Shri Bharath Kumar Hukamchand Rathi , Bangalore V. Assistant Commissioner of Income Tax Circle-1(2)(1), Bangalore

ITA 89/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0055 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISRA
• Assessee Lawyers: N O N E
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; TDS; Set aside; FORM 26AS
• Section: 50C

Judgement Text

ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUTANT MEMBER ITA NO.89/BANG/2018 ASSESSMENTYEAR:2014-15 SHRI BHARATH KUMAR HUKAMCHAND RATHI 16/16, BINNY CRESCENT, BENSON TOWN BANGALORE-560 046 PAN NO :AAMPR6525K VS. ACIT, CIRCLE-1(2)(1) BANGALORE APPELLANT RESPONDENT APPELLANT BY : N O N E RESPONDENT BY : SHRI PRIYADARSHIMISRA, D.R. DATE OF HEARING : 25.06.2020 DATE OF PRONOUNCEMENT : 29.06.2020 O R D E R PERB.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 31.8.2017 PASSED BY LD. CIT(A)-1, BENGA LURU AND IT RELATES TO ASSESSMENT YEAR 2014-15. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH ADJOURNMENT WAS GRANTED ON THE LAST OCCASION AT THE SPECIFIC REQUEST OF THE ASSESSEE. HENCE WE PROCEED TO ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE PAGE 2 OF 6 DISPOSE OF THE APPEAL EX-PARTE, WITHOUT PRESENCE OF THE ASSESSEE. 2. WE HEARD LD. D.R. AND PERUSED THE RECORD. THE GROUNDS URGED BY THE ASSESSEE GIVE RISE TO FOLLOWIN G TWO ISSUES: A) COMPUTATION OF CAPITAL GAIN BY ADOPTING SALE CONSIDERATION AS PER PROVISIONS OF SECTION 50C OF T HE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT]. B) ADDITION OF RS.4.01 LAKHS ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPTS REPORTED IN FORM 26AS AND THAT DECLARED BY THE ASSESSEE. 3. THE ASSESSEE IS PROVIDING ARCHITECTURAL SERVICES . IN THE SCRUTINY PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN ON SAL E OF A PROPERTY. THE PROPERTY WAS SOLD FOR A SUM OF RS.1,92,00,000/- AND THE ASSESSEE CLAIMED THAT HIS SHARE IS 50% THEREON. ACCORDINGLY, THE ASSESSEE ADOPTED THE SALE CONSIDERATION AS RS.93.45 LAKHS. THE A.O. NOT ICED THAT THE VALUE DETERMINED BY THE STAMP AUTHORITY WA S 2.25 CRORES AND ACCORDINGLY HE TOOK THE VIEW THAT T HE ASSESSEE SHOULD HAVE ADOPTED SALE CONSIDERATION AS ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE PAGE 3 OF 6 RS.1,12,50,000/- (BEING 50% OF RS.2.25 CRORES) IN T ERMS OF SECTION 50C OF THE ACT. WHEN THIS WAS CONFRONTE D WITH THE ASSESSEE, THE ASSESSEE SUBMITTED THAT THE PROPE RTY SOLD BY HIM DID NOT HAVE ANY APPROACH ROAD AND IS A LSO AWAY FROM THE MAIN ROAD. ACCORDINGLY, THE ASSESSEE SUBMITTED THAT THE SALE CONSIDERATION DECLARED BY H IM SHOULD BE ACCEPTED. THE A.O. DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY COMPUTE D THE CAPITAL GAIN BY ADOPTING 50% OF THE STAMP VALUE ATTRIBUTABLE TO THE ASSESSEE, WHICH WORKED OUT TO RS.1,12,50,000/-. THE LD. CIT(A) ALSO CONFIRMED TH E SAME BY OBSERVING THAT THE ASSESSEE DID NOT OBJECT TO THE ADOPTION OF STAMP DUTY VALUE . 4. WE HEARD LD. D.R. ON THIS ISSUE. WE NOTICE THAT THE ASSESSEE HAD, IN FACT, OBJECTED TO THE ADOPTION OF STAMP DUTY VALUATION BEFORE THE AO BY STATING THAT THE PR OPERTY SOLD BY HIM DID NOT HAVE ANY APPROACH ROAD AND IS A WAY FROM MAIN ROAD. IN OUR VIEW, THE ABOVE SAID REPLY FURNISHED BY THE ASSESSEE WOULD AMOUNT TO OBJECTION TO THE ADOPTION OF STAMP DUTY VALUE. IN THAT CASE, IN TERMS OF SECTION 50C(2) OF THE ACT, THE A.O. SHOULD HAVE REFERRED ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE PAGE 4 OF 6 THE MATTER OF VALUATION TO THE DVO. SINCE THE PROV ISIONS OF SECTION 50C(2) OF THE ACT HAVE NOT BEEN COMPLIED WITH, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE A.O. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE A.O. FOR EXAMIN ING THE SAME AFRESH IN TERMS OF SECTION 50C(2) OF THE ACT. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE, THE A.O. MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 5. THE NEXT ISSUE RELATES TO ADDITION OF RS.4.01 LA KHS, BEING DIFFERENCE BETWEEN GROSS RECEIPTS DECLARED BY THE ASSESSEE AND THAT WAS SHOWN IN FORM 26AS. 6. WE HEARD LD. D.R. ON THIS ISSUE AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE IS FOLLOWING C ASH SYSTEM OF ACCOUNTING. THE SUBMISSION OF THE DATA B EFORE TAX AUTHORITIES WAS THAT HIS CLIENTS, WHO ARE FOLLO WING MERCANTILE SYSTEM OF ACCOUNTING, MIGHT HAVE DEDUCTE D TDS ON THE AMOUNT PAYABLE BY THEM AND HENCE THOSE AMOUNTS HAVE BEEN REFLECTED IN FORM NO.26AS. HOWEV ER, SINCE THE ASSESSEE IS FOLLOWING CASH SYSTEM OF ACCO UNTING, ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE PAGE 5 OF 6 THE AMOUNT ACTUALLY RECEIVED BY HIM WAS DECLARED IN THE INCOME TAX RETURN FILED BY HIM. IT WAS ALSO SUBMIT TED THAT THE ASSESSEE DID NOT RECEIVE THE DIFFERENCE AMOUNT, SHOWN IN FORM 26AS TILL THE DATE OF COMPLETION OF THE ASS ESSMENT. HOWEVER, THE ABOVE SAID EXPLANATION WAS REJECTED BY THE TAX AUTHORITIES WITHOUT MAKING FURTHER ENQUIRIES IN THIS REGARD. IN OUR VIEW, THE A.O. SHOULD HAVE MADE NEC ESSARY ENQUIRIES FROM THE PARTIES WHO HAD DEDUCTED TDS AND SHOULD HAVE TAKEN DECISION ACCORDINGLY. IN THIS VI EW OF THE MATTER, THIS ISSUE ALSO REQUIRES FRESH EXAMINAT ION OF THE ADDITION AT THE END OF THE A.O. ACCORDINGLY, W E SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) ON THIS IS SUE ALSO. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29.06.2020 SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 29 TH JUNE, 2020. VG/SPS ITA NO.89/BANG/2018 SHRI BHARATH KUMAR HUKAMCHAND RATHI, BANGALORE PAGE 6 OF 6 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.