Shri Jaikishan Parchani, Indore V. The ITO-5(5), Indore

ITA 673/Ind/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2922 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 04-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.P.MOURYA
• Keywords: Sale consideration of property below Jantri Value; Deemed to accrue or arise in india; Retrospective amendment; Fair market value; Valuation report; Set aside
• Section: 6; 56(2)(vii)(b); 43B; 143(3); 50C; 40(a)(ia); 201; 55A; 20

Judgement Text

[ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE] IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.673/IND/2019 ASSESSMENT YEAR: 2015-16 SHRI JAYKISHAN PARCHANI S/O SHRI ARJUN PARCHANI, 123, B.K. SINDHI COLONY, INDORE / VS. ITO - 5 ( 5 ) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AIHPP0129L APPELLANT BY SHRI RAJESH MEHTA, CA RESPONDENT BY SHRI R . P . MOURYA , SR. DR DATE OF HEARING: 03.03.2020 DATE OF PRONOUNCEMENT: 06.03.2020 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE CIT(A)-I, INDORE DATED 06.03.2019 PERTAINING TO T HE ASSESSMENT YEAR 2015-16. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1 . THAT THE LD. A.O. ERRED IN MAKING ADDITION OF R S. 1,19,900/- AND CIT APPEALS ERRED IN CONFIRMING THE SAME WHICH IS AGAINST THE LAW AND AGAINST THE FACTS OF THE CASE HENCE NEEDS TO BE DELETED. 2. THAI THE ADDITION MADE BY THE LD. AO AND CONFIRM ED BY CIT [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 2 APPEALS WAS WITHOUT JURISDICTION, WITHOUT MAKING RE FERENCE TO VALUATION OFFICER AND THE DIFFERENCE BETWEEN TRANSA CTION VALUE AND STAMP AUTHORITY VALUE WAS NOT MORE THAN 5% OF TRANSACTIONS VALUE HENCE THE ORDER PASSED AND ADDIT ION CONFIRMED IS AGAINST THE LAW AND AGAINST THE FACTS OF THE CASE HENCE THE ADDITION OF RS. 119900/- NEEDS TO BE DELE TED. 3. T HAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR WITHDRA W ANY OF THE GROUND OF APPEAL, EITHER BEFORE OR DURIN G THE COURSE OF HEARING OF THE APPEAL. 2. THE ONLY EFFECTIVE GROUND IS AGAINST SUSTAINING THE ADDITION OF RS.1,19,900/- IN RESPECT OF THE DIFFEREN CE BETWEEN THE ACTUAL SALE CONSIDERATION AND THE STAMP VALUATION OF IMMOVABLE PROPERTY. 3. THE FACTS IN BRIEF ARE THAT THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT 1961(HEREINAFTER CALLED AS THE ACT) WAS PASSED VIDE ORDER DATED 23.11.2017. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT OBSERVE D THAT THE ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY FROM SMT. SUSHMA GANDHE W/O ANIL GANDHE, RESIDENT OF 10, [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 3 R.K. PURAM, COLONY, INDORE. THE SAID IMMOVABLE PROPERT Y IS SITUATED AT 58, SHANTI NIKETAN COLONY, GRAM NIRANJANPUR JILA, INDORE, THE PROPERTY WAS PURCHASED AT RS. 1,60,10,100/- BUT THE STAMP VALUATION AUTHORITY HAVE ADOPTED THE VALUE AT RS.1,61,30,000/-. THEREFORE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE AS WHY THE DIFFERENCE OF RS.1,19,900/- SHOULD NOT BE TREATED AS DEEMED INCOME U/S 56(2)(II)(B) OF THE ACT AND SAME MA Y NOT BE ADDED. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND TREATED THE DIFFERENCE AS DEEMED INCOME AND ADDED IN THE INCOME OF THE ASSESSEE . THUS, ASSESSED INCOME AT RS.10,33,270/- AS AGAINST RETURNED INCOME AT RS.9,13,370/-. 4. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO DISMISSED THE APPEAL. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 4 5. LD. COUNSEL FOR THE ASSESSEE REITERATED SUBMISSION AS MADE IN THE WRITTEN SUBMISSION. THE SUBMISSIONS OF T HE ASSESSEE ARE REPRODUCED AS UNDER: THAT THE ASSESSEE IN AN INDIVIDUAL DERIVING INCOME FROM BROKERAGE AND RENTAL INCOME AND DECLARING TOTAL INC OME OF RS.9,13,370/- IN HIS INCOME TAX RETURN FILED ON 08/ 08/2015 VIDE ACKNOWLEDGEMENT NO. 652524630080815 FOR AY 201 5- 16 (COPY OF ITR-V & COMPUTATION OF INCOME IS ENCLOS ED HEREWITH AS ANNEXURE A) . THAT THE ASSESSMENT O F ASSESSEE WAS COMPLETED ON 23/11/2017 FOR AY 2015-16 U/S 143(3) OF THE ACT AND ASSESSMENT WAS MADE BY MAKING ADDITION AS UNDER:- PARTICULARS AMOUN TS IN RS. RETUNED INCOME: RS.9,13,370/- ADDITION TO INCOME U/S 56(2)(VII)(B) RS.1,19,900/- ASSESSED INCOME RS.10,33,270/- TAX DEMANDED WITH INTEREST RS.44,760/- AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE C IT (A), INDORE- 1 VIDE ACK NO. 340893480211217 DATED 21.12. 2017 AND THE SAME ALSO GOT DISMISSED VIDE ORDER DATED 05.03.2019. ASSESSEE THE FILED AN APPEAL BEFORE HO, BLE ITAT, INDORE BENCH, INDORE ON 04.06.2019, IN REGARDS TO T HIS ASSESSEE SUBMITS THE FOLLOWING. 1. ADDITION ON ACCOUNT OF INCOME U/S 56(2)(VII)(B) THAT THE ASSESSEE HAD PURCHASED A PROPERTY SITUATED AT 58, SHANTI NIKETAN COLONY, GRAM NIRANJANPUR JILA, INDOR E ON 28/11/2014 FROM SMT. SUSHMA GANDHE W/O ANIL GANDHE FOR A PURCHASE CONSIDERATION OF RS.1,60,10,100/- WH EREAS STAMP DUTY VALUE MENTIONED ON PURCHASE DEED WAS RS.1,61,30,000/-.(COPY OF PURCHASE DEED IS ENCLOSE D HEREWITH AS ANNEXURE-B) [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 5 THAT THE LD. AO DURING ASSESSMENT PROCEEDING TREATE D THE DIFFERENCE OF STAMP VALUE OF PROPERTY AND PURCHASE VALUE OF PROPERTY AMOUNTING TO RS.1,19,000/- AS DEEMED INCOM E U/S 56(2)(VII)(B) OF THE ACT FOR AY 2015-16. THE SAID S ECTION STATES AS UNDER :- ANY IMMOVABLE PROPERTY, (I) WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPERTY; (II) FOR A CONSIDERATION WHICH IS LESS THA N THE STAMP DUTY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDIN G FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPE RTY AS EXCEEDS SUCH CONSIDERATION: THAT THE SECTION 56(2)(VII)(B) OF THE ACT IS SUBSTI TUTED BY SECTION 56(2)(X)(B) OF THE ACT BY FINANCE ACT, 2018 , W.E.F. 1-4- 2019 WHICH STATES THAT : (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GE NERALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING IN COMES, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES', NAMELY : (X) WHERE ANY PERSON RECEIVES, IN ANY PREVIOUS YEAR , FROM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF AP RIL, 2017, (B) FOR A CONSIDERATION, THE STAMP DUTY VALUE OF SU CH PROPERTY AS EXCEEDS SUCH CONSIDERATION, IF THE AMOUNT OF SUC H EXCESS IS MORE THAN THE HIGHER OF THE FOLLOWING AMOUNTS, N AMELY: (I) THE AMOUNT OF FIFTY THOUSAND RUPEES; AND (II) THE AMOUNT EQUAL TO FIVE PER CENT OF THE CONS IDERATION:] THE AMOUNT WHICH HAS BEEN ADDED TO THE INCOME OF AS SESSEE IS MERELY 0.75% (RS.1,19,900 / RS.1,60,10,100) OF T HE NET CONSIDERATION AND THIS DIFFERENCE AMOUNT IS NEGLIGI BLE IN AMOUNT AS COMPARED TO PURCHASE CONSIDERATION AMOUNT . IN RESPECT TO THE ABOVE SECTION AND LOOKING AT THE PRESENT CASE THE DIFFERENCE AMOUNT OF STAMP DUTY VALUE AND CONSIDERATION WAS LOWER OF SECOND CONDITION STATED UNDER [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 6 SECTION 56(2)(X)(B), THAT RESULTS THE ASSESSEE WAS NOT LIABLE TO BE TAXED. HENCE THE WRONG ADDITION MADE BY LD. AO N EEDS TO BE DELETED. THAT THE AMENDMENT MADE UNDER THE SAID SECTION 56(2 )(X)(B) IS BENEFICIAL TO THE ASSESSEE HENCE THE SAID AMENDM ENT IS CURATIVE IN NATURE AND THERE ARE VARIOUS JUDGEMENT IN FAVOUR OF ASSESSEE IN WHICH IT IS HELD THAT IF ANY AMENDME NT IS CURATIVE IN NATURE THEN THE SAID AMENDMENT HAS RETR OSPECTIVE EFFECT. THE RELIANCE CAN BE PLACED ON THE CASE LAWS AS CITED BELOW: I. SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME-TAX, KOLKATA V. CALCUTTA EXPORT COMPANY [201 8] 93 TAXMANN.COM 51 (SC) HELD THAT , WE ARE OF THE VIEW THAT THE AMENDED PROVISION OF SEC 40(A)(IA) OF THE IT ACT SHOULD BE INTERPRETED LIBER ALLY AND EQUITABLE AND APPLIES RETROSPECTIVELY FROM THE DATE WHEN SECTION 40(A)(IA) WAS INSERTED I.E., WITH EFFECT FR OM THE ASSESSMENT YEAR 2005-2006 SO THAT AN ASSESSEE SHOUL D NOT SUFFER UNINTENDED AND DELETERIOUS CONSEQUENCES BEYO ND WHAT THE OBJECT AND PURPOSE OF THE PROVISION MANDAT ES. AS THE DEVELOPMENTS WITH REGARD TO THE SECTION RECORDE D ABOVE SHOWS THAT THE AMENDMENT WAS CURATIVE IN NATURE, IT SHOULD BE GIVEN RETROSPECTIVE OPERATION AS IF THE AMENDED PROVISION EXISTED EVEN AT THE TIME OF ITS INSERTION. II. SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME-TAX, V. ALOM EXTRUSIONS LTD.[2009] 185 TAXMA N 416 (SC) HELD THAT : FOR THE AFORE-STATED REASONS, WE HOLD THAT FINANCE ACT, 2003, TO THE EXTENT INDICATED ABOVE, IS CURATIVE IN NATURE, HENCE, IT IS RETROSPECTIVE AND IT WOULD OPERATE WIT H EFFECT FROM 1-4-1988 [WHEN THE FIRST PROVISO CAME TO BE INSERTE D]. FOR THE ABOVE REASONS, WE FIND NO MERIT IN THIS BATCH OF CI VIL APPEALS FILED BY THE DEPARTMENT WHICH ARE HEREBY DISMISSED WITH NO ORDER AS TO COSTS. [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 7 III. SUPREME COURT OF INDIA IN THE CASE OF ALLIED MOTORS (P.) LTD.V.COMMISSIONER OF INCOME-TAX[1997] 91 TAXMAN 20 5 (SC) HELD THAT: LOOKING TO THE CURATIVE NATURE OF THE AMENDMENT MA DE BY THE FINANCE ACT, 1987 IT CAN BE SAID THAT THE PROVI SO WHICH IS INSERTED BY THE AMENDING FINANCE ACT, 1987 SHOULD B E GIVEN RETROSPECTIVE EFFECT AND BE READ AS FORMING A PART OF SECTION 43B FROM ITS INCEPTION. IV. HIGH COURT OF KARNATAK IN THE CASE OF COMMISSIONER OF INCOME-TAX, MANGALORE V. SANTOSH KUMAR SHETTY[2014] 49 TAXMANN.COM 47 HELD THAT: WE ARE IN THE RESPECTFUL AGREEMENT WITH THE VIEW E XPRESSED BY THE GUJARAT HIGH COURT IN GIVING RETROSPECTIVE O PERATION TO THE SAID AMENDMENT NOTWITHSTANDING THAT THE PARLIAM ENT HAS EXPRESSLY STATED THAT IT COMES INTO EFFECT FROM 01.04.2010. THE SAID AMENDMENT IS CURATIVE IN NATUR E. THE TRIBUNAL COMMITTED AN ERROR IN HOLDING IT AS PROSPE CTIVE. THE SUBSTANTIAL QUESTIONS OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSE AND AGAINST THE REVENUE. THE LD. AO ALSO PASSED ASSESSMENT ORDER WITHOUT OBT AINING VALUATION REPORT FROM ANY AUTHORITY FOR VALUATION O F SUCH PROPERTY, WHICH IS AGAINST THE LAW. THE LD. AO SHOU LD HAVE REFERRED VALUATION TO VALUATION OFFICER (DVO) FOR V ALUATION OF PROPERTY BUT LD. AO DID NOT DO SO, IT IS ALSO STATE D UNDER SECTION 56(2)(VII)(B) AND AMENDED SECTION56(2)(X)(B ), THAT: PROVIDED ALSO THAT WHERE THE STAMP DUTY VALUE OF I MMOVABLE PROPERTY IS DISPUTED BY THE ASSESSEE ON GROUNDS MEN TIONED IN SUB-SECTION (2) OF SECTION 50C, THE ASSESSING OF FICER MAY REFER THE VALUATION OF SUCH PROPERTY TO A VALUATION OFFICER, AND THE PROVISIONS OF SECTION 50C AND SUB-SECTION ( 15) OF SECTION 155 SHALL, AS FAR AS MAY BE, APPLY IN RELAT ION TO THE STAMP DUTY VALUE OF SUCH PROPERTY FOR THE PURPOSE O F THIS [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 8 SUB-CLAUSE AS THEY APPLY FOR VALUATION OF CAPITAL A SSET UNDER THOSE SECTIONS; THE SAID PROVISION IS ALSO SUBSTANTIAL AS MENTIONED IN CASES MENTIONED BELOW:- I. HIGH COURT OF ALLAHABAD IN CASE OF COMMISSIONER OF INCOME-TAX V. DR. INDRA SWAROOP BHATNAGAR [2013] 30 TAXMANN.COM 293 (ALLAHABAD) HELD THAT: IT IS FURTHER PROVIDED THAT WHERE THE ASSESSEE CLA IMS THAT THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOS ES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THE ASSESSING OFFICER MAY REFER THE VA LUATION OF THE RELEVANT ASSET TO A VALUATION OFFICER IN ACCORD ANCE WITH SECTION 55A OF THE INCOME-TAX ACT. THAT THE LD. AO PASSED ASSESSMENT ORDER WITHOUT CONSIDERING THE FACT THAT THE DIFFERENCE AMOUNT IS NEGLIGIBLE IN AMOUNT AS COMPARE TO PURCHASE CONSIDERATION AMOUNT. THE SAID ADDITION WAS CONFIRMED BY THE CIT(A)-1, INDORE . HENCE THE ADDITION MADE BY LD. AO OF NEGLIGIBLE AMOUNT ON FACE OF PURCHASED PROPERTY AND TAXED THE SAME NEEDS TO BE D ELETED. 6. LD. D.R. OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. HE SUBMITTED THAT THE LAW IS CLEAR, THERE IS NO AMB IGUITY UNDER THE LAW AND THE ASSESSEE IS REQUIRED TO RAISE OBJECTIONS APPLYING THE GUIDELINE RATES BY THE STAMP VALUATION AUTHORITY. HE SHOULD HAVE RAISED SUCH OBJECT ION BEFORE ASSESSING OFFICER BUT NO SUCH OBJECTION WAS RAI SED [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 9 BEFORE THE ASSESSING OFFICER, THEREFORE, THE AUTHORIT IES BELOW WERE JUSTIFIED IN MAKING THE ADDITION. 8. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT ASSESSEE HAD PURCHASED IMMOVABLE PROPERTY AND THERE WAS A DIFFERENCE OF VALUE AS DISCLOSED BY THE ASSESSEE AND ADOPTED BY THE STAMP VALUATION AUTHORITY. I T IS ALSO NOT A CASE WHERE THE ASSESSEE OBJECTED BEFORE T HE AO REGARDING VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY. THE ASSESSEE FIRST TIME MADE OBJECTION BEF ORE THE LD. CIT(A) REGARDING VALUATION OF THE PROPERTY. SINCE THE LD. CIT(A) HAS COTERMINOUS POWERS WITH THE ASSESSEE OFFIC ER, I OUGHT TO HAVE REFERRED THE MATTER FOR VALUATION TO THE DEPARTMENTAL VALUATION OFFICER( IN SHORT DVO). I, THERE FORE, SET ASIDE THIS ISSUE TO THE FILE OF LD. CIT(A) FOR D ECIDING AFRESH AFTER REFERRING THE MATTER TO THE DVO. THE ASSES SEE [ITA NO.673/IND/2019] [SHRI JAYKISHAN PARCHANI, INDORE 10 WOULD ALSO BE AT LIBERTY TO FILE A VALUATION REPORT IF S O ADVISED. GROUNDS RAISED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 9. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 06 .03 .2020. SD/- (KU L BHARAT) JUDICIAL MEMBER INDORE; DATED : 06/03/2020 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE