2024 (8) TMI 934 - HC - Income Tax

Applicability of Section 50C - multiplicative rate which was to be applied at the behest of the appellant - ITAT 2020 (2) TMI 1723 - ITAT DELHI affirming the order of CIT (A) holding that multiplicative factor of 1 is applicable to property sold by the appellant assessee - HELD THAT - Tribunal has failed to record or assign any reasoning, even if it be rudimentary, while proceeding to affirm the ultimate findings returned by the CIT(A). In our considered opinion, the appeal must succeed on this short ground alone and the matter consequently be placed before the concerned Tribunal for adjudication afresh. We consequently allow the instant appeal and set aside the order of the Tribunal. We leave all questions open to be addressed before the Tribunal afresh.

Summary

Issues:
1. Applicability of Section 50C of the Income Tax Act, 1961 and the multiplicative rate.
2. Correctness of the view expressed by the Commissioner of Income Tax (Appeals) on the applicability of Section 50C.

Analysis:
1. The Principal Commissioner challenged the Income Tax Appellate Tribunal's order and raised questions regarding the application of the multiplicative factor to the property sold by the appellant assessee. The Tribunal's order reducing disallowances made by the Assessing Officer was also questioned. The Tribunal's decision was challenged on various grounds, including the correctness of the law applied and the supporting evidence for expenses.

2. The High Court noted that the main issue left for consideration was the applicability of Section 50C of the Income Tax Act, 1961, and the multiplicative rate to be applied. A cross-objection was also raised by the respondent assessee regarding the correctness of the Commissioner of Income Tax (Appeals) view on the application of Section 50C.

3. The Commissioner of Income Tax (Appeals) had concluded that Section 50C was applicable, rejecting the appellant's contention. The dispute over the property category and the multiplicative factor was also addressed. The Commissioner held that the land fell in the 'G' category and the multiplicative factor of '1' was applicable, contrary to the Assessing Officer's application of '3'.

4. The High Court found that the Tribunal had failed to provide any reasoning for affirming the Commissioner's findings. Due to this lack of reasoning, the High Court allowed the appeal, setting aside the Tribunal's order and remanding the matter for fresh adjudication. The cross objection was also revived for consideration.

5. Another appeal related to the same matter was disposed of as infructuous in light of the decision in the main appeal. The High Court directed that all questions be addressed afresh before the Tribunal in the main appeal.

This detailed analysis highlights the key issues raised in the legal judgment, focusing on the applicability of Section 50C and the multiplicative rate, along with the Commissioner's findings and the Tribunal's lack of reasoning, leading to the decision to remand the matter for fresh adjudication.