HARISH GOPAL AMIN, MUMBAI V. ITO 9(2)(4), MUMBAI

ITA 848/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0349 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 06-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: DIUKLE HARIYA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition; Wrong claim; Valuation report; Revised return
• Section: 50C; 54

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 848/MUM/2017 ( / ASSESSMENT YEAR: 2012 - 13 ) HARISH GOPAL AMIN SHOP NO. 1, ARCHANA SMRUTI, MAHAKALI CAVES ROAD, ANDHERI(E), MUMBAI - 400 093 / VS. ITO - 9(2)(4), ROOM NO. 623, 6 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AA BPA 4925 B ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. DIUKLE HARIYA / RESPONDENT BY : MS. N. HEMALATHA / DATE OF HEARING : 15.11.2017 / DATE OF PRONOUNCEMENT : 05.02 .2018 / O R D E R PER SHAMIM YAHYA , A. M.: THIS A PPEAL BY THE ASSESSEE I S DIRECTED AGAINST THE O RDER OF THE COMMI SSIONER OF INCOME TAX (APPEALS) DATED 24.11.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 - 13. 2. THE GROUND S OF APPEAL READ AS UNDER: 2 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO 1) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING DETERMINATION OF LONG TERM CAPITAL GAINS OF RS.24,50,017/ - . 2) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING DETERMINATION OF LONG TERM CAPITAL GAIN IN A. Y. 2012 - 2013 &NOT IN A. Y. 2013 - 2014 YEAR IN WHICH TRANSACTION WAS COMPLETED. 3) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN NOT ALLOWING DEDUCTION OF RS. 11,51,900/ - U/S. 54 OF THE I. T. ACT, 1961. 4) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING ADOPTING MARKET VALUE OF RS.89,41,096/ - U/S. 50C OF THE I. T. ACT, 1961 AND NOT CONSIDERING SALE VALUE OF RS.65,00 ,000/ - . 5) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT (A) ERRED IN NOT CONSIDERING FACT THAT TITLE OF THE FLAT WAS NOT MARKETABLE ON ACCOUNT OF NOT RECEIPT OF OCCUPATION CERTIFICATE FROM BMC. 3. BRIEF FACTS OF THE CASE ARE AS UNDER: T HE ASSESSEE COMPANY HAD SOLD A RESIDENTIAL PROPERTY LOCATED AT WHISPERING WOODS BUILDING, POWAI VIHAR COMPLEX, POWAI, MUMBAI TO MR. DEVAPPA M. SHETTY FOR A CONSIDERATION OF RS.6 5 , 00 , 000 / - ON 02.03.2012. THE SAID FLAT WAS PURCHASED ON 09.06.2008 FRO M MR. RAMNEEK ARORA FOR A TOTAL VALUE INCLUDING STAMP DUTY, TRANSFER CHARGES ETC. FOR AN AMOUNT OF RS. 48,12,450/ - . ACCORDING TO THE ASSESSING OFFICER, THE AFORESAID PROPERTY WAS VALUED AT RS.89, 41 ,096/ - BY THE STAMP VALUE AUTHORITIES . ASSESSEE HAD NOT OFFE RED ANY CAPITAL GAINS TAX ON THE TRANSACTION THEREFORE, THE ASSESSING OFFICER ISSUED A SHOW CAUSE ASKING THE ASSESSEE AS TO WHY CAPITAL GAIN SHOULD NOT BE TAXED AS PER FOLLOWING COMPUTATION: - SALE CONSIDERATION RS.89,4 1, 096/ - COST OF ACQUISITION - RS .48,1 2,45 0 / - INDEXED COST OF ACQUISITION - 48,12,450*785/582 = RS.64,9 1 , 019 / - TOTAL LONG TERM CAPITAL GAIN RS.24,50,017/ - 3 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE , ASSESSING OFFICER REJECTED THE SUBMISSIONS MADE WITH FOLLOWING OBSERVATIONS : - ( A) THE ASSESSEE HAS NEITHER REPORTED CAPITAL GAIN NOR CLAIMED EXEMPTION U/S.54(1) OF I.T. ACT, IN HIS RETURN OF INCOME. THE ASSESSEE HAS NOT EVEN BOTHERED TO FILE A REVISED RETURN WITH RESPECT TO THE LTCG EARNED FROM SALE OF RESIDENTIAL PREMISES. TH E FACT THAT ASSESSEE HAS A/SO EARNED LONG TERM CAPITAL GAIN CAME TO THE NOTICE OF THE DEPARTMENT ONLY DURING SCRUTINY PROCEEDINGS. (B) THE ASSESSEE HAS NOT FULFILLED THE FIRST REQUIREMENT OF DEPOSITING THE CAPITAL GAIN AMOUNT IN THE PRESCRIBED CAPITAL G AIN DEPOSIT ACCOUNT BEFORE FILING HIS RETURN OF INCOME I.E.31. 07,201 2 (IN INSTANT CASE) WHEN THE AMOUNT WAS NOT UTILIZED FOR ACQUIRING A NEW RESIDENTIAL PROPERTY. FOR THE SAKE OF CLARITY, PROVISION OF SEC. 54 OF I. T. ACT IS REPRODUCED AS UNDER: [1] 'W HERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR AN HUF, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF LONG - TERM CAPITAL ASSET, BEING BUILDINGS OR LAND APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HE AD INCOME FROM HOUSE PROPERTY' (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF [ONE YEAR BEFORE OR TWO YEAR AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED] OR HAS WITHIN A PERIOD OF THREE YE ARS AFTER THAT DATE [CONSTRUCTED, A RESIDENTIAL HOUSE] THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER OF THIS SECTION, THAT IS TO SAY (I) IF THE AMOUNT OF THE CAPITAL GAIN [IS GREATER THAN THE COST OF THE RESIDENTIAL HOUSE] SO PURCHASED OR CONSTRUCTED (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED U/S,45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SH A LL BE NIL, OR (II) IF THE AMOUNT OF T HE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT BE CHARGED U/S.45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. 4 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO [2] THE AMOUNT OF THE CAPITAL G AIN WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME U/S. 139, SHALL BE DEPOSITED BY HIM BEFORS FURNISHING SUCH RET URN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME U/S.139(1) IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH , ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSE OF SUB SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET.' (C) THE ASSESSEE HAS CLAIMED THAT PREMIUM CHARGES PAID TO BMC FOR ADDITIONAL 0 . 33 FS I IN AUGUST 2013 IN T HE NAME OF SHRI HARISH G. AMIN & OTHERS SHOULD BE TREATED AS CONSTRUCTION AND CLAIM U/S.54 SHOULD BE AWARDED TO HIM, IS SIMPLY AN AFTERTHOUGHT. MOREOVER THE CHARGES PAID BY SHRI HARISH G. AMIN AND OTHERS FOR PREMIUM OF ADDITIONAL FSI TO BMC IS NEITHER IN F ORM OF PURCHASE OF NEW RESIDENTIAL PROPERTY NOR IT IS CONSTRUCTION OF NEW HOUSE. HENCE, THE BASIC REQUIREMENT FOR CLAIM OF EXEMPTION IS NOT FULFILLED BY THE ASSESSEE. (D) THE ASSESSEE VIDE SUBMISSION DATED 19.3.2015 HAS SUBMITTED THE PROPOSED ADDITION/ ALTERATION PLAN APPROVED BY BMC TO THE EXISTING BUILDING ON PLOT BEARING CTS NO. 13/11 AND 13/12 OF VILLAGE MULGAON, SITUATED AT MAHAKALI CAVES ROAD, ANDHERI (EAST). THE ABOVE REFERRED PROPOSED ADDITION/ALTERATION PLAN IS RELATED TO RAMAYA JEEVAN CO - OPERAT IVE HOUSING SOCIETY. THIS PROPOSAL WAS APPROVED ON 09.05.2013. THE ASSESSEE HAS PAID FOR FSI ON AUGUST 2013. THE PROPOSED ADDITION OR ALTERATION TO THE SOCIETY IS NOT PURCHASE OF NEW RESIDENTIAL PROPERTY OR CONSTRUCTION OF NEW PROPERTY. (E) THE GRANT O F FUNGIBLE COMPENSATORY FSI BY PAYMENT OF PREMIUM CHARGES TO BMC IS NOT CONSTRUCTION OF PROPERTY APPROVING CLAIM FOR LTCG U/S.54(1) OF THE I. T. ACT. MOREOVER, AS ON TODAY THE CONSTRUCTION WORK RELATED TO USE OF PERMISSIBLE FSI HAS NOT BEEN COMPLETED YET. ( F ) THE ASSET WAS TRANSFERRED ON 02.03.2012 AND NO NEW PROPERTY HAS BEEN ACQUIRED BETWEEN 01.03.2011 TO DATE OF SALE. 5 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO 4.6 THE ASSESSEE HAS NEITHER OFFERED ANY LTCG NOR CLAIMED ANY EXEMPTION/ DEDUCTION IN THE RETURN OF INCOME. THE FACT OF LTCG WAS NOT D ISCLOSED BEFORE ASSESSMENT PROCEEDINGS AND WAS NOTICED DURING ASSESSMENT PROCEEDINGS ONLY WHEN THE ITS DETAILS WERE CALLED FOR. AND THE ALLEGED WRONG CLAIM OF 54(1) HAS BEEN SUBMITTED BY ASSESSEE ONLY AFTER SHOW CAUSE NOTICE ISSUED FOR ADDITION OF LTCG. TH E ASSESSEE HAS NOT OFFERED THE LTCG DERIVED BY WAY OF SALE OF PROPERTY AND DEPRIVED REVENUE OF ITS LEGITIMATE RIGHTS. IN VIEW OF THE FACTS ENUMERATED ABOVE, THE LONG TERM CAPITA L GAIN EARNED BY ASSESSEE TO THE TUNE OF RS.24,50,017/ - AND NOT OFFERED FOR TAX ATION IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) IS HEREBY INITIATED FOR FURNISHING INACCURATE PARTICULARS OF I NCOME AND CONCEALMENT OF INCOME. ' 5. UPON THE ASSESSEES APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER: 6.1.3 'DURING APPELLATE PROCEEDINGS, A WRITTEN SUBMISSION WAS FILED WHICH FINDS PLACE IN PARA 5 OF THIS ORDER. THE ONLY EFFECTIVE ARGUMENT TAKEN BY THE APPELLANT WAS THAT THE OCCUPANCY CERTIFICATE FROM THE MUNICIPAL CORPORATION W AS NOT ISSUED AND THE VALUE ADOPTED BY THE ASSESSING OFFICER WAS HIGHER BUT ASSESSEE DID NOT MAKE ANY SUBMISSION REGARDING NON - APPLICA BILITY OF PROVISION OF SECTION 50 C. IN RESPECT OF THE VALUE DISPUTED BY THE APPELLANT, THE LD. AR DID NOT FILE ANY VALUATI ON REPORT OR ANY ARGUMENT REGARDING NON - APPLICABILITY OF PROVISION OF SECTION 50 C. THE VALUE TAKEN BY THE REGISTERING AUTHORITY IS BASED ON CIRCLE RATES WHICH ARE DECIDED AFTER CONSIDERING THE COST OF THE LAND TAKEN AND SUBSEQUENT CONSTRUCTION COST ETC. IN PARTICULAR AREAS. APPELLANT HAD NOT PRODUCED ANY MATERIAL WHICH CAN PROVE THAT VALUE TAKEN BY THE REGISTERING AUTHORITY IS ON THE HIGHER SIDE, THEREFORE, THE CONTENTION OF THE APPELLANT CANNOT BE ACCEPTED. HENCE, APPEAL OF THE ASSESSEE ON THESE GROUNDS IS DISMISSED AND ADDITION OF RS.24,5 0,017 / - MADE BY THE AO IS CONFIRMED. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I HAVE HEARD THE COUNSELS AND PERUSED THE RECORDS. ON CAREFUL CONSIDERATION, I NOTE THAT THE ASSESSING OFFICE R HAS MADE THE ADDITION U/S. 50C ON ACCOUNT OF THE DIFFERENCE BETWEEN THE VALUE AS PER THE AGREEMENT FOR SALE PAID FOR BY THE ASSESSEE AND THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY . UPON THE ASSESSEES APPEAL, 6 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOTED THAT THE ASSESSEE HAS NOT MADE ANY SUBMISSION REGARDING THE NON APPLICABILITY OF THE PROVISION OF SECTION 50C. HE F URTHER NOTED THAT IN RESPECT OF THE VALUATION DISPUTED BY THE ASSESSEE, THE ASSESSEE DID NOT FILED ANY VALUATION REPORT OR ANY AGREEMENT REGARDING THE NON APPLICABILITY OF SECTION 50C OF THE ACT. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED THAT THE ASSESSEES CONTENTION CANNOT BE ACCEPTED AS THE ASSESSEE HAS NOT PRODUCED ANY MATERIAL WHICH CAN PROVE THAT THE VALU E ADOPTED BY THE REGISTERED AUTHORITY IS ON HIGHER SIDE. HENCE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION. 8. IN THIS REGARD, I NOTE THAT THE ASSESSEE HAS DULY RAISED THE OBJECTION IN THE GROUNDS OF APPEAL BEFORE THE LD. COM MISSIONER OF INCOME TAX (APPEALS) AND HAS DISPUTED THE VALUE ADOPTED BY THE STAMP VALUE AUTHORITY. IN SUCH CIRCUMSTANCES, IT WAS INCUMBENT UPON THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION CELL FOR OBTAININ G THE VALUATION OF THE PROPERTY . FURTHERMORE, DESPITE THE GROUND RAISED FOR THE CLAIM U/S. 54F, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT ADJUDICATED THE SAME. HENCE, IN MY CONSIDERED OPINION , THE ISSUE S RAISED IN THIS APPEAL NEEDS TO BE REMITTE D TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ACCORDINGLY DIRECTED TO CONSIDER THE ISSUE AFRESH AND PASS THE SPEAKING 7 ITA NO. 848/MUM/2017 (A.Y. 2012 - 13) HARISH GOPAL AMIN VS. ITO ORDER IN ACCORDANCE WITH OUR OBSERVATIONS. NEEDLESS NOT ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT, TH IS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.2018 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 05.02.2018 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI