Chawla Techno Construct Ltd, New Delhi V. ACIT, Circle-6(1), New Delhi

ITA 6219/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0092 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 28-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: R S AHUJA
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 142(1); 250; 56

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER ITA NO. 6219/DEL/2018 ASSESSMENT YEAR: 2014-15 CHAWLA TECHNO CONSTRUCT LTD. VS. ACIT, CIRCLE 6(1 ), 3, LOCAL SHOPPING CENTRE, NEW DELHI MASJID MOTH, EXTENSION-II, UDAY PARK, NEW DELHI 49 (PAN: AAACC0020D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. R.S. AHUJA, CA REVENUE BY : SH. SL ANURAGI, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 16.7.2018 OF THE LD. CIT(A)-2, NEW DELHI PERTAININ G TO ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS:- (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. ACIT U/S. 143(3) AND LD. CIT(A)-2 U/S. 250 ERRED IN : I) MAKING DISALLOWANCE OF CARRY FORWARD LONG TERM CAPITAL LOSS OF RS. 82,96,820/- BY MAKING AN ADDITION U/S. 50C OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF DIFFERENCE IN THE CIRCLE RATE BETWEEN THE DATE OF REGISTRATION OF AGREEMENT TO SELL (16.7.2012) AND DATE ON WHICH SALE DEED WAS 2 REGISTERED (13.05.2013) AND NOT INCLUDING STAMP DUTY ON PURCHASE IN COST AND NOT ADDING TRANSFER CHARGES AND OTHER EXPENSES ON PURCHASE / SALE. II) ADDING A SUM OF RS. 8296820/- AS INCOME FROM OTHER SOURCES. III) STATING IN PARA 7.3 OF THE CIT(A) ORDER THAT I FIND THAT THE ASSESSING OFFICER HAS REDUCED THE LOSS FROM SALE OF THE PROPERTY. THIS STATEMENT IS INCORRECT AND CONTRARY TO THE FACTS. IV) NO APPRECIATING THE INTENTION OF BRINGING THE BENEFICIAL AMENDMENT (I.E. FIRST PROVISO TO SEC. 50C) TO PROVIDE STATUTORY RECOGNITION TO A PRINCIPLE WHICH HAD BEEN CLEARLY ADUMBRATED IN COMMERCIAL PARLANCE I.E. A CLARIFICATORY BENEFICIA L AMENDMENT IS APPLICABLE TO ALL PROCEEDINGS. (B) THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AME ND THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE CO MPANY FILED ITS RETURN OF INCOME ON 29.11.2014 DECLARING A LOSS OF RS. 85,54,511/- IN THE COMPUTATION OF INCOME. NOTICE U/S. 143(2) OF THE IN COME TAX ACT, 1961 (IN SHORT ACT) WAS SERVED UPON THE ASSESSEE COMPA NY SELECTING THE CASE FOR SCRUTINY. QUESTIONNAIRE WAS SERVED UPON THE ASSESSEE ALOGNWITH THE NOTICE U/S. 142(1) OF THE ACT DATED 18.1.2016, AS KING TO SUBMIT THE 3 REQUIRED INFORMATION. IN RESPONSE TO THE STATUTORY NOTICES, THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED NECES SARY DETAILS. THE CASE OF THE ASSESSEE WAS SELECTED THROUGH CASS FOR EXAMINING THE DETAILS IN LIMITED MANNER WITH SPECIFIC EMPHASIS ON THE ITEMS I.E. LONG TERM CAPITAL LOSS ON SALE OF PROPERTY AND MISMATCH IN AMOUNT PAID TO RELATED PERSONS U/S. 40A(2)(B) REPORTED IN AUDIT RE PORT AND ITR, AVAILABLE IN THE RETURN OF INCOME FILED BY THE ASSESSEE COMPA NY. THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF CIVIL, ELECT RICAL AND PLUMBING CONSTRUCTION. IN THIS CASE THE ASSESSEE COMPANY SOL D AN INDUSTRIAL LEASE HOLD PROPERTY VIDE SALE DEED DATED 13.5.2013 AT A T OTAL SALE CONSIDERATION OF RS.1,60,00,000/-. THE ASSESSEE HAS CLAIMED THAT IT HAD ENTERED INTO A REGISTERED AGREEMENT TO SELL WITH THE VENDEE ON 16. 7.2012 AND RECEIVED THE SUBSTANTIAL PART OF SALE CONSIDERATION, THAT W AS RS. 1,10,00,000/- OUT OF RS. 1,60,00,000/-. DURING THE FY 2013-14 WHEN THE SALE DEED WAS EXECUTED THE VALUE AS PER STAMP DUTY AUTHORITY WAS RS. 2,01,92,420/- WHEREAS IN THE IMMEDIATELY PRECEDING YEAR THE VALUE OF THE LAND AS PER THE STAMP DUTY AUTHORITY WAS RS. 1,58,05,200/-. TH E ASSESSEE CLAIMED THAT SINCE IT HAD ENTERED INTO THE AGREEMENT WITH T HE VENDEE IN FY 2012- 13, WHEN THE VALUE AS PER THE STAMP DUTY AUTHORITY WAS RS. 1,58,05,200/- AND PAYMENTS AMOUNTING TO RS. 1,10, 00,000/- HAD BEEN MADE BY CHEQUE, THE SALE VALUE SHOULD BE TAKEN ONLY AT RS. 1,60,00,000/- AO OBSERVED THAT AS PER THE PROVISION OF SECTION 56 OF THE INCOME TAX ACT, THE VALUE OF THE PROPERTY IS TO BE ADOPTED WH ICH IS TAKEN BY ANY AUTHORITY OF STATE GOVERNMENT FOR THE PURPOSE OF PA YMENT OF SUCH DUTY. 4 AO FURTHER OBSERVED THAT ASSESSEE HAS ALSO CLAIMED EXPENSES FOR TRANSFER CHARGES FOR BOTH SALE AND PURCHASE OF PROPERTY, HOW EVER, THE ASSESSEE HAS NOT PROVIDED ANY PROOF TO JUSTIFY THIS EXPENSES AND ACCORDINGLY, THE AO ADDED BACK RS. 82,96,820/- TO THE INCOME OF THE ASSESSEE BY ASSESSING THE INCOME AT RS. 45,79,460/- U/S. 143(3) OF THE ACT VIDE ORDER DATED 28.12.2016. AGGRIEVED WITH ABOVE DISALLOWAN CE THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGN ED ORDER DATED 16.7.2018 HAS PARTLY ALLOWED THE APPEAL BY CONFIR MING THE ADDITION OF RS. 82,96,820/-. AGAINST THE IMPUGNED ORDER DATED 1 6.7.2018, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT AO HAS WRONGLY MADE THE DISALLOWANCE OF CARRY FORWA RD LONG TERM CAPITAL LOSS OF RS. 82,96,820/- BY MAKING AN ADDITI ON U/S. 50C OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF DIFFERENCE IN TH E CIRCLE RATE BETWEEN THE DATE OF REGISTRATION OF AGREEMENT TO SELL (16.7 .2012) AND DATE ON WHICH SALE DEED WAS REGISTERED (13.05.2013) AND NOT INCLUDING STAMP DUTY ON PURCHASE IN COST AND NOT ADDING TRANSFER CH ARGES AND OTHER EXPENSES ON PURCHASE / SALE. IT WAS FURTHER SUBMIT TED THAT AO HAS WRONGLY MADE THE ADDITION OF RS. 8296820/- AS INCOM E FROM OTHER SOURCES. IT WAS FURTHER SUBMITTED THAT AO HAS NOT A PPRECIATED THE INTENTION OF BRINGING THE BENEFICIAL AMENDMENT (I.E . FIRST PROVISO TO SEC. 50C) TO PROVIDE STATUTORY RECOGNITION TO A PRINCIPL E WHICH HAD BEEN CLEARLY ADUMBRATED IN COMMERCIAL PARLANCE I.E. A CLARIFICAT ORY BENEFICIAL AMENDMENT IS APPLICABLE TO ALL PROCEEDINGS. IN SUP PORT OF HIS CONTENTION, 5 HE HAS FILED 02 PAPER BOOKS IN ONE OF WHICH HE H AS ATTACHED THE VARIOUS DOCUMENTARY EVIDENCES AND IN ANOTHER PAPER BOOK HE HAS ATTACHED THE VARIOUS CASE LAWS OF THE HONBLE DELHI HIGH COURT A ND THE VARIOUS TRIBUNALS DECISIONS. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THEY HAVE PASSED WELL REASO NED ORDERS, WHICH DO NOT NEED ANY INTERFERENCE AND NEEDS TO BE UPHELD. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED AND CO NSIDERED THE RECORDS ESPECIALLY THE IMPUGNED ORDER AS WELL AS TH E PAPER BOOKS AND THE CASE LAW RELIED UPON BY THE ASSESSEES COUNSEL. I FIND THAT LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUES IN DISPUTE A ND ADJUDICATED THE SAME VIDE PARA NO. 7.1 TO 7.3 AT PAGE NO. 13 TO 14, WHICH ARE REPRODUCED HEREUNDER:- 7.1 BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY SOLD AN INDUSTRIAL LEASE HOLD PROPERTY VIDE SALE DEED DATED 13.05.2013 AT A TOTAL SALE CONSIDERATION OF RS. 1,60,00,000/-. THE ASSESSEE CLAIMED THAT IT HAD ENTERED INTO A REGISTERED AGREEMENT TO SELL WITH TH E VENDEE ON 16.07.2012 AND RECEIVED THE SUBSTANTIAL P ART OF SALE CONSIDERATION, THAT WAS RS. 1,10,00,000/- O UT OF RS. 1,60,00,000/-. DURING THE FY 2013-14 WHEN THE S ALE DEED WAS EXECUTED THE VALUE AS PER STAMP DUTY AUTHORITY WAS RS.2,01,92,400/- WHEREAS IN THE IMMEDIATELY PRECEDING YEAR THE VALUE OF THE LAND AS PER THE STAMP DUTY AUTHORITY WAS RS. 1,58,05,200/-. THE ASSESSEE CLAIMED THAT SINCE IT HAD ENTERED INTO THE 6 AGREEMENT WITH THE VENDEE IN FY 2012-13, WHEN THE VALUE AS PER THE STAMP DUTY AUTHORITY WAS RS. 1,58,05,200/- AND PAYMENTS AMOUNTING TO RS. 1,10,00,000/- HAD BEEN MADE BY CHEQUE, THE SALE VAL UE SHOULD BE TAKEN ONLY AT RS. 1,60,00,000/-. 7.2 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E SUBMISSION OF THE APPELLANT. I FIND THAT THE FOLLOW ING PROVISO ENABLING THE ASSESSEE TO TAKE THE STAMP VALUATION IN ACCORDANCE WITH THE AGREEMENT FIXING T HE AMOUNT OF CONSIDERATION HAS BEEN INSERTED BY THE FINANCE ACT W.E.F. 01.04.2017. PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASS ET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER. 7.3 IT MAY BE SEEN THAT THE INSERTION OF THE ABOVE PROVISO IS ONLY W.E.F. 01.04.2017, MEANING THEREBY THE ASSESSEE SHALL NOT GET THE BENEFIT OF ITS AGREEMEN T FIXING THE AMOUNT OF CONSIDERATION IN PREVIOUS FINA NCIAL YEAR, THAT WAS 2012-13. THEREFORE, THE PROVISIONS O F 50C OF THE IT ACT ARE SQUARELY APPLICABLE IN THE CA SE OF THE ASSESSEE. I HOLD THAT THE ASSESSING OFFICER HAS RIGHTLY TAKEN THE VALUE OF THE PROPERTY AT RS.2.01.92.400/-. THE APPELLANT HAS CLAIMED TRANSFE R EXPENSES AT THE TIME OF THE PURCHASE OF THE PROPERT Y AND AT THE TIME OF THE SALE OF THE PROPERTY. THE 7 ASSESSING OFFICER, IN THE ASSESSMENT ORDER, HAS STA TED THAT THE ASSESSEE COULD NOT FURNISH EVIDENCES THAT THE EXPENSES WERE INCURRED BY IT. THE FACTS REMAIN THE SAME EVEN AT THE TIME OF APPELLATE PROCEEDINGS BEFO RE ME. THEREFORE, THE COMPUTATION OF CAPITAL GAIN MADE BY THE ASSESSING OFFICER IS HELD TO BE CORRECT. THE AP PELLANT HAS STATED THAT THE ASSESSING OFFICER HAS ADDED RS.82.96.820/- AS INCOME FROM OTHER SOURCES- WHEREA S I FIND THAT THE ASSESSING OFFICER HAS REDUCED THE L OSS SHOWN FROM THE SALE OF THE PROPERTY. ACCORDINGLY, T HIS ROUND IS ALSO LIABLE TO BE DISMISSED.' 5.1 AFTER PERUSING THE AFORESAID FINDINGS OF THE LD . CIT(A), I AM OF THE CONSIDERED VIEW THAT AS PER PROVISO OF SECTION 50C WHICH IS APPLICABLE FROM 01.04.2017, THE ASSESSEE SHALL NOT GET THE BE NEFIT OF ITS AGREEMENT FIXING THE AMOUNT OF CONSIDERATION IN PREVIOUS FINA NCIAL YEAR I.E. 2012-13. THEREFORE, THE PROVISIONS OF SECTION 50C OF THE IT ACT ARE SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE. HENCE, THE AO HAS RIGHTLY TAKEN THE VALUE OF THE PROPERTY AT RS.2,01,92,400/-. IT I S ALSO NOTED THAT THE ASSESSEE HAS CLAIMED TRANSFER EXPENSES AT THE TIME OF THE PURCHASE OF THE PROPERTY AND AT THE TIME OF THE SALE OF THE PROPERT Y. I ALSO NOTE THAT THE ASSESSING OFFICER, IN THE ASSESSMENT ORDER, HAS STA TED THAT THE ASSESSEE COULD NOT FURNISH EVIDENCES THAT THE EXPENSES WERE INCURRED BY IT. THE FACTS REMAIN THE SAME EVEN AT THE TIME OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). THEREFORE, THE COMPUTATION OF CAPI TAL GAIN MADE BY THE ASSESSING OFFICER WAS RIGHTLY HELD TO BE CORRECT B Y THE LD. CIT(A). THE ASSESSEE HAS STATED THAT THE ASSESSING OFFICER HAS ADDED RS.82,96,820/- 8 AS INCOME FROM OTHER SOURCES, WHEREAS ASSESSING O FFICER HAS REDUCED THE LOSS SHOWN FROM THE SALE OF THE PROPERTY. ACCOR DINGLY, THIS GROUND WAS RIGHTLY DISMISSED BY THE LD. CIT(A) AND THE ADD ITION IN DISPUTE WAS RIGHTLY CONFIRMED WHICH DOES NOT NEED ANY INTERFER ENCE ON MY PART, HENCE, I UPHOLD THE ACTION OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. IT IS A LSO NOTED THAT THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHED ON FACTS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 01-04-2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 01/04/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES