MAHESH KUMAR AGARWAL, Alwar V. ITO, Alwar

MA 80/JPR/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5702 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 05-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P P MEENA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Ignorance of law
• Section: 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ MA NO. 80/JP/2017 (ARISING OUT OF MA NO. 95/JP/2016) (ARISING OUT OF ITA NO. 781/JP/2013) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI MUKESH KUMAR AGARWAL 96, LAJPAT NAGAR ALWAR CUKE VS. THE INCOME TAX OFFICER, WARD 1(4) ALWAR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: ACDPA 9407 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ MA NO. 81/JP/2017 (ARISING OUT OF M.A. NO. 96/JP/2016) (ARISING OUT OF ITA NO. 782/JP/2013) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI YASH AGARWAL 96, LAJPAT NAGAR, ALWAR CUKE VS. THE INCOME TAX OFFICER, WARD 1(4) ALWAR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: ALKPA 1018 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE (WRITTEN SUBMISSION) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P. P. MEENA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 19/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/01/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 2 THESE MISCELLANEOUS APPLICATIONS HAVE BEEN FILED AGAINST THE ORDER PASSED BY THE CO-ORDINATE BENCH IN MA NO.95/JP/2016 AND 96/JP/2016 DATED 23.09.2016 FOR AY 2008-09 AND ARISING OUT OF THE ORIGINAL ORDER PASSED BY THE COORDINATE BENCH IN ITA NO. 781/JP/2013 & 782/JP/2013 DATED 18.11.2015. 2. THE FACTS OF THE CASE AS RECORDED BY THE COORDINATE BENCH IN ITS ORIGINAL ORDER DATED 18.11.2015 WHILE DISPOSING OFF THE ASSESSEES APPEALS ARE AS UNDER: 2.1 BRIEF FACTS ARE THAT SHRI MUKESH KUMAR AGARWAL (FATHER) AND SHRI YASH AGARWAL (SON), BOTH ASSESSEES CONSEQUENT TO DEATH OF SMT. SUNITA KUMARI ON 16.01.1999 INHERITED A RESIDENTIAL PLOT PURCHASED BY HER ON 14.03.1989, AS CO-OWNERS (RESIDENTIAL PLOT NO. 39 KHASRA NO. 327 VILLAGE, DAUDPUR, DIST. ALWAR). THE PLOT IN QUESTION WAS AGREED TO BE SOLD FOR RS. 5,51,000/- ON 11.04.2007. SINCE SHRI YASH AGRWAL SON OF THE ASSESSEE WAS MINOR AT THAT TIME AND WAS TO MAJOR ON 12.08.2007, THE REGISTRATION OF PROPERTY WAS AGREED TO BE EXECUTED THEREAFTER. THE REGISTRATION OF PROPERTY WAS DONE ON 16.01.2008. BOTH THE ASSESSEES FILED THEIR RETURN OF INCOME ON THE BASIS OF REGISTRATION VALUE AS ON 11.04.2007 AND OFFERED THE LONG TERM CAPITAL GAINS FOR TAXATION ACCORDINGLY. THE STAMP REGISTRATION AUTHORITY I.E. SUB REGISTRAR, ALWAR DETERMINED THE VALUE OF PROPERTY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AT RS. 13,88,875/-. THE LD. AO APPLIED PROVISIONS OF SECTION 50(1) OF IT ACT WHICH STIPULATED THAT THE SALE CONSIDERATION OF A TRANSFER SHALL BE DEEMED TO BE VALUE ADOPTED BY THE VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. THUS TAKING THE SALE CONSIDERATION AT STAMP VALUE I.E. 13,88,875/- INSTEAD OF ACTUAL SALE CONSIDERATION I.E. RS. 5,51,000/- AND M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 3 EACH ASSESSEE BEING CO-OWNER OF 50% SHARE WORKED OUT THE LTCG AS UNDER:- ON THE BASIS OF ABOVE FACTS, LONG TERM CAPITAL GAINS IS COMPUTED AS UNDER: SALE CONSIDERATION RS. 13,88,875/- 50% SHARE RS. 6,94,438/- LESS: RS. 3,33,335/- INDEXED COST OF ACQUISITION RS. 1,92,168/- ITCG RS. 1,41,167/- BALANCE TAXABLE RS. 3,61,103/- THIS RESULTED IN INCREASING THE CAPITAL GAINS TO THE EXTENT OF RS. 3,61,103/- IN EACH CASE WHICH WAS ADDED TAXED IN THE CASE OF BOTH THE ASSESSEES. 3. THE CONTENTIONS ADVANCED BY THE LD COUNSEL FOR THE ASSESSEE ARE RECORDED AT PARA 2.4 OF ORDER OF THE CO-ORDINATE DATED 18.11.2015 WHICH IS REPRODUCED AS UNDER:- 2.4 LEARNED COUNSEL RELIED ON THE WRITTEN SUBMISSION FILED IN HINDI AND FURTHER CONTENDED THAT: 1. THE PROPERTY IN PLOT WAS TRANSFERRED IN FAVOR OF THE BUYER AT THE TIME OF AGREEMENT TO SALE ON 11.04.2007 ITSELF AND AN AMOUNT OF RS. 1,01,000/- WAS RECEIVED AS ADVANCE; BALANCE OF RS. 4,50,000/- WAS TO BE RECEIVED AT THE TIME OF REGISTRATION OF THE DOCUMENTS WHICH WAS A MINOR AT THE TIME OF EXECUTION OF AGREEMENT. HOWEVER THE POSSESSION OF THE PLOT WAS GIVEN TO THE PURCHASER THE TIME OF AGREEMENT ITSELF WITH PERMISSION TO PROCEED WITH CONSTRUCTION THEREON IF THEY DESIRED, THUS THE PROPERTY IN THE PLOT WAS TRANSFERRED IN THE NAME OF THE PURCHASER ON 11.04.2007. M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 4 2. THUS THE ACTUAL DATE OF TRANSFER OF PROPERTY IS RELATES BACK TO 11.04.07 AND NOT 16.01.2008 WHICH IS ONLY THE DATE OF REGISTRATION OF DOCUMENTS. THEREFORE, THE STAMP DUTY VALUE AS ON THE DATE OF TRANSFER I.E. 11.04.07 IS APPLICABLE WHICH IS ADOPTED BY THE ASSESSEE. THE RETURN WAS FILED OFFERED ON TERM CAPITAL GAIN OF RS. 1,41,167/- IN EACH CASE ON THE BASIS OF DLC. VALUE AS ON 11.04.2007 OFFERING CORRECT AMOUNT OF LTCG. 3. IN THE HINDI WRITTEN SUBMISSION IT IS STATED THAT ASSESSEE HAVE ADOPTED THE SALE CONSIDERATION ON STAMP VALUATION AS ON 11.04.07 AS ADVISED BY THEIR COUNSEL. INCOME TAX LAW IS VERY COMPLEX AND ASSESSEES HAD NO KNOWLEDGE ABOUT AMENDMENT IN SEC. 50C WEF 1.04.03. RELIANCE IS PLACED ON MOTILAL PADAMPAT SINGHANIA SUGAR MILLS VS. STATE OF UP (1979) 118 ITR 326 FOR THE PROPOSITION THAT THE MAXIM IGNORANCE OF LAW IS NO EXCUSE SHOULD BE APPLIED IN ONLY APPROPRIATE CATEGORY OF CASES IN WHICH THESE CASES DONT FALL. 4. INCOME TAX LAW IS NOT HARSH BUT IT IS MADE BY THE OFFICERS VERY HARSH AND RELIEF OUGHT TO HAVE BEEN GRANTED BY LOWER AUTHORITIES RELYING ON MOTILAL PADAMPAT CASE (SUPRA) AND VISHAKHAPATNAM ITAT CASE OF MOOLE RASI RETTY V. ITO 2011 TIOL 135. 4. THE FINDINGS OF THE COORDINATE BENCH WHILE DISMISSING THE ASSESSEES APPEALS ARE AT PARA 2.6 OF ITS ORDER WHICH IS REPRODUCED AS UNDER: 2.6 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND THE MATERIAL AVAILABLE ON RECORD AS ALSO WRITTEN SUBMISSION FILED BY THE ASSESSEE. AS PER THE UNAMBIGUOUS PROVISIONS OF SECTION 50C, THE SALE CONSIDERATION OF A TRANSFER OF PROPERTY SHALL BE DEEMED TO BE VALUE OF AS TAKEN BY THE REGISTRATION AUTHORITIES FOR LEVY OF STAMP DUTY COMMONLY KNOWN AS DLC RATE, WHICH ARE DULY PUBLISHED IN PUBLIC DOMAIN. SEC. 50C BEING A M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 5 MANDATORY DEEMING PROVISION AND ASSESSEE CASE BEING NOT COVERED IN PRESCRIBED EXCEPTIONS IN THE ABSENCE OF ANY CHALLENGE THE DLC VALUATION OR REQUEST FOR DVO VALUATION, ASSESSEE PLEA ABOUT HARSHNESS OF LAW OR APPLICABILITY OF PADAMPAT CASE OF MOOLE RASI CASE HAVE NOT MERIT. IN THE ENTIRETY FACTS AND CIRCUMSTANCES, I FIND NO INFIRMITY IN THE ORDERS OF LD. AO & CIT(A) WHICH ARE UPHELD; BOTH APPEALS OF THE ASSESSES ARE DISMISSED. 