BONIFACIO D'SOUZA, MUMBAI V. INCOME TAX OFFICER-30(1)(2), MUMBAI

ITA 4819/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0363 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Sale consideration of property below Jantri Value; Gift
• Section: 143(3); 50C; 56

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 4819/MUM/2017 ( / ASSESSMENT YEAR: 2013 - 14 ) SHRI BONIFACIO DSOUZA SHOP NO. 1, LA LINK CHS LTD. JAMUNA SUNDER LANE, ORLEM, MALAD (W), MUMBAI - 400 064 / VS. ITO - 30(1)(2), PRATYAKSHAKAR BHAVAN, BANDRAKURLA COMPLEX, MUMBAI - 400 051 ./ ./ PAN/GIR NO. AUOPD 5097 J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. N. HEMALATHA / DATE OF HEARING : 09.11.2017 / DATE OF PRONOUNCE MENT : 05.02 .2018 / O R D E R PER S HAMIM YAHYA , A. M.: THIS A PPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 12.05.2017 AND PERTAINS TO THE A SSESSMENT YEAR 2013 - 14. 2. T HE GROUNDS OF APPEA L READ AS UNDER: 2 ITA NO. 4819/MUM/2017 (A.Y. 2013 - 14) SHRI BONIFACIO DSOUZA VS. ITO 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 26,75,724 / - IN THE INCOME OF MR. BONIFACIOD'SOUZA BEING THE AMOUNT OF LONG TERM CAPITAL GAINS ON THE IMMOVABLE PROPERTY TRA NSFERRED DURING THE YEAR BY INVOKING SECTION 50C OF THE INCOME TAX ACT. 2. THE LD. CIT (A) FAILED TO APPRECIATE THE FACTS THAT: A) THE APPELLANT HAS TRANSFERRED THE ASSET TO A RELATIVE AT A PRICE LOWER THAN THE MARKET VALUE. B) THE DIFFERENCE BETWEEN TH E MARKET PRICE AND THE TRANSACTION VALUE IS THE GIFT MADE BY THE ASSESSEE TO HIS RELATIVE. C) THE RELATIVE IS COVERED U/S 56(2)(VI) OF THE ACT. D) THE AFFIDAVIT FILED BY THE APPELL A NT, EXPLAINING THAT THE TRANSACTION WAS A GIFT, WAS IGNORED BY THE CIT(A). 3. BRIEF FACTS OF THE CASE D URING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD FLAT NO. 804, MALHAR BUILDING, GAURAV GARDEN CHSL, KANDIVALI WEST, MUMBAI - 400067 AT A SALE CONSIDERATION OF RS.28,00,000/ - . AS PER ASSESSEE, THE AFORESAID SALE RESULTS INTO LONG TERM CAPITAL GAIN OF RS.13,11,224/ - WITHOUT CONSIDERING PROVISIONS OF SECTION 50C [ STAMP VALUATION BEING RS. 41,64,500/ - ] WHICH WAS NOT SHOWN IN THE RETURN THROUGH OVERSIGHT OF THE ACCOUNTANT. IT WAS ALSO CLAIMED THAT THE SALE WAS TO BROTHER - IN - LAW AND HIS WIFE AND HENCE THE DIFFERENCE AFTER CONSIDERING PROVISIONS OF SECTION 50C IS THE A MOUNT OF GIFT WHICH IS EXEMPT. TH E ASSESSING OFFICER HELD THAT SECTION 50C DOES NOT DISCRIMINATE BETWEEN THE SALE TO A THIRD PARTY OR TO A RELATIVE. THE ASSESSING OFF ICER RECOMPUTED THE LTCG AT RS.26,75,724/ - BY INVOKING THE PROVISIONS OF SECTION 50C AND BROUGHT THE SAME TO TAX. 4. AGAINST ABOVE ORDER ASSESSEE APPEA L ED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3 ITA NO. 4819/MUM/2017 (A.Y. 2013 - 14) SHRI BONIFACIO DSOUZA VS. ITO 5. BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS), THE A SSESSEE INTER ALIA SUBMITTED THAT THE ASSESSEE WANTED TO GIFT THE PROPERTY TO HIS BROTHER - IN - LAW. HOWEVER, HE COLLECTED RS.28,00,000/ - FOR THE SAME. WHILE REGISTERING THE DOCUMENT, DUE TO LACK OF KNOWLEDGE, THIS FACT WAS NOT MENTIONED IN THE AGREEMENT. THE TRANSFER IS TO A RELATIVE WITHIN THE DEFINITION OF SECTION 56 (2)(VI) OF THE ACT. THE GIFT IS NOT COVERED UNDER TRANSFER AS PER SECTION 47(III). THE ASSESSEE HAS FILED A COPY OF AFFIDAVIT OF ASSESSEE DATED 12.5.2017 STATING THE ABOVE CLAIM. 6. H OWEVER , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT SATISFIED. HE UPHELD ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UN DER: 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AS WELL AS ORDER U/S 143(3) OF THE I.T. ACT. IN THE ASSESS MENT ORDER, THE LONG TERM CAPITAL GAIN WAS COMPUTED ON SALE OF FIAT AS PER PROVISIONS OF SECTION 50C AND SUBJECTED TO TAX BY THE AO. THE ASSESSEE DID NOT OFFER ANY CAPITAL GAIN ON SALE OF THE SAID FLAT IN ITS RETURN OF INCOME. AS PER DEED OF TRANSFER [CON VEYANCE DEED], THE PREMISES HAVE BEEN SOLD AND T RANSFERRED FOR THE PRICE OF RS. 28,00, 000 / - . THE TRANSFEREES HAVE PAID IN FULL TO THE TRANSFEROR BEFORE THE EXECUTION OF THE TRANSFER DEED. THE STAMP DUTY AND REGISTRATION CHARGES PAYABLE ON THE DEED OF TRANSF ER WAS BORNE AND PAID BY THE TRANSFEREES WHICH IS THE NORMS IN ANY SALE TRANSACTIONS. THEREFORE, TO HOLD THE TRANSACTION AS GIFT EVEN PARTIALLY IS NOT AT AIL JUSTIFIED FROM ANY ANGLE. IN A GIFT, THERE IS NO ROLE OF ANY PRICE OR CONSIDERATION. THE PLEA OF P ARTIAL GIFT AND PARTIAL SALE IS JUST AN AFTER - THOUGHT AND CHANCE TAKEN BY THE ASSESSEE TO MINIMIZE THE TAX LIABILITY AFTER BEING CAUGHT AS PER TRANSFER DEED, THE ENTIRE PRICE OF THE PREMISES WAS PAID BY THE TRANSFEREES. THEREFORE, NOTHING IS LEFT TO BE GIF TED. THE TAX LIABILITY ARISES BECAUSE OF APPLICATION OF PROVISIONS OF SECTION 50C ON TRANSFEROR. IN VIEW OF ABOVE, THE ADDITION OF RS. 26,75,724/ - MADE BY THE AO AS LTCG ON SALE OF FLAT IS HEREBY SUSTAINED. THE GROUNDS ARE REJECTED. 7. AGAINST ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 4 ITA NO. 4819/MUM/2017 (A.Y. 2013 - 14) SHRI BONIFACIO DSOUZA VS. ITO 8. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL CONSIDERATION I NOTE THAT ASSESSEE HAS SOLD A PROPERTY. THE VALUATION OF THE PROPERTY AS PER THE R EG ISTERING AUTHORITY IS HIGHER THAN THAT REFLECTED IN THE AGREEMENT OF SALE. HENCE , THE ADDITION FOR THE DIFFERENCE BETWEEN VALUE AS PER THE STUMP VALUATION AUTHORITY AND THAT REFLECTED IN THE AGREEMENT OF SALE HAS BEEN ADDED BY THE ASSESSING OFFICER. IN THE CIRCUMSTANCES , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I S CORRECT IN HOLDING THAT THE SUBSEQUENTLY THE PLEA OF THE ASSESSEE THAT HE HAS SOLD THE PROPERTY TO HIS B ROTHER - IN - LAW AND THE DIFFERENTIAL AMOUNT SHOULD BE DEEMED AS PARTIAL GIFT , IS CLEARLY A N AFTERTHOUGHT . SINCE, THE SAME IS NOT SUPPORTED BY ANY EVIDENCE IT IS NOT SUSTAINABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. HENCE , I DO NOT FIND ANY INFIRMITY IN THE ORDER'S OF AUTHORITIES BELOW. ACCORDINGLY , I UPHOLD THE SAME . 9. IN THE RESULT , TH IS APPEAL BY THE ASSESSEE STANDS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2018 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 05.02.2018 . . ./ ROSHANI , SR. PS 5 ITA NO. 4819/MUM/2017 (A.Y. 2013 - 14) SHRI BONIFACIO DSOUZA VS. ITO / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI