9911796707
TMI Blog2010 (8) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... ultant profit was also declared by her in her return of income. The questions which were to be decided by ld. CIT(A) were whether the said income which has been shown by the assessee of a sum of Rs. 50,000 was assessable as business income or it was liable for tax under the head ‘Capital gain’. Secondly, whether the provisions of section 50C were applicable or not? ld. CIT(A) has also held that provisions of section 50C are not applicable on the assessee as the name of the assessee did not appear in the revenue record. Applicability of section 50C - Held that: - if the assessee claims that the value adopted for stamp valuation purposes is in excess of fair market value of the property, then, he may request to the Assessing Officer for the valuation of the said land from the valuation officer and the procedure laid down in section 50C is required to be adopted. In our considered opinion, the case of the assessee falls within the purview of section 50C as the consideration received by the assessee as a result of transfer of the said land is less than the value adopted or assessed by the stamp valuation authority. Business income or short term capital gain - held that: - it has neve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout prejudice to above grounds section 50C of the Income-tax Act was not applicable to the assessee case. The assessee denies her liabilities to be assessed on any short-term capital gain. 2. In the Cross Objection the first objection of the assessee is regarding non-service of notice under section 143(2). To support, the assessee has filed an affidavit, the contents of which are as under: Affidavit of Sushma Gupta w/o Sh. Pradeep Kumar Gupta aged about 44 years r/o 202, New Mohanpuri, Meerut It is solemnly affirmed and stated on oath as under:- 1. That I have been carrying on business in the manufacture and sale of readymade garments under the name and style of M/s. Cee Kay Garments at 202, New Mohanpuri, Meerut as sole proprietor of the firm. 2. That in the Asst. Order dated 21-11-2005 under section 143(3) for assessment year 2003-04 as passed by ITO, Ward 2(3) Meerut the following observations are factually incorrect : A notice under section 143(2) dated 24-11-2004 was issued and served upon the assessee by affixture on 30-11-2004. No such notice was ever served on me or any other person authorized to receive such notice. On inspection of the file it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be taken at any stage of the appellate proceedings and the facts are borne on record and the assessee has submitted the affidavit. In this view of the situation, after hearing both the parties, we admit this ground being legal ground as facts are available on record. Therefore, we proceed to decide the legal objection taken by the assessee with regard to validity or otherwise of the assessment proceedings. 6. ld. DR has also brought assessment record, a copy of which was furnished before us. It is observed from the assessment record that the return was filed by the assessee stating the address as follows: Sushma Gupta, Father s Name: Kishan Lal Gupta, Address: Cee Kay Garments, Shastri Nagar, Meerut. 7. In all the documents attached with the return the same address was mentioned. The Assessing Officer has issued notice dated 24-11-2004 at the same address which was sent by speed post. The said notice was for appearance on 8-12-2004. vide order sheet entry dated 24-11-2004 it has been stated by the Assessing Officer that the case has been selected for scrutiny and issue notice under section 143(2). 8. The case was fixed on 8-12-2004. Below that there is a noting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a defect, which vitiate the whole proceedings. 14. Another objection of the assessee, as stated in the affidavit, is that in the letter dated 18-10-2004 issued under section 139(9), the correct address of the assessee was stated. But, as pointed out earlier, the assessment proceedings are to be initiated at the address mentioned in the return of income and no material whatsoever is brought on record to show that change in address, if any, was intimated by the assessee to the Assessing Officer. Therefore, this contention is also to be rejected. Therefore, the ground taken by the assessee regarding non-service of notice is to be decided against the assessee and accordingly rejected. 15. Ground No. 2 of the Cross Objections and the ground taken in departmental appeal raise common issue i.e., with regard to an addition of Rs. 15,50,000. Through ground No. 2 of Cross Objections, the claim of the assessee is that the surplus of Rs. 50,000 on account of difference in purchase and sale price was to be assessed as business income in place of short-term capital gain assessed by the Assessing Officer and in third ground it is the case of the assesse that section 50C is not applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase price was taken as income earned by way of short-term capital gain. Accordingly, an addition of Rs. 16,50,000 was made. 20. Aggrieved, the assessee filed an appeal before the CIT(A). It was submitted that section 50C has no application. It was submitted that nowhere in the sale deed the name of the assessee was appearing and, therefore, the assessee was never the owner of the said land and she did not transfer any capital asset, hence, section 50C was not applicable. In the alternative, it was submitted that the value taken by the Assessing Officer on the basis of stamp valuation is on very very high side and the value of land is much lower than the value adopted by the Assessing Officer and the Assessing Officer should have referred the valuation of capital asset to the valuation officer. 21. The assessee also had submitted Khasra-Girdavari of the said land and mutation details of various owners and transfer thereof in which the name of the assessee was not included and, thus, it was contended that section 50C had no application. 22. The ld. CIT(A), called for remand report from the Assessing Officer, the relevant portion of which has been reproduced in para 3.2.2 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a capital asset, but to attract the provisions of section 50C the transfer of capital asset has to be directly by the person concerned either as owner or by means of letter of attorney and as the assessee is not directly owner of the said plot, provisions of section 50C were not applicable. The applicability of section 50C can be examined in the case of Shri K.S. Gupta and, in this manner, the addition made in the hands of the assessee has been deleted. The Department is aggrieved, hence, in appeal. 25. After narrating the facts, it was submitted by ld. DR that there is a total fallacy In the claim of the assessee as the assessee herself has paid the purchase consideration and the transaction was entered into by the father-in-law of the assessee being in the capacity of attorney holder of the assessee. The sale consideration was also shown to have been received by the assessee and the profit was shown by the assessee. He contended that the Assessing Officer has made reference to section 2(47)(v) which reference has altogether been ignored by the CIT(A). He submitted that where substantial payment has been made and the possession has been obtained, then, it has to be construed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the rival submissions in the light of the material placed before us. ld. CIT(A) has deleted the addition of Rs. 15,50,000 on the ground that the said transaction was in the nature of purchase and transfer of capital asset by Shri K.S. Gupta and not by the assessee. We find no substance in such finding given by ld. CIT(A). The transaction was owned by the assessee which was entered into by her through her power of attorney holder. The payments were made by the assessee and the resultant profit was also declared by her in her return of income. The questions which were to be decided by ld. CIT(A) were whether the said income which has been shown by the assessee of a sum of Rs. 50,000 was assessable as business income or it was liable for tax under the head Capital gain . Secondly, whether the provisions of section 50C were applicable or not? ld. CIT(A) has also held that provisions of section 50C are not applicable on the assessee as the name of the assessee did not appear in the revenue record. 28. Now, we are to examine whether such findings of ld. CIT(A) are in accordance with the law. The Assessing Officer, while holding that the assessee is liable for capital gain, has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed (or assessable) shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where - (a) the assessee claims before any Assessing Officer that the value adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act. However, if the assessee claims that the value adopted for stamp valuation exceeds, the fair market value of the property as on the date of transfer or the value so adopted or assessed by the stamp valuation authority is disputed in any appeal or revision or no reference has been made by other authority, court or the High Court, etc., the Assessing Officer may refer the valuation of the capital asset to the valuation officer. Therefore, if the assessee claims that the value adopted for stamp valuation purposes is in excess of fair market value of the property, then, he may request to the Assessing Officer for the valuation of the said land from the valuation officer and the procedure laid down in section 50C is required to be adopted. In our considered opinion, the case of the assessee falls within the purview of section 50C as the consideration received by the assessee as a result of transfer of the said land is less than the value adopted or assessed by the stamp valuation authority. 32. ld. AR of the assessee has agitated the applicability of section 50C firstly on the basis of decision of Hon ble Punjab Haryana High Court in the case of Chandni Bhucha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 50C. Therefore, on the basis of decision of Hon ble Punjab Haryana High Court in the case of CIT v. Chandni Bhuchar (supra), the assessee cannot claim that section 50C is not applicable to her case. 34. Now, coming to the decision of Ahmedabad Bench in the case of Kaushik Sureshbhai Reshamwla (supra), the facts of that case reveal that the stamp value for the purpose of property on the date of sale was at the rate of Rs. 400 sq. metre. The assessee disclosed the value at the rate of 483 per sq. metre and the Assessing Officer estimated the value of land at the rate of Rs. 700 per sq. metre. The value adopted by the Assessing Officer was further enhanced by the CIT(A) to Rs. 5,000 per sq. metre and all these facts can be found in paras 4 and 5 of the said order. Therefore, the said case was not a case where the value was adopted by the assessee was lower than the value assessed by stamp valuation authority. The said case also cannot be relied upon by the assessee to contend that section 50C is not applicable to her case as in that case the value stated in the sale deed was not less than the value adopted by the stamp valuation authority and the value recorded in the titl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
