M/S MYRA REAL ESTATE PVT. LTD., JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR

ITA 659/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6326 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income; Fair market value; Assessment record
• Section: 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 659/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 M/S MYRA REAL ESTATE PVT. LTD., A-8, 1 ST FLOOR, MALL ROAD, SECTOR-1, VIDHYADHAR NAGAR, JAIPUR. CUKE VS. THE ACIT, CIRCLE-4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFCM 3772 K VIHYKFKHZ@ APPEL LANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 11/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 13/07/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 26.02.2018 OF CIT (A), JAIPUR FOR THE ASSESSMENT YE AR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS AS UNDER: - 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ADDITION OF RS. 41,94,426/- U/S 50C OF THE IT A CT ON ACCOUNT OF DIFFERENCE BETWEEN THE SALES CONSIDERATION AND T HE VALUE ADOPTED BY THE VALUATION OFFICER WITHOUT APPRECIATI NG THE FACT THAT ITA NO. 659/JP/2018 M/S MYRA REAL ESTATE PVT. LTD. VS. ACIT 2 DLC RATE DO NOT REPRESENT THE FMV OF THE PROPERTY A ND ASSESSEE HAS BROUGHT EVIDENCE ON RECORD THAT EVEN AT THE TIM E OF PURCHASE OF PROPERTY, THE DLC RATE WAS HIGHER THAN THE FMV O F THE PROPERTY. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND WH ICH READS AS UNDER:- THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN RE JECTING THE CONTENTION OF ASSESSEE THAT THE PROPERTY UNDER CONS IDERATION IS STOCK-IN-TRADE AND THEREFORE, SECTION 50C IS NOT AP PLICABLE ONLY FOR THE REASON THAT THIS ISSUE IS NOT CONTESTED BEF ORE THE AO AND NO SUCH GROUND IS TAKEN BEFORE HIM EVEN WHEN THE FA CT THAT THE PROPERLY UNDER CONSIDERATION IS STOCK-IN-TRADE IS EVIDENT FROM THE ANNUAL ACCOUNTS OF ASSESSEE AVAILABLE ON RECORD. 2. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR O N ADMISSION OF ADDITIONAL GROUND AND CAREFULLY PERUSED THE RELEVAN T MATERIAL ON RECORD. IN THE ADDITIONAL GROUND THE ASSESSEE HAS RAISED A LEGAL ISSUE OF APPLICABILITY OF SECTION 50C OF THE ACT IN CASE OF SALE OF PROPERTY IN QUESTION WHICH WAS HELD AS STOCK-IN-TRADE. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WHILE COMPUTING ITS INCOME HAS SHOWN THE PROFIT FROM SALE OF LAND IN QUESTION AS BUSINES S INCOME WHICH HAS NOT BEEN DISTURBED BY THE AO THROUGH, THE ASSESSING OFFICER HAS MADE AN ADDITION BY APPLYING THE PROVISIONS OF SECTION 5 0C OF THE ACT. THE LD. ITA NO. 659/JP/2018 M/S MYRA REAL ESTATE PVT. LTD. VS. ACIT 3 AR HAS FURTHER CONTENDED THAT THE ASSESSEE HAS RAIS ED THIS PLEA BEFORE THE LD. CIT(A) WHICH WAS NOT ENTERTAINED BY THE LD. CIT(A) ON THE GROUND THAT THE ASSESSEE DID NOT RAISE THIS ISSUE B EFORE THE AO. THE LD. AR HAS SUBMITTED THAT NO NEW FACT IS REQUIRED TO BE INVESTIGATED FOR ADJUDICATION OF THIS GROUND AND THEREFORE, THE SAME MAY BE ADMITTED ON THE BASIS OF THE FACT AVAILABLE ON RECORD. HE HA S RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS . NTPC LTD. 229 ITR 383. THE LD. AR HAS REFERRED TO THE PROFIT AND LOSS ACCOUNT AS WELL AS BALANCE SHEET AND SCHEDULE-18 TO SHOW THAT THE P ROPERTY IN QUESTION WAS PART OF STOCK-IN-TRADE AND THEREFORE, THE PROFI T ON SALE OF THE SAID PROPERTY IS BUSINESS INCOME OF THE ASSESSEE AND PRO VISIONS OF SECTION 50C OF THE ACT ARE NOT APPLICABLE. THE LD. AR HAS F URTHER CONTENDED THAT THIS PROPERTY WAS PURCHASED BY THE ASSESSEE IN THE AUCTION OF JAIPUR DEVELOPMENT AUTHORITY (JDA) AND THE PURCHASE CONSID ERATION ITSELF WAS VERY LESS IN COMPARISON TO THE DLC RATE ON THAT DAT E OF PURCHASE IN FEBRUARY, 2010. 3. ON THE OTHER HAND, THE LD. DR HAS OBJECTED TO TH E ADDITIONAL GROUND RAISED BY THE ASSESSEE AND SUBMITTED THAT TH E ASSESSEE DID NOT RAISE THIS PLEA BEFORE THE ASSESSING OFFICER AND EV EN NO SUCH ISSUE WAS RAISED IN THE GROUND RAISED BEFORE THE LD. CIT(A). ONLY SUBMISSIONS ITA NO. 659/JP/2018 M/S MYRA REAL ESTATE PVT. LTD. VS. ACIT 4 WERE MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) ON THIS ISSUE WHICH WERE NOT ACCEPTED BY THE LD. CIT(A). HE HAS RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIALS ON RECORD WE NOTE THAT THE ADDITIONAL GRO UND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND FURTHER ALL THE FACTS AND MATERIALS ARE AVAILABLE ON THE ASSESSMENT RECORD FOR ADJUDICA TION OF THIS GROUND AND NO NEW FACTS ARE REQUIRED TO BE INVESTIGATED. W E FIND THAT THE FACTS WHICH ARE RECORDED IN THE PROFIT AND LOSS ACCOUNTS AND BALANCE SHEET AS WELL AS COMPUTATION OF INCOME OF THE ASSESSEE ARE S UFFICIENT FOR ADJUDICATION OF THIS ISSUE RAISED IN THE ADDITIONAL GROUND. ACCORDINGLY, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CA SE OF CIT VS. NTPC LTD. (SUPRA) THE ADDITIONAL GROUND RAISED BY THE AS SESSEE IS ADMITTED. 5. SINCE, THIS ISSUE INVOLVES THE VERIFICATION OF T HE RECORD WHICH IS AVAILABLE ON THE ASSESSMENT RECORD AND THEREFORE, I T REQUIRES THE STAND OF THE ASSESSING OFFICER ON THE FACTUAL ASPECT OF T HE PROPERTY IN QUESTION BEING STOCK-IN-TRADE AND NOT CAPITAL ASSET AS PER THE BOOKS OF ACCOUNTS AND COMPUTATION OF THE ASSESSEE. ONCE IT I S FOUND THAT THE PROPERTY IN QUESTION WAS HELD BY THE ASSESSEE AS ST OCK-IN-TRADE ALL THROUGH YEARS THEN THE PROVISIONS OF SECTION 50C OF THE ACT WOULD NOT ITA NO. 659/JP/2018 M/S MYRA REAL ESTATE PVT. LTD. VS. ACIT 5 APPLY FOR COMPUTATION OF THE PROFIT ON SALE OF STOC K-IN-TRADE. SECTION 50C OF THE IT ACT IS PART OF CHAPTER IV OF THE INCO ME TAX WHICH DEALS THE COMPUTATION OF INCOME FROM CAPITAL GAIN. ACCORD INGLY, ONCE THE PROPERTY IN QUESTION IS FOUND TO BE STOCK-IN-TRADE OF THE ASSESSEE THEN FULL VALUE CONSIDERATION AS PER THE PROVISIONS OF S ECTION 50C OF THE ACT WOULD NOT GERMAINE TO THE CONTROVERSY. HENCE, WE SE T ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFFICER TO VERIFY TH E RECORD ON THE ASPECT OF THE NATURE OF THE PROPERTY IN QUESTION BEING STO CK-IN-TRADE OF THE ASSESSEE AND THEN DECIDE THE ISSUE AS PER LAW IN LI GHT OF THE ABOVE OBSERVATION. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/07/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/07/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S MYRA REAL ESTATE PVT. LTD., JAIP UR. 2. IZR;FKHZ@ THE RESPONDENT - ACIT, CIRCLE-4, JAIPUR. 3. VK;DJ VK;QDR@ CIT ITA NO. 659/JP/2018 M/S MYRA REAL ESTATE PVT. LTD. VS. ACIT 6 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 659/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR