The ADIT.,(Intl.Taxn.), Ahmedabad V. Shri Tushar Baurai Mehta, Ahmedabad

ITA 548/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6791 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-04-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 19-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D. AGRAWAL, V.P. AND HON'BLE SHRI T.K. SHARMA, J.M .) I.T.A. NO. 548/AHD./2009 ASSESSMENT YEAR : 2000-2001 THE ADDL. (INTL. TAXN.), AH MEDABAD (APPELLANT) ( PAN : ACAPM2268C) VS.- SHRI TUSHAR BAURAI MEHTA, AHMEDABAD RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN , SR. D.R. RESPONDENT BY : SHRI M.G.PATEL, A.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 20-11-2008 OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-XXI, AH MEDABAD FOR THE ASSESSMENT YEAR 2000-2001. 2. GROUND NO.1 OF THE REVENUES APPEAL READS AS UND ER: THE LD. CIT(A)-XXI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.70,01,029/- IN THE LONG TERM CAPITA L GAIN BY DIRECTING TO TAKE SALE VALUE OF PROPERTY AT RS.48,50,000/- AS AGAINST JAN TRY RATE OF RS.1,18,51,029/- . 3. THE FACTS RELATING TO CONTROVERSY INVOLVED IN TH E AFORESAID GROUND OF APPEAL ARE THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE ADDITION OF RS.70,01,029/- IN LONG TERM CAPITAL GAIN ON THE BASIS OF JANTRI RATE OF RS.1,18,51,029/- AS AGAINST ACTUAL SALE VALUE OF RS.48,50,000/-. 4. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) DELETED THE SAID ADDITION ON THE GROUN D THAT SECTION 50C HAS NO APPLICATION IN THE ASSESSMENT YEAR UNDER APPEAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH THE SIDES. IT IS PERTINENT TO NOTE THAT THERE IS NO EVIDENCE WHATSOEVER INDICATING THAT THE ASSESSEE HAS RECEIVE D A SINGLE PENNY MORE THAN THE SALE CONSIDERATION OF RS.48,50,000/-. ON THIS BASIS, HE HAS DECLARED THE CAPITAL GAIN IN THE ITA NO.548/AHD/2009 2 RETURN OF INCOME. THE ASSESSING OFFICER ADOPTED THE SALE CONSIDERATION ON THE BASIS OF JANTRI RATE AT RS. 1,18,51,029/-. SECTION 50C OF TH E I.T. ACT, WHICH AUTHORISES THE ASSESSING OFFICER TO ADOPT JANTRI RATE IS APPLICABL E W.E.F. 01.04.2003 I.E. FROM THE ASSESSMENT YEAR 2003-04. WE ARE, THEREFORE, OF THE VIEW THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR DELETING THE ADDITION OF RS. 70,01,029/- MADE BY THE ASSESSING OFFICER. WE, THER EFORE, DECLINE TO INTERFERE. GROUND NO.1 IS REJECTED. 6. GROUND NO.2 OF REVENUES APPEAL READS AS UNDER: 2. THE LD. CIT(A)-XXI, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS IN DELETING THE ADDITION OF RS.2,00,000/- PAID TO TENANT FOR WITHD RAWING LEGAL SUIT. 7. FACTS RELATING TO CONTROVERSY INVOLVED IN THE AF ORESAID GROUND OF APPEAL ARE THAT IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HELD TH AT DEDUCTION OF RS.2 LAKHS CLAIMED FROM SALE CONSIDERATION, BEING PAID TO TENANT M/S. MODI STONE LTD. IS NOT PERMISSIBLE UNDER SECTION 48 OF THE I.T. ACT AS IT WAS NOT INCU RRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANSFER. 8. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), IT WAS CONTENDED THAT PROPERTY WAS IN LITIGATION WITH THE TENANT AND COMPENSATION WAS PAID FOR WITHDRAWING THE LEGAL SUIT WHICH WAS ALSO MENTIONED IN THE REGISTERED CONVEYANCE DEED. AFTER CONSIDERING THE VARIOUS CONTENTIONS, THE LEAR NED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT THE ASSESSEE COULD NOT H AVE EFFECTED THE SALE WITHOUT VACATING THE TENANT. IT WAS FURTHER OBSERVED THAT COMPENSATI ON OF RS.2 LAKHS HAD BEEN PAID TO THE TENANT DIRECTLY BY THE PURCHASER IN CONNECTION WITH THE SALE TRANSACTION AND AS SUCH, THIS EXPENDITURE IS QUITE INCIDENTAL TO THE TRANSFER. HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF RS.2 LAKHS FROM S ALE CONSIDERATION. AGGRIEVED, THE REVENUE IS IN APPEAL. 9. WE HAVE HEARD BOTH THE SIDES. THE LD. D.R. HEAVI LY RELIED ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. A S AGAINST THIS, THE COUNSEL OF THE ASSESSEE SUBMITTED THAT THIS PAYMENT WAS MADE FOR E FFECTING THE TRANSFER. LOOKING TO THE FACT THAT PROPERTY IN QUESTION CANNOT BE SOLD, UNLE SS DISPUTE WITH THE TENANT IS SETTLED. THEREFORE, IN OUR OPINION, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS LEGALLY ITA NO.548/AHD/2009 3 AND FACTUALLY CORRECT IN HOLDING THAT THIS EXPENDIT URE IS INCIDENTAL TO THE TRANSFER. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS). THIS GROUND OF APPEAL IS ALSO REJECTE D. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE COU RT ON 21.04.2011 SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 21/04/2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S.