2022 (8) TMI 676 - AT - Income Tax

Revision u/s 263 - CIT directing the AO to examine the sale of land, invoking the provisions of Section 50C - HELD THAT - It is seen from the sale deed executed on 30.05.2011, the entire consideration were being made through cheque payments. However, as it can been seen from the other co-owners assessment orders, the Income Tax Department has accepted the returned income filed by the respective assessee and has not adopted section 50C valuation for the other co-owners namely Smt. Hiraben Shantilal and Smt. Indiraben Shantilal as can been seen from the reassessment orders passed u/s. 143(3) r.w.s. 147 dated 30.12.2019. There cannot be two different yardsticks for the same set of sale transaction made by five co-owners. We have no hesitation in holding that different treatments cannot be given on the same set of facts in respect of different co-owners of a common piece of land which are subjected to capital gains. If such action on the part of Revision Authority is approved, it would militate against the principle of equality of law as enshrined in the Article 14 of the Constitution of India. Further, it is seen that the ld.CIT has not taken any steps for reopening the case of other co-owners viz. Smt. Hiraben Shantilal and Smt. Indiraben Shantilal and thereby accepted similar long term capital gain and on the said transaction. Therefore, in our considered view, the assessee cannot be treated differently for similar transaction - assessment order passed u/s. 143(3) r.w.s. 263 is hereby quashed. Appeal of assessee allowed.

Summary

Issues:
1. Addition made under Section 50C of the Income Tax Act.
2. Application of Jantri Rate in determining capital gain.
3. Validity of interest levied under Section 234A/B/C/D of the Act.
4. Principle of equity in treating co-owners differently.

Issue 1: Addition made under Section 50C of the Income Tax Act:
The appeal was filed against an assessment order adding Rs. 52,73,470 under Section 50C. The appellant argued that the sale consideration agreed upon in the agreement should be adopted for capital gain calculation. The appellant cited a judgment supporting the retrospective effect of Section 50C. The appellant highlighted that other co-owners' assessments did not invoke Section 50C, questioning the differential treatment. The appellant emphasized the need for consistency in treatment among co-owners. The Tribunal noted the inconsistency and quashed the assessment order under Section 263.

Issue 2: Application of Jantri Rate in determining capital gain:
The appellant contended that the Jantri Rate at the time of the agreement should be considered for capital gain calculation, not the rate at the sale deed execution. The appellant relied on a judgment supporting this argument. The Tribunal considered the argument and emphasized the need for uniformity in treatment among co-owners. The Tribunal found merit in the appellant's contention and quashed the assessment order under Section 263.

Issue 3: Validity of interest levied under Section 234A/B/C/D of the Act:
The appellant challenged the interest levied under various sections of the Act. However, the judgment did not delve into this issue specifically, as the focus was primarily on the additions made under Section 50C and the application of Jantri Rate.

Issue 4: Principle of equity in treating co-owners differently:
The Tribunal highlighted the principle of equity in treating co-owners consistently in similar transactions. Citing judicial precedents, the Tribunal emphasized that different treatments for co-owners in the same transaction would violate the principle of equality under Article 14 of the Constitution. The Tribunal noted that the Revision Authority did not reopen other co-owners' cases, leading to the quashing of the assessment order under Section 263 for the appellant.

This detailed analysis of the judgment highlights the key issues raised, arguments presented, relevant legal principles applied, and the ultimate decision rendered by the Tribunal.