Rita Goyal, Meerut V. ITO, Ward- 2(2), Meerut

ITA 864/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3577 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S KASHYAP
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition
• Section: 50C; 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.864/DEL/2018 ASSESSMENT YEAR : 2013-14 RITA GOYAL, KASHYAP & CO. CAS, 214, CITI CENTER, BEGUM BRIDGE ROAD, MEERUT, UTTAR PRADESH. VS. ITO, WARD- 2(2), MEERUT, UTTAR PRADESH. PAN : AFKPG3896F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. S. KASHYAP, CA DEPARTMENT BY : SHRI ATIQ AHMED, SR. DR DATE OF HEARING : 02-08-2018 DATE OF PRONOUNCEMENT : 21-08-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 18.12.2017 OF CIT(A), ALIGARH RELATING TO ASSESSMEN T YEAR 2011-12. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THAT THE CIT(A) ALIGARH CAMP AT MEERUT HAS ERRE D IN LAW AS WELL AS ON FACTS IN ACCEPTING THE VALUE OF HOUSE PROPERTY AS PER THE PROVISIONS OF SEC.50C OF THE ACT WHEN THE PROPERTY IN QUESTION WAS A LEASE HOLD PROP ERTY. 2. THAT THE A.O. HAD FRAMED ASSESSMENT AFTER ADOPTI NG THE VALUE AS PER THE PROVISIONS OF SEC.50C OF THE ACT IN SPITE OF THE SP ECIFIC REQUEST OF THE ASSESSEE TO REFER THE MATTER OF VALUATION TO THE DVO. THE LAPSE COMM ITTED BY THE A.O. CANNOT BE CURED BY CIT(A). HENCE THE ORDER PASSED BY CIT(A) AND AD DITION PASSED BY A.O. OUGHT TO BE ANNULLED. 3. THAT ON FACTS THE ADDITION MADE U/S 50C OF THE A CT FOR RS.30,12,846/- IS WITHOUT ANY BASIS, TOTALLY WRONG, UNJUSTIFIED, ILL LEGAL AND UNWARRANTED. I) THAT THE LD. CIT(A) HAS NOT CONSIDERED THE VARIO US FACTS BEFORE PASSING THE ORDER. II) THAT ADDITION WAS MADE ON THE BASIS OF AGREEMEN T EXECUTE BY THE ASSESSEE, THOUGH THE PROPERTY WAS SOLD BY HER LATE MOTHER. 2 ITA NO.864/DEL/2018 4. THAT THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, AL TER OR WITHDRAW ANY OF THE GROUND OF APPEAL ON OR BEFORE THE DATE OF HEARING. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS. SHE FILED HER RETURN OF INCOME ON 21.03.2012 DECLARING TOTAL INCOME OF RS.1,67,140/-. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED FROM THE A IR INFORMATION RECEIVED THAT THE ASSESSEE HAS SOLD PROPERTY SITUATED AT MAH ANAGAR, LUCKNOW FOR RS.1,08,23,309/-. ON BEING QUESTIONED BY THE ASSES SING OFFICER, IT WAS SUBMITTED THAT THIS PROPERTY WAS INHERITED PROPERTY FROM HER LATE MOTHER SMT. KRISHNA GUPTA, WHO EXPIRED ON 21.07.2009. AS PER T HE WILL, AFTER THE DEATH OF SMT. KRISHNA GUPTA, THE ASSESSEE WAS THE JOINT OWNE R OF THE SAID PROPERTY ALONG WITH HER SISTER SMT. APARNA KUMAR. THEREFORE, THE ASSESSEE WAS 50% OWNER OF THE SAID PROPERTY. FROM THE PERUSAL OF CALCULATION OF LONG TERM CAPITAL GAIN FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER OB SERVED FOLLOWING :- (A) THE VALUE OF ACQUISITION OF THE SAID PROPERTY A S ON 01.04.1981 WAS AT RS.25,13,779/-. (B) THE SALE CONSIDERATION VALUE SHOWN WAS AT RS.2 5,00,000/- U/S 50C. (C) THE ASSESSEE CLAIMED DEDUCTION U/S 54F AT RS.1 0,50,000/-. 4. THE ASSESSING OFFICER OBSERVED THAT AS PER THE S ALE DEED THE SALE VALUE SHOULD HAVE BEEN TAKEN AT RS.54,11,655/- AS PER PRO VISIONS OF SECTION 50C OF THE I.T. ACT. FURTHER, THE ASSESSEE HAS TAKEN THE COST OF ACQUISITION OF THE PROPERTY 3 ITA NO.864/DEL/2018 AS PER THE RATE OF FINANCIAL YEAR 1981-82 AT RS.3,5 0,000/- AND COST OF IMPROVEMENT IN FINANCIAL YEAR 2009-10 AT RS.22,470/ - WITHOUT ANY DOCUMENTARY EVIDENCE. HE, THEREFORE, ADOPTED THE PREVAILING CI RCLE RATE IN THE FINANCIAL YEAR 1981-82 AT RS.46,660/- BEING THE COST OF ACQUISITIO N OF THE PROPERTY SINCE CIRCLE RATE AT THAT TIME WAS RS.10/- PER SQ.FT. AND THE TO TAL AREA OF THE PROPERTY WAS APPROXIMATELY 4666 SQ.FT.. REJECTING THE VARIOUS E XPLANATIONS GIVEN BY THE ASSESSEE, THE ASSESSING OFFICER DETERMINED THE LONG TERM CAPITAL GAIN AT RS.49,86,062/- AFTER DEDUCTION OF RS.19,73,216/- U/ S 54 OF THE I.T. ACT, 1961. THE ASSESSING OFFICER MADE ADDITION OF RS.30,12,846 /- ON ACCOUNT OF LONG TERM CAPITAL GAIN BY OBSERVING AS UNDER :- VALUE U/S 50C 54,11,655 LESS : INDEXED COST VALUATION OF LAND @ 12.50 PER SQ FOOT 2,07,349 F.Y. 1981-82 29163 X 711 100 IMPROVEMENT 25,279 F.Y. 2009-10 22470 X 711 100 VALUATION OLD STRUCTURE 1,92,965 F.Y. 1981-82 27140 X 711 100 4,25,593 LESS : DEDUCTION U/S 54 19,73,216 30,12,846 THEREFORE, AN ADDITION OF RS.30,12,946/- IS BEING M ADE IN THE INCOME OF THE ASSESSEE ON ACCOUNT OF LTCG. 5. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF T HE ASSESSING OFFICER BY OBSERVING AS UNDER :- 7.1 THE A.O. HAD COMPUTED LTCG BY TAKING FULL VALUE OF CONSIDERATION AS THE VALUE DETERMINED FOR STAMP DUTY PURPOSES. HOWEVER, THE APPELLANT WAS CONTESTING 4 ITA NO.864/DEL/2018 THIS VALUATION AND CLAIMED THAT THE FAIR MARKET VAL UE IS MUCH LESS THAN THE VALUE DETERMINED FOR STAMP PURPOSES. ACCORDINGLY, THE MA TTER OF VALUATION WAS REFERRED TO THE DVO. THE DVO HAS DETERMINED THE VALUE OF THE A PPELLANTS SHARE AT RS.59,32,450/- (HALF SHARE OF RS.1,18,64,900/-). T HE VALUE DETERMINED BY THE DVO IS EVEN HIGHER THAN THE VALUE DETERMINED FOR STAMP PUR POSES AT RS.54,11,655/-. UNDER THESE CIRCUMSTANCES, THE VALUE DETERMINED FOR STAMP PURPOSES I.E. RS.54,11,655/- HAS TO BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF SECTION 48. THE DVO HAS DETERMINED THE VALUE AS ON 01.04.1981 AT RS.70, 000/- WHICH IS MUCH LOWER THAN WHAT THE APPELLANT HAS CLAIMED. IN THE ASSESSMENT PROCEEDINGS, THE A.O. HAD ACCEPTED THE APPELLANTS CALCULATION WITH REGARD TO THE INDEXED COST OF ACQUISITION OF RS.4,25,593/-. SINCE THE REFERENCE FOR VALUATION W AS MADE UNDER THE PROVISIONS OF SECTION 50C, THE DVO WAS NOT REQUIRED TO GIVE