Kanyalal Manglani, Kolkata V. ITO, Ward - 40(4), Kolkata , Kolkata

ITA 812/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5913 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYAJIT MONDAL
• Assessee Lawyers: O P BAID
• Keywords: Sale consideration of property below Jantri Value

Judgement Text

ITA NO.812/KOL/2018 KANYALAL MANGLANI A.Y.2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.812/KOL/2018 ASSESSMENT YEAR : 2014-15 KANYALAL MANGLANI -VERSUS- I.T.O., WARD-40 (4), KOLKATA KOLKATA (PAN: AERPM 7384 J) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI O.P.BAID, FCA FOR THE RESPONDENT: SHRI SATYAJIT MONDAL, ADDL. CIT DATE OF HEARING : 17.07.2018. DATE OF PRONOUNCEMENT : 25.07.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-12, KOLKATA DATED 0 5.03.2018 FOR A.Y. 2014-15 PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (ACT). 2. THE ASSESSEE IS AN INDIVIDUAL. HE IS A SENIOR C ITIZEN AND HAS FILED HIS RETURN OF INCOME ON 24.03.2015, DECLARING TOTAL INCOME OF RS. 2,85,590/- ONLY. THOUGH A NUMBER OF GROUNDS WERE RAISED, THE ASSESSEE ARGUED ONLY GROUND NO.4 WHICH READS AS UNDER :- 4. THAT WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AS AFORESAID, LD ITO, WARD 40(4), (A) IN BRIEF)KOLKATA HAD ERRED IN LAW AND IN FACTS BY MAKING AN ADDITION BY APPLYING SECTION 56(2)(VII) (B) OF THE ACT WHICH CAME INTO FORCE AND WITH EFFECT FROM 01.04.2014 FOR TRANSFERS TAKING PLACE FROM AY 2014-15 ONWARDS, EVEN THOUGH TRANSFER OF YOUR APPELLANT WAS COMPLETED ON 05.09.2011 CORRESPONDING TO AY 2012-13. HENCE THE ENTIRE ASSESSMENT ORDER IS IL LEGAL, INVALID, AND VOID AB- INITIO. 3. THE FACTS LEADING TO THE GROUND ARE THAT, THE AS SESSEE ALONG WITH HIS WIFE SMT. SUSHILA MANGLANI AND SON MR. GOVIND MANGLANI PURCHA SED AN IMMOVABLE PROPERTY BEING A RESIDENTIAL FLAT NUMBERED 11D ON 11 TH FLOOR OF TOWER 1 AD MEASURING 1357 SQ FT, IN SUNRISE TOWER AT 134B, BELIAGHATA ROAD, KOLK ATA-700015 FOR TOTAL CONSIDERATION ITA NO.812/KOL/2018 KANYALAL MANGLANI A.Y.2014-15 2 OF RS.23,21,200/- VIDE AGREEMENT FOR SALE DATED 5 TH SEPTEMBER, 2011. THE ASSESEE SUBMITS THAT FULL CONSIDERATION WAS PAID AND POSSES SION OF THE FLAT WAS HANDED OVER TO THE ASSESSEE ON 5 TH SEPTEMBER, 2011 ITSELF. 4. THIS FLAT WAS REGISTERED BY THE SELLER IN FAVOUR OF THE PURCHASERS I.E. THE ASSESSEE, HIS WIFE AND SON, ON 4 TH AUGUST, 2013. THE VALUE OF THE PROPERTY AS PER THE CIRCLE RATE PRESCRIBED BY REGISTRATION OF STAMPS AU THORITY, AS ON 4 TH AUGUST, 2013 WAS RS.56,60,765/-. THE DIFFERENCE BETWEEN THE SALE CO NSIDERATION ACTUALLY PAID FOR PURCHASE OF THE FLAT AND THIS CIRCLE RATE OF THE FL AT WAS CALCULATED BY THE ASSESSING OFFICER AND 1/3 RD OF THIS DIFFERENCE WAS ADDED IN THE HANDS OF THE A SSESSEE U/S 56(2)(VII) OF THE ACT. AGGRIEVED, THE ASSESSEE CARR IED THE MATTER IN APPEAL WITHOUT SUCCESS. FURTHER AGGRIEVED THE ASSESSEE IS BEFORE U S. 5. AFTER HEARING RIVAL SUBMISSIONS, WE FIND THAT IN THIS CASE, THE ENTIRE CONSIDERATION FOR THE FLAT WAS PAID BEFORE 5 TH SEPTEMBER, 2011 AND THE POSSESSION OF THE FLAT WAS ALSO HANDED OVER TO THE ASSESSEE ON 5 TH SEPTEMBER, 2011. THUS THE PURCHASE TRANSACTION IN QUESTION WAS COMPLETED DURI NG THE FINANCIAL YEAR 2011-12 RELEVANT TO A.Y.2012-13. 6. SECTION 56(2)(VII) READS AS UNDER :- (B) ANY IMMOVABLE PROPERTY, (I) WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WH ICH EXCEEDS FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPERTY; (II) FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DU TY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPE RTY AS EXCEEDS SUCH CONSIDERATION: PROVIDED THAT WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROPERT Y AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VA LUE ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF THIS SUB-CLAUSE : PROVIDED FURTHER THAT THE PROVISIONS OF THE FIRST PROVISO SHALL APPL Y ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION RE FERRED TO THEREIN, OR A PART THEREOF, HAS BEEN PAID BY WAY OF AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE ITA NO.812/KOL/2018 KANYALAL MANGLANI A.Y.2014-15 3 THE DATE OF AGREEMENT FOR TRANSFER OF SUCH IMMOVABL E PROPERTY: 7. THIS SECTION 56(2)(B)(VII) WAS INSERTED W.E.F. 01.04.2014 BY THE FINANCE ACT, 2013. IN THIS SECTION THE FIRST PROVISO MANDATES TH AT, WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR TRANSFER OF THE IMMOVABLE PROPERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VA LUE ON THE DATE OF AGREEMENT HAS TO BE TAKEN FOR THE PURPOSE OF THIS SUB-CLAUSE. THIS P ROVISO WAS NOT CONSIDERED BY THE LD. AO. THE CIRCLE RATE ON THE DATE OF REGISTRATION OF THE DOCUMENT CANNOT BE TAKEN. HENCE THIS ADDITION IS DELETED. EVEN OTHERWISE THE TRANSF ER IN THIS CASE WAS COMPLETED IN A.Y.2012-13 IN TERMS OF SECTION 2(47) OF THE ACT. H ENCE, THE ADDITION CANNOT BE MADE DURING THIS ASSESSMENT YEAR 2014-15. 8. IN VIEW OF THE ABOVE DISCUSSION WE DELETE THE AD DITION MADE BY THE AO AND ALLOW THIS GROUND OF THE ASSESSEE. ALL OTHER GROUND S ARE DISMISSED AS NOT ARGUED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED IN PART. ORDER PRONOUNCED IN THE COURT ON 25.07.2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 25.07.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.KANYALAL MANGLANI, C/O BAID & COMPANY, CHARTERED ACCOUNTANTS, 10C, BALLYGUNJE CIRCULAR ROAD, 2 ND FLOOR, KOLKATA-700019. 2. I.T.O., WARD-40 (4), KOLKATA. 3. C.I.T.(A)- 12, KOLKATA 4. C.I.T-14, KOLKAT A 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.812/KOL/2018 KANYALAL MANGLANI A.Y.2014-15 4