GAUTAM SHROFF, MUMBAI V. ACIT CIR 12(3), MUMBAI

ITA 4737/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2432 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 06-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JEVAN LAL LAVEDIA
• Assessee Lawyers: GULATI
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH G , MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4737/MUM/2012 (ASSESSMENT YEAR : 2007-2008) GAUTAM T. SHAROFF C/O M. R. GULATI & CO. 110, MAKERS BHAWAN NO. 3, NEW MARINE LINES MUMBAI-400020. PAN: AAACH0973N VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 12(3), MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. M. R. GULATI (AR) REVENUE BY : SH.JEVAN LAL LAVEDIA (DR) DATE OF HEARING : 04.10.2016 DATE OF PRONOUNCEMENT : 14.10.2016 O R D E R PER PAWAN SINGH; 1. THIS APPEAL U/S. 253 OF INCOME TAX ACT (ACT) IS D IRECTED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-38, M UMBAI DATED 18.09.2014 FOR ASSESSMENT YEARS (AY) 2010-11. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN NOT ACCEPTING THE APPELLANT CONTENTION THAT PURCHASE PR ICE OF 3 PLOTS SHOULD BE AS PER PURCHASE AGREEMENT ONLY. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 31 JULY 2007, DECLARING TOTAL IN COME AT RS.36,33,462 /-. THE RETURN WAS SELECTED FOR SCRUTINY. THE AO WHILE FRAM ING ASSESSMENT NOTED THAT ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAIN ON SALE OF IMMOVEABLE PROPERTY. THE ASSESSEE HAS COMPUTED GAIN ON THE SALE OF BUILDING AT RS 2,50,000/-. IT WAS FURTHER OBSERVED ASSESSEE PURCHASED THE SAID PROPERTY VIDE SALE DEED DATED 26 JUNE1983, ITA 4737/M/2012 GAUTAM T SHROFF 2 CONSISTING OF THE LAND AND BUILDING FOR A CONSIDER ATION OF RS. 5,45,400/- ALONG WITH HER WIFE. WHILE CLAIMING CAPITAL GAIN THE ASSESSEE HAS TAKEN THE COST OF INDEXATION FOR COMPUTING CAPITAL GAIN. THE AO ISSUED SHOW CAUS E NOTICE AS TO WHY THE CAPITAL GAIN ON THE SALE OF BUILDING BE CALCULATED BY TAKIN G PURCHASED CONSIDERATION AS IT ATTRIBUTABLE TO THE BUILDING INSTEAD OF ENTIRE PURC HASE CONSIDERATION WHICH CONSIST OF COST OF LAND AND BUILDING BOTH. IN RESPONSE TO THE SHOW CAUSE NOTICE THE ASSESSEE FILED REPLY DATED 18 DECEMBER 2009 AND ALSO REVISE COMPUTATION OF INCOME COMPUTING LONG TERM CAPITAL GAIN ON BUILDING AT RS 21,92,440/- AS AGAINST EARLIER CLAIM OF RS 2,50,000/-. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND HE CALCULATED LONG TERM CAPIT AL GAINS AT RS 22,54,390 /- ON SALE OF BUILDING. AGGRIEVED BY THE ORDER OF ASSESSI NG OFFICER, THE ASSESSEE FILED APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEAL). IN APPEAL ASSESSEE URGED THAT AO ERRED IN CALCULATING THE VALUE OF BUILDING AT TH E RATE OF RS. 69,154 /-INSTEAD OF RS. 3,85,000 /-. DURING THE FIRST APPELLATE STAGE THE A SSESSEE CONTENDED VIDE WRITTEN SUBMISSIONS DATE 03.02.2012 THAT THE ASSESSEE SOLD THREE SEPARATE PARCEL (PEACE) OF LAND AND NOT ONE AS COMPARED BY ASSESSING OFFICER. THE COST OF PURCHASE BY THE ASSESSEE FOR THREE PROPERTIES WAS RS. 5,85,000/- AN D NOT RS.5,84,000/-. IT WAS FURTHER CONTENDED THAT THE ASSESSEE HAD PAID RS. 10,000/- TO SH. TV KINI AND RS. 30,000/- TO SONS OF GANAPTHY FOR LAND. THE APPELLANT WITH HER WIFE SOLD LAND WITH AN AREA OF 4.82 ACRE AND BUILDING WITH TWO OTHER PARCEL OF LA ND VIDE SALE DEED DATED 14 FEBRUARY 2007. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY LEARNED CIT (APPEALS) HOLDING THAT THE ASSESSEE HIMSELF HAD OFF ERED LONG TERM CAPITAL GAIN OF RS 21,92,440/- IN THE REVISE COMPUTATION AND AO ASS ESSED THE SAME AT RS 22,54,390/- AND DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TAX APPEALS, THE ASSESSEE HAS FILED THE PRES ENT APPEAL BEFORE US. 4. WE HAVE HEARD THE LD AR OF THE ASSESSEE AND THE LD DR FOR THE RREVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARN ED AR OF THE ASSESSEE ARGUED THAT THE ASSESSEE HAS TRANSFERRED THREE PIECE OF LAND VI DE THE SALE DEED DATED 14 TH FEBRUARY, 2007. THE ASSESSEE ALONG WITH HIS WIFE AC QUIRED ALL THREE PROPERTY ON DIFFERENT DATES. ALL THOSE PROPERTIES WERE TRANSFE RRED BY WAY OF SINGLE SALE DEED REFERRED ABOVE. IT WAS FURTHER ARGUED THAT THE ASSE SSING OFFICER AS WELL AS LD ITA 4737/M/2012 GAUTAM T SHROFF 3 COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONS IDER THE CONTENTION OF ASSESSEE WHICH WERE DULY SUPPORTED WITH THE DOCUMENTARY EVID ENCE. THE LD AR FOR THE ASSESSEE WOULD ARGUE THAT THE COST OF ACQUISITION O F ALL THREE PROPERTIES BE CONSIDERED AT RS.5,85,000/- INSTEAD OF RS.5,45,000/-. THE LD A R FOR THE ASSESSEE FINALLY WOULD ARGUE THAT REVENUE MAY BE DIRECTED TO CONSIDER THE COST OF ACQUISITION OF THREE PROPERTY/ PIECE OF LAND AT RS.5,85,000/- THE LEA RNED DR FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. THE LEARN ED DR FOR THE REVENUE WOULD ARGUE THAT THE ASSESSEE HIMSELF HAS TAKEN INCONSIST ENT STAND ABOUT COST OF THE ACQUISITION OF PROPERTY. THE ASSESSEE HIMSELF PROVI DED THE WORKING OF LONG TERM CAPITAL GAIN OF RS.2,50,000 /-WHICH WAS SUBSEQUENTL Y REVISED BY THE ASSESSEE HIMSELF. IT WAS FINALLY ARGUED THAT THE ORDER OF AU THORITY BELOW DOES NOT REQUIRE ANY INTERFERENCE AT THIS STAGE. 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. A VERY SHORT QUESTION FOR OUR CONSIDERATION IS THAT WHAT IS COST OF ACQUISITION OF PROPERTIES WHICH WERE SOLD BY ASS ESSEE IN THE SALE DEED DATED 14 TH FEBRUARY 2007. THE PERUSAL OF ASSESSMENT ORDER SHOW S THAT AO HAS NOT GONE THROUGH THE CONTENTS OF SALE DEED DATED 14 TH FEBRUARY, 2007. THE CONTENTS OF SAID SALE DEED CLEARLY MENTIONED ABOUT THE TRANSFER OF THREE PIECE (PARCEL) OF LAND WHICH CONSIST OF ONE FARM HOUSE WITH GODOWNS AND TWO OTHER PIECE OF LAND (PAGE NO.1TO10 OF P/B). THE FIRST PIECE OF LAND CONSIST OF FARMHOUSE AND BUILDING WHICH WAS ACQUIRED BY SALE DEED DATED 22 JUNE 1983(PAGE11TO28), SECOND P IECE OF LAND WAS ACQUIRED BY WAY OF DEED OF DECLARATION DATED 29 SEPTEMBER 1982( PAGE 29TO 38 OF P/B) AND 3 RD PIECE OF LAND WAS ACQUIRED VIDE DEED OF SETTLEMENT DATED 28 DECEMBER 1982 (PAGE 39 TO 58 OF P/B). THE ASSESSEE HAS EXPLAINED THE P AYMENT OF CONSIDERATION OF RS. 40,000/- IN RESPECT OF TWO REMAINING PIECE OF LANDS . WE HAVE OBSERVED THAT NEITHER THE ASSESSING OFFICER NOR THE LEARNED CIT(A) TAKE N INTO ACCOUNT THE COST OF REMAINING TWO PIECE OF LAND WHILE COMPUTING THE LON G TERM CAPITAL GAIN. THUS, WE ARE ACCEPTING THE CONTENTION OF ASSESSEE THAT THE C OST OF ACQUISITION OF THE PROPERTIES SOLD IN THE SALE DEED IS/ WAS RS. 5,85,000/-. ACCOR DINGLY, THE AO IS DIRECTED TO RE- COMPUTE THE WORKING OF LTCG WHILE TAKING INTO THE C ONSIDERATION THE COST OF ACQUISITION AT RS.5,85,000/- OF THREE PROPERTIES. W E ORDER ACCORDINGLY. ITA 4737/M/2012 GAUTAM T SHROFF 4 IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS ALLO WED. ORDER ANNOUNCED IN OPEN COURT ON 14 TH OF OCTOBER 2 016. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 14/10/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, M UMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/