HIS O PINION WITH REGARD TO THE COST OF ACQUISITION. MOREOVER, SINCE THERE WAS NO DISPUTE WITH REGARD TO THE COST OF ACQUISITION, THE VALUE DETERMINED BY THE DVO NEEDS TO BE IGNORED. IN VIEW OF THE ABOVE, NO ERROR IS ESTABLISHED IN TH E COMPUTATION OF LTCG MADE BY THE A.O. THEREFORE, THE ASSESSMENT IS BEING CON FIRMED AND THE GROUNDS OF APPEAL ARE BEING DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT SINCE THE PROPERTY IS A LEASEHOLD PROPERTY, THEREFORE, THE PR OVISIONS OF SECTION 50C ARE NOT APPLICABLE. REFERRING TO THE DECISION OF THE MUMBA I BENCH OF THE TRIBUNAL IN THE CASE OF VANDANA D. SHETTY VS. ITO VIDE ITA NO.6 668/MUM/2016 ORDER DATED 05.07.2017, HE SUBMITTED THAT THE TRIBUNAL FO LLOWING VARIOUS DECISIONS HAS HELD THAT THE TRANSFER OF CAPITAL ASSET AND NOT TRANSFER OF LEASEHOLD RIGHTS ATTRACT THE PROVISIONS OF SECTION 50C OF THE ACT. SINCE THE PROPERTY IN QUESTION WAS A RESIDENTIAL HOUSE HAVING MUNICIPAL NO.498/237 /2 WITH LEASEHOLD RIGHTS IN LAND MEASURING 4666 SQ.FT., THEREFORE, THE PROVISIO NS OF SECTION 50C DO NOT 5 ITA NO.864/DEL/2018 APPLY. THEREFORE, ENTIRE ADDITION MADE BY THE ASSE SSING OFFICER AND SUSTAINED BY THE LD. CIT(A) SHOULD BE DELETED. 8. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. HE SUBMITTED THAT IT WAS NEITHER STATED BEF ORE THE ASSESSING OFFICER NOR BEFORE THE LD. CIT(A) THAT THE PROPERTY IS A LEASEH OLD PROPERTY. NOTHING IS COMING OUT OF THE RECORD THAT THE IMPUGNED PROPERTY IS A LEASEHOLD PROPERTY. THEREFORE, THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE CANNOT BE ACCEPTED AT THIS STAGE. 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS THE SUBMIS SION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PROPERTY IN QUESTION IS A LEASEHO LD PROPERTY AND, THEREFORE, THE PROVISIONS OF SECTION 50C ARE NOT APPLICABLE. HOWE VER, A PERUSAL OF THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) NO WHERE MENTIONS THAT IT IS A LEASEHOLD PROPERTY SINCE NOTHING IS COMING OUT FROM THE RECORD. IT IS ALSO NOT COMING OUT OF RECORD AS TO WHAT HAS HAPPENED IN THE CASE OF THE CO-OWNER. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE A ND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH. WHILE DO ING SO, HE HAS TO GIVE HIS OPINION AS TO WHETHER THE PROPERTY IS A LEASEHOLD P ROPERTY OR NOT AND WHETHER LONG TERM CAPITAL GAIN IS CHARGEABLE ON THE LEASEHO LD PROPERTY OR NOT. FURTHER, THE ASSESSING OFFICER WHILE PASSING THE ORDER SHALL KEEP IN MIND THE DECISION OF 6 ITA NO.864/DEL/2018 THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VAN DANA D. SHETTY (SUPRA). THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER FACT AND LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST AUGUST, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 21-08-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI