Vandana Sethi, New Delhi v. ITO, New Delhi

ITA 1614/DEL/2017 | 2013-2014
Pronouncement Date: 23-03-2021 | Result: Allowed

Appeal Details

RSA Number 161420114 RSA 2017
Assessee PAN ABJPS9504K
Bench Delhi
Appeal Number ITA 1614/DEL/2017
Duration Of Justice 4 year(s) 6 day(s)
Appellant Vandana Sethi, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 23-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 23-03-2021
Assessment Year 2013-2014
Appeal Filed On 17-03-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI R.K.PANDA ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA JUDICIAL MEMBER I.T.A NO.1614/DEL/2017 (ASSESSMENT YEAR 2 013-14) SMT. VANDANA SETHI B-376 NEW FRIENDS COLONY NEW DELHI-110 025. PAN-ABJPS 9504K VS. INCOME TAX OFFICER WARD-28(4) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SANJEEV RAI MEHRA CA RESPONDENT BY SH. PRAKASH DUBEY SR. DR DATE OF HEARING 23.03.2021 DATE OF PRONOUNCEMENT 23.03.2021 ORDER PER SUDHANSHU SRIVASTAVA JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AG AINST ORDER DATED 30.12.2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10 NEW DELHI {CIT(A)} FOR ASSESSMEN T YEAR 2013-14. 2 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE HAD FILED A RETURN OF INCOME DECLARING AN INCOME OF RS.2 00 7 80/-. THE INCOME DECLARED WAS UNDER THE HEAD CAPITAL GAINS A ND INCOME FROM OTHER SOURCES. THE ASSESSEES CASE WAS SELECT ED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD 50% SHARE IN OWNERSHIP OF RESIDENT IAL FLAT SITUATED AT C-758 FIRST FLOOR NEW FRIENDS COLONY WHICH WAS S OLD DURING THE YEAR ON 26.09.2012 VIDE AGREEMENT TO SALE. THE 50% SHARE OF THE ASSESSEE WAS RS.2.25 CRORES. THE ASSESSEE RECEIV ED AN AMOUNT OF RS.1 CRORE AS ADVANCE AGAINST THE SALE OF PROPER TY ON 26.09.2012. ON THE DATE OF AGREEMENT TO SALE I.E. 2 6.09.2012 THE CIRCLE RATE FOR NEW FRIENDS COLONY WAS RS.2 15 000/- PER SQ. METER. THE SALE DEED WAS FINALLY REGISTERED ON 19.12.2013. BY THAT TIME THE CIRCLE RATE HAD BEEN ENHANCED TO RS.6 45 000/- PER SQ. METER. THE ASSESSEE WORKED OUT LONG TERM CAPITAL GAIN AS U NDER: LONG TERM CAPITAL GAIN (TAXABLE) SALE VALUE OF 50% SHARE OF RESIDENTIAL FLAT 2 25 00 000/- LESS: SALE EXPENSES 2 50 000/- 2 22 50 000/- LESS: LAND (215715 * 8.52)/2 9 18 946/- 3 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO LESS: COST OF ACQUISITION BASIC COST IN 1999-2000 RS.2312500/- INDEXED COST 25 32 4 55/- 1 87 98 599/- LESS: EXEMPTION U/S 54EC 10 00 000/- LESS: EXEMPTION U/S 54 COST OF FLAT 1 42 61 540/- AMOUNT KEPT PART 33 40 000/- LONG TERM CAPITAL GAIN (OFFERED FOR TAXATION) 1 97 059/- 2.1 THE ASSESSING OFFICER (AO) WAS OF THE VI EW THAT SINCE THE CIRCLE RATE HAD BEEN ENHANCED FROM RS.2 15 000/- PE R SQ. METER TO RS.6 45 000/- THE ASSESSEE WAS LIABLE TO BE TAXED O N LONG TERM CAPITAL GAIN BY TAKING THE CIRCLE RATE EXISTING AS ON THE DATE WHEN THE REGISTERED SALE DEED WAS EXECUTED. MEANWHILE T HE ASSESSEE HAD REQUESTED REFERENCE OF THE ISSUE TO THE DISTRIC T VALUATION OFFICER (DVO) AND THE REFERENCE HAD BEEN MADE BUT THE DVOS REPORT COULD NOT BE OBTAINED TILL THE TIME OF COMPLETION OF ASSE SSMENT PROCEEDINGS. THE ASSESSEE RELIED ON THE AGREEMENT T O SALE AND CONTENDED THAT THE LONG TERM CAPITAL GAIN AS COMPUT ED BY THE ASSESSEE WAS CORRECT. HOWEVER THE ASSESSING OFFICER WAS OF THE 4 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO VIEW THAT SINCE THE AGREEMENT TO SALE WAS AN UNREGIST ERED DOCUMENT THE SAME DID NOT HAVE MUCH EVIDENTIARY VA LUE. THE ASSESSING OFFICER PROCEEDED TO COMPUTE THE LONG TER M CAPITAL GAIN AS UNDER: LONG TERM CAPITAL GAIN (TAXABLE) SALE VALUE OF 50% SHARE OF RESIDENTIAL FLAT 3 68 00 000/- LESS: SALE EXPENSES 2 50 000/- 3 65 50 000/- LESS: LAND (215715 * 8.52)/2 9 18 946/- LESS: COST OF ACQUISITION BASIC COST IN 1999-2000 RS.2312500/- INDEXED COST 25 32 4 55/- 3 30 98 599/- LESS: EXEMPTION U/S 54EC 10 00 000/- LESS: EXEMPTION U/S 54 COST OF FLAT 1 42 61 540/- AMOUNT KEPT PART 33 40 000/- LONG TERM CAPITAL GAIN 1 44 97 059/- 2.2 AGGRIEVED THE ASSESSEE APPROACHED THE LD. FIR ST APPELLATE AUTHORITY WHO PARTLY ALLOWED THE ASSESSEE S APPEAL. ALTHOUGH THE LD. CIT(A) UPHELD THE ACTION OF THE A SSESSING OFFICER IN APPLYING THE PROVISIONS OF SEC.50C OF THE INCOME TAX ACT 1961 5 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO SINCE IN THE MEANWHILE THE REPORT FROM THE DVO HAD BEEN RECEIVED WHICH ESTIMATED THE FAIR MARKET VALUE OF THE PROPERT Y AT RS.5 26 49 200/- AS ON 19.12.2012 THE LD. CIT(A) D IRECTED THAT THE VALUE OF PROPERTY AS PER THE DVOS REPORT SHOULD BE ADOPTED. THUS THE VALUE OF ASSESSEE SHARE WAS RECOMPUTED AT RS.2 6 3 24 600/- INSTEAD OF RS.3 68 00 000/-. 2.3 AGGRIEVED NOW THE ASSESSEE HAS APPROACHED THIS TRIBUNAL CHALLENGING THE ORDER OF THE LD. CIT(A) AND HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-10 NEW DELHI ERRED IN LAW AND ON FACTS IN ASSESSING TH E SALE VALUE OF THE PROPERTY AT RS.5 26 49 200/- INSTEAD OF RS.4 50 000/- AS DECLARED BY THE ASSESSEE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-10 NEW DELHI ERRED IN LAW AND ON FACTS IN NOT ADOPTING THE CORRECT CIRCLE RATE AS STIPULATED BY THE PROVISO TO SECTION 50C WHICH STATES THAT THE CIRCLE RATE ON THE DATE OF AGREEMEN T TO SELL WOULD APPLY. 3. THE APPELLANT CRAVE LEAVE TO ADD AMEND OR D ELETE ANY GROUND OF APPEAL. 6 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO 3.0 THE LD. AUTHORIZED REPRESENTATIVE (AR) SUBM ITTED THAT IT WAS ONLY IN THE CASE OF THE ASSESSEE THAT THE IMP UGNED ADDITION HAD BEEN MADE WHEREAS IN THE CASE OF THE OTHER CO-O WNER I.E. SMT. NEERJA MANCHANDA NO SUCH ADDITION HAS BEEN MADE BY THE DEPARTMENT. THE LD. AR ALSO SUBMITTED THAT EVEN OTH ERWISE THE ASSESSEE S CASE WAS COVERED BY AN ORDER OF THE DELH I TRIBUNAL IN THE CASE OF AMIT BANSAL VS. ACIT REPORTED IN [2018] 100 TAXMANN .COM 334 (DELHI-TRI. ) WHEREIN IT HAD BEEN HELD THAT IN VIEW OF PROVISO T O SEC.50C(1) OF THE ACT WHERE THE DATE OF AGREEMENT F IXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATIO N REGARDING TRANSFER OF THE CAPITAL ASSET IN QUESTION ARE NOT S AME THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALU ATION AUTHORITY ON DATE OF AGREEMENT IS TO BE TAKEN FOR PURPOSE OF FULL VALUE OF CONSIDERATION. 4.0 PER CONTRA THE LD. SR. DR PLACED RELIANCE ON THE ORDERS OF BOTH THE LOWER AUTHORITIES. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO PERUSED THE MATERIAL ON RECORD. WE HAVE GIVEN OUR T HOUGHTFUL 7 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO CONSIDERATION TO THE ISSUE. IT IS THE SUBMISSION OF THE LD. AR THAT IN VIEW OF THE PROVISO TO SEC.50C (1) OF THE ACT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND TH E DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN AND THUS THE ASSESSEE HAS CORRECTLY ADOPTED THE RATES APPLICABLE ON THE DATE THE AGREEMENT TO SALE WAS EXECUTED AS AGAINST THE DATE WH EN THE SALE DEED WAS REGISTERED. THE LD. AR HAS DRAWN SUPPORT FR OM AN ORDER OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF A MIT BANSAL VS. ACIT (SUPRA) AND WE FIND THAT THIS SUPPORT HAS BEEN RIGHTLY DRAWN. IN THE CASE OF AMIT BANSAL VS. ACIT (SUPRA) ON AN IDENTICAL ISSUE THE DELHI BENCH OF ITAT AFTER EXAMINING THE PROVIS O TO SEC.50C(1) OF THE ACT WENT ON TO HOLD THAT IN VIEW OF THE PROVI SO TO SECTION 50C(1) WHERE THE DATE OF AGREEMENT FIXING AMOUNT OF CONSIDERATION AND DATE OF REGISTRATION REGARDING TRANSFER OF CAPI TAL ASSET IN QUESTION ARE NOT THE SAME VALUE ADOPTED OR ASSESSE D OR ASSESSABLE BY STAMP VALUE AUTHORITY ON DATE OF AGREEMENT IS TO BE TAKEN FOR THE PURPOSE OF FULL VALUE OF CONSIDERATION. THE RE LEVANT 8 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO OBSERVATIONS OF THE TRIBUNAL ARE CONTAINED IN PARAG RAPHS 7 AND 8 OF THE AFORESAID ORDER. THE SAME ARE BEING REPRODUCED HEREIN UNDER FOR A READY REFERENCE: 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACTS IN THE INSTANT CASE ARE THAT THE ASSESSEE HAS PURCHASE D THE PROPERTY JOINTLY WITH SHRI VIKAS BANSAL ON 28TH JUL Y 2010 FOR A CONSIDERATION OF RS.39 33 600/- WHICH WAS SOL D ON 22ND JULY 2011 FOR A NET CONSIDERATION OF RS.42 LA KHS. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO SELL THE PROPERTY ON 25TH MARCH 2011 AND TAKEN THE PART PAYMENT OF R S.10 LAKHS. IT IS ALSO AN ADMITTED FACT THAT THERE IS NO REGISTERED CONVEYANCE DEED. WE FIND THE ASSESSING OFFICER REL YING ON THE PROVISIONS OF SECTION 53A AND THE PROVISIONS OF SECTION 2(47)(V) OF THE IT ACT TREATED THE PROPERTY AS A C APITAL ASSET AND TREATED THE PROFIT FROM SALE OF SUCH PROPERTY A S SHORT- TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. FUR THER THE ASSESSING OFFICER HAS ALSO INVOKED THE PROVISIONS O F SECTION 50C AND ADOPTED THE CIRCLE RATE OF THE PROPERTY AS ON 22ND JULY 2011 AT RS. 16 000/- PER SQ. YARD AS AGAINST THE CIRCLE RATE OF 11 000/- AS ON 25TH MARCH. 201 1 CON TENDED BY THE ASSESSEE AND CALCULATED THE FULL VALUE OF TH E CONSIDERATION AT RS.57 21 600/- AS AGAINST THE ACTU AL SALE CONSIDERATION OF RS.42 LAKHS. ACCORDINGLY THE ASSE SSING 9 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO OFFICER MADE AN ADDITION OF RS. 7 60 800/- IN THE H ANDS OF THE ASSESSEE WHICH HAS BEEN UPHELD BY THE CIT(A). I T IS THE SUBMISSION OF THE ID. COUNSEL FOR THE ASSESSEE THAT IN VIEW OF THE PROVISO TO SECTION 50C(1) OF THE IT ACT WHER E THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITA L ASSET ARE NOT THE SAME THE VALUE ADOPTED OR ASSESSED OR ASSE SSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGR EEMENT MAY BE TAKEN AND THUS THE ASSESSEE HAS CORRECTLY ADOPTED THE RATES APPLICABLE ON THE DATE OF THE AGR EEMENT AS AGAINST THE DATE OF ACTUAL SALE. WE FIND THE PRO VISO TO SECTION 50C(1) READ AS UNDER: '50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRU ING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAP ITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORI TY') FOR THE 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 B E DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER: 10 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO 84 [PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXI NG THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER:' 8. THE ABOVE PROVISO WAS INSERTED BY THE FINANCE ACT 2016 W.E.F. 01.04.2017. THEREFORE THE QUESTION THA T HAS TO BE DECIDED IS AS TO WHETHER THE ABOVE AMENDMENT IS PROSPECTIVE IN NATURE I.E. WILL BE APPLICABLE FROM A.Y. 2017- 18 OR IS RETROSPECTIVE IN NATURE BEING CURATIVE IN NATURE. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE AHMEDAB AD BENCH OF THE TRIBUNAL IN THE CASE OF DHARAMSHIBHAI SONANI {SUPRA) WHERE IT HAS BEEN HELD THAT AMENDMENT TO SE CTION 50C INTRODUCED BY THE FINANCE ACT 2016 FOR DETERMI NING FULL VALUE OF CONSIDERATION IN THE CASE OF INVOLVED PROPERTY IS CURATIVE IN NATURE AND WILL APPLY RETROSPECTIVEL Y. WE FIND FOLLOWING THE ABOVE DECISION THE AHMEDABAD BENCH O F THE TRIBUNAL IN THE CASE OF RAHUL G. PATEL {SUPRA) HELD THAT THE PROVISO TO SECTION 50C(1) INTRODUCED BY THE FINANCE ACT 2016 CAN BE CONSTRUED AS CLARIFICATORY IN NATURE AN D CAN BE APPLIED ON PENDING MATTERS. THE VARIOUS OTHER DECIS IONS 11 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO RELIED ON BY THE ID. COUNSEL FOR THE ASSESSEE ALSO SUPPORT THE CASE OF THE ASSESSEE THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND TH E DATE OF REGISTRATION REGARDING THE TRANSFER OF THE CAPIT AL ASSET IN QUESTION ARE NOT THE SAME THE VALUE ADOPTED OR ASS ESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON T HE DATE OF THE AGREEMENT IS TO BE TAKEN FOR THE PURPOSE OF FULL VALUE OF CONSIDERATION. I THEREFORE ACCEPT THE ARGUMENT OF THE ID. COUNSEL FOR THE ASSESSEE IN PRINCIPLE AND RESTORE T HE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO VERIFY NECESSARY FACTS AND DECIDE THE ISSUE IN THE LIGHT O F MY ABOVE OBSERVATION DIRECTING TO ADOPT THE CIRCLE RAT E ON THE DATE OF AGREEMENT TO SELL IN ORDER TO COMPUTE THE CONSEQUENTIAL CAPITAL GAIN. 5.1 ACCORDINGLY RESPECTFULLY FOLLOWING THE ORD ER OF THE CO- ORDINATE BENCH AS AFOREMENTIONED WE ACCEPT THE ARGU MENT OF THE LD. AR IN PRINCIPLE AND RESTORE THIS ISSUE TO THE F ILE OF ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE NECESSARY FAC TS AND DECIDE THE ISSUE IN LIGHT OF THE OBSERVATIONS REGARDING ADOPTI NG THE CIRCLE RATE ON THE DATE OF AGREEMENT TO SALE IN ORDER TO COMPUT E THE CONSEQUENTIAL CAPITAL GAIN. 12 ITA NO.1614 /D EL/2017 VANDANA SETHI V S. ITO 6.0 IN THE RESULT THE APPEAL OF THE ASSES SEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23/03/2021. SD/- SD/- (R.K.PANDA) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23/03/2021 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI