2022 (6) TMI 1427 - AT - Income Tax

Capital gain computation - fair market value of assessee s capital asset - HELD THAT - As we note with the able assistance coming from the Departmental side that this taxpayer had neither transferred any land nor a building as specified u/s.50C(1) but only its lease hold rights in the CIDCO area. We thus hold that such a leasehold rights are nowhere covered u/s.50C(1) going by specified categories therein as per stricter interpretation recently reiterated in Commissioner of Customs Vs. Dilip Kumar and Co 2018 (7) TMI 1826 - SUPREME COURT We accordingly reject the Revenue s instant sole substantive grievance. Unaccounted cash component - Revenue vehemently argued that both the learned authorities have gone by the seized material as clearly indicating cash paid to Jai Ganesh Co-operative members - It further invokes the necessary presumption of correctness given to the such seized documents u/s 292C as well - As no substance in Revenue s forgoing arguments supporting the impugned addition. This is for the precise reason that the alleged seized document itself rebuts the presumption in assessee s favour once its members only had received the payment who are separately assessable in their individual capacity(ies). We further make it clear that the learned lower authorities have nowhere quoted any other cogent evidence since they have only gone by above seized document. We accordingly accept the assessee s sole substantive grievance.

Summary

Issues:
1. Appeal against CIT(A)'s order for Assessment Year 2008-09 under Income Tax Act, 1961.
2. Dispute over fair market value of assessee's capital asset.
3. Alleged unaccounted cash component addition.

Analysis:

1. The appeal before the Appellate Tribunal ITAT Pune involved cross appeals by the Revenue and the assessee against the CIT(A)'s order for Assessment Year 2008-09 under the Income Tax Act, 1961. The proceedings were initiated under section 144 read with section 147 of the Act. The case proceeded ex-parte as the assessee did not appear despite being called twice.

2. The Revenue's main grievance was related to the fair market value of the assessee's capital asset, which was claimed to be Rs. 5,94,96,000. The Tribunal noted that the taxpayer had not transferred any "land nor a building" as specified under section 50C(1) of the Act but only leasehold rights in the 'CIDCO' area. Referring to the stricter interpretation in Commissioner of Customs Vs. Dilip Kumar and Co., it was held that leasehold rights are not covered under section 50C(1). Consequently, the Revenue's grievance and the main appeal were rejected.

3. The assessee's cross appeals contested the addition of an alleged unaccounted cash component of Rs. 5,94,96,000. The Revenue argued that the seized material indicated cash "paid to Jai Ganesh Co-operative members" and invoked the presumption of correctness under section 292C. However, the Tribunal found no merit in the Revenue's arguments as the seized document itself indicated that the payment was received by individual members assessable separately. The lower authorities had solely relied on the seized document without any other substantial evidence. Therefore, the assessee's grievance was accepted, and its cross appeal was allowed.

4. In conclusion, the Revenue's appeal was dismissed, and the assessee's cross appeal was allowed. The Tribunal's order was pronounced on June 8, 2022, in open court. The detailed analysis of the issues involved in the judgment clarifies the Tribunal's findings and decisions on the disputes raised by both parties in the appeal proceedings.