P.E. JUSSAWALLA, MUMBAI V. DCIT 24(3), MUMBAI

ITA 3945/MUM/2009

• Counselvise Citation: 394519914 RSA 2009
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-09-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Additional evidence; Bad and doubtful debts
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI R.S.PADVEKAR, JM ITA NO.3945/MUM/2009 : ASST.YEAR 2004-2005 SHRI P.E.JUSSAWALLA 3/A, EVERGREEN, 5 PERRY ROAD BANDRA (WEST), MUMBAI 400 050. PA NO.AADPJ5700D. VS. THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 24(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MADHUR AGARWAL RESPONDENT BY : SHRI JITENDRA YADAV O R D E R PER R.S.SYAL (AM) : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 29.04.2009 IN RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. FIRST THREE GROUNDS ARE AGAINST THE SUSTENANCE O F DISALLOWANCE OF CERTAIN EXPENSES AND BAD DEBTS. BRIEFLY STATED THE FACTS OF THESE GROUNDS ARE THAT THE ORIGINAL ASSESSMENT ORDER IN THIS CASE WAS PASSED U /S.143(3) ON 18.12.2006. SUBSEQUENTLY THE LEARNED CIT, BY EXERCISING HIS POW ER U/S.263, SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH. PURSUANT TO THAT THE PRESENT ASSESSMENT ORDER WAS P ASSED BY THE A.O. U/S.143(3) R.W.S.263 INTER ALIA MAKING ADDITION ON ACCOUNT OF BAD DEBTS TO THE TUN E OF RS.11,00,783 AND CERTAIN OTHER EXPENSES AT RS.5,37, 137. WHEN THE ASSESSEE CHALLENGED THESE ADDITIONS BEFORE THE LEARNED CIT(A ), HE REJECTED THESE GROUNDS BY GIVING REASON THAT HE WAS INCOMPETENT TO ADJUDICAT E ON THE ISSUES WHICH WERE ALREADY DECIDED BY THE LEARNED CIT. HE, THEREFORE, DECLINED TO INTERFERE WITH THESE TWO DISALLOWANCES. ITA NO.3945/MUM/2009 SHRI P.E.JUSSAWALLA. 2 3. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE LEARNED CIT(A) FAILED TO AP PRECIATE THAT HE WAS HEARING AN APPEAL AGAINST THE ASSESSMENT ORDER PASSED BY THE A .O. U/S.143(3) PURSUANT TO ORDER U/S.263. WHEN THE LEARNED CIT, IN EXERCISE OF HIS J URISDICTION U/S.263, DIRECTED THE ASSESSING OFFICER TO DECIDE CERTAIN ISSUES AFRESH W ITHOUT HIMSELF ORDERING FOR MAKING CERTAIN ADDITIONS, THE ISSUE WAS THROWN OPEN BEFORE THE A.O. FOR FRESH DECISION IN ACCORDANCE WITH LAW. THE LEARNED CIT(A) WAS NOT DENUDED OF HIS POWER IN DECIDING THE APPEAL AGAINST SUCH ORDER PAS SED BY THE A.O. U/S.143(3) R.W.S. 263. WE, THEREFORE, SET ASIDE THE IMPUGNED O RDER ON THESE TWO ISSUES AND RESTORE THE MATTER TO HIS FILE FOR A FRESH DECISION ON MERITS AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 4. THE ONLY OTHER ISSUE IS AGAINST THE COMPUTATION OF CAPITAL GAIN ON THE BASIS OF STAMP DUTY VALUE OF PLOT OF LAND. FACTS OF THIS GRO UND ARE THAT THE ASSESSEE PURCHASED PLOT NO.28 IN THE YEAR RELEVANT TO THE AS SESSMENT YEAR 1988-89 AND PLOT NO.27 IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT Y EAR 1991-92. A FIRM NAMELY M/S. FORTUNE HI TECH PLASTICS CONSTRUCTED A SHED THEREON IN 1992. THE PROPERTY WAS SOLD DURING THE YEAR FOR RS.30 LAKHS. THE STAMP DUTY VALUE WAS AT RS.59,21,829. THE ASSESSEE TOOK THE STAMP DUTY VALU ATION OF BOTH PLOTS AT RS.17 LAKHS. THE ASSESSING OFFICER FOUND FROM THE READY R ECKONER THAT THE STAMP DUTY VALUE OF BOTH THE PLOTS OF LAND WAS RS.31,36,625. H E ADOPTED THIS VALUE FOR COMPUTING LONG TERM CAPITAL GAIN. NO RELIEF WAS ALL OWED IN FIRST APPEAL. 5. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD, WE FIND NO DOUBT IN HOLDING THAT SECTION 50C IS APPLIC ABLE IN THE INSTANT CASE AND ACCORDINGLY STAMP DUTY VALUATION IS REQUIRED TO BE CONSIDERED FOR THE PURPOSES OF COMPUTING CAPITAL GAIN. THE LEARNED A.R. ALSO ADMIT TED THE SAME BUT POINTED OUT THAT THE STAMP VALUATION WAS NOT PROPERLY TAKEN BY THE ASSESSING OFFICER. WHILE RELYING ON PAGE 20 ONWARDS OF THE PAPER BOOK, THE L EARNED A.R. CONTENDED THAT THE ITA NO.3945/MUM/2009 SHRI P.E.JUSSAWALLA. 3 VALUE SHOULD HAVE BEEN CONSIDERED ACCORDING TO THE SLABS WHICH WERE APPLICABLE IN ITS CASE. THE LEARNED DEPARTMENTAL REPRESENTATIVE O PPOSED THE SUBMISSION ADVANCED ON BEHALF OF THE ASSESSEE BY STATING THAT THE VALUE IN SLABS WERE NOT APPLICABLE AS THE ASSESSEE SOLD COMMERCIAL PROPERTY , WHEREAS THE SLAB VALUES WERE APPLICABLE ON RESIDENTIAL UNITS. IN PRINCIPLE WE AG REE WITH THE VIEW TAKEN BY THE AUTHORITIES BELOW THAT THE PROVISIONS OF SECTION 50 C ARE APPLICABLE AND CAPITAL GAIN IS TO BE COMPUTED BY CONSIDERING STAMP DUTY VALUATI ON OF THE PROPERTY. IT IS NOT EMERGING FROM THE RECORD THAT WHETHER THE SLAB VALU E AS STATED BY THE ASSESSEE IS APPLICABLE ON COMMERCIAL PROPERTIES ALSO. THE ASSES SEE HAS FILED SOME ADDITIONAL EVIDENCE IN SUPPORT OF HIS CASE. UNDER SUCH CIRCUM STANCES, WE ARE OF THE CONSIDRED OPINION THAT IT WOULD BE IN THE INTEREST OF JUSTICE , IF THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE AND THE MATTER IS RESTORED TO TH E FILE OF THE LD. FIRST APPELLATE AUTHORITY FOR APPLYING THE CORRECT STAMP VALUE AS APPLICABLE IN THIS CASE AND DETERMINING LONG TERM CAPITAL GAIN ACCORDINGLY AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF SEPTEMBER, 2010. SD/- SD/- (R.S.PADVEKAR) JUDICIAL MEMBER (R.S.SYAL) ACCOUNTANT MEMBER MUMBAI : 30 TH SEPTEMBER, 2010. DEVDAS* ITA NO.3945/MUM/2009 SHRI P.E.JUSSAWALLA. 4 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XXIV, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.