2018 (5) TMI 2025 - AT - Income Tax

Capital gain computation - addition of AO by invoking the provisions of section 50C - HELD THAT - In the present case, the sale consideration as per sale deed is ₹ 59.40 Lakhs and the value adopted by DVO u/s. 50C (2) and therefore, the difference between these two values is of ₹ 4,70,400/- which is less about 8% of the sale consideration shown by the assessee. Respectfully following the Tribunal order cited by ld. AR of assessee having been rendered in the case of M/s. John Fowler (India) Pvt. Ltd. Vs. DCIT 2017 (1) TMI 1682 - ITAT MUMBAI and also other two Tribunal orders followed by the Tribunal in that case being Tribunal order rendered in the case of Smt. Sita Bai Khetan Vs. ITO 2016 (11) TMI 955 - ITAT JAIPUR and Rahul Constructions 2012 (1) TMI 229 - ITAT PUNE hold that in the facts of the present case, no addition is justified and therefore, delete the same. No merit of the case, the technical and legal issue raised by assessee as per ground nos. 2 and 3 becomes of academic interest and hence, I hold that no adjudication is called for on that aspect.

Summary

Issues:
Appeal against order of ld. CIT(A)-4, Bangalore for Assessment Year 2011-12. Grounds raised by assessee: validity of assessment, addition under section 50C of IT Act, interest u/s. 234B. Merit issue: addition of ?4,70,400 under section 50C of IT Act.

Validity of Assessment:
Assessee contended assessment void-ab-initio due to no notice u/s.143(2) on revised return. Assessee participated in proceedings without objecting to notice absence. Tribunal held participation in invalid proceedings cannot cure jurisdictional defect. Assessee denied liability over income reported in revised return. Authorities added ?4,70,400 invoking section 50C without appreciating valuation differences. Tribunal found difference <10% of sale consideration, following precedent, deleted addition. Technical and legal issues deemed academic.

Addition under Section 50C of IT Act:
Assessee challenged addition of ?4,70,400 under section 50C. Tribunal noted sale consideration ?59.40 Lakhs, DVO valuation ?64,10,400, difference <10%. Relying on precedent, Tribunal deleted addition. Cited cases supported no addition if difference <15%. Tribunal held no addition justified, allowing appeal.

Interest u/s. 234B:
Authorities charged interest u/s. 234B, disputed by assessee. Tribunal did not address interest issue separately due to deletion of addition under section 50C and academic nature of technical and legal issues. Appeal allowed based on deletion of addition under section 50C.

This judgment addressed the validity of assessment, addition under section 50C of IT Act, and interest u/s. 234B. The Tribunal found the assessment not void-ab-initio despite notice absence, deleted addition under section 50C due to valuation differences <10%, and did not address interest issue separately. The appeal was allowed based on the deletion of the addition under section 50C.