Ashika R. Chokhawala L/H of late Raameshchandra Nanalal Chokhawala, Surat V. The Income Tax Officer, Ward-2(1), Surat

ITA 454/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6247 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-03-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 10-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARM YADAV
• Assessee Lawyers: P M JAGAGSHETH
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.454/AHD/2014 / ASSTT. YEAR: 2004-2005 LATE RAMESCHANDRA NANALAL L/H. ASHIKA R. CHOKHAWALA CHOPKHAWALA, CHOKHAWALA ESTATE SOMNATH MAHADEV ROAD OPP: UMRA JAKAT NAKA SURAT 395 007. PAN : ABFPC 0095 D VS. ITO, WARD-2(1) SURAT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M. JAGAGSHETH REVENUE BY : SHRI DHARM YADAV, SR.DR ! / DATE OF HEARING : 10/03/2017 '#$ ! / DATE OF PRONOUNCEMENT: 05/04/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-II, SURAT DATED 15.11.2013 PASSED FOR ASS TT.YEAR 2004-05. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING PENALTY OF RS.1,25,960/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. ITA NO.454/AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D 1/4 TH SHARE IN PROPERTY BEARING R.S.NO.92, F.P.NO.64, TPS NO.21, C HORYASI, BESTAN, DIST. SURAT. THIS PROPERTY WAS SOLD BY THE ASSESSE E ALONG CO-SHARES. THE ASSESSEE HAS SHOWN THE VALUE OF THE PROPERTY IN THE SALE DEED AT RS.11.00 LAKHS FOR EACH PLOT. THERE WERE TWO PLOTS . HOWEVER, SUBSEQUENTLY, IT CAME TO THE NOTICE OF THE DEPARTME NT THAT STAMP DUTY VALUATION AUTHORITY HAS IMPOSED ADDITIONAL STAMP DU TY UPON THE ASSESSEE AND SALE PRICE WAS TAKEN AT RS.1,90,68,800 /-. ACCORDINGLY, A REFERENCE WAS MADE UNDER SECTION 50C(2) OF THE INCO ME TAX ACT AND FAIR MARKET VALUE OF THE PROPERTY WAS DETERMINED AT HIGHER RATE. THE AO HAS WORKED OUT LONG TERM CAPITAL GAIN AT RS.6,11 ,459/- AFTER GIVING BENEFIT OF INDEXATION OF THE COST OF ACQUISITION AT RS.51,541/- AS ON 1.4.1981. HE ACCORDINGLY MADE AN ADDITION OF RS.6, 11,459/- IN THE TOTAL INCOME OF THE ASSESSEE. THE AO INITIATE PENA LTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF LON G TERM CAPITAL GAIN OF RS.6,11,459/-. ACCORDINGLY, THE AO HAS IMPOSED PEN ALTY OF RS.1,25,960/-. APPEAL TO THE LD.CIT(A) DID NOT BRI NG ANY RELIEF TO THE ASSESSEE. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF SECTION 50C WOULD INDICATE THAT IT REPLACE THE ACTUAL SALE CONSIDERATION ALLEG ED TO HAVE BEEN RECEIVED BY AN ASSESSEE WITH A DEEMED SALE CONSIDER ATION. IT CONTEMPLATES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSE T, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL FO R THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE C ONSIDERATION OR ACCRUING AS A RESULT OF SUCH TRANSFER. FURTHER, SU B-SECTION (2) OF SECTION 50C PROVIDES FOR DETERMINATION OF FMV OF THE CAPITA L ASSETS TRANSFERRED BY AN ASSESSEE. THUS, ACTUAL SALE CONSIDERATION IS SOUGHT TO BE ITA NO.454/AHD/2014 3 REPLACED BY A DEEMING CONSIDERATION. FOR SUCH TYPE OF REPLACEMENT, IT CANNOT BE ALLEGED THAT THE ASSESSEE HAS CONCEALED P ARTICULARS. IT HAS DISCLOSED EVERYTHING IN ITS RETURN OF INCOME. CONS IDERATION HAS CHANGED ON ACCOUNT OF DEEMING FICTION WHICH HAS GIVEN RISE TO HIGHER CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. THEREFORE, IT CANNOT BE ALLEGED THAT THE ASSESSEE HAS DELIBERATELY CONCEALED THE INCOME. WE FURTHER FIND THAT IN THE HANDS OF TWO OTHER CO-OWNERS, VIZ. SHRI BHUPEND RA CHOKHAWALA AND SHRI ROHIT CHOKHAWALA SIMILAR PENALTY HAS BEEN DELE TED. ON DUE CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES, W E ARE OF THE VIEW THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY, ACCORDINGLY, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 5 TH APRIL, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER