LAKSHMANS PREMIER INTERNATIONAL, MUMBAI V. ACIT 12(3), MUMBAI

ITA 4064/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7578 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C SRINIVASA REDDY
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Opportunity of being heard; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI. D.K. AGARWAL (J.M.) AND SHRI. N.K. BIL LAIYA (A.M.) ITA NO.4064/MUM/2011 ASSESSMENT YEAR: 2007-08 M/S. LAKSHMANS PREMIER INTERNATIONAL, 1412, DALAMAL TOWER, 14 TH FLOOR, 211, NARIMAN POINT, MUMBAI 400 021. PAN: AAAFL2489A VS. ACIT-12(3), AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. DEEPAK TRALSHAWALA RESPONDENT BY : SHRI. C. SRINIVASA REDDY DATE OF HEARING: 15.3.2012 DATE O F PRONOUNCEMENT: 21-3-2012 O R D E R PER N.K. BILLAIYA, A.M. THIS APPEAL IS DIRECTED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A)- 23, MUMBAI DATED 25.02.2011. THE APPELLANT HAS ASS AILED THE ORDER OF THE LD. CIT (A) BY TAKING TWO GROUNDS OF APPEAL WHICH ARE AS UN DER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT (A) ERRED IN APPLYING THE PROVISION OF SECTION 50C OF T HE I.T. ACT AGAINST SECTION 50 OF THE I.T. ACT FOR THE PURPOSE OF COMPUTATION O F SHORT TERM CAPITAL GAIN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT (A) ERRED IN UPHOLDING THE ACTION OF AO FOR NOT REFERRI NG THE VALUATION OF THE INDUSTRIAL GODOWN AT NAFEES CHAMBERS, TO THE VALUATI ON OFFICER OF THE DEPARTMENT TO DETERMINE THE FAIR MARKET VALUE OF TH E SAID GODOWN AS ON THE DATE OF TRANSFER. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E FOR THE YEAR UNDER CONSIDERATION ASSESSEE HAS SOLD GODOWN AT NAFEES CH AMBERS, CARNAC BUNDER ROAD, 2 ITA NO.4064/MUM/2011 MUMBAI FOR A CONSIDERATION OF RS. 12,00,000/-. HOW EVER, AS PER THE ITS DETAILS GENERATED FROM THE SYSTEM THE ASSESSING OFFICER FOU ND THAT THE VALUE ADOPTED FOR STAMP DUTY PURPOSES IS RS. 36,10,174/-. THE ASSESS ING OFFICER CONFRONTED THIS TO THE ASSESSEE ASKING HIM WHY THE STAMP DUTY VALUATIO N SHOULD NOT BE TAKEN AS THE FULL VALUE OF CONSIDERATION. ASSESSEE VIDE LETTER DATED 16.12.2009 VEHEMENTLY OBJECTED TO THE PROPOSED ACTION TO BE TAKEN BY THE ASSESSING OFFICER BY ADOPTING STAMP DUTY VALUATION AS THE FULL VALUE OF THE CONSI DERATION. THE OBJECTION OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE ASSESSING OFFICER WHO WENT ON TO COMPUTE THE SHORT TERM CAPITAL GAIN BY ADOPTING STAMP DUTY VALUE. AGGRIEVED BY THIS ORDER, ASSESSEE QUESTIONED THE ACTION TAKEN BY THE ASSESSI NG OFFICER BEFORE THE LD. CIT (A). 3. BEFORE THE LD. CIT (A) THE ASSESSEE NOT ONLY QUE STIONED THE ADOPTION OF STAMP DUTY VALUE BUT ALSO VOICED THAT PROVISIONS OF SEC.50C ARE NOT APPLICABLE ON THE FACTS OF HIS CASE BECAUSE THE ASSET WHICH HAS BEEN TRANSFERRED IS PART OF THE BLOCK OF ASSET ON WHICH DEPRECIATION HAS BEEN CLAIMED. THE ASSESSEE ALSO QUESTIONED THE VALIDITY OF THE ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE VALUATION OFFICER A S PROVIDED UNDER CLAUSE (2) OF SEC.50C OF THE INCOME TAX ACT. 4. THE LD. CIT (A) CONSIDERED BOTH THE ISSUES RAISE D BY THE ASSESSEE AND HELD THAT (A) PROVISIONS OF SEC.50C SQUARELY APPLIES ON THE FACTS OF THE CASE AND (B) IT IS A DISCRETION OF THE ASSESSING OFFICER TO REFER THE MA TTER TO THE VALUATION OFFICER. 3 ITA NO.4064/MUM/2011 5. THE LD. CIT (A) WENT ON TO CONCLUDE THAT THE ACT ION TAKEN BY THE ASSESSING OFFICER IN COMPUTING SHORT TERM CAPITAL GAINS TAKIN G THE STAMP DUTY VALUATION AS THE FULL VALUE OF THE CONSIDERATION FOR COMPUTING THE CAPITAL GAINS WAS CORRECT AND ACCORDING TO THE PROVISIONS OF SEC 50C OF THE I.T AC T . 6. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AR REITERATED HIS STAND THAT THE ASS ESSING OFFICER OUGHT TO HAVE REFERRED THE ISSUE OF VALUATION TO THE VALUATION OF FICER CONSIDERING THE PECULIAR CIRCUMSTANCES OF THE CASE AND THE LOCATION OF THE A SSET SOLD, TO THIS THE LEARNED AR CONTENDED THAT THE MATTER OF VALUATION SHOULD HAVE BEEN REFERRED TO THE VALUATION OFFICER TO DETERMINE THE FAIR MARKET VALUE OF THE A SSET SOLD. 8. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES AND FIND MERIT IN THE CONTENTION OF THE LEARNED AR THAT THE MATTER DE SERVES TO BE REFERRED TO THE VALUATION OFFICER. WE ACCORDINGLY DIRECT THE ASSES SING OFFICER TO REFER THE MATTER OF VALUATION TO THE APPROPRIATE VALUATION OFFICER AFTE R GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. MATTER IS RESTORED BACK TO THE FILES OF THE AO AS PER GIVEN DIRECTIONS. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF MARCH, 2012. SD/- SD/- (D.K. AGARWAL) (N.K. BILLA IYA) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATE : 21-3-2012 AT :MUMBAI 4 ITA NO.4064/MUM/2011 OKK COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR A BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI