ACIT-16(3), MUMBAI V. SHRI VISHWANG Y DESAI, MUMBAI

ITA 4445/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9396 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 28-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SETHILD
• Assessee Lawyers: SANJAY PARIKHLD
• Keywords: Sale consideration of property below Jantri Value; Valuation report; Capital Gains
• Section: 143(3); 50C; 48

Judgement Text

ITA NO.4445/MUM/2019 SHRI VISHWANG Y. DESAI ASSESSMENT YEAR: 2015-16 1 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.4445/MUM/2019 ( / ASSESSMENT YEAR: 2015-16) ACIT - 16(3) 446, 4 TH FLOOR, AAYKAR BHAVAN, CHURCHGATE, MUMBAI-400 020 / VS. SHRI VISHWANG Y. DESAI 2 ND FLOOR, LENTIN CHAMBERS DALAL STREET, FORT MUMBAI-400 023 '# ./ ./PAN/GIR NO. AACPD-4371-R ( ! #% /APPELLANT ) : ( &'#% / RESPONDENT ) REVENUE BY : SHRI SANJAY SETHI-LD. DR ASSESSEE BY : SHRI SANJAY PARIKH-LD. AR / DATE OF HEARING : 24/12/2020 / DATE OF PRONOUNCEMENT : 04/01/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY THE REVENUE FOR ASSESSMENT Y EAR 2015- 16 CONTESTS THE ORDER OF THE LD. COMMISSIONER OF IN COME-TAX (APPEALS)-7 [IN SHORT CIT(A)], MUMBAI, APPEAL NO.C IT(A)-7/IT- 110/2017-18 ORDER DATED 12/04/2019 FOLLOWING GROUND OF APPEAL:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AN D IN LAW, WHETHER THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF 2,23,98,632/- MADE BY THE AO UNDER SECTION 50C OF THE I.T. ACT 1961 FOR ASSES SMENT YEAR 2015-16. ITA NO.4445/MUM/2019 SHRI VISHWANG Y. DESAI ASSESSMENT YEAR: 2015-16 2 2. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLA CED IN THE PAPER BOOK. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 3.1 AN ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE U /S 143(3) ON 26/12/2017 WHEREIN THE ASSESSEE HAS BEEN SADDLED WITH AN ADDITION OF 223.98 LACS UNDER THE HEAD LONG-TERM CAPITAL GAINS (LTCG). THE SAME WOULD STEM FROM THE FACT THAT THE ASSESSEE ALONG WITH MR. YESHWANT DESAI AND MRS. PAULOMI DESA I SOLD A CERTAIN PROPERTY SITUATED AT UNIT NO..14, 14 TH FLOOR, LODHA EXCELLUS, APOLLO MILLS COMPOUND, N.M.JOSHI MARG, MAHALAXMI, M UMBAI ON 28/11/2014 FOR CONSIDERATION OF 56.38 CRORES. THE ASSESSEES SHARE THEREIN WAS TO THE EXTENT OF 37.5% WHICH WAS 25% SELF ACQUIRED WHILE PURCHASING THE PROPERTY IN THE YEAR 2011 WHEREAS BALANCE 12.5% WAS ACQUIRED OUT OF SHARE OF HER MOTH ER UPON HER DEATH ON 04/07/2013. THE PROPERTY WAS PURCHASED FOR 48 CRORES AND THE ASSESSEES SHARE THEREIN WORKED OUT TO BE 18 CRORES. THE ASSESSEES SHARE IN SALE CONSIDERATION WORKED OUT T O BE 21.14 CRORES. AFTER INDEXATION BENEFIT, LONG-TERM CAPITAL LOSS WAS WORKED OUT AT 296.54 LACS WHICH WAS REFLECTED IN THE RETURN OF INCOME. 3.2 HOWEVER, THE DISPUTE ARISES IN VIEW OF THE FACT THAT THE STAMP DUTY VALUATION OF THE PROPERTY WAS 82.27 CRORES AND THE PROVISIONS OF SEC.50C WERE FOUND APPLICABLE TO THE CASE OF THE ASSESSEE. AS PER ASSESSEES REQUEST, THE MATTER OF VALUATION WAS REFERRED TO LD. DISTRICT VALUATION OFFICER (DVO), W HO VALUED THE PROPERTY AT 62.35 CRORES. THE ASSESSEE ALSO FILED INDEPENDENT ITA NO.4445/MUM/2019 SHRI VISHWANG Y. DESAI ASSESSMENT YEAR: 2015-16 3 VALUATION REPORT FROM TWO VALUERS WHO VALUED THE PR OPERTY AT 59.40 CRORES & 53.96 CRORES. THE ASSESSEE OBJECTED TO VALUATION MA DE BY LD. DVO BY POINTING CERTAIN ERRORS BUT LD. AO CH OSE TO ADOPT THE SAME SINCE THE VALUATION WAS DONE AFTER ADJUSTI NG THE SALE INSTANCES OF PROPERTIES WITH REFERENCE TO TIME LAG, FLOOR VALUATION, CAR PARKING ETC. THE VALUATION THUS ADOPTED BY LD. AO RESULTED INTO REDUCTION OF LONG-TERM CAPITAL LOSS TO THAT EXTENT. 4. UPON FURTHER APPEAL, LD. CIT(A) DELETED THE SAME , INTER-ALIA, BY OBSERVING THAT THE DIFFERENCE BETWEEN THE AGREEM ENT VALUE AND VALUE DETERMINED BY LD. DVO WAS LESS THAN 10% OF TH E VALUE DETERMINED BY LD. DVO AND THEREFORE, THE ADDITIONS WERE NOT JUSTIFIED. RELIANCE WAS PLACED, INTER-ALIA, ON THE DECISION OF HONBLE JAMMU & KASHMIR HIGH COURT IN HONEST GROUP OF HOTELS (P) LTD. V/S CIT (177 CTR 232) AS WELL AS THE DECISION OF PUNE TRIBUNAL IN RAHUL CONSTRUCTIONS V/S DCIT (38 DTR 19) BESIDES OTHER DECISIONS WHICH HAVE ALREADY BEEN ENUMERATED IN THE IMPUGNED ORDER. RESULTANTLY, THE ADDITION SO MADE BY LD. AO WAS DELETED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX AS ENUMERATED IN THE PRECEDING PARAGRAPHS, IT IS QUITE EVIDENT THAT THE STAMP DUTY VALUE OF 82.27 CRORES WAS CERTAINLY NOT THE PREVAILING MARKE T PRICE WHICH IS EVIDENT FROM THE VALUATION MADE BY LD. DVO . UPON PERUSAL OF VALUATION MADE BY LD. DVO, WE FIND THAT ARITHMETIC AVERAGE RATE PER SQUARE METERS FOR 3 SALES INSTANCE S WOULD WORK OUT TO BE 211367 PER SQUARE METER AS AGAINST 225732 ADOPTED BY LD. DVO. HOW THE RATE WAS ARRIVED AT BY LD.DVO I S NOT DISCERNIBLE FROM THE VALUATION REPORT. ADOPTING THE CORRECT RATE, THE ITA NO.4445/MUM/2019 SHRI VISHWANG Y. DESAI ASSESSMENT YEAR: 2015-16 4 VALUATION MADE BY LD. DVO WOULD FALL FURTHER. SECON DLY, AS RIGHTLY CONCLUDED BY LD. CIT(A), THE OVERALL DIFFERENCE WAS LESS THAN 10% OF VALUATION MADE BY LD. DVO AND THEREFORE, THE ADD ITIONS WERE NOT JUSTIFIED IN TERMS OF THE CITED DECISIONS. WE C ONCUR WITH THE SAME SINCE THE MATTER OF VALUATION WAS MERE ESTIMAT ION AND THE ASSESSEE WOULD NOT GAIN TO UNDER-VALUE THE PROPERTY IN VIEW OF THE FACT THAT IT INCURRED LONG TERM CAPITAL LOSSES OF 296.54 LACS. VIEWING FROM ANY ANGLE, IMPUGNED ORDER WOULD NOT RE QUIRE ANY INTERFERENCE ON OUR PART. 6. THE APPEAL STAND DISMISSED. ORDER PRONOUNCED ON 4 TH JANUARY, 2021. SD/ - SD/- (AMARJIT SINGH) (MANO J KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04/01/2021 S R.PS, SUDIP SARKAR; SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. ! #% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. - ( ! ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./ & 0 , ! 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.