,13,772/- ON THE SAL E CONSIDERATION OF RS. 31,00,000/-. THE LD. ASSESSING OFFICER DID NOT REFER THE MATTER FOR DETERMINING THE CORREC T MARKET VALUE. THE ASSESSEE HAS SUBMITTED BEFORE THE CIT(A) , THE SHRI ARUN KUMAR DERASHRI, JHABUA I.T.A.NO. 334/IND/2013 A.Y. 2009-10 5 PAGE 5 OF 6 VALUATION OF THE APPROVED VALUER WHICH HAS BEEN DON E AT RS. 45,19,000/-. 5. IT IS CLEAR FROM THE ABOVE THAT IN THE ASSESSMENT O F THE PURCHASER, HE GAVE A STATEMENT THAT THE BALANCE AMOUNT FOR WHICH CHEQUES HAVE BEEN ISSUED HAS NOT BEEN PAI D TO THE ASSESSEE. THE ORIGINAL PERSONS, SHRI BABULAL SA NGHVI AND SHRI JAYANTILAL KOTHARI, WITH WHOM THE AGREEMEN T TO SELL WERE EXECUTED BY SHRI BASANTILALJI AND AMBALAL JI HAVE FILED A SUIT BEFORE THE DISTRICT JUDGE ON 09.01.200 8 FOR SPECIFIC PERFORMANCE OF THE PROPERTY ON THE BASIS O F AN AGREEMENT DATED 03.04.2000. 6. WE FOUND THAT THE IMPUGNED PROPERTY BELONGS TO SO MANY LEGAL HEIRS AND ASSESSEE CANNOT BE TAXED INDIV IDUALLY IN RESPECT OF THE ENTIRE SALE PROCEEDS. THE ASSESSE E HAS ACTED AS PER THE ORDER OF THE COURT AND ON THE BASI S OF THE INSTRUCTIONS GIVEN BY THE COURT IN THE DECREE, THE SHARE OF SHRI BASANTILALJI AND AMBALALJI WERE SOLD BY THE AS SESSEE. THUS, THERE IS NO TRANSFER MADE BY THE ASSESSEE OF HIS INDIVIDUAL PROPERTY SO AS TO ATTRACT THE CAPITAL GA INS IN HIS HAND. THE PROPERTY HAS BEEN SOLD FOR AN ON BEHALF O F THE UNCLES SHRI BASANTILALJI AND SHRI AMBALALJI. THE LD . SHRI ARUN KUMAR DERASHRI, JHABUA I.T.A.NO. 334/IND/2013 A.Y. 2009-10 6 PAGE 6 OF 6 ASSESSING OFFICER HAS NOT REFERRED THE MATTER TO TH E VALUATION CELL FOR DETERMINING THE CORRECT VALUATIO N OF THE PROPERTY. THE PROPERTY IN QUESTION IS UNDER DISPUTE AND THE LITIGATION IS PENDING IN THE COURT BY THE PERSONS W ITH WHOM THE AGREEMENT TO SELL HAS BEEN EXECUTED. UNDER THES E CIRCUMSTANCES, THE VALUATION MADE BY THE REGISTERIN G AUTHORITY IS REQUIRED TO BE VETTED BY THE REGISTERE D VALUER SO AS TO ARRIVE AT THE FAIR MARKET VALUE OF PROPERT Y. 7. IN VIEW OF THE ABOVE DISCUSSION, WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DE CIDING AFRESH KEEPING IN VIEW OBSERVATIONS MADE BY US HEREINABOVE. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29 TH OCTOBER, 2013. CPU* 282910