ROMA H. BHAGWANANI, MUMBAI V. ITO 15(1)((4), MUMBAI

ITA 7535/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8889 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA SR
• Assessee Lawyers: SUMIT DALAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI G.E. VEERABHADRAPPA, PRESIDENT & SHRI VIVEK VARMA, JUDICIAL MEMBER I.T.A. NO. 7535/MUM/2010 ASSESSMENT YEAR : 2006-07 MRS. ROMA H. BHAGWANANI, BUILDING NO. 1, FLAT NO. 32, 10 TH FLOOR, NAVJIVAN SOCIETY, LAMINGTON ROAD, MUMBAI 400 008. PAN: ADCPB 8517 C VS. INCOME TAX OFFICER 15(1)(4), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUMIT DALAL. RESPONDENT BY : SHRI N. K. MEHTA. SR. A.R DATE OF HEARING: 07-08-2012. DATE OF PRONOUNCEMENT: 05.09.2012 O R D E R PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF CIT(A) 26, MUMBAI DATED 09-09-2010 WHEREIN THE ASSESSEE HA S RAISED FOUR GROUNDS OF APPEAL OUT OF WHICH GROUNDS NO. 1.1 TO 3 .2 ARE INTER- CONNECTED WITH REGARD TO SECTION 50-C OF THE I.T.AC T, 1961. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS : 1.1 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS )-26, MUMBAI [THE LD. CIT(A)] ERRED IN CONFIRMING THE ACTION OF THE INC OME TAX OFFICER, 15(1)-4, MUMBAI [THE AO] IN RECOMPUTING THE LONG TERM CAPI TAL GAIN ARISING ON ACCOUNT OF THE SALE OF SHOP BY ADOPTING THE SALE CO NSIDERATION AT RS. 52,42,829/-, BEING STAMP DUTY VALUATION IN TERMS OF SECTION 50C OF THE ACT, IN PLACE OF THE ACTUAL CONSIDERATION OF RS. 38,00,000/ - AS OFFERED BY THE APPELLANT IN TERMS OF THE AGREEMENT WITH THE BUYER. MRS. ROMA H. BHAGWANANI. I.T.A.NO. 7535/M/10 PAGE 2 OF 4 1.2 THE LD. CIT(A) FAILED TO APPRECIATE THAT THE CA SE OF THE APPELLANT DID NOT FALL WITHIN THE PURVIEW OF SECTION 50C AS THERE WAS NO EVASION OF ANY TAX, AS THE TRANSACTION WAS WITH A NATIONALISED BANK. 1.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCU MSTANCES OF THE CASE, AND IN LAW, NO SUCH SUBSTITUTION WAS CALLED FOR. 2.1 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE AO OUGHT TO HAVE REFERRED THE MATTER TO THE DIS TRICT VALUATION OFFICER [DVO] IN TERMS OF SEC. 50C(2) OF THE INCOME TAX A CT, 1961. 2.2 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, AND IN LAW, THE ACTION OF THE AO AS WELL AS THE CIT(A) IN NOT REFERRING THE MATTER TO DVO WAS BAD AND ILLEGAL AND NOT IN ACCORDANCE WITH THE LAW. 3.1 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN ADOPTION OF THE SALES CONSI DERATION AT RS. 52,42,829/- 3.2 WHILE DOING SO, THE LD. CIT(A) FAILED TO APPREC IATE THAT : (I) THE AO HAD TAKEN INTO ACCOUNT IRRELEVANT AND E XTRANEOUS CONSIDERATION; AND (II) IGNORED RELEVANT MATERIAL AND CONSIDERATIONS A S SUBMITTED BY THE APPELLANT. 3. THE SOLITARY ISSUE IN THE CASE IS THAT THE APPEL LANT, AN INDIVIDUAL, DERIVES INCOME FROM INVESTMENT IN BONDS AND OTHER S CHEMES. IN THE YEAR UNDER CONSIDERATION SHE HAD SHOWN INCOME FROM LONG TERM CAPITAL GAINS AT RS. 5,74,540/- IN THE SALE OF SHOP NO. 8, GROUND FLOOR, EVEREST BLDG., TARDEO, MUMBAI ADMEASURING 400 SQ.FT. OF CAR PET AREA TO THE BANK OF BARODA FOR RS. 38,00,000/-. THE AO DURING T HE ASSESSMENT PROCEEDINGS CONFRONTED THE ASSESSEE AS TO WHY VALUA TION AS PER THE STAMP DUTY NOT BE TAKEN FOR THE PURPOSE OF COMPUTIN G THE CAPITAL GAINS AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. TH E ASSESSEE OBJECTED TO THE ADOPTION OF VALUE AS PER STAMP DUTY VALUATIO N AND ASKED THE AO TO REFER THE CASE TO THE VALUATION CELL. THE AO AFT ER CONSIDERING THE REPLY OF THE ASSESSEE, COMPUTED THE CAPITAL GAINS A T RS. 13,97,299/- AND TAXED THE AMOUNT AFTER GIVING THE BENEFIT OF IN VESTMENTS U/S 54EC. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A) WHO SUSTAINED THE OBSERVATIONS OF THE AO AND DISMISSED THE APPEAL. 5. THE ASSESSEE IS NOW BEFORE THE ITAT. MRS. ROMA H. BHAGWANANI. I.T.A.NO. 7535/M/10 PAGE 3 OF 4 6. BEFORE US AR POINTED OUT THAT THE PROVISIONS OF SEC 50C ARE NOT APPLICABLE. IN CASE THE VALUATION AS PER SECTION 50 C IS CHALLENGED BY THE ASSESSEE THEN THE DUTY IS CAST UPON THE AO TO R EFER THE VALUATION TO THE DVO. 7. WE HAVE SEEN FROM THE ORDERS OF THE REVENUE AUTH ORITIES THAT THE VALUATION AS DONE WAS CHALLENGED BY THE ASSESSE E. SINCE THE ONLY ISSUE IS WITH REGARD TO THE VALUATION OF THE PROPER TY DONE ON STAMP DUTY VALUATION WHICH HAS BEEN CHALLENGED BY THE ASS ESSEE, IN OUR CONSIDERED OPINION, THE ISSUE NEEDS TO GO BACK TO T HE AO WITH THE DIRECTION THAT THE PROPERTY MAY BE VALUED BY THE DV O. IN THE CIRCUMSTANCES, THE ORDER OF THE CIT(A) IS SET ASIDE WITH A DIRECTION TO THE AO TO COMPUTE THE CAPITAL GAINS AS PER THE PROV ISIONS OF LAW. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 05/09/2012. SD/- (G.E. VEERABHADRAPPA) PRESIDENT SD/- (VIVEK VARMA) JUDICIAL MEMBER MUMBAI, DATE: 05/09/2012 P/-* COPY TO- 1) APPELLANT 2) RESPONDENT 3) CITA MUMBAI. 4) CIT CITY MUMBAI 5) DR BENCH MUMBAI TRUE COPY BY ORDER DY /ASST.REGISTRAR,ITAT MUMBAI.