M/s. Shembekar Industries, Pune V. Income-tax Officer, Pune

ITA 790/PUN/2010

• Counselvise Citation: 79024514 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 26-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R G NAHAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 790/PN/2010 (ASSTT. YEAR: 2004-05) M/S. SHEMBEKAR INDUSTRIES, APPELLANT PAN : AAEFS0405P C/O. SHAH KHANDELWAL JAIN & ASSOCIATES CHARTERED ACCOUNTANTS, 1 ST FLOOR, ALANKAR CINEMA BUILDING, PUNE - 411001 V. INCOME TAX OFFICER , ... RESPONDENT WARD 9(4), AAYKAR BHAVAN, OPP. AKURDI RAILWAY STN., AKURDI, PUNE 411 044 APPELLANT BY : SHRI R.G. NAHAR RESPONDENT BY : MS. NEERA MALHOTRA DATE OF HEARING : 29.11.11 DATE OF PRONOUNCEMENT: .12.11 ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON FOLLOWING GROUNDS : 1. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CAS E & AS PER PROVISIONS OF LAW, IT BE HELD THAT THE PROVISIONS OF SEC. 50C OF THE INCOME TAX ACT DO NOT APPLY TO THE PRESENT CASE, AS THE SALE OF LAND & BU ILDING COVERED BY THE ISSUE IS THE BUSINESS LAND & BUILDING. THE CONSEQUENTIAL RELIEF ON ACCOUNT OF NON APPLICATION OF SEC. 50C BE GRANTED TO THE APPELLANT . 2. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW & ASSUMING WITHOUT ADMITTING THAT THE PROVISION S OF SEC. 50C DO APPLY TO THE PRESENT CASE, IT BE HELD THAT ASSESSING OFFICER HAS NOT FULFILLED & FOLLOWED THE REQUISITE INGREDIENT OF SEC. 50C AND THEREFORE, COMPUTATION MADE THERE UNDER BE HELD TO BE IMPROPER, UNWARRANTED & UNJUSTI FIED. JUST & PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS SCORE. 3. ON FACTS & CIRCUMSTANCES PREVAILING IN THE CASE & AS PER PROVISIONS OF LAW & ASSUMING WITHOUT ADMITTING THAT THE PROVISION S OF SEC. 50C DO APPLY TO ITA . NO. 790 /PN/2010 M/S. SHEMBEKAR INDUSTRIES A.Y. 2004-05 PAGE OF 4 2 THE PRESENT CASE, IT BE HELD THAT THE TAXABLE INCOM E COMPUTED UNDER THE HEAD SHORT TERM CAPITAL GAIN ON SALE OF FACTORY OF RS. 18,20,361/- & THAT OF LONG TERM CAPITAL GAIN ON SALE OF LAND AT RS.2,64,3 12/- IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. THE CAPITAL LOSS D ECLARED BY THE APPELLANT FIRM OF RS. 72,75,398/- BE ACCEPTED AS PER THE PROVISION S OF THE ACT & FACTS & CIRCUMSTANCES PREVAILING IN THE CASE. JUST & PROPE R RELIEF BE GRANTED TO THE APPELLANT IN THIS SCORE. GROUND NO.1 2. THE ASSESSEE DID NOT PRESS THIS GROUND. THE SAM E IS ACCORDINGLY DISMISSED AS WITHDRAWN. GROUND NOS.2 & 3 3. THE LD. A.R. ALLEGED THAT THE A.O HAS NOT FOLLOW ED THE PROVISIONS LAID DOWN U/S. 50C OF THE ACT. HE SUBMITTED THAT UNDER SUB-S ECTION (2) TO SECTION 50C OF THE ACT, IT HAS BEEN PROVIDED THAT WHERE THE ASSESSEE C LAIMS BEFORE A.O THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VA LUATION AUTHORITY UNDER SUB- SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE P ROPERTY AS ON THE DATE OF THE TRANSFER, AND THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY A UTHORITY, COURT OR THE HIGH COURT, THE A.O MAY REFER THE VALUATION OF THE CAPIT AL ASSET TO A VALUATION OFFICER. HE POINTED OUT THAT BEFORE THE A.O, THE ASSESSEE ALONG WITH OTHER DOCUMENTS HAD ALSO FURNISHED VALUATION REPORT OF REGISTERED VALUER, A COPY WHEREOF HAS BEEN MADE AVAILABLE AT PAGE NOS. 10A TO 15 OF THE PAPER BOO K SHOWING VALUE OF THE PROPERTY FOR CAPITAL GAIN TAX PURPOSES AT RS. 40,74,600/-. THE A.O. IGNORING THE SAME HAS ADOPTED VALUE OF THE PROPERTY ESTIMATED FOR STAMP DUTY PURPOSES. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS : I) RAVI KANT VS. ITO, 110 TTJ 297 (DEL.) II) MHD. SHOIB VS. DCIT, 127 TTJ 459 (LUCK.) ITA . NO. 790 /PN/2010 M/S. SHEMBEKAR INDUSTRIES A.Y. 2004-05 PAGE OF 4 3 4. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUSTIF Y THE ORDERS OF THE AUTHORITIES BELOW. 5. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND SUBS TANCE IN THE CONTENTION OF THE LD. A.R. THAT IN SUCH A SITUATION WHERE THE AS SESSEE CLAIMS BEFORE A.O THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE ST AMP VALUATION AUTHORITY UNDER SUB-SECTION 1(1) EXCEEDS THE FAIR MARKET VALUE OF T HE PROPERTY AS ON THE DATE OF TRANSFER, THE A.O ON FULFILLING THE CONDITION LAID DOWN U/S. 50C(2) OUGHT TO HAVE REFERRED THE VALUATION OF THE CAPITAL ASSET TO VALU ATION OFFICER. SINCE THE A.O HAS FAILED TO COMPLY WITH THESE PROVISIONS OF SECTION 5 0C OF THE ACT WITHOUT APPRECIATING THIS FACT THAT SUB-SECTION (2) TO SECTION 50C IS EX CEPTION TO SUB-SECTION (1) TO SECTION 50C OF THE ACT, WE SET ASIDE THE MATTER TO THE FILE OF THE A.O TO MAKE ASSESSMENT AFRESH FOLLOWING THE PROVISIONS OF SECTI ON 50C IN ITS ENTIRETY, AND AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 6. IN RESULT, APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15TH DECEMBER 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 15TH DECEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT V, PUNE 4. THE CIT(A)-V, PUNE ITA . NO. 790 /PN/2010 M/S. SHEMBEKAR INDUSTRIES A.Y. 2004-05 PAGE OF 4 4 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE