LIYAQAT ALI, Jaipur V. ITO, Jaipur

MA 29/JPR/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4516 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PA M VIHYKFKHZ IZRFKHZ
• Assessee Lawyers: P C PARWAL CA SHRI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 45(2); 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH VH-VKJ-EHUK ] YS[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI T.R. MEENA, AM M.A. NO. 29/JP/2016 ARISING OUT IF ITA NO. 779/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08. SHRI LIYAQAT ALI, 1855, MEHRON KI NADI, CHOWKRI RAM CHANERJI, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 5(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABYPA 7802 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR, ADDL. CIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.06.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24/06/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE ARIS E OUT OF THE ORDER OF THE TRIBUNAL IN ITA NO. 779/JP/2013 SEEKING RECALL OF T HE ORDER DATED 29.01.2016 ON THE GROUND THAT CERTAIN LEGAL ASPECTS WERE NOT CONSIDER ED RESULTING INTO MISTAKE APPARENT FROM THE RECORDS. 2. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS ARE MADE IN THE MISCELLANEOUS APPLICATION AND SUBMITTED THAT TH ERE IS A MISTAKE APPARENT FROM RECORD, SINCE THE TRIBUNAL HAS FAILED TO APPRECIATE THE FACT THAT THE AMENDMENT MADE IN SECTION 50C WHERE BY ASSESSABLE VALUE IS CO NSIDERED AS FULL VALUE OF CONSIDERATION IS MADE APPLICABLE ONLY FROM 01.10.20 09. THIS ASPECT HAS ESCAPED ATTENTION OF THE TRIBUNAL, THEREFORE, THERE IS A MI STAKE APPARENT ON RECORD. 2 MA NO. 29/JP/2016 LIYAQAT ALI. 3. ON THE CONTRARY, THE LD. D/R OPPOSED THE SUBMISS IONS AND SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE SUBMISSION MADE IN THE APPLICATION IS R EPRODUCED AS UNDER :- THE APPLICANT BEGS TO SUBMIT THAT THE ORDER GIVIN G RISE TO THE PRESENT MISCELLANEOUS APPLICATION WAS PASSED ON 29.01.2016. THE DEPARTMENT IN ITS SOLE GROUND HAS CHALLENGED TH E DELETION OF THE ADDITION OF RS. 39,38,796/- MADE BY THE AO ON ACCOU NT OF CAPITAL GAIN. THE FACTS OF THIS GROUND WERE THAT AO OBSERVED THAT ASSESSEE HAD TRANSFERRED 50% OF CERTAIN PROPERTIES SHOWN IN THE BALANCE SHEET OF M/S. SL. EXPORTS AS ON 31.03.2006 TO SH. SHOUKAT AL I DURING THE YEAR 06-07 BUT NO CAPITAL GAIN HAS BEEN DECLARED. IT WAS FURTHER NOTED THAT M/S. S.L. EXPORTS WAS A PARTNERSHIP FIRM WITH SH. L IYAQAT ALI AND SH SHOUKAT ALI AS PARTNER. THE PARTNERSHIP FIRM DISSOL VED ON 31.03.2005 WHEREBY LIYAQAT ALI CONTINUED TO CARRY THE BUSINESS OF S.L. EXPORT BY TAKING ALL ITS ASSETS AND LIABILITIES. THEREAFTER, SH. LIYAQAT ALI PASSED ENTRIES IN THE BOOKS OF ACCOUNTS ON 01.04.2006 FALL ING IN AY 07-08 WHEREBY 50% OF THE THREE IMMOVEABLE PROPERTIES WAS TRANSFERRED TO SH SHOUKAT ALI. THE AO, THEREFORE, INVOKED SEC. 50C AND ON THE BASIS OF THE REPORT OF THE DVO ADOPTED THE FAIR MARKET VA LUE OF THESE PROPERTIES AND WORKED OUT THE CAPITAL GAIN AT RS. 3 9,38,796/-. THE LD. CIT (A) DELETED THE ADDITION BY HOLDING THA T SEC. 50C IS NOT APPLICABLE AS THESE PROPERTIES WERE NOT ASSESSED BY STAMP VALUATION AUTHORITIES AND THE AMENDMENT TO SEC. 50C WHEREBY T HE ASSESSABLE VALUE CAN ALSO BE ADOPTED WAS MADE EFFECTIVE FROM 0 1.10.2009 AND THEREFORE IN THE ABSENCE OF ANY VALUE ADOPTED/ASSES SED BY THE STAMP AUTHORITIES IN RESPECT OF THESE THREE PROPERTIES, N O CAPITAL GAIN TAX CAN BE LEVIED ON THE ASSESSEE. THE HONBLE ITAT AFTER CONSIDERING THESE FACTS IN P ARA 6 OBSERVED THAT THE VARIOUS TRIBUNALS HAVE HELD THAT AMENDMENT MADE IN SE. 50C FOR ASSESSABLE VALUE IS EFFECTIVE FROM 01.10.2009 BUT T HE LD. AO HAS USED DLC RATE TO DECIDE THE FMV ON THE DATE OF TRANSFER. IT IS UNDISPUTED FACT ALSO THAT THESE PROPERTIES WERE NOT GO6T REGIS TERED UNDER THE REGISTRATION OF STAMP ACT. IT IS ALSO A FACT THAT T HERE WAS A TRANSFER OF ASSET FROM ASSESSEE TO THE BROTHER OF THE ASSESSEE NAMELY SH. SHOUKAT ALI. THE ASSESSEE HIMSELF ADMITTED THAT THIS TRANSF ER IS ON 01.04.2006. IT THEREFORE UPHELD THE ORDER OF THE AO BY REVERSIN G THE FINDING OF CIT (A). 3 MA NO. 29/JP/2016 LIYAQAT ALI. IN GIVING THE ABOVE FINDING, HONBLE BENCH IGNORED THAT AS PER SEC. 48, THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN I S COMPUTED BY DEDUCTING FROM THE FULL VALUE OF CONSIDERATION RECE IVED OR ACCRUING AS A RESULT OF TRANSFER OF THE CAPITAL ASSET, THE EXPEND ITURE INCURRED IN CONNECTION WITH TRANSFER AND THE COST OF ACQUISITIO N OF THE ASSET. THUS, IN COMPUTING THE CAPITAL GAIN, ACTUAL SALE CONSIDER ATION IS CONSIDERED AS FULL VALUE OF CONSIDERATION. HOWEVER, BY DEEMING FI CTION OF SECTION 50C, IT IS PROVIDED THAT WHERE THE ACTUAL CONSIDERATION AS A RESULT OF TRANSFER IS LESS THAN VALUE ADOPTED/ASSESSED BY THE STAMP AUTHORITIES, THEN FOR THE PURPOSE OF SEC. 48, THE VALUE ADOPTED OR ASSESSED BY THE STAMP AUTHORITIES SHALL BE DEEMED TO BE FULL VALUE OF CONSIDERATION. IN THE PRESENT CASE, THE VALUE OF CONSIDERATION OF THE SE THREE PROPERTIES IS RS. 16,19,320/- WHICH IS SAME AS THE COST OF ACQUIS ITION OF THESE PROPERTIES TO THE ASSESSEE. THE VALUE OF THESE PROP ERTIES IS NOT ASSESSED/ADOPTED BY THE STAMP AUTHORITIES. THE AMEN DMENT MADE IN SEC. 50C WHEREBY ASSESS ABLE VALUE IS CONSIDERED AS FULL VALUE OF CONSIDERATION IS MADE APPLICABLE FROM 01.10.2009. T HIS IS ALSO ACCEPTED BY THE HONBLE BENCH. THERE IS NO PROVISIO N IN THE ACT FOR THE RELEVANT ASSESSMENT YEAR WHEREBY THE ACTUAL CONSIDE RATION CAN BE REPLACED BY THE VALUE DETERMINED BY THE DVO. THEREF ORE, A MISTAKE OF LAW, APPARENT FROM RECORD HAS CREPT IN THE ORDER WH ERE BY HONBLE BENCH UPHELD THE ORDER OF THE AO WHERE THE CAPITAL GAIN WAS WORKED OUT ON THE BASIS OF FAIR MARKET VALUE AS PER THE RE PORT OF THE DVO. IT IS ALSO SUBMITTED THAT THERE IS NO PROVISION IN THE ACT THAT WHILE COMPUTING THE CAPITAL GAIN, THE ACTUAL CONSIDERATIO N IS TO BE REPLACED BY THE FAIR MARKET VALUE OF THE PROPERTY EXCEPT AS PROVIDED IN SEC. 45(2) AND SEC. 45(4). BOTH THESE SECTIONS ARE NOT A PPLICABLE IN THE PRESENT CASE AS NEITHER IT IS A CASE OF CONTRIBUTIO N OF CAPITAL ASSET INTO STOCK IN TRADE OF THE BUSINESS CARRIED ON BY THE AS SESSEE OR IS A CASE OF DISSOLUTION OF FIRM. HOWEVER, THE AO IN CASE OF THE PARTNERSHIP FIRM M/S. SL EXPORTS WHERE THE FIRM DISSOLVED ON 31.03.2 005 HAS INVOKED SECTION 45(4) AND ACCORDINGLY HE HAS TAKEN THE FMV OF THESE PROPERTIES AND ASSESS THE INCOME IN A.Y. 05-06 ACCORDINGLY. CO PY OF THE ASSESSMENT ORDER IN CASE OF S.L. EXPORTS IS ENCLOSE D. IT IS FURTHER SUBMITTED THAT IN COURSE OF THE HEARI NG NO ARGUMENT WAS PUT FORTH AS THE HONBLE BENCH AFTER CONSIDERING TH E ORDER OF CIT (A), PRINCIPALLY ACCEPTED THE FINDING OF THE LD. CIT (A) AND THEREFORE THERE WAS NO OCCASION WITH THE ASSESSEE TO EXPLAIN THE CA SE AND SUBMIT THE ASSESSMENT ORDER OF THE FIRM M/S. S.L. EXPORT. IN VIEW OF ABOVE, A MISTAKE APPARENT ON RECORD HAS CREPT IN THE ORDER OF HONBLE ITAT AND THEREFORE THE ORDER PASSED BY I T BE SUITABLY MODIFIED. 4 MA NO. 29/JP/2016 LIYAQAT ALI. 5. AFTER CONSIDERING THE SUBMISSIONS, WE ARE OF THE VIEW THAT THIS ASPECT WHETHER THE AMENDMENT MADE IN SECTION 50C WOULD BE APPLICABLE OR NOT ESCAPED ATTENTION OF THE TRIBUNAL. THEREFORE, THIS ASPECT R EQUIRES EXAMINATION. ACCORDINGLY, WE HERE BY RECALL OUR ORDER DATED 29.01.2016 AND FI X THE APPEAL I.E. ITA NO. 779/JP/2013 FOR HEARING ON 10.08.2016. THE REPRESE NTATIVES OF THE PARTIES HAVE NOTED THE DATE, THEREFORE, NO SEPARATE NOTICE WILL BE ISSUED. 6. IN THE RESULT, MISCELLANEOUS APPLICATION IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/06/2 016. SD/- SD/- VH-VKJ-EHUK] ( DQY HKKJR ) ( T.R. MEENA) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 24/06/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI LIYAQAT ALI, JAIPUR. 2. THE RESPONDENT- THE ITO WARD 5(1), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. M.A. 29/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 MA NO. 29/JP/2016 LIYAQAT ALI.