ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-17(1), MUMBAI V. HIRANANDANI INDUSTRIAL ENTERPRISES, MUMBAI

MA 265/MUM/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8146 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Assessee Lawyers: CHETAN KARIA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Fair market value; Set aside
• Section: 50C; 251; 254(2); 55A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI RAVISH SOOD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 265/MUM/2020 (ITA NO. 2305/MUM/2018) ASSESSMENT YEAR: 2010 - 11 THE ASSISTANT COMMISSIONER OF INCOME TAX - 17(1), ROOM NO. 117, KAUTILYA BHAVAN, G - BLOCK, BKC, MUMBAI - 400051 VS. HIRANANDANI INDUSTRIAL ENTERPRISES, 514, DALAMAL TOWERS, 211, F . P . J MARG, NARIMAN POINT, MUMBAI - 400021 PAN NO. AAAFH 1372 E APPELLANT RESPONDENT REVENUE BY : MR. GURBINDER SINGH, DR ASSESSEE BY : MR. CHETAN KARIA, AR DATE OF HEARING : 15/ 01 / 2021 DATE OF PRONOUNCEMENT : 18/01/2021 ORDER PER N.K. PRADHAN, A.M. BY MEANS OF THIS MISCELLANEOUS APPLICATION (MA), THE APPLICANT SEEKS RECTIFICATION OF THE ORDER DATED 27.12.2019 PASSED BY THE ITAT H BENCH MUMBAI (ITA NO. 2305/MUM/2018) FOR THE ASSESSMENT YEAR (AY) 2010 - 11. 2. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITS THAT WHILE ADJUDICATING THE APPEAL FILED BY THE ASSESSEE VIDE ITS ORDER DATED 27.12.2019, THE TRIBUNAL HELD THAT THE ASSET IS DEPRECIABLE, HENCE AGREED WITH THE VIEW OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT CIT(A)] ; HOWEVER, THE TRIBUNAL HELD THAT THE LD. CIT(A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE HIRANANDINI INDUSTRIAL ENTERPRISES M.A. NO. 265/M/2020 2 ASSESSMENT AND HE HAS NO POWER TO SET ASIDE/RESTORE THE ORDER TO THE FILE OF THE AO. IT IS THUS ARGUED BY THE LD. DR THAT AS BOTH T HE CIT(A) AND ITAT PRINCIPALLY AGREED WITH THE VIEW OF THE AO THAT INVOKING SECTION 50C WAS RIGHT, THE ORDER DATED 27.12.2019 PASSED BY THE TRIBUNAL MAY BE RECTIFIED U/S 254(2) OF THE ACT. 3. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS TH AT THERE BEING NO MISTAKE APPARENT FROM RECORD, THE PRESENT MA MAY BE DISMISSED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISION ARE GIVEN BELOW. GROUND NO. 2E OF THE APPEAL FILED BY THE AS SESSEE BEFORE THE LD. CIT(A) WAS AS UNDER : THE ASSESSING OFFICER FAILED TO CONSIDER THE ALTERNATIVE CLAIM OF THE APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTION (2) OF SECTION 50C AND REFER VALUATION OF THE ASSET TO A VALUATION OFFICER. IN T HE INSTANT CASE, THE LD. CIT(A) VIDE ORDER DATED 23.03.2018 HAS HELD ON THE ABOVE GROUND, WHICH READS AS UNDER : GROUND 2E IS AGAINST NOT MAKING REFERENCE TO VALUATION OFFICER IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2). IN THIS CASE THE 3 UNITS WERE SOLD, NOT ON UNIFORM PRICES. I FIND THAT IN PARAGRAPH 9 OF LETTER DATED 27.10.2014 THE ASSESSEE HAD MADE THE SUBMISSIONS AS AN ALTERNATIVE CLAIM. THIS WAS TO BE CONSIDERED BY THE ASSESSING OFFICER. THIS PROCEDURAL LACUNAE NEEDS TO BE CLEARED. ACCORDINGLY ASSESSING OFFICER IS DIRECTED TO MAKE A REFERENCE TO VALUATION OFFICER IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2) AND ADOPT FIGURE AS DETERMINED BY HIM READ WITH PROVISIONS OF RELEVANT SECTION. THE GROUND IS TREATED AS PARTLY ALLOWED. AS MENTIONED I N OUR ABOVE ORDER, AS PER SECTION 50C(2), IF THE FOLLOWING CONDITIONS ARE SATISFIED, THE ASSESSING OFFICER MAY REFER THE HIRANANDINI INDUSTRIAL ENTERPRISES M.A. NO. 265/M/2020 3 VALUATION OF RELEVANT ASSET TO A VALUATION OFFICER IN ACCORDANCE WITH SECTION 55A OF THE ACT : I. WHERE THE ASSESSEE CLAIMS BEFORE THE AS SESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED OF ASSESSABLE BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER ; AND II. THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY STAMP VALUATION AUTHORITY HA S NOT BEEN DISPUTED, IN ANY APPEAL OR REVISION OR REFERENCE BEFORE ANY AUTHORITY OR COURT. IT IS HELD IN S. MUTHURAJA V CIT (2013) 218 TAXMAN 73(MAG) (MAD) THAT WHERE SPECIFIC OBJECTION WAS MADE BY ASSESSEE TO ASSESSING OFFICER ADOPTING MARKET VALUE OF PROPERTY U/S 50C(2), THE ASSESSING OFFICER OUGHT TO HAVE REFERRED VALUATION OF CAPITAL ASSET TO VALUATION OFFICER. 4.1 FURTHER WE HAVE MENTIONED IN THE ABOVE ORDER THAT P OWER OF THE FIRST APPELLATE AUTHORITY TO SET ASIDE THE ASSESSMENT ORDER HAS BEEN WITHDRAWN. IT IS PERTINENT TO NOTE THAT DUE TO THE OMISSION (W.E.F. 1 - 6 - 2001) BY THE FINANCE ACT, 2001 (14 OF 2001) OF CERTAIN WORD S, VIZ., - - OR HE MAY SET ASIDE THE ASSESSMENT AND REFER THE CASE BACK TO THE ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE COMMISSIONER (APPEALS) AND AFTER MAKING SUCH FURTHER INQUIRY AS MAY BE NECESSARY, A ND THE ASSESSING OFFICER SHALL THEREUPON PROCEED TO MAKE SUCH FRESH ASSESSMENT AND DETERMINE, WHERE NECESSARY, THE AMOUNT OF TAX PAYABLE ON THE BASIS OF SUCH FRESH ASSESSMENT FROM SECTION 251(1)(A), THE POWER FOR THE FIRST APPELLATE AUTHORITY TO SET ASIDE THE ASSESSMENT ORDER HAS BEEN WITHDRAWN (W.E.F. 1 - 6 - 2001). FURTHER, THE FIRST APPELLATE AUTHORITY CANNOT - HIRANANDINI INDUSTRIAL ENTERPRISES M.A. NO. 265/M/2020 4 - (W.E.F. 1 - 6 - 2001) REFER THE CASE BACK TO THE ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE COMMISSI ONER (APPEALS) AND AFTER MAKING SUCH FURTHER INQUIRY AS MAY BE NECESSARY, THE ASSESSING OFFICER SHALL THEREUPON - - (W.E.F. 1 - 6 - 2001) PROCEED TO MAKE SUCH FRESH ASSESSMENT AND - (W.E.F. 1 - 6 - 2001) DETERMINE, WHERE NECESSARY, THE AMOUNT OF TAX PAYABLE ON THE BA SIS OF SUCH FRESH ASSESSMENT. 4.2 TO SUM UP, IN THE INSTANT CASE, THE LD. CIT(A) HAS DIRECTED THE AO TO MAKE A REFERENCE TO THE VALUATION OFFICER IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2) OF THE ACT. AS MENTIONED EARLIER, THE LD. CIT(A), IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. HE HAS NO POWER TO SET ASIDE/RESTORE THE ORDER TO THE FILE OF THE AO. IN SUCH A SCENARIO, WE HAVE HELD THAT THE ORDER PASSED BY THE LD. CIT(A) BEING NOT IN CONFORMITY WI TH SECTION 251 OF THE ACT IS BAD IN LAW. CONSEQUENTLY, WE ANNULLED THE ORDER PASSED BY THE LD. CIT(A) AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. THUS THE RELEVANT PROVISIONS OF THE ACT AS MENTIONED HEREINABOVE HAVE BEEN FOLLOWED. 5. CONSEQUENTLY, THE RE BEING NO MISTAKE IN THE ORDER DATED 27.12.2019 PASSED BY THE TRIBUNAL, THE MA BEING DEVOID OF MERIT, IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.01.2021. SD/ - SD/ - (RAVISH SOOD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 18.01.2021 ALINDRA, P.S. HIRANANDINI INDUSTRIAL ENTERPRISES M.A. NO. 265/M/2020 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) ITAT, MUMBAI