DCIT, New Delhi V. M/s Surajkund Properties Pvt. Ltd., New Delhi

ITA 3421/DEL/2011

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3549 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 08-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: R K KAPOOR
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G, DELHI .. , , , ! BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.3421/DEL/2011 ASSESSMENT YEAR: 2008-09 D CIT, CIRCLE-6, ROOM NO.334, ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI / VS. M/S SURAJKUND PROPERTIES PVT. LTD. S-1, AMERICAN PLAZA, INTERNATIONAL TRADE TOWER, NEHRU PLACE, NEW DELHI ( / REVENUE) ( &' /ASSESSEE) PAN. NO. AAACS0370A + / DATE OF HEARING : 08 /11 /2017 + / DATE OF ORDER: 08 / 11 /2017 / REVENUE BY SHRI KAUSHLENDRA TIWARI DR &' / ASSESSEE BY SHRI PRADEEP DINODIA & SHRI R.K. KAPOOR ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER 05/04/2011 OF THE LD. FIRST APPELLATE AUTHORITY, NE W DELHI FOR ASSESSMENT YEAR 2008-09, HOLDING THE ACTION OF THE AO TREATING THE TRANSFER OF PROPERTY AS SALE AND FU RTHER DELETING THE ADDITION OF RS.47,48,750/- ON ACCOUNT OF DIFFERENCE IN MARKET VALUE OF LAND AND SALE VALUE S HOWN BY THE ASSESSEE. 2. DURING HEARING, SHRI KAUSHLENDRA TIWARI, LD. SR . DR, DEFENDED THE ADDITION MADE BY THE LD. AO, BY ADVANCING ARGUMENTS, WHICH ARE IDENTICAL TO THE GRO UND RAISED. ON THE OTHER HAND, SHRI PRADEEP DINODIA ALO NG WITH SHRI R.K. KAPOOR, LD. COUNSEL FOR THE ASSESSEE, DEF ENDED THE IMPUGNED ORDER BY CONTENDING THAT THERE IS NO TRANS FER OF THE PROPERTY AT ALL AT THE ASSESSEE MERELY PROVIDED ACCESS/RASTA/PASSAGE FOR USE AND TILL TODAY THE ASS ESSEE IS OWNER OF THE PROPERTY. IT WAS ALSO CONTENDED THAT I T WAS KEPT AS STOCK-IN-TRADE BY PLEADING THAT SECTION 50C OF T HE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) IS NOT APPLICAB LE TO THE ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 3 FACTS OF THE PRESENT APPEAL. RELIANCE WAS PLACED UP ON THE DECISION IN THE CASE OF CIT VS THIRUVENGADAM INVESTMENTS PVT LTD 320 ITR 345 (MAD. ) AND CIT VS R. SUGANTHA RAVINDRAN (2013) 352 ITR 488 (CHENNAI). 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS OF RESORTS , HOTELS, REAL ESTATE, BUILDING AND LAND DEVELOPERS. THE ASSE SSEE COMPANY SOLD TWO LAND PROPERTIES I.E. ONE AT THEME PARK AND ANOTHER AT GLOBAL BUSINESS CITY, BOTH LOCATED A T LAKKARPUR, FARIDABAD AT A COST OF RS.8,12,500/- AND RS.5 LAKHS RESPECTIVELY. THE LD. AO RAISED QUERY WITH R ESPECT TO A HUGE GAP IN THE SALE RATE/SALE VALUE WITH RESPECT TO THESE PROPERTIES. THE MUTATION PAPERS FROM THE MUNICIPAL AUTHORITIES WERE SUBMITTED. CONSIDERING THE FACTS, THE LD. AO MADE ADDITION OF RS.47,48,750/- ON ACCOUNT OF DIFFERENCE IN SALE VALUE OF THE LAND AT GLOBAL BUSI NESS CITY. 2.2. ON APPEAL BEFORE THE LD. CIT(A), THE FACTUAL MATRIX WAS CONSIDERED ALONG WITH THE AFFIDAVIT-CUM- ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 4 UNDERTAKING EXECUTED ON 27/04/2007, WHEREIN, THE SA ID LAND WAS USED FOR COMMUTATION OF GENERAL PUBLIC AS AAM RASTA (THOROUGH FARE) WITHOUT ANY OBJECTION OR OBST RUCTION BY THE ASSESSEE COMPANY. THERE WAS NO OBJECTION BY THE ASSESSEE COMPANY, IF THE CONCERNED AUTHORITIES GRANT/SANCTION/PERMISSION/ APPROVAL ON THE BASIS OF THIS THOROUGH FARE TO M/S AMSHUL DEVELOPERS PVT. LTD. (A SISTER CONCERN OF OMAX GROUP). THE ASSESSEE COMPANY ALSO ASSURED TO HAND OVER/TRANSFERRED, THE SAID RASTA TO THE CONCERNED AUTHORITY IF ANY INSTRUCTION IS GIVEN BY THE SAID AUTHORITY FOR USE THE SAME AS AAM RASTA TO THE GENE RAL PUBLIC. THE ASSESSEE RECEIVED RS.5 LAKH AS COMPENSA TION FROM THE ADJOINING LAND DEVELOPERS FOR PROVIDING TH E RASTA BUT FACT REMAINS, TILL TODAY, THE OWNERSHIP, REMAIN ED WITH THE ASSESSEE COMPANY AND WAS NOT TRANSFERRED TO ANY BODY. THE LD. AO TOOK THE AMOUNT AT RS.52,48,750/- AS DEE MED CONSIDERATION OF THE LAND/RASTA MEASURING 0.525 ACR ES AND MADE ADDITION OF RS.47,48,750/-. ADMITTEDLY, BEFOR E THE LD. AO, THESE NECESSARY DOCUMENTS LIKE RECEIPT, AFFIDAV IT-CUM- UNDERTAKING ALONGWITH COPY OF BANK STATEMENT WERE SUBMITTED SUPPORTED IN THE SHAPE OF CIRCLE RATE NOT IFIED BY ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 5 THE GOVERNMENT. IN SUCH A SITUATION, WHEN THE OWNER SHIP OF THE LAND REMAINED WITH THE ASSESSEE ITSELF, THERE I S NO QUESTION OF TRANSFER OF LAND. 2.3. SO FAR AS, APPLICATION OF SECTION 50C IS CONC ERNED, IT IS A DEEMING PROVISION BUT THERE IS NO EVIDENCE, BROUGHT ON RECORD BY THE LD. AO THAT THE ASSESSEE ACTUALLY RECEIVED OVER AND ABOVE THE AMOUNT RECEIVED AS A COMPENSATIO N FROM THE ADJOINING DEVELOPER. IN THE PRESENT CASE, THE OWNERSHIP OF THE LAND STILL REMAINED WITH THE ASSESSEE, THERE FORE, THERE IS NO QUESTION OF INVESTING MORE AND MORE SPECIFICA LLY WHEN THERE IS NO CHANGE OF OWNERSHIP. THE AMOUNT OF RS. 5 LAKHS WAS RECEIVED BEING COMPENSATION FOR ALLOWING THE PI ECE OF LAND TO ALLOW AS AAM RASTA FOR THE GENERAL PUBLIC. EVEN OTHERWISE, THE COMPENSATION IS AT PAR WITH CIRCLE R ATE, THEREFORE, THERE IS NO PRESUMPTION THAT THE ASSESSE E RECEIVED MORE THAN THE DECLARED ONE. EVEN OTHERWISE, NO REGI STER SALE DEED TOOK PLACE IN RESPECT OF THE SAID PIECE OF LAN D, THEREFORE, SECTION 50C IS NOT ATTRACTED. THE DECIS ION IN THE CASE OF KUMUDINI VENUGOPAL (2010) 5 ITR (TRIB.) 145 (CHENNAI) AND SMT. SANDHYA BEN A PUROHIT VS ITO 154 TTJ ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 6 514 (AHD.) SUPPORTS OUR VIEW. EVEN OTHERWISE, SECTI ON 50C OF THE ACT WAS AMENDED W.E.F 01/10/2009, WHERE THE WORDS ASSESSED OR ASSESSABLE WERE INSERTED. PRIOR TO THIS AMENDMENT SECTION 50C WAS APPLICABLE ONLY WHEN THE PROPERTY HAS BEEN ASSESSED TO STAMP DUTY IE. STAMP DUTY HAS BEEN PAID AND ACTUAL TRANSFER HAS BEEN TAKEN PL ACE. THE TRANSACTION OF ALLOWING AAM RASTA TOOK PLACE IN APRIL, 2007 I.E. MUCH PRIOR TO THE AMENDMENT MADE IN SECTI ON 50C, THEREFORE, SECTION 50C IS NOT APPLICABLE TO TH E CASE OF THE ASSESSEE. SECTION 50C OF THE ACT IS ATTRACT WHE N THE LAND OR BUILDING ARE BOTH ARE TRANSFERRED. 2.4. THE HONBLE HIGH COURT IN CIT VS R. SUGANTHA RAVINDARAN 352 ITR 488 (CHENNAI) CONSIDERED CBDT CIRCULAR NO.5 OF 2010 DATED 03/06/2010 CONCLUDING T HAT AMENDMENT MADE IS PROSPECTIVE AND NOT RETROSPECTIVE . THE RATIO LAID DOWN IN DEVENDRA K. CHADDA VS ITO (2016) -T10C- 2098-ITAT-MUMBAI AND RAMESH VERMA VS DCIT (ITA NO.394/CH/2015) AND SMT. DEVENDRA BEN I. BAROT VS I TO (TS-258-ITAT-2016-AHD) SUPPORTS OUR VIEW. THEREFORE , FROM THIS ANGLE ALSO, WE FIND MERIT IN THE CONTENTION OF THE LD. ITA NO.3421/DEL./2011 SURAJKUND PROPERTIES PVT. LTD. 7 COUNSEL FOR THE ASSESSEE. IN THE LIGHT OF THE FOREG OING DISCUSSION, WE DONT FIND ANY INFIRMITY IN THE CONC LUSION DRAWN BY THE LD. FIRST APPELLATE AUTHORITY, RESULTA NTLY, THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 08/11/2017. SD/- SD/- (N. K. SAINI) (JOGINDER SINGH) ' / ACCOUNTANT MEMBER # ' /JUDICIAL MEMBER DELHI; DATED : 08/11/2017 F{X~{T? P.S/. .. $#&' (' / COPY OF THE ORDER FORWARDED TO : 1. / / THE APPELLANT 2. 01/ / THE RESPONDENT. 3. 3 ( ) / THE CIT, NEW DELHI. 4. 3 / CIT(A)- , DELHI 5. 5 0 , , / DR, ITAT, DELHI 6. & / GUARD FILE. / BY ORDER, 15 0 //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, DELHI