The DCIT, Central Circle, Vijayawada V. Smt Gunupudi Bharati, Vijayawada

ITA 85/VIZ/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6915 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: Y SURYACHANDRA RAO
• Keywords: Sale consideration of property below Jantri Value
• Section: 69C; 50C

Judgement Text

ITA NO 85 OF 2011 GUNUPUDI BHARATI VIJAYAWADA PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO. 85 /VIZAG/ 20 11 ASSESSMENT YEAR: 200 6 - 07 DCIT CENTRAL CIRCLE , VIJAYAWADA VS. GUNUPUDI BHARATI, VIJAYAWADA (APPELLANT) (RESPONDENT) PAN NO:AHEPG 9323 K ASSESSEE BY: SHRI Y. SURYA CHANDRA RAO , CA DEPARTMENT BY: SHRI D.S.SUNDER SINGH, SR.DR ORDER PER SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE CIT (A) ON SOLITARY GROUND THAT THE CIT (A) HAS ERRED IN DE LETING THE ADDITION OF RS.18,59,345/- MADE ON DIFFERENCE IN THE REGISTERED SALE VALUE AND THE MARKET VALUE FOR THE STAMP DUTY PURPOSE. 2. THE BRIEF FACTS BORNE FROM THE RECORDS WITH REGA RD TO THE IMPUGNED ISSUE ARE THAT THE ASSESSEE PURCHASED PROPERTY AT WARD NO .19, BLOCK NO.2 CHANDULAL BARADARI, HYDERABAD. THE SALE CONSIDERATION AS PER THE REGISTERED DOCUMENT WAS RECORDED AT RS,12,51,000/-. HOWEVER, THE MARKET VAL UE OF THE PROPERTY AS PER THE ENDORSEMENT IN THE DOCUMENT WAS ADOPTED AT RS.2 8,99,000/- FOR THE PURPOSE OF STAMP DUTY. THE STAMP DUTY WAS PAID ON T HE MARKET VALUE FIXED BY THE REGISTRATION AUTHORITIES. THE ASSESSING OFFICER ACCORDINGLY OBSERVED THAT THE ACTUAL VALUE OF THE LAND WOULD BE MORE THAN THE VAL UE ADOPTED FOR STAMP DUTY PURPOSES AND CONSEQUENTLY THE DIFFERENCE BETWEEN TH E REGISTERED SALE VALUE AND THE MARKET VALUE WAS TREATED AS TOTAL INVESTMENT BY THE ASSESSEE IN PURCHASE OF THE PROPERTY. HE ACCORDINGLY BROUGHT A SUM OF RS.18 ,59,345/- TO TAX U/S 69B OF THE ACT. THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT (A) AND PLACED HEAVY RELIANCE OF THE ORDERS OF THE TRIBUNAL IN THE CASE OF KAMAL KISHORE CHANDAK VS. ITA NO 85 OF 2011 GUNUPUDI BHARATI VIJAYAWADA PAGE 2 OF 3 ITO (2006) 10 SOT 43 (URO) IN SUPPORT OF HIS CONTEN TION THAT THE ADDITION ON ACCOUNT OF DIFFERENCE OF THE SALE VALUE DECLARED IN THE DOCUMENT AND THE VALUE ADOPTED FOR REGISTRATION PURPOSES CANNOT BE MADE. 3. THE CIT (A) CAREFULLY EXAMINED THE ISSUE IN THE LIGHT OF THE AFORESAID ARGUMENTS AND WAS OF THE VIEW THAT SEC.50C OF THE A CT CANNOT BE INVOKED IN THE CASE OF THE PURCHASER. THE LEGAL FICTION IS CREATED BY DEEMING THESE GUIDELINES VALUE AS A DEEMED SALE CONSIDERATION IN THE CASE OF SELLER. 4. AGGRIEVED THE REVENUE HAS PREFERRED AN APPEAL WI TH THE SUBMISSION THAT THE ASSESSEE HAS SHOWN THE VALUE OF THE PROPERTY AT LESSER PRICE DESPITE THE FACT THAT THE MARKET VALUE OF THE PROPERTY IS MUCH MORE THAN THE VALUE ADOPTED BY THE REGISTERING AUTHORITIES FOR THE STAMP DUTY PURP OSES. 5. THE LD COUNSEL FOR THE ASSESSEE HAS ON THE OTHER HAND HAS PLACED HEAVY RELIANCE UP ON THE JUDGMENT OF THE TRIBUNAL OF THE AHMEDABAD BENCH IN THE CASE OF ITO VS. VENU PROTEINS INDUSTRIES (2010) (4 ITR 1 82) AND ITO VS. HARLEY STREET PHARMACEUTICALS LTD (2010) (6 ITR 182) IN SUPPORT O F HIS CONTENTION THAT THE PROVISIONS OF SEC.50C ARE NOT APPLICABLE AT THE INS TANCE OF THE PURCHASER. THEREFORE, THE ADDITIONS CANNOT BE MADE IN THE HAND S OF THE ASSESSEE-PURCHASER OF PROPERTY BASED ON 50C VIOLATION FOR STAMP DUTY P URPOSE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WE FIND THAT THE ASSESSIN G OFFICER HAS INVOKED SEC.50C FOR MAKING AN ADDITION OF DIFFERENCE IN VALUE DECLA RED IN THE REGISTERED DOCUMENTS AND THE VALUATION ADOPTED FOR THE STAMP D UTY PURPOSES. IN THE CASE OF ITO VS. HARLEY STREET PHARMACEUTICALS LTD., THE TRIBUNAL HAS CONCLUDED THAT SEC.50C CREATES A LEGAL FICTION FOR TAXING THE CAPI TAL GAINS IN THE HANDS OF THE SELLER AND IT CANNOT BE INVOKED FOR TAXING THE DIFF ERENCE BETWEEN APPARENT CONSIDERATION AND VALUATION DONE BY STAMP VALUATION AUTHORITIES AS UNDISCLOSED INVESTMENT U/S 69C WHERE THERE WAS NO EVIDENCE AVAI LABLE ON RECORD TO SHOW THAT CONSIDERATION OVER AND ABOVE WHAT HAS BEEN REC ORDED IN THE SALE DEED HAS BEEN MADE BY THE ASSESSEE-PURCHASER. SINCE THE IMPU GNED ISSUE IS SQUARELY ITA NO 85 OF 2011 GUNUPUDI BHARATI VIJAYAWADA PAGE 3 OF 3 COVERED BY THE ORDERS OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE, WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THIS APPEAL. MORE OVER, THE CIT (A) HAS ADJUDICATED THE ISSUE FOLLOWING THE ORDERS OF THE T RIBUNAL. WE THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE CIT (A). WE ACCORDING LY CONFIRM THE ORDER OF THE CIT (A). 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 2/6/2011. SD/- SD/- (BR BASKARAN) (SUNIL K UMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PVV/SPS VISAKHAPATNAM, DATE: 2 ND JUNE, 2011. COPY TO 1 THE DCIT CENTRAL CIRCLE, VIJAYAWADA 2 SMT. GUNUPUDI BHARATI, D.NO.27 - 20 - 30 MUSEUM ROAD, GOVE RNORPET, VIJAYAWADA 3 4. THE CIT CENTRAL, HYDERABAD THE CIT(A), VIJAYAWADA 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM