ACIT, Chandigarh V. Smt. Kiran Bala, Chandigarh

ITA 594/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6935 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: N K SAINI
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C; 54F; 142(1); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.594/CHD/2017 ASSESSMENT YEAR: 2012-13 THE ACIT VS. SMT. KIRAN BALA CIRCLE 2(1) # 182/65 CHANDIGARH INDUSTRIAL AREA I CHANDIGARH PAN NO. AESPB5681E CROSS OBJECTION NO. 44/CHD/2017 (IN ITA NO.594/CHD/2017) ASSESSMENT YEAR: 2012-13 SMT. KIRAN BALA VS. ACIT # 182/65, INDUSTRIAL AREA I C-2(1) CHANDIGARH CHANDIGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. N.K. SAINI REVENUE BY : SMT. C. CHANDRAKANTA DATE OF HEARING : 12/07/2017 DATE OF PRONOUNCEMENT : 28/08/2017 ORDER PER B.R.R. KUMAR A.M. THE PRESENT APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-I, CHANDIGARH DT. 27/01/2017 AND CROSS OBJEC TION FILED BY THE ASSESSEE. 2. FIRSTLY WE SHALL DEAL WITH THE APPEAL OF THE REV ENUE. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION A MOUNTING TO RS. 89,33,382/- MADE ON ACCOUNT OF LONG TERM CAPITAL GA IN. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CA NCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 4. THE ONLY EFFECTIVE GROUND IS GROUND NO. 2 OF THE REVENUE APPEAL. 2 5. BRIEF FACTS OF THE CASE UNDER CONSIDERATION IS E XEMPTION OF THE LONG TERM CAPITAL GAIN OF RS. 92,85,664/-. DURING THE YEAR TH E ASSESSEE HAS SOLD THE RESIDENTIAL HOUSE NO. 1128, SECTOR-34C, CHANDIGARH ON 30/07/2011 FOR RS. 166,00,000/- AND CLAIMED EXEMPTION UNDER SECTION 54 OF RS. 86,38,256/-. 6. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE S UBMITTED THAT SHE CLAIMED EXEMPTION UNDER SECTION 54F. 7. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE SHO ULD NOT OWN MORE THAN ONE RESIDENTIAL HOUSE AND DISALLOWED DEDUCTION UNDE R SECTION 54F AND RECOMPUTED THE CAPITAL GAINS TO RS. 89,33,382/- INS TEAD OF RS. 86,38,256/-. 8. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE LD.CIT(A), IT WAS STATED BY THE LD. COUNSELS THAT THE CLAIM HAS BEEN MADE U/S 54F INADVERTENTLY WHEREAS THE APPELLANT'S CASE FALLS U/S 54 OF THE I NCOME TAX ACT. SECTION 54 COVERS THE CAPITAL GAIN ARISING FROM TH E TRANSFER OF RESIDENTIAL PROPERTY AND WHICH HAVE BEEN INVESTED IN A RESIDENT IAL PROPERTY WITHIN THE STIPULATED PERIOD. SECTION 54F COVERS CASES OF SALE OF NON RESIDENTIAL PROPERTY, NET CONSIDERATION OF WHICH HAS BEEN INVESTED IN THE RESIDENTIAL PROPERTY WITHIN THE STIPULATED PERIOD. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF L ONG TERM CAPITAL GAIN MAINLY ON THE GROUND THAT THE APPELLANT HAD HERSELF ACCEPT ED THAT HER CLAIM FOR EXEMPTION DOES NOT FALL U/S 54 OF THE ACT. 9. THE LD. CIT(A) HELD THAT THE APPELLANT HAS SOLD HOUSE NO. 1128, SECTOR- 34C, CHANDIGARH ON 30/07/2011 AND A CAPITAL GAIN OF RS. 86,38,256/- ACCRUED TO THE ASSESSEE. AN INVESTMENT OF RS. 1,30,00,000/- WA S MADE IN ANOTHER RESIDENTIAL HOUSE I.E. H.NO. 1037, SECTOR-21-B, CHANDIGARH ON 1 ST FEBRUARY, 2013 I.E. WITHIN STIPULATED TIME. THEREFORE, IT IS NOT A CASE COVERE D U/S 54F. THE CASE OF THE APPELLANT FALLS U/S 54, AS IT IS A CASE WHERE THE A PPELLANT HAD SOLD ONE RESIDENTIAL PROPERTY AND HAS PURCHASED ANOTHER RESIDENTIAL PROP ERTY AND HAS INVESTED THE NET CONSIDERATION IN THE PURCHASE OF SAID PROPERTY AND DELETED THE ADDITION . 10. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO AND ARGUED THAT SINCE THE AMOUNT HAS BEEN CLAIMED UNDER SECTION 54F BEFOR E THE AO, THE ORDER OF THE CIT(A) IS TO BE NULLIFIED. 11. LD. AR RELIED ON THE ORDER OF THE CIT(A). 3 12. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FOUND THAT THE ASSESSEE HAS SOLD THE RESIDENTIAL PROPERTY AND INVESTED THE PROCEEDS IN ANOTHER RESIDENTIAL PROPERTY WITHIN THE STIPULATED TIME, CL AIMING EXEMPTION UNDER SECTION 54, HENCE THERE IS NO NEED TO INTERFERE IN THE ORDE R OF THE LD. CIT(A) ON THIS GROUND. 13. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. 14. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION OF RS. 9,50,990/- ON ACCOUNT OF SHORT TERM CAPITAL GAINS TO THE DECLARED INCOME. 2. THE LEARNED CIT(A) HAS ERRED IN LAW IN CONFIRMING T HE ADDITION OF SHORT TERM CAPITAL GAINS AT RS. 15,90.970/-AGAINST THE DECLARE D SHORT TERM CAPITAL GAINS AT RS. 6.40.000/-BY APPLYING THE PROVISIONS OF SECTION 50C WHEREAS ASSESSEE HAS OBJECTED TO SAME STATING THAT THE PLOT SOLD WAS A T RIANGULAR PLOT AND IN LAST CORNER OF COLONY AND THERE BEING NO BUYER. THE LEARNED ASS ESSING OFFICER OUGHT TO HAVE REFERRED THE MATTER TO VALUATION OFFICER FOR DETERM INING THE FAIR MARKET VALUE OF THE PROPERTY AS REQUIRED UNDER SECTION 50C(2) OF IT ACT 1961. 15. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AS SOLD PROPERTY OF 286 SQ. YRDS. OF RESIDENTIAL PLOT FOR RS. 14.00 LACS AND RE TURNED SHORT TERM CAPITAL GAINS OF RS. 6,40,000/-. THE ASSESSING OFFICER HAS OBSERVED THAT THE STAMP DUTY VALUATION OF THE PLOT WAS 25,74,000/-. INVOKING PROVISION UND ER SECTION 50C, THE ASSESSING OFFICER HAS RECOMPUTED THE SHORT TERM CAPITAL GAIN S TO 15,90,970/- THUS ENHANCING STCG FROM RS. 6,40,000/-. THE LD. CIT(A) HAS CONFIRMED THE ADDITION. 16. REGARDING THE GROUNDS OF THE ASSESSEE PERTAINI NG TO CONFIRMING OF RS. 9,50,990/- ON ACCOUNT OF SHORT TERM CAPITAL GAINS, THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE AO OUGHT TO REFER THE MATTER T O VALUATION OFFICER FOR DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY A S REQUIRED UNDER SECTION 50C(2) OF THE ACT. SIMILAR ISSUE HAS BEEN DEALT IN THE CASE OF ANIL KUMAR JAIN VS. ITO IN ITA NO. 5331/DEL/2012 WHEREIN IT WAS HELD AS UNDER: CAPITAL GAINVALUATIONCASE OF ASSESSEE WAS SELECTE D FOR SCRUTINY AND NOTICES U/S 143(2) AND 142(1) WERE SERVEDAO HELD THAT ASSE SSEE SHOWED SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY FROM PERUSAL OF S ALE DEED, AO NOTED THAT STAMP DUTY ON SALE OF PROPERTY WAS AS PER CIRCLE RA TE OF AREA AT TIME OF SALEAO TOOK VIEW THAT AS PER SECTION 50C(1) FOR CALCULATIN G CAPITAL GAIN, SALE PRICE OF PROPERTY WAS TO BE DEDUCTED ON WHICH STAMP DUTY HAS BEEN PAIDAO MADE ADDITIONCIT(A) CONFIRMED ACTION OF OBSERVING THAT THAT ASSESSEE HAD NOT BROUGHT ANY SUBSTANTIAL MATERIAL TO CONTROVERT FIND ING OF AOHELD, AS PER SECTION 50C(2) WHERE ASSESSEE CLAIMS BEFORE AO OR AUTHORITY THAT VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDS FAIR MARKET VALUE OF PROPERTY AS ON DATE OF TRANSFER AND VALUE SO ADOPTED AND ASSESS ED BY STAMP VALUATION AUTHORITY HAS NOT BEEN DISPUTED IN ANY APPEAL OR RE VISION OR OTHERWISE PROVIDED, AO MAY REFER VALUATION OF CAPIT AL ASSET TO VALUATION OFFICER AND IN THAT EVENT, RELEVANT AND CORRESPONDING PROVI SIONS OF WEALTH TAX ACT SHALL, WITH NECESSARY MODIFICATIONS, WILL APPLYTHEREFORE, IT WAS INCUMBENT UPON AO TO REFER MATTER FOR VALUATION TO VALUATION OFFICER AS PROVIDED IN SECTION 50C(2) THUS, ORDERS OF AUTHORITY BELOW ARE SET ASIDE MATT ER RESTORE TO FILE OF AO FOR FRESH 4 ADJUDICATION AFTER REFERRING MATTER TO VALUATION OF FICER U/S 50C(2)APPEAL ALLOWED. 17. SIMILARLY IN THE CASE OF 1411/CHD/2016 THE COOR DINATE BENCH HELD THAT OWING TO THE PROVISION AS PER SECTION 50C(2) THE VA LUATION REPORT FROM THE DVO IS REQUIRED TO COMPUTE THE CAPITAL GAINS UNDER SECTION 50C HENCE THE MATTER IS SET ASIDE TO THE AO FOR PASSING OF THE ORDER AFTER OBTAINING THE REPORT FROM THE VALUATION OFFICER. HENCE THIS ISSUE IS SET ASIDE TO THE DESK OF THE ASSESSING OFFICER FOR RE-COMPUTATION OF CAPITAL GAINS AFTER O BTAINING THE REPORT FROM THE DVO. 18. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D AND CROSS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/08/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR