JYOTI M. KHADAWALA, MUMBAI V. ITO WD 12(1)(4), MUMBAI

ITA 3942/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88297 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 01-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Principle of natural justice; Additional evidence; Valuation report
• Section: 143(3); 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.3942/M/2013 ( / ASSESSMENT YEAR: 2009 - 2008 ) MRS. JYOTI M KHADAWALA, 13/15, A.K. MARG, FORT, MUMBAI 400 001. / VS. ITO WARD 12(1)(4), 1 ST FLOOR, AAYAKAR BHAVAN, CHURCHGATE, MUMBAI - 20. ./ PAN : AABPK1985B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : DR. K. SHIVARAM / RESPONDENT BY : SHRI S.D. SRIVASTAVA, CIT - DR / DATE OF HEARING : 09 .2.2015 / DATE OF PRONOUNCEMENT : 20 .2.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 17.5.2013 IS AGAINST THE ORDER OF THE CIT (A) - 23, MUMBAI DATED 1.3.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN PASSING THE ORDER WITHOUT PROVIDING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FILE ADDITIONAL EVIDENCE INFORM OF ZONING CERTIFICATE AND CERTIFICATE OF SUB - REGISTRAR FOR EXPLAINING APPLICATION OF N.A. RATE FOR STAMP DUTY VALUE WHICH WAS NOT ACCEPTED BY THE CIT (A) ON THE GROUND THAT FACTS ARE IDENTICAL WITHOUT THE OTHER TWO CASES NAMELY MANHAR P KHANDAWAL & SUNIL M KHANDAWAL. 2. THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS. 1,38,25,6 29/ - (APPLYING SECTION 50C) ON ACCOUNT OF ALLEGED LONG TERM CAPITAL GAINS ALLEGED ON SALE OF AGRICULTURAL LAND FAILING TO APPRECIATE THAT THE LAND WAS NOT EXIGIBLE TO CAPITAL GAIN AS IT WAS NOT CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14)(III) BEING T HE AGRICULTURAL LAND AND ACTUAL CONSIDERATION RECEIVED OF RS. 40,64,243/ - . 3. THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN COMPUTING THE CAPITAL GAIN ON SALE OF AGRICULTURAL LAND BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AND SUBSTITUTING THE ALLEGED STAMP DUTY VALUATION FOR NON - AGRICULTURAL LAND RATES, BEING RS. 1,40,64,600/ - IN PLACE OF THE ACTUAL CONSIDERATION RECEIVED OF RS. 40,64,243/ - , WITHOUT REFERRING THE MATTER TO THE DVO IN ACCORDANCE WITH THE SUB - SECTION (2) OF SECTION 50C. 4. THE LD CIT (A) FAILED TO APPRECIATE THAT THE CERTIFICATE OF VALUATION BY SUB - REGISTRAR WAS PERTAINING TO NON - AGRICULTURAL AND AGRICULTURAL LAND WHILE THE SAID TRANSACTION WAS FOR AGRICULTURAL LAND. 5. THE LD CIT (A) ERRED IN NOT GRANTIN G THE EXEMPTION U/S 54F OF THE ACT, AS THE PROCEEDS WERE KEPT IN CAPITAL GAIN DEPOSIT A/C. THE AFORESAID CONTENTION WAS RAISED IN THE SUBMISSION FILED BEFORE CIT (A). 2 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME AND THE SAME WAS SCRUTINIZED U/S 143(3) OF THE ACT DETERMINING THE ASSESSED INCOME AT RS. 1,40,19,490/ - AGAINST THE RETURNED INCOME OF RS. 1,89,475/ - . ASSESSING OFFICER MADE ADDITIONS ON ACCOUNT OF LONG TERM CAPITAL GAINS AMOUNTING TO RS. 1,38,25, 629/ - AND OTHER ADDITION OF RS. 4,390/ - (PARA 5 OF THE ASSESSMENT ORDER IS RELEVANT). MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIST APPELLATE AUTHORITY, ASSESSEE CONTESTED THE ABOVE ADDITIONS AND EVENTUALLY A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED WITH THE SAME, ASSESSEE IS IN APPEAL BEFORE US. 4. IN THE ABOVE MENTIONED GROUNDS THE ASSESSEE COMPLAINS OF NOT GETTING PROPER AND SUFFICIENT OPPORTUNITY TO FILE THE ADDITIONAL EVIDENCES. ASSESSEE ALSO ARGUED THAT THE LONG TERM CAPITAL GAINS MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE AS THE LAND IN QUESTION IS NOT EXIG IBLE TO LONG TERM CAPITAL GAINS AS THE SAME IS A CAPITAL GAI NS WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. ASSESSEE ALSO QUESTIONED THE ASSESSING OFFICERS DECISION IN INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AS WELL AS NOT GRANTING OF EXEMPTION U/S 54F OF THE ACT. 5. BEFORE US, LD COUNSEL FOR THE ASSESSEE FILED A PAPER BOOK CONTAINING THE ORDER OF THE TRIBUNAL IN ITA NO.4234/M/2013 (AY 2009 - 2010), DATED 16.9.2013 IN THE CASE OF MR. MANHAR P. KHADAWALA VS. ACIT (PAGE 368 OF THE PAPER BOOK). HE ALSO FILED THE ASSESSMENT ORDER AND THE FIRST APPELLATE AUTHORITY ORDER IN THAT CASE. BRINGING OUR ATTENTION TO THE FACTS OF THAT CASE, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT AN IDENTICAL ISSUE CAME UP FOR ADJUDICATION AS SEEN FROM PARA 9 AND THE TRIBUNAL REMANDED THE ISSUE R ELATING TO THE LONG TERM CAPITAL GAINS TO THE FILE OF THE ASSESSING OFFICER AND DIRECTED HIM TO VERIFY THE APPLICABILITY OF THE PROVISIONS OF SECTION 50C OF THE ACT ON THE FACTS OF THE CASE AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. LD COUNSEL ALSO BROUGHT OUR ATTENTION TO THE REST OF THE REST OF THE ISSUES AND MENTIONED THAT ALL THE ISSUES RAISED BY THE ASSESSEE ARE REQUIRED TO BE REMANDED TO THE ASSESSING OFFICER AND IDENTICAL DIRECTIONS AS GIVEN BY THE TRIBUNAL IN THE CASE OF M R. MANHAR P KHANDAWALA (SUPRA). 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL (SUPRA) DATED 1 6.9.2013. ON 3 PERUSAL OF THE SAID ORDER OF THE TRIBUNAL, WE FIND PARA 9 IS RELEVANT IN THIS REGARD. CONSIDERING THE IMPORTANCE OF THE SAID PARA AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARA 9 IS EXTRACTED AS UNDER: 9. WE HAVE CONSIDERED TH E RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL EVIDENCE BROUGHT ON RECORD IN THE FORM O F PAPER BOOK. IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS THE OWNER OF 51 NOS OF FARM PLOTS. IT IS ALSO NOT IN DISPUTE T HAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SURRENDERED ALL THOSE 51 NOS. OF FARM PLOT S FOR A CONSIDERATION OF RS. 2.04 CRS. THE ONLY POINT OF DISPUTE IS THAT ACCORDING TO THE ASSESSEE, THE IMPUGNED FARM PLOT S WERE AGRICULTURAL LAND AND ACCO RDING TO THE REVENUE AUTHORITIES, THE SAME WERE NON - AGRICULTURAL LAND, THUS, THE ISSUE RELATES TO THE CHARGEABILITY OF CAPITAL GAIN TAX. IT IS A FACT THAT IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER HAS ACCEPTED THE IMPUGNED FARM LAND AS AGRICULTURAL LAND. HOWEVER, WE FIND THAT THE LD CIT (A) HA S SIMPLY RUBBISHED THE REMAND REPORT WITHOUT ASSIGNING ANY REASON. WE ALSO FIND FORCE IN THE CONTENTION OF THE ASSESSEE THAT THE LD CIT (A) HAS RELIED UPON CERTAIN DOCUMENTS WHICH DO NOT PERTAIN TO THE ASSESS EE FOR EXAMPLE 7/12 EXTRACTS. WE ALSO FIND THAT THE REPORT OF THE INSPECTOR WAS NOT PROVIDED TO THE ASSESSEE THOUGH USED AGAINST HIM THEREBY VIOLATING THE BASIC PRINCIPLES OF NATURAL JUSTICE. THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 50 C OF THE ACT THOUGH THE FACTS ON RECORD SHOW THAT THERE WAS NO REGISTERED TRANSFER DEED EXECUTED FOR THE SURRENDER OF SAID FARM PLOTS WHICH MEANS THAT NO STAMP DUTY VALUE WAS ASSESSED. THE WORD ASSESSABLE HAS BEEN BROUGHT UNDER THE PROVISIONS OF SECTION 50C FROM 1.10.2009 THEREFORE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION. WE ALSO FIND THAT THE ASSESSEE HAS SUBSTANTIATED HIS CLAIM BY VALUATION REPORT WHICH WAS FILED BEFORE THE ASSESSING OFFICER AND IF THE ASSESSING OFFICER WAS NOT SATISFIED, THE M ATTER SHOULD HAVE BEEN REFERRED TO THE DVO. CONSIDERING ALL THESE FACTS IN TOTALITY AND THE FACT THAT THERE WAS A DENIAL OF NATURAL JUSTICE, WE RESTORE THIS ISSUE BACK TO THE FILES OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUE AFRESH AFTER COLLECTING NECESSARY INFORMATION FROM THE THEHSIL RECORDS RELATING TO THE NATURE OF THE FARM PLOTS. THE ASSESSING OFFICER IS ALSO DIRECTED TO REFER THE MATTER RELATING TO THE VALUATION TO THE DISTRICT VALUATION OFFICER AND AFTER RECEIV ING THE REPORT, THE ASSESSING OFFICER IS DIRECTED TO PROVIDE THAT REPORT TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FURNISH ALL THE NECESSARY DOCUMENTS BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE HIS CLAIM THAT THE IMPUGNED FARM PLOTS ARE AGRICULTURAL L AND. THE ASSESSING OFFICER IS ALSO DIRECTED TO VERIFY THE APPLICABILITY OF THE PROVISIONS OF SECTION 50C OF THE ACT ON THE FACTS OF THE CASE AFTER GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO.1, 2 AND 3 ARE ALLOW ED FOR STATISTICAL PURPOSES. 8. CONSIDERING THE ABOVE AS WELL AS RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE ITAT, WE ARE OF THE OPINION THAT THE GROUNDS RAISED BY THE ASSESSEE NEED TO BE REMANDED TO THE FILE OF THE ASSESSING OFFI CER WITH IDENTICAL DIRECTIONS. WE ORDER ACCORDINGLY. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 2 0 T H FEBRUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 0 .2.2015 4 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI