ITO, Ward-7(1), Hyd, Hyderabad V. Mumtaz Begum, Hyd, Hyderabad

ITA 877/HYD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98650 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 142(1); 148

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 877/HYD/2015 ASSESSMENT YEAR: 2007-08 INCOME TAX OFFICER, WARD 7(1), HYDERABAD. VS. MUMTAZ BEGUM, HYDERABAD PAN AAMPB 9197 K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B. KURMI NAIDU ASSESSEE BY : SHRI A.V. RAGHURAM DATE OF HEARING : 27-10-2015 DATE OF PRONOUNCEMENT : 04-11-2015 O R D E R PER P. MADHAVI DEVI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-3, HYDERABAD FOR THE AY 2007-08. 2. REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN HOLDING THAT THE SRO VALUE AS ON THE DATE OF THE AGREEMENT OF SA LE HAS TO BE CONSIDERED UNDER THE PROVISIONS OF SECTION 50C OF T HE I.T. ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E, AN INDIVIDUAL WAS ISSUED A NOTICE U/S 148 OF THE ACT TO BRING TO TAX THE CAPITAL GAINS. HOWEVER, THERE WAS NO RESPONSE FROM THE ASSE SSEE AND, THEREFORE, NOTICE U/S 142(1) WAS ALSO ISSUED ON 30/ 08/2013. IN RESPONSE TO THE NOTICE U/S 142(1), THE ASSESSEES R EPRESENTATIVE APPEARED AND FILED A LETTER STATING THAT THE ASSESS EE HAD ALREADY FILED HER RETURN ON 28/07/2007 AND THE SAME MAY BE TREATE D AS FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THEREAFT ER, THE AO PROCEEDED TO COMPUTE CAPITAL GAINS DECLARED BY ASSE SSEE FROM THE 2 ITA NO. 877/HYD/2015 MUMTAZ BEGUM, HYD. SALE OF HOUSE PROPERTY AT JUBILEE HILLS, HYDERABAD ADOPTING THE SALE VALUE AT RS. 3,50,00,000. THE AO OBSERVED THAT ASSE SSEE HAD SOLD HOUSE PROPERTY FOR A SUM OF RS. 3,50,00,000 ON 15/0 2/2007 WHEREAS THE SRO, BANJARA HILLS HAS VALUED AT RS. 3,83,95,00 0 AND COLLECTED STAMP DUTY AND THAT THE ASSESSEE DID NOT AGITATE TH IS VALUE OF SRO AT THE TIME OF REGISTRATION. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSEE FILED A LETTER DATED 30/1 0/2013 ENCLOSING A COPY OF PURCHASE DEED, VALUERS REPORT FOR THE CONS TRUCTION OF HOUSE SOLD AND THE AGREEMENT OF SALE DATED 14/12/2006 AND ALSO STATING THAT MARKET VALUE FOR THE PURPOSE OF REGISTRATION WAS EN HANCED BY THE GOVT. ON 01/02/2007 FROM RS. 30,000 TO RS. 35,000 A ND, THEREFORE, REQUESTED TO CONSIDER THE VALUE AS PER THE AGREEMEN T OF SALE ENTERED INTO ON 14/12/2006 AS VALUE OF THE SALE CONSIDERATI ON. THE AO, HOWEVER, HELD THAT THE ASSESSEE DID NOT CHALLENGE T HE ENHANCED VALUE OF RS. 35,000 PER SQ.YD AS ON THE DATE OF REG ISTRATION ON 15/02/2007 AND HAS PAID REGISTRATION CHARGES AND A S PER CLAUSE 10 OF THE SALE DEED, ASSESSEE HAS DELIVERED THE VACANT PH YSICAL POSSESSION OF THE PROPERTY TO THE SECOND PARTY ON 15/02/2007 A ND, THEREFORE, VALUE OF THE SRO ON THE DATE OF REGISTRATION ONLY H AS TO BE ADOPTED U/S 50C OF THE ACT. HE ACCORDINGLY COMPUTED THE CAP ITAL GAINS. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). 4. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE ITAT IN THE CASES OF KODURU SATYA SRINIVAS & ANR. VS. ACIT (ITA NO. 556 AND 557/VIZAG/2008, DATED 02/07/1 0) (VISAKHAPATNAM) AND M/S LAHIRI PROMOTERS (ITA NO. 1 2/VIZAG/2009, DATED 22/06/2010) BY HOLDING THAT SRO MARKET VALUE AS ON THE DATE OF AGREEMENT OF SALE HAS TO BE CONSIDERED FOR THE COMP UTATION OF CAPITAL GAIN. AGGRIEVED BY THE RELIEF GRANTED BY CIT(A), TH E REVENUE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, THE LD. DR SUPPORTED THE ORDER OF THE AO AND HAS PLACED RELIANCE UPON THE DECISION OF THE HO NBLE MADRAS HIGH 3 ITA NO. 877/HYD/2015 MUMTAZ BEGUM, HYD. COURT IN CASE OF AMBATTUR CLOTHING CO. LTD. VS. ACI T, [2010] 326 ITR 245. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUPPORTED THE ORDER OF THE LD. CIT(A) AND PLACED RELIANCE ON THE DECISIONS OF THE TRIBUNAL IN THE CASES RELIED UPON BY THE CIT(A). 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ONLY ISSUE BEFORE US IS TH E VALUE TO BE ADOPTED U/S 50C WHETHER AS ON THE DATE OF AGREEMENT OF SALE OR AS ON THE DATE OF REGISTRATION. WE FIND THAT SIMILAR ISSU E CAME UP FOR CONSIDERATION BEFORE THE ITAT, VIZAG BENCH IN THE C ASE OF M/S LAHIRI PROMTERS (SUPRA) AND THE COORDINATE BENCH HAS EXTEN SIVELY DEALT WITH THE ISSUE AND AFTER CONSIDERING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF K.P.VARGHESE VS INCOME TAX OFFICER AND ANOTHER (131 ITR 597) AND ALSO CONSIDERING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF K.R. PA LANI SWAMY AND OTHERS VS. UNION OF INDIA ( 2008-TMI-30601 IN APPEAL NO W.P NO 4387 OF 2003 VIDE ORDER DATED 5-8-08.) HA S HELD THAT SINCE THE PROCESS OF SALE HAS BEEN INITIATED FROM THE DAT E OF SALE AGREEMENT, THE APPLICABILITY OF THE PROVISIONS OF S ECTION 50C SHOULD BE LOOKED AT ONLY ON THE DATE OF SALE AGREEMENT. TH E SAID DECISION OF THE LAHIRI PROMTERS (SUPRA) HAS BEEN FOLLOWED BY TH E SUBSEQUENT BENCH OF ITAT, VIZAG IN THE CASE OF KODURU SATYA SR INIVAS & ANR. (SUPRA), A COPY OF WHICH IS FILED AT PAGES 5 TO 15 OF THE PAPER BOOK FILED BY THE ASSESSEE. THE JUDGMENT ON WHICH THE LD . DR HAS PLACED RELIANCE ONLY DEALT WITH THE ISSUE AS TO THE APPLIC ABILITY OF PROVISIONS OF SECTION 50C AND NOT THE DATE ON WHICH THE PROVIS IONS OF SECTION 50C ARE TO BE APPLIED. THEREFORE, THE SAID DECISION DOES NOT COME TO THE RESCUE OF THE REVENUE. IN VIEW OF THE ABOVE, AN D RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCHES A T VIZAG (CITED SUPRA), WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND ACCORDINGLY WE UPHOLD THE SAME DISMISSIN G THE APPEAL OF THE REVENUE. 4 ITA NO. 877/HYD/2015 MUMTAZ BEGUM, HYD. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER, 2015. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI D EVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 4 TH NOVEMBER, 2015 KV COPY TO:- 1) ITO, WARD 7(1), 2 ND FLOOR, B BLOCK, IT TOWERS, HYDERABAD 2) SMT. MUMTAZ BEGUM, H. NO. 10-2-289/51, SHANT I NAGAR, HYDERABAD - 500 028 3 CIT(A) - 3, HYDERABAD 4) CIT 3`1, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD.