ITO, Ward 2, Ahmednagar V. Shri Hasan Babu Zarekar, Ahmednagar

ITA 960/PUN/2013

• Counselvise Citation: 96024514 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.960/PN/2013 (A.Y: 2008-09) ITO, WARD-2, AHMEDNAGAR APPELLANT VS. SHRI HASAN BABU ZAREKAR BHOSALE AKHADA, BURUDGAON ROAD, AHMEDNAGAR. PAN: AAYPZ0417E RESPONDENT CO NO.75/PN/2014 (A.Y: 2008-09) SHRI HASAN BABU ZAREKAR BHOSALE AKHADA, BURUDGAON ROAD, AHMEDNAGAR. PAN: AAYPZ0417E CROSS OBJECTOR VS. ITO, WARD-2, AHMEDNAGAR RESPONDENT APPELLANT BY : SHRI B.C. MA LAKAR RESPONDENT BY : SHRI S.N. PURANIK DATE OF HEARING: 25.07.2014 DATE OF ORDER : 22.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I, PUNE, DAT ED 13.02.2013 FOR A.Y. 2008-09 ON THE FOLLOWING GROUND S. 2 ITA NO.960/PN/13 & CO NO.75/PN/2014 SHRI HASAN BABU ZAREKAR 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN HOLDING THAT SECTION 50C IS NOT AP PLICABLE TO TRANSFER / ASSIGNMENT BY THE ASSESSEE OF HIS RIG HTS OVER LAND; AND ACCORDINGLY IN HOLDING THAT STAMP DU TY VALUATION COULD NOT BE ADOPTED FOR COMPUTATION OF CAPITAL GAINS IN THE ASSESSEE'S HANDS. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THE EXP RESSION 'LAND OR BUILDING OR BOTH' USED IN SECTION 50C WOUL D COVER RIGHTS OVER 'LAND OR BUILDING OR BOTH' AS WEL L. 4. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY OR ALL THE GROUNDS OF APPEAL. 2. THE ASSESSEE TRANSFERRED RIGHT OVER THE LAND IN QUESTION, THE OWNERSHIP OF WHICH WAS IN DISPUTE OVER THE LAST 25 YEARS OR SO. THE FACTS RELATING TO THE DISPUTE HAVE BEEN MENTION ED IN THE SALE DEED EXECUTED WITH REGARD TO THE PROPERTY IN QUESTI ON. ACCORDINGLY, THE ASSIGNEE PURCHASERS HAVE AGREED TO BE IMPLEADED AS NECESSARY PARTIES IN THE COURT PROCEED INGS AND TAKE POSSESSION OF PROPERTY AS CONSEQUENT TO OUTCOME OF COURT PROCEEDINGS. THE ASSIGNOR / APPELLANT HAS UNDERTAK EN TO SIGN THE PAPERS/ DOCUMENTS AS AND WHEN REQUIRED. THE AS SESSEE HAD APPRISED THE ASSESSING OFFICER THAT BECAUSE THE LAN D IS DISPUTED, THE ASSESSEE COULD NOT EXECUTE SALE / CONVEYANCE DE ED BUT HAD TO EXECUTE A BECHAN PATRA (DEED OF ASSIGNMENT). SINCE THE PURCHASERS DID NOT AGREE TO PAY THE STAMP DUTY AND REGISTRATION CHARGES ON STAMP DUTY VALUATION, THE ASSESSEE UNDER TOOK TO PAY THE SAME, AS HE WISHED TO GET OUT OF ONGOING LITIGA TION. UNDER SUCH CIRCUMSTANCES, WHEN THE ASSESSEE DISPUTED THE APPLICABILITY OF SECTION 50C, THE ASSESSING OFFICER SHOULD 3 ITA NO.960/PN/13 & CO NO.75/PN/2014 SHRI HASAN BABU ZAREKAR NECESSARILY HAVE REFERRED THE VALUATION OF THE PROP ERTY TO THE DVO U/S 50C(2) AS HELD BY THE COURTS. WHERE ASSESSEE M AKES A CLAIM BEFORE ASSESSING OFFICER THAT STAMP DUTY VALUATION IS HIGHER THAN FMV OF AN ASSET, THE ASSESSING OFFICER SHOULD, AND IS IN FACT, DUTY BOUND TO REFER THE MATTER TO THE VALUATION OFF ICER. THE RATIONALE BEING THAT THE VALUATION OFFICER IS TECHN ICALLY EQUIPPED TO ARRIVE AT THE FAIR MARKET VALUE OF A PROPERTY. THIS VIEW IS FORTIFIED BY THE DECISION OF ITAT, PUNE BENCH IN TH E CASE OF K. K. NAG LTD. VS ADDL. CIT (2012) 52 SOT 381 (PUNE) AND SIMILAR OTHER CASES. 2.1 THE ASSESSING OFFICER'S ORDER SUFFERS FROM INFI RMITY ON THE ISSUE OF APPLICABILITY OF SECTION 50C. THE LAND IN QUESTION WHICH STANDS ASSIGNED VIDE ASSIGNMENT DEED DATED 27.11.20 07 IS LAND WHOSE PHYSICAL POSSESSION WAS NOT WITH THE ASSESSEE AT RELEVANT POINT OF TIME AND THE SAME WAS IN THE POSSESSION OF VARIOUS TENANTS AND WAS THE SUBJECT MATTER OF DISPUTE BEFOR E THE APPROPRIATE JUDICIAL FORUMS. ITAT, 'B' BENCH, AHME DABAD IN THE CASE OF ITO VS YASIN MOORA GODIL (2012) 52 SOT 344 WHEREIN IT WAS HELD THAT RELINQUISHMENT OF BOOKING RIGHT IN A FLAT BY THE ASSESSEE, WHEN HE HAD NEITHER BEEN HANDED OVER POSS ESSION OF THE FLAT NOR EXECUTED REGISTERED SALE DEED, DOES NO T ATTRACT THE PROVISIONS OF SECTION 50C. ON SAME PARITY, WE FIND THAT THE ASSESSEE HAD RIGHTS AND INTEREST IN THE LAND IN QUE STION BUT HE WAS NOT IN PHYSICAL POSSESSION OF THE SAME. HIS RI GHTS HAVE BEEN ASSIGNED TO THIRD PARTY THROUGH A DEED OF ASSIGNMEN T AND THE SAME SHOULD NOT BE COVERED U/S 50C OF THE ACT. THE ASSESSEE HAD ONLY BEEN ASSIGNED SOME RIGHTS OVER THE LAND IN QUESTION WHICH HE SUBSEQUENTLY RE-ASSIGNED TO ANOTHER PARTY. SO, THE PROVISION OF SECTION 50C CANNOT BE TRIGGERED TO THE FACTS OF THE ASSESSEE. THE CLAIM OF THE ASSESSEE HAS RIGHTLY AL LOWED BY THE CIT(A) AS PRAYED. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 4 ITA NO.960/PN/13 & CO NO.75/PN/2014 SHRI HASAN BABU ZAREKAR 2.2 SINCE THE CROSS OBJECTION FILED BY THE ASSESSEE IS NOTHING BUT TO SUPPORT THE ORDER OF CIT(A), THE SAME GOES I NFRUCTUOUS. 3. IN THE RESULT, APPEAL FILED BY THE REVENUE AND T HE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED AS DI SCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF AUGUST, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 22 ND AUGUST, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, PUNE 4) THE CIT-I, PUNE 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE