ALOK MUKHERJEE(IND), Jaipur V. ITO, Jaipur

ITA 690/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1997 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 27-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANMUGA PRIYA
• Assessee Lawyers: PRAVIN SARASWAT
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value
• Section: 50C; 148; 2

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. 690/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2005-06 ALOK MUKHERJEE (IND) HATHI BABU KA BAGH, STATION ROAD, JAIPUR. CUKE VS. THE ITO, WARD- 3(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACTPM 0161 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI PRAVIN SARASWAT (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SRI SHANMUGA PRIYA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/03/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 02.03.2016 OF THE CIT(A), JAIPUR FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- THE LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING TH E FACTS ON RECORD THAT NOTICE U/S 148 WAS BASED ON WRONG FOUND ATION & DEFECTIVE. THE NOTICE ISSUED ON 29.03.2012 WAS BEYO ND FOUR YEARS, WHILE SO CALLED ESCAPEMENT OF INCOME WAS ONL Y ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 2 RS.67,190/- AS MENTIONED IN REASONS OF ISSUE OF NOT ICE U/S 148. HENCE INITIATION OF PROCEEDINGS WAS ILLEGAL AND NOT JUSTIFIED 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE A DDITION OF RS.15,13,717/-INCOME FROM LONG TERM CAPITAL GAIN ON BASIS OF CUT- PASTE OBSERVATIONS OF OTHER CASE. HENCE LEARNED CIT (A) HAS NOT GIVEN ANY FINDINGS ON CORRECT SUBMISSION OF ASSESSE E. I) THE LEARNED CIT(A) HAS WRONGLY CONFIRMED ADDITIO N OF LONG TERM CAPITAL GAIN OF RS. 2,87,252/- AFTER APPLYING WRONGLY ADOPTED INDEXED COST BY A.O. FOR THE 1/3D SALE PROC EEDS OF PROPERTY PLOT NO. 5, HATHI BABU KA BAGH, STATION RO AD, JAIPUR ON THE EVALUATED VALUE ADOPTED BY SUB-REGISTRAR, JAIPU R. II) THE LEARNED CIT(A) HAS NOT CONSIDERED THE VALUE TAKEN BY THE ASSESSEE AS ON 1.4.1981 OF RS. 70,825/- FOR SAID PR OPERTY AND AFTER INDEXED COST VALUE OF PROPERTY COMES TO RS. 3 ,39,960/- IN WHICH NO CAPITAL GAIN WILL BE CHARGEABLE IN CORRECT PROSPECTIVE. III) THAT THE LEARNED CIT(A) & LEARNED ASSESSING OF FICER HAS ASSESSED CAPITAL GAINS IN A.. 2005-06 BY IGNORING THE BASIC FACT THAT 'TRANSFER' OF CAPITAL ASSET, HAD ALREADY COMPL ETED, IN TERMS OF SECTION 2(47)(V), 2(47)(VI) AND EXPLANATION 2 TO THE SECTION 2(47), IN THE RELEVANT ASSESSMENT YEARS I.E. 1976-7 7 ITSELF, WHEN THE AGREEMENT TO SALE WAS EXECUTED ACCOMPANIED WITH HANDING OVER OF PHYSICAL POSSESSION OF CAPITAL ASSET AND PU RCHASER HAD MADE CONSTRUCTION OVER IT AND ENJOYING THE PROPERTY FOR BUSINESS/RESIDENCE. IV) THAT THE LEARNED CIT(A) & LEARNED A.O. BY IGNOR ING THE LAW THAT SECTION 50C CAME ON THE STATUTE W.E.F. 1.04.20 03 AND THE TRANSACTIONS THROUGH 'AGREEMENT TO SELL, OR POWER OF ATTORNEY CAME IN THE ENLARGED SCOPE OF SECTION 50C(1) W.E.F. 01.10.2009 WHEREAS THE CAPITAL ASSETS OF THE ASSESSEE WERE TRA NSFERRED BY WAY OF AGREEMENT FROM ASSESSMENT YEAR 1997-77 ITSEL F. ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 3 V) THE LEARNED CIT(A) & LEARNED ASSESSING OFFICER H AS WRONGLY CONSIDERED THE PROPERTY 7 & 7A IN THIS YEAR WHILE T HESE ARE PERTAINS TO A.Y. 2004-05, EVIDENT FROM SALE DEED DA TED 04.03.2004. SO ADDITION MADE ON THIS ACCOUNT IN THI S YEAR IS NOT JUSTIFIED. HENCE LEARNED CIT(A) HAS WRONGLY CONFIRMED ADDITION OF RS.15,67,840/- BY INVOKING PROVISIONS OF SEC. 50C W HICH IS NOT JUSTIFIED. 3. THE ASSESSEE CAN ADD ALTER OR AMEND ANY GROUND O F APPEAL BEFORE HEARING OR DURING HEARING. 2. GROUND NO. 1 IS REGARDING VALIDITY OF REOPENING. AT THE TIME HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS S TATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1 AND THE SAME M AY BE DISMISSED AS NOT PRESSED. THE LD. DR HAS RAISED NO OBJECTION IF GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED AS NOT PRESSED. ACCORDINGLY THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT PRESSED. 3. THE ASSESSEE HAS RAISED THE ISSUE OF ASSESSABILI TY OF CAPITAL GAIN FROM SALE OF CAPITAL ASSET IN QUESTION IN THE YEAR UNDER CONSIDERATION IN GROUND NO. (III) TO (V) OF THE GROUNDS OF APPEAL. S INCE, THIS ISSUE RAISED BY THE ASSESSEE GOES TO THE ROOT OF THE MATTER REGA RDING THE CAPITAL GAIN ARISING FROM TRANSFER OF THE CAPITAL ASSET IS ASSESSABLE IN THE YEAR UNDER CONSIDERATION OR FOR THE ASSESSMENT YEAR 1976 -77 AS CLAIMED BY THE ASSESSEE OR IN THE ASSESSMENT YEAR 2004-05 AS T HE SALE DEED IN ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 4 QUESTION WAS EXECUTED ON 04.03.2004 WHICH FALL FOR THE ASSESSMENT YEAR 2004-05 THEREFORE, WE TAKEN UP THIS ISSUE FIRS T. 4. WE HAVE HEARD LD. AR AS WELL AS LD DR AND SUBMIT TED THAT THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSESS EE HAS NOT RAISED THIS OBJECTION OF ASSESSABILITY OF CAPITAL GAIN ARISING FROM TRANSFER OF CAPITAL ASSET IN QUESTION FOR THE ASSESSMENT YEAR 19976-77 OR FOR THE ASSESSMENT YEARS 2004-05 BEFORE THE AUTHORITIES BEL OW. THE CLAIM OF THE ASSESSEE IS THAT THE ASSET IN QUESTION WAS TRAN SFERRED BY WAY OF AGREEMENT TO SALE EXECUTED BY THE FATHER OF THE ASS ESSEE BEING GUARDIAN OF THE ASSESSEE ON 13.05.1975 AND THEREAFT ER, THE ASSESSEE HAS EXECUTED THE SALE DEED ON 04.03.2004. SINCE, TH E ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE AUTHORITIES BELOW AND T HE AGREEMENT DATED 13.05.2005 IS NOT THE BASIS OF THE AO TO INITIATE THE PROCEEDINGS U/S 147/148 OF THE ACT THEREFORE, IN THE ABSENCE OF THE LEAVE OF THE TRIBUNAL TO RAISE A FRESH GROUND WHICH IS ALTOGETHE R SETTING UP A NEW CASE AND ALSO PURELY FACTUAL IN NATURE, ADJUDICATIO N OF THE SAME REQUIRES INVESTIGATION OF THE FACTS FIRST TIME PLEADED BY TH E ASSESSEE AT THIS STAGE, THE SAME CANNOT BE ALLOWED. HENCE, WE REJECT THE GROUND NO. 2(III) OF THE ASSESSEES APPEAL AND THE SAME IS NOT ARISING FROM THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE AS SESSEE HAS ALSO NOT ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 5 SOUGHT IN PRIOR LEAVE OF THE TRIBUNAL FOR RAISING SUCH AN ISSUE FIRST TIME AT THIS STAGE. 5. AS REGARDS THE GROUND NO. 2(IV) & (V) SINCE, THE ASSESSING OFFICER HAS INITIATED PROCEEDING U/S 147/148 TO ASSESS THE INCOME BEING CAPITAL GAIN ESCAPED FROM ASSESSMENT ON THE BASIS OF THE IN FORMATION OF TRANSFER OF THE CAPITAL ASST BY THE ASSESSEE ALONG WITH THE OTHER CO- OWNERS THROUGH SALE DEED THEREFORE, THIS FACT OF SA LE DEED DATED 04.03.2004 WAS VERY MUCH IN THE KNOWLEDGE OF THE AS SESSING OFFICER. THOUGH THE ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE AUTHORITIES BELOW HOWEVER, THIS VERY FACT IS THE SOLE BASIS OF REOPENING OF THE ASSESSMENT THEN, THE ASSESSING OFFICER WAS REQUIRED TO TAKE INTO CONSIDERATION THE SAME WHILE FRAMING THE REASSESSME NT. SINCE, THE ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE LD. CI T(A) THEREFORE, SAME COULD NOT BE EXAMINED BY THE LD. CIT(A) WHILE PASSI NG THE IMPUGNED ORDER. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESSEE DID NOT RAISE A SPECIFIC OBJECTION REGARDI NG THE ASSESSABILITY OF THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2004-05 WE DEEM IT FIT AND PROPER THAT THIS ISSUE SHALL BE EXAMINED BY THE ASS ESSING OFFICER. IN CASE IT IS FOUND THAT THE CAPITAL GAIN ARISING FROM TRANSFER OF THE CAPITAL ASSET IN QUESTION PERTAINS TO THE ASSESSMENT YEAR 2 004-05 THE AO IS ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 6 FREE TO REOPEN THE ASSESSMENT FOR THE ASSESSMENT YE AR 2004-05. ACCORDINGLY, THIS ISSUE IS SET ASIDE TO THE RECORD OF THE AO IN THE ABOVE TERMS. 6. THE OTHER GROUNDS OF THE APPEAL OF THE ASSESSEE ARE REGARDING THE INDEX COST OF ACQUISITION BEING FAIR MARKET VAL UE OF THE ASSET AS ON 01.04.1981AND FULL VALUE CONSIDERATION AS PER THE P ROVISIONS OF SECTION 50C OF THE ACT. SINCE, THE ISSUE OF ASSESSABILITY O F CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION OR FOR THE A.Y. 2004-05 HA S BEEN SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER WHICH GOES TO T HE ROOT OF THE MATTER THEREFORE, THE OTHER ISSUES ARE ONLY CONSEQUENTIAL AND CAN BE EXAMINED ONLY AFTER DECIDING THE ISSUE OF TAXABILITY OF THE CAPITAL GAIN WHETHER IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR FOR THE A.Y. 2004-05. ACCORDINGLY, THESE ISSUES ARE ALSO SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER FOR CONSIDERATION AND ADJUDICATIO N AFTER DECIDING THE ISSUE OF CHARGEABILITY OF CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION. NEEDLESS TO SAY THAT THE OBJECTIONS RAISED BY THE A SSESSEE ON THE FAIR MARKET VALUE AS ON 01.04.1981 AND FULL VALUE CONSID ERATION AS PER SECTION 50C OF THE ACT MAY BE CONSIDERED BEFORE PAS SING THE FRESH ORDER. ITA NO. 690JP/2016 ALOK MUKHERJEE (IND) VS. ITO 7 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/03/2018. HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/03/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ALOK MUKHERJEE (IND), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD- 3(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 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. 690/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR