ASHWIN AMULAKH PAREKH, MUMBAI V. ACIT 22(1), RAIGAD

ITA 373/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2184 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SIVAJI GHOTE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M AND SRI RAJESH KUMAR, AM ITA NO. 373 /MUM/201 6 (A.Y: 200 8 - 0 9 ) SHRI. ASHWIN AMULAKH PREKH 503, KAILASH PALACE, UPASHRAYA LANE, GHARKOPAR EAST, MUMBAI - 400077 PAN NO.AACPP32 64F VS. ACIT 22 (1), MUMBAI APPELLANT .. RESPONDENT ASSESSEE BY .. SHRI MEHUL SHAH, AR REVENUE BY .. SIVAJI GHOTE , SR. DR DATE OF HEARING .. 0 9 - 11 - 2016 DATE OF PRONOUNCEMENT .. 09 - 1 1 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE ASSE SSEE IS ARISING OU T OF THE ORDER OF CIT (A) - 25 , MUMBAI IN APPEAL NO . CIT (A ) - 25/IT/ 352/10 - 11 DATED 19 - 1 0 - 20 1 5 . THE A SSESSMENT WAS FRAMED BY ACIT CIRCLE - 22 (1), MUMBAI FOR THE A . Y . 20 08 - 0 9 VIDE ORDER DATED 10 - 12 - 2010 UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER THE ACT) . 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT (A) IN CONFIRMING THE ACTION OF THE AO IN DISALLOWING EXPENSES RELATABLE TO EXEMPTED INCOME BY INVOKING THE PROVISIONS OF SECTION 14 A OF THE ACT READ WITH RULE 8D OF THE INCOME TAX RULES 196 2 (HEREINAFTER THE RULES ). 3. AT THE OUTSET LEARNED COUNSEL FOR THE ASSESSEE STATED THAT HE HAS INSTRUCTION FROM ASSESSEE NOT TO PRESS THE ISSUE DUE TO SMALLNESS OF THE AMOUNT I.E . RS. 8410/ - (RUPEES EIGHT THOUSAND FOUR HUNDRED TEN ONLY). BUT HE REQUESTED THE B ENCH THAT TH IS CONCESSION SHOULD NOT BE TREATED AS PRECEDENT. IN VIEW OF THE ABOVE CONCESSION GIVEN BY LEARNED COUNSEL, WE DISMISS THIS GROUND OF APPEAL AS WITHDRAWN . 4. THE NEXT ISSUE IN THIS APPEAL OF THE ASSES SEE IS AGAINST ORDER OF CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE CAPITAL GAINS ON ITA NO. 373 / MUM/201 6 2 SALE OF PROPERTY BY SUBSTITUTING STAMP D UTY VALUATION AMOUNTING TO RS. 29,99,920/ - IN PLACE OF SALE CONSIDERATION RECORDED IN SALE DEED AT RS . 25,00,000/ - , WHEREAS THE AO SHOULD HAVE TAKEN THE VALUE ASSESSEE BY DVO AS MANDATED BY SECTION 50 C ( 2) OF THE ACT . FOR THIS ASSESSEE HAS RAISED FOLLOWING GROUND NO. 3: - 3. ON THE FACTS, AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, LEANED COMMISSIONER OF INCOME - TAX (APPEAL) ERRED IN UPHOLDING ACTION OF THE ASSESSING OFFICER IN INVOKING PROVISIONS OF SECTION 50C AND SUBSTITUTING STAMP DUTY VALUATION OF 2,999,920 IN PLACE OF SALE PRICE OF 2,500,000 DESPITE HAVING THE VALUATION FROM DVO DATED 05 - 08 - 2015 TH AT REDUCED THE VALUATION TO RS. 2,626,700 STATING THAT THERE IS NO PROVISIONS IN SECTION 50C TO REDUCE THE VALUE OF A PROPERTY BELOW STAMP DUTY VALUATION 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY S TATED FACTS LEADING TO THIS ISSUE IS THAT T HE ASSESSEE HAS PURCHASED ONE SHOP IN PLATINUM MALL, GHATKOPAR (E) , MUMBAI ON 14 - 08 - 2006 FOR A TOTAL CONSIDERATION OF RS. 24 ,70,500/ - . THIS PROPERTY WAS SOLD DURING THE PREVIOUS YEAR 2007 - 08 RELEVANT TO ASSESSMENT YEAR 2008 - 09 BY REGISTERING A TOTAL SALE CONSIDERATION AT RS. 25, 00,000/ - AS AGAINST STAMP DUTY V ALUATION OF RS. 29,99,920/ - . THE ASSESSING OF FICER AND CIT (A) ADOPTED STAMP D UTY V ALUATION OF RS.29,99,920/ - AS FAIR MARKET VALUE/SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE PROPERTY IS REFERRED TO DVO AND THE DVO VIDE HIS REPORT DATED 05 - 08 - 15 VALUED THE PROPERTY AT RS. 26,26,700 / - AS ON 14 - 08 - 200 6 . THE CIT ( A) ALSO ACCEPTED THE ACTION OF AO IN ADOPTING THE STAMP DUTY VALUATION AS AGAINST THE PROPERTY VALUED BY DVO U/S 50C ( 2) OF THE ACT. WE FIND THAT THE PROVISIONS OF SECTION 50C(2)(A) & SECTION 50C(3) OF THE ACT CLEARLY MANDATES THAT IF THE ASSESSEE CLAIM BEFORE THE AO THAT THE VALUE ADOP TED OR ASSESSED OR ASSESSABLE BY THIS STAMP VALUATION AUTHORITY UNDER SUB SECTION ( 1 ) OF SECTION 50C OF THE ACT EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER , THE AO HAS TO REFER THE VALUATION OF CAPITAL ASSET TO THE DVO UNDER TH IS PROVISION AND IN CASE THE VALUE ASCERTAIN U/S 50C(2) OF THE ACT EXCEEDS THE VALUE ADOPTED BY THIS STAMP VALUATION AUTHORITY REFER TO IN SUB SECTION (1) OF SECTION 50C OF THE ACT, THE VALUE SO ADOPTED OR ASSESSED BY DVO SHALL BE TAKEN AS FULL VALUE OF ITA NO. 373 / MUM/201 6 3 CO NSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER . IF THE FAIR MARKET VALUE DETERMINED BY THE DVO IS LESS THAN THE MARKET VALUE SO ADOPTED BY THE STAMP VALUATION AUTHORITY, THE AO SHALL TAKE SUCH FAIR MARKET VALUE TO BE THE FULL VALUE OF CONSIDE RATION. HOWEVER, IF THE FAIR MARKET VALUE DETERMINED BY THE DVO IS MORE THAN THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES, THE AO SHALL NOT ADOPT SUCH FAIR MARKET VALUE DETERMINED BY DVO AND SHALL TAKE THE FULL VALUE OF CONSIDERATION TO BE THE VAL UE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY. IN THE PRESENT CASE BEFORE US, THE VALUE DETERMINED BY STAMP VALUATION AUTHORITY IS AMOUNTING TO RS.29,99,920/ - AS AGAINST THE VALUE DETERMINED BY DVO AT RS. 26,26,700/ - . WE FIND THAT THE LOWER AUTHORITI ES HAVE ERRED IN ADOPTING THE VALUE DETERMINED BY STAMP VALUATION AUTHORITY AND THEY SHOULD HAVE ADOPTED THE VALUE DETERMINED BY DVO AT RS. 26,26,700/ - FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. WE DIRECT THE AO TO ADOPT THE VALUE DETERMINED BY DVO A T RS. 26,26,700/ - AND COMPUTE THE CAPITAL GAINS ACCORDINGLY. THIS ISSUE IS DECIDED IN FAVOUR OF ASSESSEE. 6. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE AGAINST THE ORDER OF CIT(A) IN ALLOWING LOCAL PURCHASE OF RS. 35,520 / - AND BROKERAGE OF RS. 27,520 / - PAID ON ACQUISITION FOR A PURPOSE OF COMPUTATION FOR SHORT - TERM CAPITAL GAINS. AFTER HEARING BOTH THE SIDES AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY THESE CLAIM S AND IF IT IS FOU ND THAT THE EXPENSE HAS BEEN INCURRED IN PURCHASING THE PROPE RTY WHICH HAS BEEN DISPOSED OFF, THE CLAIM MAY BE ALLOWED. WE FIND NO INFIRMITY IN THE DIRECTION OF THE CIT(A) BECAUSE HE HAS PRACTICALLY ON PRINCIPLE ALLOWED THE CLAIM OF THE ASSESSEE BUT ONLY FOR VERIFICATION OF THE FACTS WHETHER THESE EXPENSES ARE INCURRED IN CONNECTION WITH THE PURPOSE OF PURCHASE OR SALE OF PROPERTY. HENCE , WE CONFIRMED THE FINDINGS OF CIT ( A) AND THIS ISSUE OF ASSESSEES APPEAL IS PARTY ALLOWED FOR STATISTICAL PURPOSE. 7. TH E NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT ( A) IN MERELY GIVEN DIRECTION TO THE ASSESSING OFFICER TO DELETE THE ADDITION AMOUNTING OF RS. 16,275/ - ON ACCOUNT OF R ENTAL INCOME AND DIFFERENCES IN TDS CERTIFICATES. BEFORE US LEARNED C OUNSEL FOR THE ASSESSEE STATED THAT DIFFERENCE IS ITA NO. 373 / MUM/201 6 4 ON ACCOUNT OF SERVICE TAX WHICH HAS BEEN PAID BY THE ASSESSEE. WE FIND THAT THE CIT(A) ALSO DIRECTING ASSESSING OFFICER TO VERIFY THE FACTS THAT THIS IS A SERVICE TAX ELEMENT PAID BY ASSESSEE WH ICH IS ONLY DIFFERENTIAL AMOUNT. T HE ASSESSING OFFICER WILL ALLOW THE CLAIM OF ASSESSEE BY VERIFYING THIS FACT . ACCORDINGLY, THIS ISSUE OF APPEAL BY THE ASSESSEE IS PARTY ALLOWED FOR STATISTICAL PURPOSES . IN RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDIC ATED ABOVE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE . ORDER PRONOUNCED IN THE OPEN COURT ON 09 - 1 1 - 2016 . SD/ SD/ (RAJESH KUMAR) (MAHAVIR SINGH) ACCO U NTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 0 9 - 11 - 2016 SUDIP SARKAR/SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTA NT REGISTRAR ITAT, M UMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//