UMASHANKAR SHIWAPRASAD MODI, MUMBAI v. ITO WD 12(3)(2), MUMBAI

ITA 8552/MUM/2011 | 2005-2006
Pronouncement Date: 29-04-2015 | Result: Partly Allowed

Appeal Details

RSA Number 855219914 RSA 2011
Assessee PAN AABPM8785D
Bench Mumbai
Appeal Number ITA 8552/MUM/2011
Duration Of Justice 3 year(s) 4 month(s) 10 day(s)
Appellant UMASHANKAR SHIWAPRASAD MODI, MUMBAI
Respondent ITO WD 12(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2015
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 29-04-2015
Assessment Year 2005-2006
Appeal Filed On 19-12-2011
Judgment Text
F IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ./ I.T.A. NO.8552 /MUM/2011 ( / ASSESSMENT YEAR : 2005-2006 UMASHANKAR SHIWAPRASAD MODI 49 BAJAJ BHAVAN NARIMAN POINT MUMBAI 400 021. / VS. ITO 12 (3)(2) MUMBAI. ./ PAN : AABPM8785D ( / APPELLANT ) .. ( / RESPONDENT ) A PP ELLANT BY SHRI BHUPENDRA SHAH R E SPONDENT BY : MS. NEELIMA V. NADKARNI / DATE OF HEARING : 29-04-2015 / DATE OF PRONOUNCEMENT : 29-04-2015 [ !' / O R D E R PER G.S. PANNU A.M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 23 MUMBAI DATED 02-09-2011 FOR THE A. Y. 2005-06 IN THE MATTER OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143 (3) R.W.S. 147 OF THE INCOME TAX ACT 1961 DATED 29-12-2010. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY OF REOPENING THE ASSESSMENT BY ISSUANCE OF NOTICE U/S.148 OF THE I.T ACT. APPELLANT CONTENDS THAT THE NOTICE SO ISSUED IS TOTALLY ILLEG AL AND UNJUSTIFIED AND CONSEQUENTLY THE REASSESSMENT ORDER PASSED U/S.143( 3) R.W.S 147 OF THE I T ACT IS LIABLE TO BE QUASHED. ITA 8552/M/11 2 2) (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE A S WELL AS IN LAW THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ACTI ON OF THE AO TO ADOPT THE MARKET VALUE OF THE PROPERTY AS PER STAMP DUTY VALUATION AT RS.1 25 35 250- (1/2 SHARE) BY APPLYING THE PROVISI ONS OF SECTION 50C AS AGAINST THE ACTUAL SALE CONSIDERATION AS PER AGR EEMENT AT RS. 50 00 000/- (1/2 SHARE). (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW THE LEARNED CIT (A) HAS ERRED IN APPRECIATING THE FACT THAT APPELLANT HAD SOLD THE LEASE HOLD RIGHTS IN THE PROPERTY AND NOT THE OWNERSHIP PROPERTY AND THEREFORE PROVISIONS OF SECTION 5OC SH OULD NOT BE MADE APPLICABLE. (C) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW THE LEARNED CIT(A) HAS FURTHER ERRED IN UPHOLDING THE A DDITION OF RS. 75 35 250/- IN THE LONG TERM CAPITAL GAIN DECLARED BY THE APPELLANT IN THE RETURN OF INCOME AT RS.(29 18 957/-). 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DIRECTING THE AO TO REFER THE MATTER TO THE VALUATION OFFICER FOR DETERMINING THE CORRECT V ALUE OF THE PROPERTY SOLD BY THE APPELLANT. 4) THAT THE ORDER OF THE LD. C.I.T.(APPEALS) BEING ARBITRARY AND BAD IN LAW THE SAME SHOULD BE QUASHED AND YOUR APPELLA NT BE GIVEN SUCH RELIEF OR RELIEFS AS PRAYED FOR. 3. AT THE TIME OF HEARING THE LD. REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT THE PERTINENT ISSUE IN THIS APPEAL RELATES TO LONG TERM CAPITAL LOSS DECLARED BY THE ASSESSEE WITH RESPECT TO SALE OF IM MOVABLE PROPERTY VIDE AGREEMENT DATED 24-9-2004. THE LD. REPRESENTATIVE F OR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD 1/2 SHARE IN THE TRANSACT ION THE OTHER 1/2 BEING WITH THE ASSESSEES WIFE SMT. GEETADEVI UMASHANKAR MODI. IT WAS CONTENDED THAT IDENTICAL DISPUTE HAD ARISEN IN THE CASE OF TH E ASSESSEES WIFE SMT. GEETADEVI UMASHANKAR MODI AND THE TRIBUNAL VIDE ITS ORDER IN ITA 3636/MUM/2012 FOR A.Y. 2005-06 DATED 19-09-2014 HAD UPHELD THE INITIATION OF PROCEEDINGS BY ISSUANCE OF NOTICE UND ER SECTION 148 OF THE ACT AND WITH RESPECT TO THE MERITS THE MATTER WAS REMA NDED BACK TO THE FILE OF ITA 8552/M/11 3 THE A.O. FOR DECIDING A FRESH. IT WAS THEREFORE CON TENDED THAT HEREIN ALSO THE AFORE STATED GROUNDS OF APPEAL BE DECIDED IN THE LI GHT OF THE SAID PRECEDENT. 4. THE LD. D.R. APPEARING FOR THE REVENUE HAS NOT O PPOSED THE AFORESAID PLEA OF THE ASSESSEE. 5. WE FIND THAT IN THE CASE OF CO-OWNER OF THE IMPU GNED PROPERTY NAMELY SMT. GEETADEVI UMASHANKAR MODI THE TRIBUNAL IN ITS ORDER DATED 19-09- 2014 (SUPRA) HELD AS UNDER:- WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND ALSO GONE THROUGH THE RECORD. SO FOR AS THE GROUND NO. 1 OF T HE ASSESSEE AGITATING THE VALIDITY OF THE REOPENING OF THE ASSESSMENT IS CONCERNED IN OUR VIEW IT WAS THE DUTY OF THE ASSESSEE TO DISCLOSE TRUE AN D ENTIRE FACTS RELATING TO THE INCOME EARNED FROM THE SALE OF THE PROPERTY IN QUESTION. THE ASSESSEE HAD SHOWN THE SALE PRICE OF IMMOVABLE PROP ERTY AT RS. 50 LAKHS AND THE RETURN WAS PROCESSED BY THE AO ACCOR DINGLY. HOWEVER THE ASSESSING OFFICE RECEIVED INFORMATION FROM LETT ER DATED 25.11.2008 FROM ADD1. C.I.T. RANGE-19(1) MUMBAI DISCLOSING TH AT THE TOTAL SALE CONSIDERATION UNDER THE AGREEMENT WAS RS. L.30 CROR ES. THE STAMP DUTY AUTHORITIES DETERMINED THE MARKET VALUE OF THE PRO PERTY AT RS. 2 50 70 500/- UNDER SUCH CIRCUMSTANCES THE ASSESSI NG OFFICER HAD REASON TO BELIEVE THAT INCOME OF THE ASSESSEE' HAD ESCAPED ASSESSMENT . IT WAS A CASE OF FAILURE ON THE PART OF THE ASSESSE E TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR HER ASSE SSMENT IN HER CASE. HENCE WE DO NOT FIND ANY FAULT WITH THE ACTION OF THE A.O. IN REOPENING ASSESSMENT AFTER RECEIVING THE LETTER DATED 25-11-2 008 FROM ADDL. C.I.T RANGE 19(1) MUMBAI. GROUND NO. 1 IS ACCORDINGLY DE CIDED AGAINST THE ASSESSEE. 8. SO FOR AS THE GROUND NO.2 TO 4 ARE CONCERNED WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE LOWER AUTHORIT IES FAILED TO TAKE INTO CONSIDERATION NECESSARY FACTS AS WERE NARRATED BY T HE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AS WELL DURING THE APPEL LATE PROCEEDINGS BEFORE THE CIT(A). UNDER SUCH CIRCUMSTANCES THE AC TION OF THE LOWER AUTHORITIES IN STRAIGHT AWAY APPLYING THE PROVISION OF SECTION 50C IN A MECHANICAL MANNER AND THEREBY CHARGING THE ASSESSEE FOR CAPITAL GAINS TAX AS PER THE VALUE ADOPTED BY THE STAMP DUTY AUTH ORITIES CANNOT BE HELD TO BE JUSTIFIED. THE LOWER AUTHORITIES HAVE FA ILED TO CONSIDER THE VERY RELEVANT FACT THAT ASSESSEE HAD RECEIVED ONLY A PAR T OF THE SALE CONSIDERATION WHEREAS THERE WERE SOME OTHER PERSO NS AS NARRATED ABOVE WHO HAD ALSO RECEIVED CONSIDERATION OUT OF T HE SALE PROCEEDS. HENCE THE ORDER UNDER APPEAL IS HERBY SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO WITH THE DIRECTION T O DECIDE THE MATTER AFRESH ITA 8552/M/11 4 AFTER TAKING INTO CONSIDERATIONS THE SUBMISSION OF THE ASSESSEE AND IF THE CONTENTION OF THE ASSESSEE IS FOUND CORRECT THEN T O DETERMINE THE ACTUAL SALE CONSIDERATION OF THE PROPERTY AND CHARGE THE A SSESSEE ON THE AMOUNT RECEIVED BY HER. THE AO WILL BE AT LIBERTY T O CHARGE THE RESPECTIVE OTHER RECEIVERS OF THE SALE CONSIDERATION AS PER TH E AMOUNT/SHARE RECEIVED BY THEM IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THE LAW. NEEDLESS TO SAY THAT THE AO WILL GIVE PROPER O PPORTUNITY TO THE ASSESSEE TO PRESENT HER CASE. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 6. FOLLOWING THE AFORESAID PRECEDENT THE GROUND O F APPEAL NO. 1 RELATING TO THE VALIDITY OF RE-OPENING OF ASSESSMENT BY ISSU E OF NOTICE UNDER SECTION 148 OF THE ACT IS HEREBY DISMISSED. 7. INSOFAR AS THE OTHER GROUNDS OF APPEAL RELATING TO DETERMINATION OF LONG TERM CAPITAL GAIN IS CONCERNED THE MATTER IS SET-A SIDE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE MA TTER AFRESH IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CASE OF CO-OWNE R SMT. GEETADEVI UMASHANKAR MODI (SUPRA). NEEDLESS TO SAY THE ASSE SSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEAR D BEFORE PASSING AN ORDER IN ACCORDANCE WITH LAW. 8. IN THE RESULT GROUNDS OF APPEAL NOS. 2 & 3 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. RESULTANTLY THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 10. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN C OURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARIN G ON 29-04-2015. SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER . / MUMBAI ; 0! DATED 29-4-2015 ITA 8552/M/11 5 .8../ RK RKRK RK SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9 () / THE CIT(A) 33 MUMBAI 4. 9 / CIT - 23 MUMBAI 5. <=> 88?@ ?@ . / / DR ITAT MUMBAI B BENCH 6. >BC D / GUARD FILE. ' / BY ORDER < 8 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) . / / ITAT MUMBAI DRAFT DICTATED ON 2 9 - 4 - 15 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 29-4-15 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH SR PS