Bikram Sen (Adv.), Hazaribagh V. ITO, Hazaribagh

ITA 37/RAN/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9994 (ITAT-RANCHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Keywords: Sale consideration of property below Jantri Value; Set aside; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.37 /RAN/2016 ASSESSMENT YEAR : 2009 - 2010 BIKRAM SEN, DHIRENPURI, SADANAND ROAD, HAZARIBAG. VS. ITO, WARD 2(2), RAVINDRA PATH, HAZARIBAG PAN/GIR NO. AIEPS 2138 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI M.K.CHOWDHARY/S.S.AGARWAL , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 14 /12/ 2016 DATE OF PRONOUNCEMENT : 14 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - HAZARIBAG , DATED 9.12.2015 , FOR THE ASSESSMENT YEAR 2009 - 2010 . 2. THE FIRST SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED I N CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE CAPITAL GAINS ON T HE TOTAL VALUE SHOWN AT RS.48,90,000/ - WHICH WAS DETERMINED BY THE STATE GOVERNMENT ONLY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AND THE REAL SALE CONSIDERATION WAS ONLY RS .8 LAKHS RECEIVED BY THE ASSESSEE DULY MENTIONED IN THE REGISTERED SALE DEED DOCUMENTS AND AS 2 ITA NO.37 /RAN/2016 ASSESSMENT YEAR : 2009 - 2010 SU CH THE ADDITION MADE OF RS.22,03 ,000/ - AS CAPITAL GAIN WAS LIABLE TO DELETED. 3. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS EXECUTED A SALE DE ED FOR HIS RESIDENTIAL HOUSE , BUILT ON KHAS MAHAL LAND A T SADANAND ROAD, HAZA RIBAG TO SMT. SARIT JAIN, W/O RANJAN KUMAR JAIN ON 18.6.2008 , VALUE OF WHICH WAS FIXED AT RS.48,90,500/ - FOR THE PURPOSE OF STAMP DUTY. THE ASSESSEE SUBMITTED THAT IT HAD ENTERED INTO AN AGREEMENT WITH SMT. SARITA JAIN ON 2.7.7.2001 FOR THE SALE OF SAID P ROPERTY FOR NET CONSIDERATION OF RS.8,00,000/ - . THE ASSESSING OFFICE R TOOK THE SALE VALUE OF THE PROPERTY AS PER PROVISION OF SECTION 5 0 C OF THE ACT AT RS.48,90,500/ - AND AFTER ALLOWING DEDUCTION FOR THE AMOUNT PAID TO THE STATE GOVERNMENT OF RS.19,52,50 0/ - AS ROYALTY AS WELL AS THE INDEXED COST OF THE PROPERTY OF RS.7,35,000 ASSESSE D THE LONG TERM CAPITAL GAINS AT RS.22,03,000/ - . 4. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME, LD A.R. FILED A COPY OF ORDER DATED 24 . 10.2016 OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, CENTRAL - II, IN INCOME MUMBAI VS M/S. GREENFIELD HOTELS & ESTATES PVT LTD., IN TAX APPEAL NO.735 OF 2014 AND SUBMITTED THAT IT HAS BEEN HELD BY THE HONBLE HIGH COURT T HAT THE PROVISIONS OF SECTION 50 C WOULD NOT BE APPLICABLE ON T RANSFER OF LEASEHOLD RIGHTS IN L AND AND BUILDINGS. HENCE, IT WAS HIS 3 ITA NO.37 /RAN/2016 ASSESSMENT YEAR : 2009 - 2010 SUBMISSION THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING THE CAPITA L GAIN S OF RS.22,03,000/ - BY ADOPTING THE STAMP DUTY VALUE U/S.50C OF THE ACT AT RS.48,90,500/ - AS SALE CONSIDERATION . HE SUBMITTED THAT IF THE ACTUAL CONSIDERATION OF RS.8 LAKHS IS TAKEN INTO CONSIDERATION THEN THERE IS LOSS AND THE ASSESSEE IS NOT LIABLE TO ANY CAPITAL GAINS. 6. LD D.R. AGREED TO THE SUBM ISSION OF LD A.R. OF THE ASSESSEE. 7. I FIND THAT IN THE INSTANT CASE, THE ASSESSING OFFICER ASSESSED THE CAPITAL GAINS ON TRANSFER OF LEASEHOLD RIGHTS OF THE IMMOVABLE PROPERTY OF RS.22,03,000/ - BY ADOPTING THE STAMP DUTY VALUE U/S.50C AT RS.48,90,500/ - . LD A.R. OF THE ASSESSEE FILED BEFORE ME THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. GREENFIELD HOTELS & ESTATES PVT LTD(SUPRA), WHEREIN, IT HAS BEEN HELD THAT SECTION 50C WOULD NOT BE APPLICABLE ON TRANSFER OF LEASEHOLD LAND AND BUILDIN G S . LD D.R. HAS NOT FILED ANY CONTRARY DECISION BEFORE ME. HENCE, I HOLD THAT THE ASSESSEE IS NOT LIABLE TO CAPITAL GAIN TAX OF THE VALUE OF THE IMMOVABLE PROPERTY AS P E R SECTION 50C OF THE ACT. I FURTHER FIND THAT THE ASSESSEE HAS DISCLOSED SALES CONSI DERATION FOR TRANSFER OF IMMOVABLE LEASEHOLD PROPERTY AT RS.8 LAKHS AND THE PAYMENT TO STATE GOVERNMENT AS ROYALTY HAS BEEN SHOWN AT RS.19,52,500/ - AND INDEXED COST OF THE PROPERTY IS DETERMINED AT RS.7,35,000/ - BY THE ASSESSING OFFICER . HENCE, CONSIDERIN G THESE FACTS , THERE WILL BE NO CAPITAL GAINS IN THE HANDS OF THE ASSESSEE O N WHI CH THE ASSESSEE WOULD BE LIABLE TO CAPITAL GAINS TAX . I, THEREFORE, SET ASIDE THE ORDER OF LOWER AUTHORITIES AND DELETE THE ADDITION ON ACCOUNT OF 4 ITA NO.37 /RAN/2016 ASSESSMENT YEAR : 2009 - 2010 CAPITAL GAINS OF RS.22,03,000/ - AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 8. FURTHER, THE OTHER ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE CAPITAL GAINS FROM SALE OF KOLKATA FLAT AT RS.70,257/ - 9. I HAVE HEARD THE RIVAL S UBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD, THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE EARNED LONG TERM CAPITAL GAINS OF RS.70,257/ - FROM SALE OF FLAT AT KOLKATA FOR RS.16,87,500/ - OF WHICH THE ASSE SSEE WAS HAVING HALF SHARE. THE ASSESSING OFFICER DID NOT ALLOW DEDUCTION U/S.54 OF THE A CT TO THE ASSESSEE AS THE DETAILS IN RESPECT OF CAPITAL GAINS WAS LEFT BLANK IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 2010. THE CONTENTION OF THE ASSESSEE IS THAT SINCE THERE WAS NO CAPITAL GAIN EARNED, THE SAME WAS NOT CLAIMED IN THE RETURN OF INCOME. 10. ACCORDING TO THE ASSESSING OFFICER, DEDUCTION 54 OF THE ACT IS AVAILABLE WHEN THE ASSESSEE HAS FILLED ANY DETAILS OF INVESTMENT IN THE NEW ASSETS OF THE CAPITAL GAINS EARNED FROM THE SALE OF OLD ASSETS. THE ASSESSEE FAILED TO DISCLOSE FULL FACTS OF HIS TRANSACTION IN THE RETURN OF INCOME AND ANY SUBMISSION DURING THE COURSE OF HEARING IS AN AFTERTHOUGHT ON THE PART OF THE ASSESSEE. THEREFORE, HE DISALLOW ED DEDUCTION U/S.54 OF THE ACT. 5 ITA NO.37 /RAN/2016 ASSESSMENT YEAR : 2009 - 2010 11. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM U/S.54F OF THE ACT. 12. BEFORE ME, LD A.R. HAS SIMPLY ARGUED THAT THE ASSESSEE WAS NOT ALLOWED DEDUCTION U/S.54F OF THE A CT BUT HE COULD NOT FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM AND, THEREFORE, NO INTERFERENCE IS REQUIRED IN THE ORDER OF THE LD CIT(A) ON THIS GROUND, WHICH IS HEREBY CONFIRME D AND THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED . 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRO N OUNCED IN THE OPEN COURT ON 14 /12/2016 IN THE PRESENCE OF PARTIES. S D / - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 14 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : BIKRAM SEN, DHIRENPURI, SADANAND ROAD, HAZARIBAG 2. THE RESPONDENT: ITO, WARD 2(2), RAVINDRA PATH, HAZARIBAG 3. THE CIT(A) HAZARIBAG 4. CIT , HAZARIB AG 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//