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TMI Blog2019 (7) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... led to explain as to why the difference between deemed sale consideration of ₹ 2,60,05,348/- adjusted purchase costs and ₹ 2,26,00,000/- being ₹ 34,05,348/- should not be subjected to capital gain tax in the light of Section 50C. The brokerage costs incurred on sale consideration by the purchaser cannot be taken into account for the purposes of Section 50C. CIT(A) has thus failed to take cognizance of applicability of Section 50C to the extent of ₹ 34,05,348/-. Hence, the order of the CIT(A) requires to be modified to the aforesaid extent and the chargeable capital gain requires to be increased by ₹ 34,05,348/-.- Appeal of the Revenue is partly allowed. - I.T.A. No. 1782/Ahd/2017 - - - Dated:- 26-6-2019 - SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER For The Revenue : Shri L. P. Jain, Sr. D.R. For The Assessee : Shri S. N. Soparkar , Sr. Adv. With Shri Nishi t Shah, A.R. ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in tune with Section 50C of the Act. It was contended before the AO by the assessee that she has received a consideration of ₹ 51 Lakhs only and no more and there is no question of under valuation of property. It was submitted that the property was occupied unauthorizedly by 17 families who had also taken electrical connection and were illegal occupier of the property. The assessee was not in a position to get the vacant possession. The assessee sold the property as it is together with encroachment and therefore the value was bound to be lower. It was essentially contended that the impugned plot as well as the adjoining plot of the neighbourer were illegally occupied and therefore the assessee has not given vacant possession of the property to the purchaser. The purchaser has negotiated with the illegal occupiers and incurred additional costs of ₹ 1,75,00,000/- to get the property vacated. The AO has in fact made inquiries with purchasers who duly confirmed the cost incurred of ₹ 1,75,00,000/- to the illegal occupiers. The AO however was not convinced with the plea of the assessee for adoption of ₹ 51Lakhs as the sale consideration for the purposes of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With reference to your letter dated 22/12/2015 we would like to give details as below: 1. Copy of sales deed vide document register no. 12118 dated 19/10/2011 is attached herewith. 2. Copy of ledger of Smt. Rajni M Bhagat is attached herewith. 3. We have purchase said property of juntry value ₹ 26005348/- in ₹ 5100000/- from Smt. Rajni M Bhagat. However we have paid ₹ 17500000/- to land tress passer and ₹ 1100000/- as brokerage. So total land cost to us is ₹ 25025650/-. Copy of land account, copy of land tress passer a/c with all deed are attacher herewith for your reference. Please acknowledge the same. For Pravinchandra N Maniar The Assessing Officer has not accepted the argument of the third party that ₹ 1,75,00,000/- have been paid to the tress passers. This information was collected u/s 133(6} by the AO. However, the details as filed before AO is at page 64 of paper book which is reproduced as under: Date Particulars Vch Type ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... By Land F.P. 12 S.P. 11,12,13,14 19 95 1,75,00,0000.00 1,75,00,0000.00 1,75,00,0000.00 It is also noticed that plot no. 12 has two sub-plots, one being of appellant and another being of Shashank Indulal Shah others. I find that there are illegal encumbrances in the part of the sub-plot belonging to Shashank Indulal Shah others as per information filed before AQ. Hence it can clearly be concluded that in all likely hood, there have been illegal occupants of the sub-plot belonging to the appellant. Secondly, the appellant has raised technical infirmities of the addition so made by highlighting provisions of sub section (2) of section 50C. The submission of the appellant 11/03/2016 has been reproduced in Para 7 of assessment order. The relevant portion from page 6/7 of assessment order is reproduced as under: 5. The copy of registered agreement t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted relevant case laws. The appellant has argued and relied on a few case laws as under: (f) CIT Vs. Chandrnarain Chaudhari (2013) 86CCH 0034 All HC (g) ITO Vs. Ms. Kumudini Venugopal (2010) 29 CCH 0327 Chen Trib (h) Sunilkumar Agarwal Vs. CIT(2014) 88 CCH 0387 Kol HC (i) Anilkumar Jain Vs. ITO (2013) 143 ITD 0659 Delhi ITAT (j) SarwanKumarVs. ITO (2014) 150 ITD 0289 Delhi ITAT I also find the ratio favourable to the appellant in following case laws: (a) Dinesh Kumar Mittal vs. ITO (1992) 193 ITR 770 (All.), (b) CIT vs. Smt. Raj Kurnar Vimla Devi and another (2005) 279 ITR 360 (All.) (c) CIT vs. Chandani Bhochar (2010) 323 ITR 510 (P H), (d) N. Meenakshi 226 CTR 625 (Mad.), (e) Mohd. Shoib vs. DCIT (2009) 29 DTR 306 (ITAT Lko), (f) Meghraj Baid vs. ITO (2008} 114 TTJ 841 (Jodh.), (g) Ajmal Fragrances Fashions (P) Ltd. vs. CIT (2009) 34 SOT 57 (Mum.), (h) (h)Nandita Khosla 11 Taxmann.com 344, (i) Shaik Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. In addition to above, the ratio laid down in undermentioned case laws clearly make out a case for the appellant. - Ajmal Fragrance Fashions P. Ltd. Vs ACIT, Cir.13(1) - ITAT [2009] 34 SOT 57 Mum.) Smt. T.V. Nagasena Vs. ITO - IATA No.296 (Bang.) - ITO Vs. M/s. Onkarmal Kajaria Family Trust - ITA No.1065 (Kol.) It is understood that the appellant raised objections to considering the Stamp Duty Valuation as total sale consideration and the AO failed to send the matter for valuation to DVO as per provisions of section 50C(2). To my mind the AO overburdened himself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be taxed. The apex Court in the case of CIT vs. British Paints India Ltd. has held, it is duty of A.O. to correctly deduce the income, no principle of estoppels, A.O. is not bound by the method followed in earlier years. In view of above facts and the ratio laid down by various Courts (Supra) and ITATs, the addition of ₹ 2,09,13,053/ made u/s.50C of IT Act, 1961 is hereby deleted. However, the income to be taxed at ₹ 3,42,036/-. The argument of the appellant to replace ₹ 2,60,05,348/- at Page No. 10 of assessment order with ₹ 51,00,000/- is hereby rejected as inconsistency in the argument is noticed. This order is not to be issued to issue refund of the amount which has already been paid during assessment proceedings. The ground No.1 to 5 are partly allowed. The CIT(A) thus essentially accepted the sale consideration at ₹ 51 Lakhs as claimed by the assessee. 6. Aggrieved by the substantial relief granted by the CIT(A) towards sale consideration, the Revenue preferred appeal before the Tribunal. 6.1 The learned DR for the Revenue relied upon the order of the AO and submitted in furtherance that provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 12,74,4000/- for purchase of property. The learned AR thus submitted that it was incumbent upon the AO to take note of these facts while ascertaining the deemed sale consideration. The learned AR also submitted that the application of Section 50C of the Act is not automatic and the AO can take cognizance of such circumstances for departure in the sale consideration aggregate upon. The learned AR thus submitted that no interference with the order of the CIT(A) is called for. 7. We have carefully considered the rival submissions. The substitution of the actual sale price of the property by deemed sale consideration as per the valuation adopted by the registering authority under s.50C is in controversy. It is the case of the Revenue that the assessee is chargeable to long term capital gains of ₹ 2,09,13,053/- when computed with reference to jantri value adopted by the registering authority. The assessee, on the other hand, pleads for chargeability of capital gains at ₹ 3,42,036/-. Having regard to the actual sale consideration received on sale of the property. It is primarily the case of the assessee that the lower consideration received on sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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