Case Law Details
Shri B.S. Sanjay [HUF] Vs ITO (ITAT Bangalore)
In the present case, the sale consideration as per sale deed is Rs. 59.40 Lakhs and the value adopted by DVO u/s. 50C (2) is Rs. 64,10,400/- and therefore, the difference between these two values is of Rs. 4,70,400/- which is less about 8% of the sale consideration shown by the assessee. Respectfully following the Tribunal order cited by ld. AR of assessee having been rendered in the case of M/s. John Fowler (India) Pvt. Ltd. Vs. DCIT (supra) and also other two Tribunal orders followed by the Tribunal in that case being Tribunal order rendered in the case of Smt. Sita Bai Khetan Vs. ITO (supra) and Rahul Constructions Vs. DCIT (supra), I hold that in the facts of the present case, no addition is justified and therefore, I delete the same.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is filed by the assessee which is directed against the order of ld. CIT(A)-4, Bangalore dated 29.12.2017 for Assessment Year 2011-12.
2. The grounds raised by the assessee are as under.
“1. The order of the learned Commissioner of Income-tax [Appeals] passed under Section 250 of the Act dated 29/12/2017 in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case.
2. The learned Commissioner of Income-tax (Appeals) erred in law in not holding that the entire assessment is void-ab-initio as the assessment was concluded by the learned assessing officer without issuance of statutory notice u/s.143(2) of the act on a valid revised return of income filed by the appellant, despite noticing the fact that the appellant has filed a valid revised return of income and also has considered the total income as declared in the revised return of income filed by the appellant for the purposes of computing the total income of the appellant in the impugned assessment order passed under section 143(2) of the Act, on the facts and circumstances of the case.
3. The learned Commissioner of Income-tax (Appeals) is not justified in holding that, as the appellant has participated and has not objected in the assessment proceedings as regard to the non-issuance of a notice u/s. 143(2) of the Act on a revised return filed by the appellant and erred in holding that the order of assessment is valid, on the facts and circumstances of the case. The learned Commissioner of Income-tax (Appeals) failed to appreciate that mere participation in an invalid assessment proceedings cannot cure the procedural aspect of validity of proper assumption of jurisdiction on the facts and circumstances of the case.
4. Without Prejudice the appellant denies itself liable to taxed over and above the income reported by the appellant in the revised return of income amounting to Rs. 7,72,330/- on the facts and circumstances of the case.
5. The learned authorities below were not justified in adding a sum of Rs. 4,70,400/- by invoking the provisions of section 50C of the Act on the facts and circumstances of the case, without properly appreciating the reasons for difference in the agreed value of sale consideration as against the value adopted for the purposes of section 50C of the Act on the facts and circumstances of the case.
6. The authorities below erred in law in not appreciating the difference between the fair market value determined by the department valuation officer which was considered by the learned assessing officer in the impugned order of assessment and the actual amount of sale consideration received by the appellant is marginal to the extent of 7.34% on the facts and circumstances of the case.
7. The authorities below were not justified in law in charging the interest u/s. 234B of the Act and further the calculation of interest u/s. 234 B of the Act is not in accordance with law since the rate, method of calculation, quantum is not discernable from the Order of assessment on the facts and circumstances of the case.
8. The Appellant craves leave to add, alter, delete, substitute or modify any of the grounds urged above.
9. For the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice.”
3. It was submitted by ld. AR of assessee that in addition to legal issue raised by assessee as per ground nos. 2 and 3, there is only one issue involved on merit being addition of Rs. 4,70,400/- made by the AO by invoking the provisions of section 50C of IT Act. He submitted that the issue on merit is covered in favour of the assessee by the Tribunal order rendered in the case of M/s. John Fowler (India) Pvt. Ltd. Vs. DCIT in ITA No. 7545/Mum/2014 dated 25.01.2017. He submitted a copy of this Tribunal order and drawn my attention to para nos. 5 to 7 of this Tribunal order and pointed out that it was held by Tribunal in this case that if the difference between the valuation as per stamp duty and the sale consideration received by the assessee is less than 15%, in such circumstances no addition can be made. He also pointed out that the Tribunal in this case has followed two other Tribunal orders rendered in the case of Smt. Sita Bai Khetan Vs. ITO in ITA No. 823/JP/2013 dated 27.07.2016 and in the case of Rahul Constructions Vs. DCIT as reported in 38 DTR 0019. He submitted that in the present case, the difference between the sale price and the valuation as per stamp duty is less than 10% because in the present case, the assessee has shown sale consideration of Rs. 59.40 Lakhs and the DVO has valued the property u/s. 50C(2) of IT Act at Rs. 64,10,400/- and because of this difference, the addition is made by the AO of Rs. 4,70,400/- which is less than 10% of the value of sale consideration declared by assessee of Rs. 59.40 Lakhs and therefore, as per Tribunal order, no addition is justified. The ld. DR of revenue supported the orders of authorities below.
4. I have considered the rival submissions. I find force in the submissions of ld. AR of assessee because I find that in the present case, the sale consideration as per sale deed is Rs. 59.40 Lakhs and the value adopted by DVO u/s. 50C (2) is Rs. 64,10,400/- and therefore, the difference between these two values is of Rs. 4,70,400/- which is less about 8% of the sale consideration shown by the assessee. Respectfully following the Tribunal order cited by ld. AR of assessee having been rendered in the case of M/s. John Fowler (India) Pvt. Ltd. Vs. DCIT (supra) and also other two Tribunal orders followed by the Tribunal in that case being Tribunal order rendered in the case of Smt. Sita Bai Khetan Vs. ITO (supra) and Rahul Constructions Vs. DCIT (supra), I hold that in the facts of the present case, no addition is justified and therefore, I delete the same. In view of this decision on the merit of the case, the technical and legal issue raised by assessee as per ground nos. 2 and 3 becomes of academic interest and hence, I hold that no adjudication is called for on that aspect.
5. In the result, the appeal filed by the assessee is allowed in the terms indicated above.
Order pronounced in the open court on the date mentioned on the caption page.
