WESTERN PRESS P. LTD, MUMBAI V. DCIT 2(3), MUMBAI

ITA 4079/MUM/2011

• Counselvise Citation: 407919914 RSA 2011
• Duration Of Justice: 3 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 22-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Assessee Lawyers: NISHIT GANDHI
• Keywords: Sale consideration of property below Jantri Value; Tangible material; Fair market value; Assessment record; Reassessment proceedings
• Section: 147; 148; 263; 143(3); 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNALG BENCH, MUMB AI BEFORE SHRI D.MANMOHAN, VP AND SHRI D. KARUNAKARA R AO, AM ITA NO. 4079/MUM/2011 ASSESSMENT YEAR-2005-06 WESTERN PRESS PVT. LTD. 19/21, BOMBAY MUTUAL CHAMBER, AMBALAL DOSHI MARG, FORT, MUMBAI-400023 / VS. THE DCIT - 2(3), AAYAKAR BHAVAN, 5 TH FLOOR, 101 M.K.ROAD, MUMBAI-400020 ./ PAN :AAACW1225E ( /ASSESSEE ) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI NISHIT GANDHI / REVENUE BY : SHRI R.N. DSOUZA, -DR / DATE OF HEARING : 22/09/2014 / DATE OF PRONOUNCEMENT : 22/09/2014 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF THE CIT(A)-6, MUMBAI DATED 12/04/2011 FOR THE ASSESSMEN T YEAR 2005- 06. THE GROUNDS READ AS UNDER: IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE , AND IN LAW , THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 6 [ ' LD . CIT (A)] ERRED IN UPHOLDING THE REASSESSMENT PROCEEDINGS INITIATED UNDER SECTION 14 8 OF THE ACT . THE LD CIT(A) ERRED IN FACTS AND IN LAW IN CONFIRMI NG ADDITION OF RS . 3.00 LACS UNDER SHORT TERM CAPITAL GAINS ON SALE OF IMMO V EABLE PROPERTY UNDE R PRO VI S I ON OF SECTION 50 C OF THE ACT . THE LD . CIT (A ) FAILED TO APPRECIATE THAT THE I NTEREST CHARGED UNDER SECTION 234 C OF THE ACT IS ILLEGAL AND UNLAWFUL AND / OR EXCESSIVE. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S 143(3) OF THE ACT ON 1 7/12/2007. 2 ITA NO.4079/MUM/2011. SUBSEQUENTLY, BASED THE REASONS RECORDED BY THE AO, THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT O N 19/03/2009 FOR RE-COMPUTING THE CAPITAL GAINS APPLYING THE PRO VISIONS OF SECTION 50C OF THE ACT. AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, THE FAIR MARKET VALUE OF PROPERTY UNDER CONSIDERATION S HOULD HAVE BEEN TAKEN AT ` .33 LACS BY THE AO INSTEAD OF ` .30 LACS. IN THIS REGARD, BRINGING OUR ATTENTION TO THE COPY OF THE SAID AGRE EMENT FILED IN THE ASSESSMENT PROCEEDINGS, LD. COUNSEL FOR THE ASSESSE E MENTIONED THAT THE ASSESSING OFFICER ERRONEOUSLY ASSUMED THE JURIS DICTION U/S 147 OF THE ACT. HE MENTIONED THAT THE AO HAS NO INCREM ENTING/TANGIBLE MATERIAL TO INVOKE THE PROVISIONS OF SECTION 147 R. W.S 148 OF THE ACT VALIDLY. HE SUBMITTED THAT THE ASSESSING OFFICER H AD A COPY OF AGREEMENT DATED 19/07/2004 ON THE RECORDS FILED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. THE COPY OF SAME IS PLACED IN THE PAPER BOOK AT PAGE 36 WHICH MENTIONS THE MARKET VAL UE ( CKTKJ EQY; CKTKJ EQY; CKTKJ EQY; CKTKJ EQY; )AT ` .33 LACS. WHEN THE SAID DOCUMENT IS ALREADY AVAILAB LE IN THE ASSESSMENT RECORDS BEFORE THE ASSESSMENT IS COMPLET ED, AND WHEN THE ASSESSING OFFICER FAILED TO MAKE USE OF THE SAM E, THE PROVISIONS OF SECTION 147 READ WITH SECTION 148 CANNOT BE VALI DLY INVOKED BY THE ASSESSING OFFICER. FOR THIS PROPOSITION, HE FILED VA RIOUS DECISIONS INCLUDING THE ONE IN THE CASE OF PATEL PLASTICS CORPORATION IN ITA NO.914/MUM/2009, DATED 16/07/2014 WHEREIN ONE OF US (AM) IS CO- AUTHOR TO THE SAID ORDER OF THE TRIBUNAL. IN THIS REGARD, HE BROUGHT OUR ATTENTION TO PARA 5 OF THE SAID ORDER OF THE TR IBUNAL (SUPRA) AND MENTIONED THAT THE ISSUES ARE SAME AND THE PROPOSIT ION LAID DOWN IN THE SAID ORDER OF THE TRIBUNAL IS ALSO APPLICABLE T O THE PRESENT CASE OF THE ASSESSEE. 3. AFTER HEARING THE LD. DR OF THE REVENUE, WE HAV E PERUSED THE SAID PARAGRAPH 5 WITH ITS SUB-PARAS OF THE SAID ORD ER OF THE TRIBUNAL 3 ITA NO.4079/MUM/2011. (SUPRA). CONSIDERING THE SIGNIFICANCE OF THOSE PARA GRAPHS, RELEVANT PORTIONS EXTRACTED AND THE SAME READ AS UNDER: 5.1 IT IS MANIFEST FROM THE REASONS RECORDED BY AO THAT THE RECORD CONSISTING OF SALE CONSIDERATION AS WELL AS CONVEYANCE DEED AN D THE VALUATION OF STAMP DUTY AUTHORITIES WAS AVAILABLE ON RECORD AS I T WAS FILED BY THE ASSESSEE IN THE ORIGINAL ASSESSMENT PROCEEDINGS. TH EREFORE, AFTER COMPLETION OF THE ASSESSMENT UNDER SECTION 143(3) NEITHER ANY MATERIAL NOR ANY NEW INFORMATION CAME TO THE KNOWLEDGE OF THE AO WHICH C OULD LEAD TO THE CONCLUSION THAT THE INCOME ASSESSABLE TO TAX HAS ES CAPED ASSESSMENT DUE TO THE REASON OF UNDER -STATEMENT OF SALE CONSIDERATIO N OF PROPERTY IN QUESTION. EVEN IN THE REASONS RECORDED OR IN THE REASSESSMENT ORDER THE AO HAS NOT DOUBTED THE CORRECTNESS OF THE ACTUAL SALE CONSIDER ATION RECEIVED BY THE ASSESSEE. THE ASSESSMENT WAS RE-OPENED BECAUSE IN T HE ORIGINAL ASSESSMENT THE AO DID NOT CONDUCT ANY ENQUIRY ON THE ISSUE OF APPLICABILITY OF PROVISIONS OF SECTION 50C AND ADOPTION OF THE VALUE OF STAMP VALUATION AUTHORITY AS FULL VALUE CONSIDERATION. IT IS NOT TH E CASE OF A BOGUS OR ABSOLUTELY ILLEGAL CLAIM OF ASSESSEE WHICH IS NOT P ERMISSIBLE UNDER LAW BUT IN THIS CASE THE ISSUE OF ADOPTION OF VALUATION OF STA MP VALUATION AUTHORITY HAS TO BE EXAMINED AND DECIDED AFTER CONSIDERING THE OB JECTIONS OF THE ASSESSEE AND THEREAFTER IF THE CIRCUMSTANCES REQUIRE THE VAL UATION HAS TO BE REFERRED TO THE DVO. THEREFORE, THE NON CONDUCT OF ENQUIRY B Y THE AO IN THE ORIGINAL ASSESSMENT DOES NOT GIVE IT AN AUTHORITY AND JURISD ICTION TO MAKE UP THE DEFICIENCY IN THE ASSESSMENT ON HIS PART IN THE ORI GINAL ASSESSMENT. THE AO IS NOT PERMITTED TO REVIEW OR REVISE HIS OWN ASSESS MENT ORDER PASSED UNDER SECTION 143(3) ON THE REASON THAT HE HAS NOT CONDUC TED A PROPER ENQUIRY IN THE ORIGINAL ASSESSMENT. 4. THUS, IT IS A SETTLED LAW THAT THE AO CANNOT ISS UE THE NOTICE U/S 147 OF THE ACT WHEN HE DOESNT HAVE ANY TANGIBLE MA TERIAL. ISSUANCE OF NOTICE U/S 147 OF THE ACT BASED ON THE DOCUMENTS ALREADY AVAILABLE ON RECORD, IS NOT A VALID ONE. AO HAS NO POWER TO REVISE U/S 148 AND THE REVISION POWER IS AVAILABLE TO THE CIT ONLY U/S 263 OF THE ACT. CONSIDERING THE ABOVE, WE ARE OF THE OPINI ON THAT THE PROPOSITION LAID DOWN IN THE ABOVE MENTIONED ORDER OF THE TRIBUNAL IS SQUARELY APPLICABLE TO THE PRESENT CASE OF THE ASSE SSEE. THEREFORE, ON THE SAID FACTS, INVOKING THE PROVISIONS OF SECTION 147 R.W.S 148 IS UNSUSTAINABLE. ACCORDINGLY, THE LEGAL ISSUE RAISED BY THE ASSESSEE IS ALLOWED. THE OTHER ISSUES BEING CONSEQUENTIAL IN NA TURE ARE DISMISSED AS ACADEMIC. 4 ITA NO.4079/MUM/2011. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2014 !' # $% &! ' 22/09/2014 ( ) SD/- SD/- D.MANMOHAN D.KARUNAKARA RAO (VICE PRESIDENT) (ACCOUNTANT MEMBER) MUMBAI , DATED: 22/09/2014 F{X~{T? P.S. !' *+, -, / COPY OF THE ORDER FORWARDED TO : (1) *./0 / THE ASSESSEE; (2) / THE REVENUE; (3) 1( ) / THE CIT(A); (4) 1 / THE CIT, MUMBAI CITY CONCERNED; (5) ,4( **5., 5., $ 7 / THE DR, ITAT, MUMBAI; (6) (8/ 9 / GUARD FILE. , * / TRUE COPY !' / BY ORDER : / ; / (DY./ASSTT. REGISTRAR) 5., $ 7 / ITAT, MUMBAI,