HIGGIN AUGAL DISILVA, MUMBAI V. ITO WD 25(1)(1), MUMBAI

ITA 3634/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3954 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 22-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Assessee Lawyers: K P KAPADIA
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3634/MUM/2013 ASSESSMENT YEAR: 2009-10 MR. HIGGIN AUGAL DISILVA, NICHOLAS WADI, YASHWANTRAO TAWADE ROAD, NEAR SAINATH BHAVAN, DAHISAR (WEST), MUMBAI- 400068. PAN :- AKKPD4003G VS. THE ITO WARD 25(1)(1), C-11, 2 ND FLOOR, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX. BANDRA (EAST), MUMBAI- 400052. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. K.P.KAPADIA. RESPONDENT BY : SHRI. CHANDRA VIJAY. DATE OF HEARING: 22/02/2016 DATE OF PRONOUNCEMENT: 26/02/2016 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 03/01/2013 PASSED BY THE LD. CIT(A)-35 MUMBAI FOR A .Y. 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,21,180/-. THE C ASE WAS SELECTED FOR SCRUTINY. IN ORDER TO VERIFY THE SALE OF IMMOVABLE PROPERTY FOR RS. 2,72,16,000/- THE AO MADE ENQUIRY UNDER SECTION136 (6) OF THE INC OME TAX ACT (IN SHORT THE ACT.) AND OBTAINED COPY OF SALE DEED FROM THE OFFI CE OF THE CONCERNED JOINT SUB- REGISTRAR, MUMBAI. PERUSAL OF THE SALE DEED REVEALE D THAT TEN CO-OWNERS 2 ITA NO. 3634/MUM/2013 ASSESSMENT YEAR: 2009-10 INCLUDING THE PRESENT ASSESSEE HAD SOLD THEIR IMMOV ABLE PROPERTY TO M/S. M.K. REALTORS, FOR RS. 2,72,16,000/-. THE AO ADDED THE E NTIRE SALE CONSIDERATION OF RS. 2,72,16,000/- TO THE INCOME OF THE ASSESSEE UND ER THE HEAD INCOME FROM LONG TERM CAPITAL GAIN TREATING THE ASSESSEE AS TH E SOLE OWNER OF THE PROPERTY AND FURTHER HOLDING THAT LONG TERM CAPITAL GAIN SHO ULD BE CALCULATED AT THE VALUE ADOPTED FOR STAMP DUTY PURPOSES UNDER SECTION 50C OF THE ACT TREATING THE SAME AS NON-AGRICULTURAL LAND. ACCORDINGLY, TH E ASSESSMENT ORDER U/S 144 OF THE ACT WAS COMPLETED DETERMINING THE TOTAL INCO ME OF APPELLANT AT RS. 2,73,69,410/-. 3. THE ASSESSMENT ORDER WAS CHALLENGED BY THE ASSES SEE BEFORE THE CIT(A) MUMBAI WHO AFTER HEARING THE ASSESSEE DISMISSED THE APPEAL HOLDING THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THAT THE CO-OWNER S WERE GENUINE BUT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS AND FURTH ER FAILED TO PROVE THAT THE SALE CONSIDERATION WAS DISTRIBUTED AMONG ALL THE TE N CO-OWNERS. 4. AGGRIEVE BY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. THE ASSESSEE HAS CHALL ENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX, APPEAL S ERRED IN CONFIRMING THE ACTION OF THE INCOME TAX OFFICER IN TAXING THE SALE PROCEEDS OF RS. 2,72,16,000/- ON SALE OF LAND AS LO NG TERM CAPITAL GAIN IN THE HANDS OF YOUR APPELLANT. WHEN: IT WAS KNOWN TO THE ASSESSING OFFICER AS WELL AS CO MMISSIONER OF INCOME TAX, APPEALS THAT THE LAND BELONGED TO 10 CO -OWNERS. AT THE MOST 1/10 TH OF THE SALE PROCEEDS SHOULD HAVE BEEN CONSIDERED AS INCOME OF YOUR APPELLANT. 3 ITA NO. 3634/MUM/2013 ASSESSMENT YEAR: 2009-10 2. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN NOT ACCEPTING THE ARGUMENT OF YOUR APPELLANT THAT WHAT IS TAXABLE IN THE HANDS OF YOUR APPELLANT IS NOT THE SALE PROCEEDS BUT THE PRO PORTIONATE CAPITAL GAIN WHICH WAS TO BE COMPUTED AFTER DEDUCTING THE I NDEXED COST OF LAND OWNED BY YOUR APPELLANT ALONG WITH 9 CO-OWNERS . FOR THIS PURPOSE, YOUR APPELLANT SHOULD HAVE BEEN ALLOWED TO INDEX THE MARKET VALUE OF THE LAND AS ON 01/04/1981, AS THE L AND WAS ACQUIRED BY YOUR APPELLANT ALONG WITH 9 CO-OWNERS P RIOR TO 01/04/1981. 3. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN NOT ALLOWING DEDUCTION U/S. 54 OF THE INCOME TAX ACT, 1961 AS TH E ENTIRE SALE CONSIDERATION WAS INVESTED IN RESIDENTIAL HOUSE. WHEN: IN THE COURSE OF APPELLATE PROCEEDINGS, YOUR APPELL ANT RELIED UPON THE JUDGMENT OF HONBLE HIGH COURT OF KARNATAKA IN CASE OF CIT VS. K.G. RUKMINIMMA REPORTED IN 331 ITR 211 TO SUPPORT HIS CONTENTION. 5. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ON 03 RD APRIL, 2008 THE ASSESSEE AND THE OTHER NINE CO-SHARERS SOLD THEIR L AND BEARING SURVEY NO. 281, AT DAHISAR (W) ALONG WITH THE STRUCTURE THEREON ( H EREIN AFTER REFERRED TO THE PROPERTY), TO M/S. M.K. REALTORS FOR A TOTAL A CON SIDERATION OF RS. 11,00,000/-. HOWEVER, THE STAMP DUTY AUTHORITIES DETERMINED THE MARKET VALUE OF THE SAID PROPERTY AT RS. 2,72,16,000/-. THE STAMP DUTY OF RS . 13,60,800/- WAS PAID BY THE PURCHASERS M/S. M.K. REALTORS. SINCE THE ASSESS EE HAD ONLY 1/10 TH SHARE IN THE LAND SOLD TO M/S. M.K. REALTORS, THE LD. CIT (A) OUGHT TO HAVE SET ASIDE THE ASSESSMENT ORDER VIDE WHICH THE ENTIRE SALE CON SIDERATION/CAPITAL GAIN OF RS. 2,72,16,000/-HAD BEEN ASSESSED IN THE HANDS OF THE ASSESSEE. 4 ITA NO. 3634/MUM/2013 ASSESSMENT YEAR: 2009-10 6. THE LD. AR ALSO PRODUCED COPY OF ASSESSMENT ORDE R DATED 27.12.2011 IN RESPECT OF ONE OF THE CO-OWNERS OF THE ABOVE REFERR ED PROPERTY TO M/S M.K. REALTORS, MR. NEVAL ANGEL DISILVA, FOR THE ASSESSME NT YEAR 2009-10 AND COPY APPELLATE ORDER DATED 2.01.2013 PASSED BY THE CONCE RNED CIT(A) IN APPEAL FILED BY THE ASSESSEE MR. NEVAL ANGEL DISILVA, AGAINST TH E ASSESSMENT ORDER DATED 27.12.2011 AND POINTED OUT THAT THE ASSESSING OFFIC ER CONCERNED HAD ADDED THE TOTAL SALE CONSIDERATION AMOUNTING TO RS. 2,72,16, 000/-TO THE INCOME OF THE ASSESSEE MR. NEVAL ANGEL DISILVA. MR. DISILVA CHALL ENGED THE ASSESSMENT ORDER BEFORE THE CIT(A), WHO VIDE ORDER DATED 2.01.2013 P ARTLY ALLOWED THE APPEAL AND ISSUED DIRECTION TO THE ASSESSING OFFICER TO P ROVIDE APPROPRIATE RELIEF TO THE APPELLANT BY ALLOWING THE EXEMPTION U/S 54 OF T HE INCOME TAX ACT AND WORK OUT THE CAPITAL GAIN TAXABLE IF ANY, ON THE 1/10 TH SHARES OF SALE CONSIDERATION OF THE APPELLANT. THE LD. AR FURTHER SUBMITTED THAT IN VIEW OF THE APPELLATE ORDER PASSED BY THE CIT(A) IN CASE OF MR. NEVAL ANGEL DISILVA, THE IMPUGNED ORDER IS ERRONEOUS AND LIABLE TO SET-SIDE. 7. THE LD. DR ON THE OTHER HAND SUBMITTED THAT IN THE LIGHT OF THE ORDER PASSED BY CIT(A) IN CASE OF MR. NEVAL ANGEL DISILVA , AN APPROPRIATE ORDER MAY BE PASSED. 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS ADVAN CED BY THE LD. AR AND SUBMISSION MADE BY THE LD. DR AND PERUSED THE MATER IAL PLACED BEFORE US. THE DOCUMENTARY EVIDENCE ON RECORD APPEARS TO SUGGE ST THAT THE ASSESSEE WAS HAVING 1/10 TH SHARE IN THE PROPERTY PRIOR TO THE EXECUTION OF TH E SALE DEED IN FAVOUR M/S. M.K. REALTORS. IT WAS BROUGHT TO OUR NO TICE THAT THE LD. CIT(A) HAS ALLOWED THE APPEAL FILED BY ANOTHER CO-OWNER MR. NE VAL ANGEL DISILVA HOLDING THAT THE SAID ASSESSEE WAS HAVING 1/10 TH SHARE OF THE PROPERTY. THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS IN TOTAL CONTRADI CTION TO THE ORDER PASSED IN THE CASE OF MR. NEVAL ANGEL DISILVA, WHO HAPPENED T O BE ONE OF THE CO-OWNERS OF THE PROPERTY. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES RE- 5 ITA NO. 3634/MUM/2013 ASSESSMENT YEAR: 2009-10 ADJUDICATION AT THE END OF THE LD. CIT(A) BY DULY C ONSIDERING THE APPELLATE ORDER PASSED IN THE CASE OF MR. NEVAL ANGEL DISILVA . WE, THEREFORE, SET-ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE SAME TO HIM WITH THE DIRECTION TO PASS AN APPROPRIATE ORDER BY CONSIDERI NG THE ORDER PASSED IN CASE OF MR. NEVAL ANGEL DISILVA DISCUSSED IN THE FOREGOI NG PARAS. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE FOR THE A.Y. 2009-10 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2016 SD/- SD/- ( B.R.BASKARAN ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 26/02/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA