Aruna A. Khadilkar, Pune V. ITO Wd-3(2), Pune,

ITA 648/PUN/2012

• Counselvise Citation: 64824514 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 648/PN/2012 (ASSESSMENT YEAR : 2007-08) SMT. ARUNA A. KHADILKAR, 1170/31/6, REVENUE COLONY, VRUSHALI APARTMENT, SHIVAJINAGAR, PUNE 411 005. PAN : AFIPK9985M . APPELLANT VS. INCOME TAX OFFICER, WARD 3(2), PUNE. . RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY : SHRI S. P. WALIMBE DATE OF HEARING : 11-11-2013 DATE OF PRONOUNCEMENT : 30-12-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 30.12.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 24.12.2009 PAS SED BY THE ASSESSING OFFICER, U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ONLY DISPUTE RELATES TO THE TAXABILITY ON CAPITAL GAINS ARISING ON SALE OF PROPERTY AT 310, NARAYAN PETH, P UNE. IN BRIEF, THE FACTS ARE THAT ASSESSEE JOINTLY OWNED THE AFORESAID PROPERTY WITH OTHER CO-OWNERS AND ASSESSEES SHARE WAS 1/4 TH . AS PER THE SALE-DEED EXECUTED ON 16.09.2006, THE PROPERTY WAS SOLD TO A PURCHASER WHEREBY CONSID ERATION PAYABLE WAS RS.2.30 CRORES IN CASH AND RS.2.40 CRORES IN THE FO RM OF CONSTRUCTED AREA OF 3000 SQ.FT. THEREBY REFLECTING A TOTAL CONSIDERATIO N OF RS.4.70 CRORES. OUT OF THE CASH CONSIDERATION OF RS. 2.30 CRORES, ASSESSEE RECEIVED HIS SHARE OF ITA NO. 648/PN/2012 A.Y. 2007-08 RS.60 LACS. IN THE RETURN OF INCOME FILED, ASSESSE E DISCLOSED CAPITAL GAINS ON SALE OF PROPERTY. THE ASSESSING OFFICER NOTED THAT THE VALUE ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSES OF TRANS FER OF PROPERTY WAS HIGHER THAN THE TOTAL CONSIDERATION OF RS. 4.70 CRORES DEC LARED BY THE ASSESSEE. SINCE ASSESSEE DISPUTED THE VALUATION MADE BY THE S TAMP VALUATION AUTHORITY, IN TERMS OF SECTION 50C(2) OF THE ACT, T HE ASSESSING OFFICER REFERRED THE MATTER TO THE VALUATION OFFICER (VO), SOLAPUR F OR ASCERTAINING THE FAIR MARKET VALUE (I.E. FMV) OF THE PROPERTY. THE VO VA LUED THE PROPERTY AT RS.5,91,52,000/- AND ASSESSEES SHARE WAS DETERMINE D AT RS.1,47,88,000/-. THE ASSESSING OFFICER ADOPTED THE FIGURE OF RS.1,47 ,88,000/- AS THE FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE AS MANDAT ED BY SECTION 50C OF THE ACT AND COMPUTED CAPITAL GAINS OF RS.88,15,400/- AF TER ALLOWING EXEMPTION U/S 54EC & 54F OF THE ACT. THE AFORESAID DETERMINATION OF CAPITAL GAIN HAS BEEN AFFIRMED BY THE CIT(A) IN-PRINCIPLE EXCEPT TO THE E XTENT OF AMOUNT OF SALE CONSIDERATION ADOPTED BY THE ASSESSING OFFICER IN O RDER TO COMPUTE THE CAPITAL GAINS. INSTEAD OF RS.5.91 CRORES ADOPTED BY THE A SSESSING OFFICER, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ADOPT THE FULL VA LUE OF SALE CONSIDERATION AT RS.4,70,00,000/-, AS THE FMV DETERMINED BY THE VO W AS HIGHER THAN THE VALUE OF PROPERTY DETERMINED BY THE STAMP VALUATION AUTHO RITY. NOT BEING SATISFIED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHE R APPEAL BEFORE US. 3. BEFORE US, THE ONLY POINT RAISED BY THE ASSESSEE IS THAT ONE OF THE OBLIGATIONS OF THE TRANSFEREE WAS TO GIVE A CONSTRU CTED AREA OF 3000 SQ.FT. TO THE ASSESSEE CO-OWNERS, WHICH HAS NOT BEEN ADHERED TO BY THE TRANSFEREE. THE LEARNED COUNSEL POINTED OUT THAT ASSESSEE ALONG WITH OTHER CO-OWNERS HAD ALSO SENT A NOTICE TO THE PURCHASER IN THIS REGARD AND LEGAL PROCEEDINGS HAVE BEEN INITIATED FOR ENFORCING PERFORMANCE OF THE CON TRACT. IT WAS CONTENDED THAT THE EVENT OF NON-HANDING-OVER OF THE CONSTRUCTED AR EA, AS AGREED IN THE AGREEMENT BY THE PURCHASER, WOULD LEAD TO AN INFERE NCE THAT NO TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT HAS TAKEN PLACE AND THUS NO CAPITAL GAIN WAS EXIGIBLE TO TAX IN TERMS OF THE SA LE-DEED DATED 14.08.2006. ITA NO. 648/PN/2012 A.Y. 2007-08 4. IN OUR CONSIDERED OPINION, THE PLEA OF THE ASSES SEE IS QUITE MISPLACED INASMUCH AS THE TRANSFER OF THE PROPERTY IN FAVOUR OF THE PURCHASER HAS TAKEN PLACE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSE SSMENT YEAR UNDER CONSIDERATION ON EXECUTION OF THE SALE-DEED. NON-R ECEIPT OF COMPLETE CONSIDERATION CANNOT BE CONSTRUED AS A GROUND FOR A VOIDANCE OF LIABILITY TO CAPITAL GAINS TAX BECAUSE SECTION 45(1) OF THE ACT SPECIFICALLY PROVIDES THAT PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAP ITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL BE CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YE AR IN WHICH THE TRANSFER TOOK PLACE. OSTENSIBLY, IN THE PRESENT CASE, IT IS UNDENIABLE THAT THE TRANSFER OF PROPERTY HAS TAKEN PLACE IN THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THUS CAPITAL GAIN ARISING T HEREON IS LIABLE TO BE CHARGED IN THE INSTANT ASSESSMENT YEAR. THE HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. ROHTAK TEXTILE MILLS LTD. (1982) 13 8 ITR 195 (DEL) SUPPORTS THE AFORESAID UNDERSTANDING OF THE IMPLICATION OF SECTI ON 45 OF THE ACT AND WE FIND NO JUSTIFICATION IN THE PLEA OF THE ASSESSEE WHICH HAS BEEN RIGHTLY NEGATED BY THE CIT(A). THE CIT(A) HAS LUCIDLY BROUGHT OUT THE JUSTIFICATION FOR HOLDING THAT A TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT HAS TAKEN PLACE DURING THE YEAR UNDER CONSIDERATION AND THEREFORE, THERE IS NO ESCAPEMENT FROM THE LIABILITY OF CAPITAL GAINS TAX. ACCORDING LY, WE AFFIRM THE ORDER OF THE CIT(A) AND ASSESSEE FAILS ON THIS ASPECT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED : 30 TH DECEMBER, 2013 SUJEET ITA NO. 648/PN/2012 A.Y. 2007-08 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE