ITO 3(3)(1), MUMBAI V. ROVICK PROPERTIES & INVESTMENT P.LTD, MUMBAI

ITA 796/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7938 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E SRIDHAR
• Assessee Lawyers: REEPAL G TRALSHAWALA
• Keywords: Sale consideration of property below Jantri Value; Business income; Fair market value; Tax effect
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 796 /MUM/2017 ASSESSMENT Y EAR: 2012 - 13 THE ITO 3(3)(1 ), R. NO. 602 , AAYAKR BHAVAN, M.K. ROAD, NEW MARINE LINES, MUMBAI - 4000 20 VS. M/S ROVICK PROPERTIES & INVESTMENTS PVT. LTD., 1013, MAKER CHAMBERS NO. 3, JAMNALAL BAJAJ MARG, NARIMAN POINT, MUMBAI - 400021 PAN: AAACR9354H (APPELLANT) (RESPONDENT) REVENUE BY : SHRI E. SRIDHAR ( CIT D R) ASSESSEE BY : SHRI REEPAL G. TRAL SHAWALA (AR) DATE OF HEARING: 19 /09 /201 8 DATE OF PRONOUNCEMENT: 19 / 09 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 17.10.2016 PASS ED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 8 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2012 - 13 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. AGGRIEVED BY THE ORDER OF LD. CIT (APPEAL S ), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT (A) WAS RIGHT IN AL LOWING THE APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES THAT IN THIS CASE THE ASSESSEE HAS SHOWN THE ASSET AS FIXED ASSET IN THE PRECEEDING YEAR AND THEREFORE, AT MOST, THE ASSESSEE HAS CONVERTED THE ASSET INTO STOCK - IN - TRADE AND HENCE, THE PROVISIONS OF SECTION 45(20 IS SQUARELY APPLICABLE AND CONSEQUENTLY THE CONVERSION WAS REQUIRED TO BE TREATED AS DEEMED TRANSFER U/S 50C AND SHORT 2 ITA NO. 796 MUM/2017 ASSESSMENT YEAR: 2012 - 13 TERM CAPITAL GAINS WERE REQUIRED TO BE WORKED OUT ON BASIS OF THE FAIR MARKET VALUE. 2. WHETHER ON T HE FACTS AND CIRCUMSTANCES AND IN LAW, THE LD. CIT (A) HAS ERRED IN ALLOWING THE TREATMENT OF PROCEEDS ON SALE OF THE IMMOVABLE PROPERTY MENTIONED IN GROUND NO. 1 ABOVE AS BUSINESS RECEIPTS WHEREAS THE SAME WERE PARTLY IN NATURE OF CAPITAL GAINS AND PARTL Y BUSINESS RECEIPTS. 3 . AT THE OUTSET, THE LD. COUNSEL FOR THE RESPON DENT/ASSESSEE POINTED OUT THAT THE TAX EFFECT OF THE RELIEF GRA NTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS.20 LACS AND AS PER THE CBDT CIRCULAR NO. 3/2018, F. NO. 279/MISC.142/2007 - ITJ (PT) DATED 11 TH JULY, 2018 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA LIMIT FIXED BY THE CBDT FOR FILING THE APPEAL BEFORE THE ITAT IS 20 LACS . 4 . THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) FAIRLY CONCEDED THAT TH IS APPEAL IS NOT MAINTAINABLE IN LIGHT OF THE ABOVE SAID CBDT CIRCULAR. THE LD. DR ALSO DID NOT POINT OUT THAT TH IS APPEAL FALL S IN ANY OF THE EXCEPTIONS CARVED OUT IN THE ABOVE SAID CIRCULAR. 5 . WE HAVE GONE THROUGH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND THE GROUNDS OF APPEALS. WE FIND THAT THE TAX EFFEC T IN THE ABOVE REFERRED APPEAL IS LESS THAN RS. 20 LACS. ACCORDINGLY, W E DISMISS THE AFORESAID APPEAL FILED BY THE REVENUE. IN THE RESULT, T HE APPEAL BY THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON 19 TH SEPTEMBER , 2018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 19/ 09 / 201 8 ALINDRA, PS 3 ITA NO. 796 MUM/2017 ASSESSMENT YEAR: 2012 - 13 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A ) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI