Buttepatil Properties , Pune V. Income-tax Officer, Ward - 3(1), Pune

ITA 682/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4907 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 16-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Assessee Lawyers: P S SHINGTE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Fair market value; Revised return
• Section: 43CA; 50C

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 682/PUN/2018 / ASSESSMENT YEAR : 2014-15 BUTTEPATIL PROPERTIES, 658 GULAB PAVALLION, DECCAN GYMKHANA, PUNE-411 004 PAN : AALFB1805H .... / APPELLANT ! / V/S. THE INCOME TAX OFFICER, WARD 3(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE REVENUE BY : SHRI N. ASHOK BABU / DATE OF HEARING : 07.02.2019 / DATE OF PRONOUNCEMENT : 08.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEAL), PUNE-3 DATED 27.03.2018 FOR THE ASSESSMENT Y EAR 2014-15 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED AUTHORITIES HAVE ERRED IN MAKING THE ADDITI ON OF RS.5,74,924/- BY INVOKING PROVISIONS OF SECTION 43CA OF THE INCOM E TAX ACT, 1961 BY REJECTING APPELLANTS SUBMISSION IN THIS REGARD. AP PELLANT PRAYS FOR DELETION OF ENTIRE ADDITION. 2 ITA NO. 682/PUN/2018 A.Y.2014-15 THE APPELLANT CRAVES FOR TO LEAVE, ADD, ALTER, MODI FY, DELETE ABOUT GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING, IN THE INTEREST OF NATURAL JUSTICE. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THE ADDITION OF RS.5,74,924/- BY INVOKING PROVISIONS OF SECTION 43CA OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON ACCOUNT OF DIFFERE NCE BETWEEN STAMP DUTY VALUATION AND ACTUAL CONSIDERATION. 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING ON BUSINESS OF BUILDERS, PROMOTERS AND DEVELOPERS SINCE 2011 AND ASSESSED TO INCOME TAX BY THE ITO, WARD 7(1), PUNE. THE A SSESSEE HAS DECLARED TOTAL INCOME OF RS.2,45,750/- FOR THE ASSESSMENT Y EAR 2014-15 BY FILING REVISED RETURN DATED 08.12.2014 AND THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT VIDE ASSESSMENT ORDER DATED 22.12.20 16. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SOLD A FLAT T O PREMAL VASANT WAGH FOR ACTUAL CONSIDERATION OF RS.67,20,000/- VIDE DOCUM ENT NO.5363/2013 DATED 22.04.2013 WHEREAS STAMP DUTY VALUE ADOPTED BY THE GOVERNMENT WAS RS.72,94,924/- WHICH IS MORE THAN THE V ALUE RECORDED IN THE BOOKS OF ACCOUNTS. ACCORDINGLY, THE ASSESSING OFFICER ADDED RS.5,74,924/- TO THE TOTAL INCOME OF THE ASSESSEE U/S.43CA OF THE ACT. 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE LD. CIT(APPE AL) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER AND ALSO OBSERVED T HAT THE CASE LAWS RELIED ON BY THE ASSESSEE ARE RELATED TO SECTION 50C OF THE ACT, WHEREAS, THE PROVISIONS OF SECTION 43CA WERE INVOKED WHICH IS INSERTED B Y THE FINANCE ACT, 2013, W.E.F. 01.04.2014. 3 ITA NO. 682/PUN/2018 A.Y.2014-15 5. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE SU BMITTED THAT PROVISION OF SECTION 43CA IS IDENTICAL IN NATURE WITH RESPECT TO SECTION 50C OF THE ACT. THE LD. AR HAS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I) RAHUL CONSTRUCTION VS. DCIT, PUNE ITA NO.1543/PN/2007 FO R A.Y.2004-05 II) SMT. SITA BAI KHETAN VS. INCOME TAX OFFICER, JAIPUR, ITA NO.826/JP/2013 FOR A.Y.2010-11. WHILE PLACING RELIANCE ON THE AFORESAID DECISIONS, IT WAS CONT ENDED BY THE LD.AR THAT IN THESE CASES, THERE WAS DIFFERENCE BETWE EN STAMP DUTY VALUATION ADOPTED BY THE GOVERNMENT & THE ACTUAL CONSI DERATION RECEIVED. IT WAS HELD THAT, IF THE DIFFERENCE IS LESS THAN 10% THEN STAMP DUTY/MARKET VALUE, THE DIFFERENCE SHALL NOT BE CONSIDERED FOR THE PURPOS E OF SECTION 50C OF THE ACT. SINCE SECTION 43CA IS HAVING IDENTICAL SITUATION A S REFERRED TO IN SECTION 50C THEREFORE, DECISIONS OF THE ABOVE CASES SHALL APPLY ALSO AND COVERED BY SECTION 43CA OF THE ACT. 6. THE LD. DR HAS PLACED RELIANCE ON THE ORDERS OF THE SU B-ORDINATE AUTHORITIES. 7. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED TH E RELEVANT PROVISIONS OF THE ACT I.E. SECTION 50C AND SECTION 43CA. SEC TION 50C DEALS WITH SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTA IN CASES WITH REGARD TO CAPITAL ASSET. SECTION 43CA IS ALSO SPECIAL PROVIS ION FOR FULL VALUE OF CONSIDERATION FOR TRANSFER OF ASSETS OTHER THAN CAPITAL AS SETS IN CERTAIN CASES. IN THIS CONTEXT, THE APPLICATION OF THE CASE LAWS WITH REG ARD TO SECTION 50C IS APPLICABLE TO SECTION 43CA AS WELL. 4 ITA NO. 682/PUN/2018 A.Y.2014-15 8. WITH THESE OBSERVATIONS, WE REFER TO THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, PUNE IN THE CASE OF RAHUL CONSTRUCT ION VS. DEPUTY COMMISSIONER OF INCOME TAX (SUPRA.). IN THAT CASE, ASSESSEE RECEIVED AN AMOUNT OF RS.19,00,000/- AS SALE CONSIDERATION ON ACCOUNT OF SALE OF BASEMENT OF A BUILDING. STAMP VALUATION AUTHORITIES HAVE ADO PTED THE VALUE AT RS.28,73,000/- FOR THE PURPOSE OF STAMP DUTY ON BEING OBJECTED BY THE ASSESSEE FOR SUBSTITUTION OF THE SAME FIGURE UNDER SECTI ON 50C(2). THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO WHO DET ERMINED THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE AT RS.2 0,55,000/-. THE PUNE BENCH OF THE TRIBUNAL OBSERVED THAT THIS ITSELF SHOWS THA T THERE IS A WIDE VARIATION BETWEEN THE TWO VALUES AND THAT THEY ARE BAS ED ON SOME ESTIMATE. DIFFERENCE BETWEEN THE SALE CONSIDERATION SHOWN BY THE AS SESSEE AND THE FAIR MARKET VALUE DETERMINED BY THE DVO IS ONLY RS.1,55,000/- WHICH IS LESS THAN 10%. IN VIEW OF THE FACT THAT VALUATION IS ALWAYS A MATTE R OF ESTIMATION WHERE SOME DIFFERENCE IS BOUND TO OCCUR. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN SUBSTITUTING THE VALUE DETERMINED BY THE DVO FOR THE SA LE CONSIDERATION DISCLOSED BY THE ASSESSEE. THEREFORE, ASSESSING OFFICER WAS DIRECTED TO TAKE RS.19,00,000/- ONLY AS THE SALE CONSIDERATION OF THE PROPERTY. THIS CASE OF RAHUL CONSTRUCTION VS. DCIT (SUPRA.) WAS ALSO FOLLOWED BY THE PUNE BENCH OF THE TRIBUNAL IN ITA NO.2704/PUN/2016, THEREIN ALSO, THE BENEFIT OF 10% DIFFERENCE OF SALE VALUE WAS ALLOWED IN FAVOUR OF THE ASSESSEE. THUS, FOLLOWING THE AFORESAID DECISIONS, WE ARE OF THE CONSIDER ED VIEW THAT DIFFERENCE BETWEEN THE SALE CONSIDERATION OF THE PROPERTY SHOWN BY THE ASSESSEE AND THE FAIR MARKET VALUE DETERMINED BY THE DV O UNDER SECTION 50C(2) BEING LESS THAN 10%, THE ASSESSING OFFICER IS NOT JUST IFIED IN SUBSTITUTING THE VALUE DETERMINED BY THE DVO FOR THE SA LE CONSIDERATION DISCLOSED BY THE ASSESSEE. 5 ITA NO. 682/PUN/2018 A.Y.2014-15 9. IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE L D. CIT(APPEAL) AND ALLOW THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED ON 08 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 08 TH FEBRUARY, 2019. SB '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL), PUNE-3. 4. THE PR. CIT-2, PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 682/PUN/2018 A.Y.2014-15 DATE 1 DRAFT DICTATED ON 0 7 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 0 7 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER