Bhausaheb Shankar Salunke, Pune V. Income-tax Officer,

ITA 716/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9221 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Agreed addition; Tax effect; Benefit of exemption
• Section: 50C; 54F; 54; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 716 /PUN/2015 / ASSESSMENT YEAR : 20 1 1 - 12 SH RI BHAUSAHEB SHANKAR SALUNKE, FLAT NO. 414, GANGOTRI BUILDING, THE HILL SIDE, BAVDHAN KHURD, PUNE 411021 PAN : ABQPS2690P ....... / APPELLANT / V S. INCOME TAX OFFICER, WARD 6( 3 ), PUNE / RESPONDENT . / ITA NO . 750/PUN/2015 / ASSESSMENT YEAR : 2011 - 12 INCOME TAX OFFICER, WARD 4(2), PUNE ....... / APPELLANT /VS. SHRI BHAUSAHEB SHANKAR SALUNKE, FLAT NO. 414, GANGOTRI BUILDING, THE HILL SIDE, BAVDHAN KHURD, PUNE 411021 PAN : ABQPS2690P / RESPONDENT ASSESSEE BY : SHRI S .N. PURANIK REVENUE BY : S HRI MUKESH JHA / DATE OF HEARING : 2 8 - 06 - 2017 / DATE OF PRONOUNCEMENT : 30 - 0 6 - 2017 2 ITA NO S. 716 & 750/PUN/2015, A.Y. 2011 - 12 / ORDER PER VIKAS AWASTHY, JM : TH ESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 3, PUNE DATED 30 - 01 - 2015 FOR THE ASSESSMENT YEAR 201 1 - 12. 2. THE ASSESSEE IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE STAMP DUTY VALUATION RS.39,80,000/ - ADOPTED BY THE ASSESSING OFFICER IN RESPECT OF SALE OF PLOT AT ADAGAON, AS AGAINST THE ACTUAL CONSIDERATION PAID RS.35,00,000/ - . 3. SHRI S.N. PURANIK APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE ADOPTED STAMP DUTY VALUATION DISBELIEVING THE ACTUAL FULL SALE CONSIDERATION RECEIVED BY THE ASSESSEE IN RESPECT OF SALE OF PLOT AT ADAGAON FOR DETERMINING LONG TERM CAPITAL GAIN. THE LD. AR FURTHER SUBMITTED THAT THE AUTHORITIES BELOW SHOULD HAVE REFERRED THE MATTER TO DEPARTMENT VALUATION OFFICER (DVO) U/S. 50C(2) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 4. ON THE OTHER HAND SHRI MUKESH JHA REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ADDITION HAS BEEN MADE AFTER THE LD. AR OF THE ASSESSEE AGREED FOR THE RE - WORKING OF THE HIGHER CAPITAL GAIN. THIS FACT HAS BEEN RECORDED BY THE ASSESSING OFFICER IN PARA 3.2 OF THE ASSESSMENT ORDER. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE 3 ITA NO S. 716 & 750/PUN/2015, A.Y. 2011 - 12 COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER : 4.3 THE APPELLANT HAS CONTESTED THE ADOPTION OF THE STAMP DUTY VALUE BY THE A.O. FOR THE SALE OF PLOT AT ADAGAON AT RS .39,80,000/ - AS AGAINST THE VALUE OF RS. 35,00,000/ - SHOWN BY THE APPELLANT AS PER THE PROVISIONS OF SECTION 50C AND WHO ACCORDINGLY REWORKED THE COMPUTATION OF LONG - TERM CAPITAL GAIN AT RS. 62,59,898/ - AS AGAINST RS. 58,08,791/ - WORKED OUT BY THE APPELLANT. HOWEVER, ON SEEKING THE EXPLANATION FROM THE APPELLANT DURING TH E ASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER IT IS NOTICED THAT THE APPELLANT ACCEPTED THE REWORKED HIGHER CAPITAL GAIN AND THE AFORESAID FACT HAS ALSO BEEN NOTED BY THE ASSESSING OFFICER IN PARA 3.2 OF THE ORDER, WHEREIN IT IS CLEARLY MENTIONED THAT THE A.R. OF THE APPELLANT ACCEPTED THIS FACT VIDE ORDER SHEET NOTING DATED 23.09.2013. IN THE RESULT THE CONTENTION RAISED BY THE APPELLANT IN THIS REGARD IS FOUND TO BE NOT TENABLE AS NO APPEAL LIES AGAINST AGREED ADDITIONS UNLESS COERCION OR MALAFIDE IS PROVED BY THE APPELLANT AS HELD BY THE BOMBAY HIGH COURT IN RAMESHCHANDRA & CO. VS. CIT, 168 ITR 375 (BOM). HENCE, THE ADOPTION OF THE STAMP DUTY VALUE AS FULL CONSIDERATION AS AGAINST THE ACTUAL CONSIDERATION RECEIVED BY THE ASSESSING OFFICER APPEARS TO BE IN ORDER AND THE SAME IS LIABLE TO BE UPHELD. THUS, THE GROUND OF APPEAL NO. 3 RAISED BY THE APPELLANT IN THIS REGARD IS LIABLE TO BE DISMISSED. 6 . THE LD. AR OF THE ASSESSEE HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). FURTHER, WE OBSERVE THAT THE TAX EFFECT INVOLVED FROM ADDITION IS NOT MUCH , T HEREFORE, WE DO NOT WISH TO INTERFERE WITH THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. ACCORDINGLY, THE SOLITARY ISSUE RAISED IN THE APPEAL BY THE ASSESSEE IS DISMISSED. ITA NO. 750/PUN/2015 (REVENUES APPEAL) 7 . THE DEPARTMENT IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE EXEMPTION U/S. 54F OF THE ACT. THE LD. DR SUBMITTED THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM THE BENEFIT OF EXEMPTION U/S. 54F FOR THE FOLLOWING REASONS : 4 ITA NO S. 716 & 750/PUN/2015, A.Y. 2011 - 12 I . THE NEW RESIDENTIAL HOUSE WAS PURCHASED BY THE ASSESSEE BEYOND THE PERIOD OF TWO YEARS AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET . THE ASSESSEE SOLD THE CAPITAL ASSET ON 02.06.2010 AND 13.08.2010 . AS PER THE PROVISIONS OF SECTION 54F(1) THE ASSESSEE WAS REQUIRED TO PURCHASE RESIDENTIAL HOUSE ON OR BEFORE 12.08.2012. WHEREAS, THE ASSESSEE PURCHASED NEW RESIDENTIAL HO USE ON 10.10.2012. II . THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE FROM SALE OF CAPITAL ASSET WAS DEPOSITED BY THE ASSESSEE IN ORDINARY ACCOUNT INSTEAD OF CA PITAL G AINS SCHEME ACCOUNT AS ENVISAGED UNDER THE PROVISIONS OF SECTION 54F(4). III . THE ASSESSEE IS OWN ER OF MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF ORIGINAL ASSET. THE LD. DR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . RASIKLAL M. PARIKH VS. ACIT , 391 ITR 395 (BOM.); II . M.J. SIWAN I VS. COMMISSIONER OF INCOME TAX, 63 TAXMANN.COM 318 (SC). 8 . THE LD. AR OF THE ASSESSEE FAIRLY ADMITTED THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM BENEFIT OF EXEMPTION U/S. 54F AS THE ASSESSEE FAILED TO DEPOSIT SALE PROCEEDS OF THE ORIGINAL ASSET IN CAP ITAL GAIN SCHEME ACCOUNT AS SPECIFIED UNDER THE PROVISIONS OF SECTION 54F(4) OF THE ACT. THE LD. AR CONTENDED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HUMAYUN SAULEMAN MERCHANT VS. CHIEF COMMISSIONER OF INCOME TAX REPORTED AS 387 ITR 421 HAS HELD THAT WHERE THE ENTIRE AMOUNT WHICH WAS SUBJECTED TO CAPITAL GAIN TAX HA S NOT BEEN UTILIZED FOR PURPOSE OF CONSTRUCTION OF NEW HOUSE, NOR THE UNUTILIZED AMOUNT WAS DEPOSITED IN NOTIFIED BANK ACCOUNTS 5 ITA NO S. 716 & 750/PUN/2015, A.Y. 2011 - 12 BEFORE FILING RETURN OF INCOME, THE ASSESSING OFFICER WAS RIGHT IN RESTRICT ING EXEMPTION U /S. 54F PROPORTIONATELY TO AMOUNT INVESTED. 9 . BOTH SIDES HEARD. THE SOLITARY ISSUE RAISED BY THE DEPARTMENT IN APPEAL IS AGAINST ALLOWING OF EXEMPTION U/S. 54F OF THE ACT BY THE COMMISSIONER OF INCOME TAX (APPEALS). ALTHOUGH, THE REVENUE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING SUCH EXEMPTION ON VARIOUS COUNTS , THE LD. AR OF THE ASSESSEE FAIRLY ADMITTED THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM EXEMPTION U/S. 54F AS THE SALE PRO CEEDS OF THE ASSETS SOLD WERE NOT DEPOSITED IN THE SPECIFIED CAPITAL GAIN SCHEME ACCOUNT. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HUMAYUN SAULEMAN MERCHANT VS. CHIEF COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD : (H) . WHERE THE CONSIDERATION RECEI VED ON SALE OF CAPITAL ASSET IS NOT APPROPRIATED (WHERE PURCHASE WAS EARLIER THAN SALE) OR UTILIZED (WHERE PURCHASE IS AFTER THE SALE) THEN THE SAME WOULD BE SUBJECT TO THE CHARGE OF CAPITAL GAIN TAX, UNLESS THE UNUTILIZED AMOUNTS ARE DEPOSITED IN SPECIFIE D BANK ACCOUNT AS NOTIFIED IN TERMS OF SECTION 54F(4) OF THE ACT. THE EXEMPTION WOULD BE AVAILABLE TO THE UNUTILIZED AMOUNTS ONLY IF THE MANDATE OF SUB - SECTION (4) OF SECTION 54F OF THE ACT IS COMPLIED WITH. FURTHER THE PROVISO TO SUB - SECTION (4) OF SECTI ON 54F OF THE ACT, SAFEGUARDS THE REVENUE WHERE THE ASSESSEE HAD NOT INVESTED THE AMOUNTS CHARGEABLE TO CAPITAL GAINS WITHIN THE TIME PRESCRIBED UNDER SUB - SECTION (1) OF SECTION 54F OF THE ACT. THIS BY PROVIDING THAT IN SUCH CASES, CAPITAL GAIN UNDER SECT ION 45 OF THE ACT WOULD BE CHARGED ON THE UNUTILIZED AMOUNT AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET EXPIRES. 10 . THE HONBLE BOMBAY HIGH COURT IN A RECENT DECISION IN THE CASE OF R ASIKLAL M. PARIKH VS. ACIT (SUPRA) HAS TAKEN A SIMILAR VIEW BY APPROVING THE DECISION RENDERED IN THE CASE OF HUMAYUN SAULEMAN MERCHANT VS. 6 ITA NO S. 716 & 750/PUN/2015, A.Y. 2011 - 12 CHIEF COMMISSIONER OF INCOME TAX (SUPRA). THUS, IN VIEW OF UNDISPUTED FACT THAT THE ASSESSEE HAS FAILED TO UTILIZE/ DEPOSIT THE SALES PROCEEDS OF CAPITAL ASSET SOLD IN ACCORDANCE WITH THE PROVISIONS OF SECTION 54 F AND THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT WE FIND MERIT IN THE APPEAL OF THE DEPARTMENT. ACCORDINGLY, THE SAME IS ALLOWED. 1 1 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED AND THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 30 TH DAY OF JUNE, 201 7 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 30 TH JUNE, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 3, PUNE 4. / THE PR. CIT - 2, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / ASSISTANT REGISTRAR , , / ITAT, PUNE