Shri Vir Kumar Jain, Lucknow V. ACIT Rg. VI, Lucknow

ITA 557/LKW/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1646 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-02-2013
• Assessment Year: misc
• Appeal Filed On: 23-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: A R SHUKLA
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Cost of acquisition; Revised return
• Section: 50C; 142(1); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI J SUDHAKAR REDDY , ACCOUNTANT MEMBER ITA NO. 557/LKW/2011 ASSESSMENT YEAR: 2008 - 2009 SHRI. VIR KUMAR JAIN 242/9, NARAIN DAS LANE YAHIYAGANJ, LUCKNOW V. ACIT RANGE VI, LUCKNOW PAN: ABQPJ8163N (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. A.R. SHUKLA, ADVOCATE RESPONDENT BY: SMT. RANU BISWAS, D.R. DATE OF HEARING: 13.03.13 DATE OF PRONOUNCEMENT: 15.03.13 O R D E R PER S U NIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . BECAUSE THE LEARNED 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE BENEFIT OF INDEXED COST OF ACQUISITION ON ACCOUNT OF INVESTMENT MADE IN THE CONSTRUCTION OF THE HOUSE PROPERTY IN THE COMPUTATION OF CAPITAL GAIN ON THE GROUND THAT SUCH AN INDEXATION WAS NOT CLAIMED IN THE RETURN OF INCOME AND THE SAME CANNOT BE MADE THROUGH CORRECTED COMPUTATION FILED BEFORE THE ASSESSING OFFICER AND THEREFORE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS CIT, 284 ITR 323 SUCH A CLAIM CANNOT BE ALLOWED EVEN : - 2 - : AT THE APPELLATE STAGE. 2 . BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE BENEFIT OF INDEXATION OF THE COST OF THE INVESTMENT MADE IN THE HOUSE PROPERTY SHOULD HAVE BEEN ALLOWED IN THE CASE OF THE APPELLANT AS; (I) THE SUBJECT MATTER OF SALE WAS A HOUSE PROPERTY WHICH WAS SOLD FOR A SUM OF RS.56,00,000 / - AS MENTIONE D IN THE SALE DEED AND FOR THE PURPOSE OF STAMP VALUATION IT WAS VALUED AT RS.62,96,273 / - ; (II) IN THE SALE DEED ITSELF, IT WAS DULY MENTIONED THAT THE SALE WAS FOR A HOUSE PROPERTY AND NOT A PLOT; (III) AT THE TIME OF FILING OF RETURN, THE COST OF INVESTMENT IN THE CONSTRUCTION OF THE HOUSE PROPERTY COULD NOT BE TAKEN FOR INDEXATION PURPOSES DUE TO INADVERTENT MISTAKE AND ONLY INDEXED VALUE OF PLOT WAS TAKEN, HOWEVER THE SAME WAS DULY PLACED BY WAY OF CORRECTED COMPUTATION BEFORE THE ASSESSING O FFICER ALONG WITH APPROVED VALUERS' REPORT; AND THEREFORE THE VIEW TAKEN BY THE 'CIT(A)' IN DENYING THE BENEFIT OF INDEXATION IS WHOLLY ERRONEOUS NOT ONLY IN LAW BUT ALSO ON FACTS. 3 . BECAUSE THE APPELLANT HAD NOT MADE ANY KIND OF NEW CLAIM OF DEDUCTION AS E NVISAGED IN THE CASE OF GOETZ INDIA LTD. VS CIT (SUPRA) BUT HAS GIVEN CORRECTED COMPUTATION OF CAPITAL GAIN BY INCLUDING THE COST OF CONSTRUCTION OF THE HOUSE ON THE PLOT WHICH THE ASSESSING OFFICER WAS STATUTORY OBLIGED TO COMPUTE THE CORRECT TAXABLE INCO ME FROM CAPITAL GAIN OF THE APPELLANT AND THE SAME COULD NOT HAVE BEEN DISALLOWED BY THE AUTHORITIES BELOW FOLLOWING THE SAID JUDGMENT AS THE SAME IS : - 3 - : NOT APPLICABLE EITHER IN PRINCIPLE OR ON THE FACTS OF THE APPELLANT'S CASE. 4 . BECAUSE IN ANY CASE THE JUDGME NT OF HON'BLE SUPREME COURT IN THE CASE OF GOETZ INDIA LTD. VS CIT (SUPRA) IS LIMITED TO THE POWER OF THE ASSESSING OFFICER AND DOES NOT IMPINGE UPON THE POWERS OF APPELLATE AUTHORITIES WHICH HAS BEEN CLARIFIED BY VARIOUS COURTS WHILE INTERPRETING THE SAID JUDGMENT AND THEREFORE THE VIEW TAKEN BY THE 'CIT(A)' CANNOT BE SUSTAINED IN LAW. 5 . BECAUSE THE LEARNED 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE DEDUCTION U/S 54EC ON THE INVESTMENT OF RS.36,00,000/ - MADE IN C APITAL GAINS BOND WHICH WAS DU LY CLAIMED IN THE RETURN OF INCOME ALONG WITH THE EVIDENCES WHICH WERE AVAILABLE NOT ONLY BEFORE THE ASSESSING OFFICER BUT WERE ALSO PLACED BEFORE HIM AND HE SHOULD HAVE ALLOWED THE BENEFIT OF SECTION 54EC HIMSELF RATHER THAN RELEGATING THE MATTER TO THE A SSESSING OFFICER TO VERIFY THE CLAIM U/S 154. 6 . BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2 . THROUGH THESE GROUNDS, IT HAS BEEN CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE LOWER AUTHORITIES H AVE NOT CONSIDERED THE COMPUTATION OF CAPITAL GAIN FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ON INVOCATION OF PROVISIONS OF SECTION 50C OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') BY THE ASSESSING OFFICER FOLLOWING THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT [2006] 284 ITR 323. IT WAS FURTHER CONTENDED THAT EVEN THE LD. CIT(A) HAS NOT LOOKED INTO THE COMPUTATION FURNISHED BY THE ASSESSEE AND HAS CONFIRMED THE ASSESSMENT ORDER. : - 4 - : 3 . THE LD . D.R., ON THE OTHER HAND, HAS CONTENDED THAT THE CLAIM OF THE ASSESSEE CANNOT BE CONSIDERED WITHOUT FILING A REVISED RETURN. SINCE THE COMPUTATION WAS NOT FILED THROUGH REVISED RETURN, THE ASSESSING OFFICER HAS RIGHTLY IGNORED THE SAME IN THE LIGHT OF TH E JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SUPRA). THEREFORE, THERE IS NO INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES. 4 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE HAS FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2008 - 09 DECLARING TOTAL INCOME AT ` 18,06,432. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN AT ` 52,00,300 IN THE RETURN OF INCOME BY TAKING THE COST OF ACQUISITION AT ` 1,77, 000 AND AFTER INDEXATION IT COMES AT ` 3,99,700 AND THE PROPERTY SOLD AT ` ,56,00,000. THE ASSESSING OFFICER NOTICED THAT AS PER CIRCLE RATE, THE COST OF PROPERTY WOULD BE AT ` 62,96,273 AGAINST THE SALE OF PROPERTY DECLARED BY THE ASSESSEE AT ` 56,00,000. H E ACCORDINGLY ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT TO THE ASSESSEE ASKING HIM AS TO WHY SALE CONSIDERATION MAY NOT BE TAKEN AT ` 62,96,273 IN PLACE OF ` 56,00,000. IN COMPLIANCE THEREOF, THE ASSESSEE HAS SUBMITTED A REVISED COMPUTATION OF INCOME AL ONG WITH REVISED COMPUTATION OF LONG TERM CAPITAL GAIN BY SUBMITTING A VALUATION CERTIFICATE OF THE GOVERNMENT APPROVED VALUER FOR THE PROPERTY. THE REVISED COMPUTATION WAS NOT TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER IN THE LIGHT OF THE JUDGMENT OF TH E HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SUPRA) AND HAS ADOPTED THE SALE CONSIDERATION AT ` 62,96,273 FOR COMPUTING THE LONG TERM CAPITAL GAIN. 5 . THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), BUT DID NOT FIND FAVOUR WITH THE LD. CI T(A). HENCE THIS APPEAL. 6 . UNDOUBTEDLY AS PER JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SUPRA), THE ASSESSING OFFICER IS NOT REQUIRED TO ENTERTAIN THE CLAIM WITHOUT FILING A REVISED RETURN, BUT THIS RESTRICTION IS : - 5 - : NOT IMP OSED UPON THE APPELLATE AUTHORITIES. THE TRIBUNAL HAS EXAMINED THIS ASPECT IN THE CASE OF FRANCO - INDIAN PHARMACEUTICALS PVT. LTD. VS. ITO [2010] 3 ITR (TRIB.) 754 (MUMBAI), IN WHICH ONE OF THE MEMBERS WAS PARTY TO THE ORDER , AND HELD THAT THE POWERS OF TH E TRIBUNAL AS LAID DOWN IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT [1998] 229 ITR 383 ARE NOT AFFECTED BY THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SUPRA) , T HEREFORE, THE TRIBUNAL HAS POWER TO ADMIT AN AD DITIONAL GROUND OR CLAIM MADE BY THE ASSESSEE WHEN ALL THE FACTS ARE ON RECORD. SIMILAR IS THE POSITION IN THE INSTANCE CASE WHERE THE ASSESSEE HAS RAISED REVISED COMPUTATION OF CAPITAL GAIN, BUT WAS NOT EXAMINED BY THE ASSESSING OFFICER ON ACCOUNT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT (SUPRA ) . THEREFORE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE RECOMPUTATION OF CAPITAL GAIN OF THE ASSESSEE BE EXAMINED IN ACCORDANCE WITH LAW. ACCORDINGLY WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN IN THE LIGHT OF REVISED COMPUTATION FILED BY THE ASSESSEE DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IN ACCORDANCE WITH LAW. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.3.2013. SD/ - SD/ - [ J SUDHAKAR REDDY ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 15.3.2013 JJ: 1303 : - 6 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR