Arvind Gangabisan Kasat, Ahmednagar V. Assistant Commissioner of Income-tax, Ahmednagar Circle, Ahmednagar

ITA 77/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5167 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-12-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 10-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S SHINGTE
• Keywords: Sale consideration of property below Jantri Value
• Section: 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.77/PUN/2018 / ASSESSMENT YEAR : 2014-15 ARVIND GANGABISAN KASAT, MS. SHANTILAL GANDHI TAX CONSULTANT, 146 AMBER PLAZA, 1 ST FLOOR, STATION ROAD, AHMEDNAGAR-414 001 PAN : ACTPK5007C .... / APPELLANT ! / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR. / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 04.02.2019 / DATE OF PRONOUNCEMENT : 04.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEAL), PUNE-2 DATED 15.11.2017 FOR THE ASSESSMENT YE AR 2014-15 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE AL) HAS ERRED IN LAW & ON THE FACTS IN DISMISSING THE APPEAL & CONFIRMIN G THE ADDITION MADE BY A.O THAT THE ADDITIONS OF RS.7,50,000/- MADE BY THE A.O. BY INVOKING 2 ITA NO.77 /PUN/2018 A.Y.2014-15 PROVISIONS OF SECTION 50C WERE BAD IN LAW & ON THE FACTS AND HENCE THE SAME DESERVES TO BE DELETED. 2. THAT YOUR APPELLANT PRAYS THAT HE MAY BE ALLOWED TO ADD, TO ALTER, TO AMEND THE ABOVE GROUND OF APPEAL. 2. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE A CIVIL ENGINEER HAVING INCOME FROM SUPERVISION FEES, VALUATION FEES, INCOME FROM CA PITAL GAINS SHORT TERM & LONG TERM ON IMMOVABLE PROPERTIES. THE ASSESSEE HAS FILED HIS ITR DECLARING THEREIN INCOME FROM FEES AND SHORT TERM LONG TERM CAPITAL GAINS ON SALE OF IMMOVABLE PROPERTIES. THE ASSESSEE'S CASE WAS TAKEN UP FOR LIMITED SCRUTINY UNDER CASS. ALL THE INFORMATION, DOCUMENTS WERE FILED BEFORE THE ASSESSING OFFICER. ALL THE INFORMATION'S AND PAPERS WERE VERIFIE D. ACCORDINGLY THE ASSESSING OFFICER HAS MADE CERTAIN ADDITION TO THE TOT AL INCOME RETURNED. HOWEVER, WHILE DOING SO HE HAS INVOKED PROVISION OF SECTION 50C OF INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON SALE OF IMMOVABLE PROPERTY SITUATED AT VADGAON GAT. NO.154/22 & 154/23. THE SAID PROPERTY WAS OF PARTNERSHIP FIRM M/S DIAMOND TILES, IN WHICH THE ASSESSEE W AS HAVING SHARES. 3. THE FIRM, M/S. DIAMOND TILES WAS A DEFUNCT AND THE SAME IS NOT YET DISSOLVED NOR IS THE FIRM HAVING ANY BANK ACCOUNT. THE FIRM WAS HAVING A LAND ADMEASURING 855 SQ. MTS. THE PARTNERS OF FIRM DECIDED TO SELL THE SAID PROPERTY AND ACCORDINGLY THE PARTNERS SOLD THE FIRMS PROPERTY ON 20.03.2014 FOR RS.1000000/- THE READY RECKONER VALUE FOR STAMP DUTY P URPOSE WAS RS.2700000/- OF THE SAID PROPERTY. THE ASSESSEE RECEIVE D 50% OF ACTUAL SALE CONSIDERATION I.E. RS. 500000/- AND SAME WAS OFFERED FOR TAX IN HIS INDIVIDUAL CAPACITY, THOUGH THE SAME SHOULD HAVE BEEN OFFERED IN THE FIRMS HAND. THE ASSESSING OFFICER INVOKED PROVISIONS OF SECTION 50C OF THE A CT ADOPTED SALE CONSIDERATION AS SHOWN BY STAMP VALUATION AUTHORITY AT R S. 2700000/- AND 3 ITA NO.77 /PUN/2018 A.Y.2014-15 ACCORDINGLY ADDED THE DIFFERENTIAL VALUE BETWEEN ACTUAL SALE CONSIDERATION AND VALUE ADOPTED BY STAMP DUTY VALUATION AUTHORITY I.E. RS. 75 0000/- AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ALL THE NECESSARY DO CUMENTARY EVIDENCES AS REGARDS TO THE OWNERSHIP OF THE PROPERTY, THE VALUATION CERTIFICATE ISSUED BY THE ASSISTANT SUB REGISTER CLASS II SANGAMNER DATED 30.03. 2016, COPY OF SALE DEED OF ADJACENT PROPERTY, CASE LAWS ETC. WHICH WERE SUBMITTE D BEFORE ASSESSING OFFICER AND HAVE BEEN SUBMITTED BEFORE THE CIT(APPEAL). HOW EVER, THE CIT (A) HAS NOT APPRECIATED THESE FACTS AS PER REASONS APPEAR ING IN HIS ORDER WHICH IS ON RECORD UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 4. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE VE HEMENTLY ARGUED THAT THE SALE DEED CLEARLY MENTIONED THE NAME OF THE FIRM I.E. M/S. DIAMOND TILES AS SELLER AND THEREAFTER, THE NAMES OF PARTNERS IN THAT FIRM ARE MENTIONED THEREAFTER. THEREFORE, THE OBSERVATION OF THE LD. CIT(APPEA L) THAT THE SALE WAS NOT DONE BY THE FIRM RATHER IT WAS DONE BY INDIVIDUALS, WA S NOT CORRECT. FURTHERMORE, THE LD. AR SUBMITTED THAT THE TYPE OF LAND IS INDUSTRIAL USE NON- AGRICULTURAL TYPE, WHEREAS, ASSESSING OFFICER ASSESSED IT AND APPLIED T HE RATE AS COMMERCIAL LAND. 4.1 THE LD. AR FURTHER CONTENDED THAT AS PER PARA 8 OF THE CIT(APPEAL)S ORDER, WHETHER THE PROPERTY BELONGS TO THE FIRM OR TO T HE INDIVIDUAL PARTNERS IN THEIR INDIVIDUAL CAPACITY OR NOT, WAS NEITHER PROPERLY ADJU DICATED BY THE LD. CIT(APPEAL) NOR ANY VERIFICATION WAS CONDUCTED. RATHER, THE ISSUE WAS SUMMARILY DISPOSED OF BY THE LD. CIT(APPEAL). IN VIEW OF THE MATTER, THE LD. AR PRAYED BEFORE US THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DETAILED FACTUAL VERIFICATION AND RE-ADJUDICATION OF THE ISSUE. 4 ITA NO.77 /PUN/2018 A.Y.2014-15 5. THE LD. DR ON THE OTHER HAND HAS PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS. WE FIND THAT BEFORE US, CONTENTIONS OF THE LD. AR OF THE ASSESSEE ARE TWO FOLD S: FIRST , THE LAND WAS SOLD BY THE PARTNERSHIP FIRM AND NOT BY AN Y INDIVIDUAL. SECOND, THAT THE RATE APPLIED BY THE ASSESSING OFFICER WAS WITH RE GARD TO COMMERCIAL LAND AND NOT WITH REGARD TO ACTUAL NATURE OF THE LAND I.E. INDUSTRIAL USE FOR NON-AGRICULTURAL PURPOSES. TO THESE ASPECTS, THE LD. CIT(APPEAL) HAS DECIDED WITHOU T ANY SPECIFIC ENQUIRY CONDUCTED TO VERIFY THE ACTUAL FACTS AND NO SPEAKING ORDE R WAS PASSED. 7. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEAL) AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER FOR DETAILED FACTUAL VERIFICATION AND RE-ADJUDICATE THE ISSUE AFTER PROVID ING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON 04 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 04 TH FEBRUARY, 2019. SB 5 ITA NO.77 /PUN/2018 A.Y.2014-15 '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL), PUNE-2. 4. THE PR. CIT-2, PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO.77 /PUN/2018 A.Y.2014-15 DATE 1 DRAFT DICTATED ON 0 4 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 04 .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