SHRI JUGAL KISHORE GARG, Jaipur V. DCIT, Jaipur

ITA 463/JPR/2011

• Counselvise Citation: 46323114 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: S L PODDAR

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 463/JP/2011 (A.Y. 2006-07) SHRI JUGAL KISHORE GARG, VS. DCIT , CENTRAL-2, 27, AGRASEN COLONY, JAIPUR. JAIPUR. PAN NO. ABBPG 4020 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR. DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 27/01/2014. DATE OF PRONOUNCEMENT : 27/01/2014. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 16/03/2011 OF CIT(A) CENTRAL, JAIPUR. THE ONLY EFF ECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE L D. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION IN ESTIMATING SELL ING PRICE OF 60000 SHARES OF M/S. UNIQUE PROPCON PVT. LTD AND 97 00 SHARES OF M/S MARUDHARA PROPCON PVT. LTD. SOLD BY T HE APPELLANT ON THE BASIS OF DLC RATES OF OFFICES PREM ISES OWNED BY THESE COMPANY AND THEREBY MAKING AN ADDITION OF RS. 2 24,08,460/- TO THE INCOME OF THE APPELLANT ON ACCO UNT OF CAPITAL GAIN ALLEGEDLY SHORT DECLARED BY THE APPELL ANT. 2. THAT THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL AT THE TIME OF, OR BEFORE THE HEARING OF THE APPEAL. 2 DURING THE COURSE OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 02/02/2011 IN I.T.A.NO. 465/JP/2011 FOR THE A.Y. 2006-07 IN THE C ASE OF SMT. JAIMALA AGARWAL, JAIPUR VS. DCIT , CENTRAL CIRCLE-2 , JAIPUR WHEREIN SIMILAR TRANSACTIONS WERE INVOLVED AND THE FACTS ARE IDENTICAL. COPY OF THE SAID ORDER WAS FURNISHED. 3. IN HIS RIVAL SUBMISSIONS, LD. D.R., ALTHOUGH, SUP PORTED THE ORDER OF THE LD. CIT(A), BUT COULD NOT CONTROVERT T HE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PART IES AND THE MATERIAL ON RECORD, IT IS NOTICED THAT A SIMILAR IS SUE HAVING IDENTICAL FACTS HAD ALREADY BEEN ADJUDICATED BY THE ITAT, JAIPUR BENCH B, JAIPUR IN THE AFORESAID REFERRED TO CASE OF SMT. JAIMALA AGARWAL, JAIPUR VS. DCIT , CENTRAL CIRCLE-2 , JAIPUR, THE RELEVANT OBSERVATIONS AND FINDINGS HAD BEEN GIVEN I N PARA 3 & 4, WHICH ARE REPRODUCED AS UNDER:- 3 3. DURING THE YEAR ASSESSEE HAS EARNED INCOME FROM HOUSE PROPERTY, INTEREST FROM PARTNERSHIP, CAPITAL GAIN A ND OTHER SOURCES. RETURN DECLARING INCOME OF RS. 45,20,898/ - WAS FILED. THE ASSESSMENT WAS COMPLETED ON AN INCOME OF RS. 46,37, 930/- THEREBY MAKING AN ADDITION OF RS. 1,16,960/-. THE ASSESSEE WAS HOLDING 1100 SHARES OF M/S. UNIQUE PROPCON PVT. LTD . DURING THE YEAR UNDER CONSIDERATION THE SHARES WERE TRANSFERRE D @ 16.30 PER SHARE AS AGAINST PURCHASE VALUE OF RS. 10/- PER SHA RE. AFTER TAKING INTO INDEX COST, THE PROFIT OF RS. 5644/- WAS DECLA RED. SIMILARLY ASSESSEE SOLD 100 SHARES OF M/S. MARUDHARA PROPCON PVT. LTD. AND ON THESE SHARES CAPITAL GAIN WAS WORKED OUT AT RS. 360/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT ENTIR E SHARES OF M/S. MARUDHARA PROPCON PVT. LTD. STOOD TRANSFERRED TO ANOTHER COMPANY. THE ASSESSEE AND THAT COMPANY WAS OWNING AN OFFICE AT 233 GANAPATI PLAZA HAVING AN AREA OF 700 SQ. FT. WHICH WAS ACQUIRED FOR RS. 6,30,000/-. IN VIEW OF THIS FACT, THE AO INFERRED THAT ASSESSEE HAS TRANSFERRED HIS RIGHTS IN THE PRO PERTY BY SELLING SHARES OWNED BY HER. BY ADOPTING DLC RATE OF RS. 2 620/- PER SQ. FT. OF THE PROPERTY OWNED BY THE COMPANY OF WHOSE S HARES WERE SOLD BY THE ASSESSEE, THE AO COMPUTED A CAPITAL GAI N AT RS.1,16,600/-. SIMILARLY, THE CAPITAL GAIN WAS WOR KED OUT IN CASE OF OTHER COMPANY M/S. UNIQUE PROPCON PVT. LTD. WHOS E 100 SHARES ASSESSEE HAS SOLD. THIS COMPANY WAS ALSO OWNED AN OFFICE AT 232 GANAPATI PLAZA HAVING AN AREA OF 994 SQ. FT. THE A O WORKED OUT MARKET VALUE OF THIS OFFICE AT THE SAME RATE I.E. R S. 2620/- AND COMPUTED A CAPITAL GAIN OF RS. 360/-. IN THIS WAY, A TOTAL ADDITION OF RS. 1,16,960/- WAS MADE. THE LD. CIT (A) HAS CO NFIRMED THE ACTION OF THE AO. 4. AFTER CONSIDERING THE ORDERS OF AUTHORITIES BELO W AND THE SUBMISSIONS OF THE ASSESSEE, WE FIND THAT THE ADDIT ION MADE BY AO WHICH IS CONFIRMED BY LD. CIT (A) HAS NO LEG TO STA ND. ASSESSEE HAS SOLD THE SHARES OF A COMPANY AND NOT THE LAND OF TH AT COMPANY. THEREFORE, BY TAKING INTO CONSIDERATION OF THE LAND VALUE OWNED BY THAT COMPANY MAKING ANY ADDITION IN THE HANDS OF TH E ASSESSEE, IN OUR VIEW IS NOT JUSTIFIED. THERE IS NO PROVISION U NDER THE IT ACT THAT VALUE OF LAND OWNED BY A COMPANY WHOSE SHARES HAS B EEN GIVEN TO ANY PERSON AND IN THE HAND OF THAT PERSON ANY CA PITAL GAIN CAN BE ASSESSED ON THE BASIS OF LAND OR OFFICE SOLD BY THE COMPANY. IF ANY ADDITION CAN BE MADE THAT CAN BE MADE ON THE BA SIS OF VALUE OF THOSE SHARES OR TAKING INTO CONSIDERATION THAT T HE SALE 4 CONSIDERATION SHOWN BY ASSESSEE IS NOT CORRECT, IF THERE IS ANY EVIDENCE. NO SUCH MATERIAL WAS THERE BEFORE THE AO THAT ASSESSEE HAS SOLD THE SHARES BELOW MARKET PRICE AND, THEREFO RE, IN OUR CONSIDERED VIEW THE BASIS ON WHICH THE ADDITION HAS BEEN MADE BY AO WAS NOT CORRECT AND, THEREFORE, THE LD. CIT (A) WAS ALSO NOT CORRECT IN CONFIRMING THE ORDER OF AO. ACCORDINGLY , WE DELETE THE IMPUGNED ADDITION MADE AND CONFIRMED. 5. SINCE THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE AFORESAID REFERRED TO CASE OF SMT. JAIMALA AGARWAL, JAIPUR VS. DCIT, CENTRAL CIRCLE-2, JAIPUR IN I.T.A.NO. 465/JP/2011 FOR THE A.Y. 2006-07, SO BY RESPECTFULL Y FOLLOWING THE ORDER DATED 02/02/2012, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE IMPUGNED ADDITION IS DELETED. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 27 TH JANUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JANUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R BY ORDER ASSISTANT REGISTRAR, ITAT, JAIPUR.