5. THE ASSESSEE IN THEIR RESPECTIVE MISC. APPLICATIONS HAVE REFERRED TO THEIR EARLIER CONTENTION THAT THE STAMP DUTY VALUE WHICH IS TO BE CONSIDERED IS THE VALUE AS ON THE DATE OF AGREEMENT FOR TRANSFER OF PROPERTY WHICH IS 11.4.07 AND NOT THE STAMP VALUE AS ON 16.12008 WHICH IS THE DATE OF REGISTRATION OF SALE AGREEMENT WITH THE STAMP AUTHORITIES AND IN SUPPORT, THE DECISION OF COORDINATE BENCH VISHAKHAPATNAM BENCHES IN CASE OF MOOLE RAMI REDDY VS ITO IN ITA NO. 311/VIZAG/2010 WAS RELIED UPON. IT WAS SUBMITTED THAT THE COORDINATE BENCH WHILE DECIDING THE APPEAL DIDNT CONSIDER THE SAID CONTENTION AND THE DECISION OF THE VISHAKHAPATNAM BENCH, AND THE SAME WAS SUMMARILY REJECTED. IT WAS SUBMITTED THAT FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICAL TO THE FACTS OF THE CASE IN MOOLE RAMI REDDY AND THE RATIO OF THE SAID DECISION IS SQUARELY APPLICABLE TO THE CASE OF THE ASSESSEE. IT WAS SUBMITTED THAT THE SAID CONTENTION GOES TO THE ROOT OF THE MATTER AND DONOT REQUIRE ANY FURTHER INVESTIGATION OR VERIFICATION AND THEREFORE, IT IS A MISTAKE APPARENT FROM RECORD RECTIFIABLE UNDER SECTION 254(2) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE COORDINATE BENCH WHILE DISPOSING OFF THE EARLIER MISC. PETITIONS HAVE AGAIN IGNORED CONSIDERING THESE MISTAKES AND RECTIFYING THE EARLIER ORDER. M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 6 6. THE LD DR IS HEARD. HE HAS SUBMITTED THAT SIMILAR CONTENTIONS AS RAISED IN THE EARLIER MA APPLICATIONS HAVE BEEN TAKEN BY THE RESPECTIVE ASSESSEES IN THEIR SUBJECT MISCELLANEOUS APPLICATIONS. NO FRESH CONTENTIONS HAVE BEEN TAKEN BY THE RESPECTIVE ASSESSEE IN THEIR MISCELLANEOUS APPLICATIONS. IT WAS FURTHER SUBMITTED THAT THE CO- ORDINATE BENCH WHILE DISPOSING OFF THE EARLIER MISCELLANEOUS PETITIONS VIDE ITS ORDER DATED 23.09.2016 HAS TAKEN A VIEW THAT THAT THERE IS NO MISTAKE IN THE ORIGINAL ORDER RECTIFIABLE UNDER SECTION 254(2) AND HENCE, THERE IS NO BASIS FOR FILING THE SUBJECT MISC. APPLICATIONS AND THE SAME MAY BE DISMISSED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL EXAMINATION OF THE ISSUE RAISED BEFORE THE COORDINATE BENCH, THE CONTENTIONS SO RAISED BY THE ASSESSEE AND THE FINDINGS GIVEN BY THE COORDINATE BENCH, WE ARE OF THE VIEW THAT THE CONTENTION OF THE ASSESSEE SO RAISED DURING THE ORIGINAL PROCEEDINGS REGARDING DETERMINATION OF STAMP DUTY VALUE AS ON THE DATE OF AGREEMENT RATHER THAN THE DATE OF REGISTRATION WITH THE STAMP DUTY AUTHORITIES HAS APPARENTLY REMAINED UNANSWERED AND HAS NOT BEEN ADJUDICATED UPON. SO, IT IS THE CASE REGARDING APPLICABILITY OF THE RATIO LAID DOWN BY THE COORDINATE BENCH IN CASE OF MOOLE RAMI REDDY VS ITO (SUPRA) WHICH HAS BEEN RENDERED IN THE CONTEXT OF THE LEGAL PROPOSITION SO ADVANCED BY THE ASSESSEE AND WHICH HAS BEEN WRONGLY UNDERSTOOD AS RENDERED IN THE CONTEXT OF HARSHNESS OF LAW. IN OUR VIEW, THE SAID LEGAL CONTENTION AND THE DECISION OF THE COORDINATE BENCH GOES TO THE ROOT OF THE MATTER AND THE SAME NEEDS TO BE EXAMINED. THE SAME APPARENT MISSED THE ATTENTION OF THE COORDINATE BENCH WHILE DISPOSING OFF THE EARLIER MISC. PETITIONS. M.A. NO. 81 & 80/JP/2017 SHRI YASH AGARWAL, ALWAR VS ITO, ALWAR 7 8. WE ACCORDINGLY RECALL THE ORDER PASSED BY THE COORDINATE BENCH IN ITA NO. 781/JP/2013 & 782/JP/2013 DATED 18.11.2015 TO THIS LIMITED EXTENT OF EXAMINING THE ABOVE-SAID CONTENTION AND APPLICABILITY OF ABOVE CITED DECISION OF THE COORDINATE BENCH IN THE FACTS OF THE INSTANT CASE IN RESPECT OF THE BOTH THE ASSESSEES. THE REGISTRY IS DIRECTED TO FIX BOTH THE MATTERS TO HEAR THE ARGUMENTS ON MERITS IN DUE COURSE. THE MISCELLANEOUS APPLICATIONS ARE DISPOSED OFF WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/01/2018. * GANESH KR VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI YASH AGARWAL, ALWAR SHRI MUKESH KUMAR AGARWAL, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- ITO, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {M.A. NO. 80 & 81/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR