SHRI.RAMESH KUMAR ARORA, MUMBAI V. I.T.O 18(3)(3), MUMBAI

ITA 5508/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101149 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN ,AM AND LALIT KUMAR, JM ./ I.T.A. NO . 5508 / MUM/20 1 3 ( / ASSESSMENT YEA R : 200 8 - 09 ) SHRI RAMESH KUMAR ARORA, MAGNUM OFFICE AIDS, MAGNUM HOUSE - 38, CADDEL ROAD, MAHIM(W), MUMBAI - 4000 16 / VS. INCOME TAX OFFICER 1 8 ( 3 )( 3 ), 2 ND FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL, MUMBAI - 4000 1 2 . ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN : AA CPA4870G / APPELLANT BY SHRI DEEPAK P TIKEKAR / RSPONDENT BY MS.ANU AGGARWAL / DATE OF HEARING : 1 9 .8 . 201 5 / DATE OF PRONOUNCE MENT: 23.9 . 201 5 / O R D E R P ER LALITKUMAR : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 15 . 5 .201 3 PASSED BY THE LD. CIT(A) - 16 , MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 200 8 - 09 . 2. ALTHOUGH THE ASSESSEE HAS URGED VA RIOUS ISSUES IN THIS APPEAL, THE MAIN ISSUE IS WITH REGARD TO ADDITION OF SHORT TERM CAPITAL GAIN OF RS.19,39,729/ - TO THE INCOME OF THE ASSESSEE. ITA NO. 5508 / MUM/20 1 3 2 3. FACTS RELATING TO THE ISSUE ARE STATED IN BRIEF THAT THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1, 14,580/ - WAS FILED ON 30.7.2008. THE ASSESSEE IS A PARTNER IN M/S MAGNUM OFFICE AIDS WHICH IS CARRYING ON THE BUSINESS OF TRADING IN OFFICE FURNITURE. T HE ASSESSEE HAD SOLD A FLAT, VIZ., FLAT NO.102, BLDG. NO.M - 3/C, SION PRATIKSHA NAGAR, SION, MUMBAI ON 1 0.8.2007 FOR A CONSIDERATION OF RS.14.00 LAKHS. THE SAID FLAT HAD BEEN PURCHASED ON 20.6.2006 FOR RS.12,60,000/ - . ACCORDINGLY, THE ASSESSEE DECLARED SHORT TERM CAPITAL GAIN OF RS.1,40,000/ - . THE AO EXAMINED THE COPY OF SALE AGREEMENT DATED 10.8.2007 FUR NISHED TO HIM AND NOTICED THAT THE PRINTING PATTERN AND FONT WAS DIFFERENT IN PAGES 3 AND 8 OF THE AGREEMENT. IT IS PERTINENT TO NOTE THAT THE SALE CONSIDERATION WAS MENTIONED IN THOSE TWO PAGES ONLY. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE ASSESSEE H AS FABRICATED THE SALE AGREEMENT . THE ASSESSEE ALSO DID NOT PRODUCE THE ORIGINAL DOCUMENT. H ENCE T HE AO DID NOT ACCEPT THE SALE CONSIDERATION OF RS.14.00 LAKHS STATED IN THE AGREEMENT. HE FURTHER NOTICED THAT THE SALE AGREEMENT WAS ALSO NOT REGISTERED WIT H THE STAMP DUTY AUTHORITIES. 4. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAD SOLD ANOTHER FLAT LOCATED AT OSHIWARA, ANDHERI. HENCE HE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING HIM AS TO WHY THE SALE VALUE OF SION FLAT SHOULD NOT B E TAKEN EQUAL TO THAT OF THE PRICE OF OSHIWARA FLAT. THE AO NOTICED THAT THE OSHIWARA FLAT HAVING AN EXTENT OF 860 SQ. FT. WAS VALUED FOR STAMP DUTY PURPOSES AT RS.42,20,500/ - . THE FLAT LOCATED AT SION WAS HAVING 652 SQ. FT. ACCORDINGLY, THE AO ADOPTED THE SALE PRICE OF THE SION FLAT PROPORTIONATELY AT RS.31,99,729/ - AND COMPUTED SHORT TERM CAPITAL GAIN AT RS.19,39,729/ - (RS.31,99,729/ - LESS RS.12,60,000/ - ) AND ASSESSED THE SAME. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THIS ISSUE BEFORE THE LD. ITA NO. 5508 / MUM/20 1 3 3 CIT(A) WHO ALSO CON FIRMED THE ACTION. HENCE, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 5 . BEFORE US, THE LD. AR SUBMITTED THAT THE AO HAS APPLIED THE PROVISIONS OF SEC. 50C OF THE ACT ON SALE OF PROPERTY, WHICH WAS NOT REGISTERED WITH THE STAMP AUTHORITIES . HE SUBMITTED THAT THE PROVISIONS OF SEC. 50C SHALL NOT APPLY TO THE CONVEYANCE DEEDS WHICH ARE NOT REGISTERED WITH THE STAMP AUTHORITIES. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. R. SUGANTHA RAVINDRAN (2013)(352 ITR 488). 6 . THE LD. DR ON THE CONTRARY SUPPORTED THE ORDER PASSED BY LD CIT(A). 7. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE LD A.R OF THE ASSESSEE ADVANCED ARGUMENTS ON THE UNDERSTANDING THAT THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SEC. 50C OF THE ACT. HOWEVER, ON A PERUSAL OF THE ORDER PASSED BY LD CIT(A), WE NOTICE THAT THE LD CIT(A) HAS GIVEN A CLEAR FINDING THAT THE ASSESSING OFFICER HAS NOT INVOKED THE PROVISIONS OF SEC. 50C OF THE ACT. WE NOTICE THAT THE ASSESSING OFFICER WAS CONSTRAINED TO ADOPT THE SALE CONSIDERATION ON ESTIMATED BASIS, SINCE HE FELT THAT THE ASSESSEE HAS FABRICATED THE COPY OF CONVEYANCE DEED AND HENCE THE SALE CONSIDERATION COULD NOT BE THE AMOUNT ME NTIONED IN THE SALE AGREEMENT. THE ASSESSEE ALSO SUBMITTED THAT THE SALE AGREEMENT WAS NOT REGISTERED. 8. THE PRESUMPTION OF THE AO THAT THE SALE AGREEMENT IS FABRICATED ONLY WAS NOT CONTESTED BY THE ASSESSEE BEFORE LD CIT(A). EVEN THOUGH THE LD CIT (A) HAS ALSO REITERATED THE SAME IN HIS ORDER, PECULIARLY, THE ASSESSEE ITA NO. 5508 / MUM/20 1 3 4 DID NOT CONTEST THE SAID OBSERVATIONS BEFORE THE TRIBUNAL. IN FACT, THE LD CIT(A) HAS MADE SPECIFIC OBSERVATION THAT THE ADDITION WAS MADE BY THE AO U/S 50C OF THE ACT. STILL THE ASSE SSEE HAS CHOSEN TO ADVANCE HIS ARGUMENTS IN RESPECT OF PROVISIONS OF SEC. 50C OF THE ACT. 9. AT THE SAME TIME, WE NOTICE THAT THE ASSESSING OFFICER HAS ALSO COMMITTED AN ERROR IN ESTIMATING THE SALE CONSIDERATION ON THE BASIS OF THE SALE CONSIDERATIO N PERTAINING TO ANOTHER FLAT LOCATED IN ALTOGETHER DIFFERENT PLACE. FURTHER, THE AO HAS ALSO NOT CHOSEN TO EXPLORE OTHER PERMISSIBLE METHODS LIKE EXAMIN ING THE BUYER ; REFER RING THE MATTER OF VALUATION TO THE DEPARTMENTAL VALUATION OFFICER ; ASCERTAIN ING TH E MARKET VALUE OF FLAT BY COLLECTING COMPARABLE CASES ETC . HENCE, IN OUR VIEW, THE APPROACH OF THE AO WAS ALSO NOT IN ACCORDANCE WITH THE LAW. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH IN ACCORDANCE WITH THE LAW AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED ACCORDINGLY ON 23RD SEPT 2015. 23RD SEPT , 2015 SD SD ( B.R.BASKARAN) ( LALIT KUM AR) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 23RD SEPT , 2015 . . . ./ SRL , SR. PS ITA NO. 5508 / MUM/20 1 3 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI