Coimbatore Pioneer Trading & Warehousing Limited Vs DCIT (ITAT Chennai)
Summary : The ITAT Chennai allowed the appeal of Coimbatore Pioneer Trading & Warehousing Limited for Assessment Year 2014-15 and deleted an addition of Rs.4,31,39,853/- towards long-term capital gains under Section 50C. The dispute concerned the sale of 12.07 acres to Pioneer Trust through a deed dated 12.08.2013, forming part of a larger transfer of 19.44 acres for an aggregate consideration of Rs.5,50,15,000/-. The original scrutiny assessment dated 01.12.2016 had examined the capital gains computation. The assessment was subsequently reopened through a notice dated 26.10.2018, and the Assessing Officer relied on the District Revenue Officer’s order dated 10.08.2016 fixing the guideline value at Rs.150/- per sq.ft. The enhanced value adopted for the second transfer was Rs.7,89,30,750/-. The CIT(A) sustained the addition, principally because the BIFR proceedings and board minutes were not considered an agreement for sale. The assessee argued that the transaction and consideration had crystallised much earlier under a statutory rehabilitation process. Pioneer Trust was already in possession under a registered lease dated 11.03.1998 containing a first option to purchase. BIFR’s in-principle approval dated 08.06.2009 contemplated the sale of the entire property for Rs.5,50,15,000/-. The assessee’s board approved the transfer on 03.05.2010, and Pioneer Trust’s board approved the purchase and authorised advances on 31.05.2010. Advances aggregating to Rs.1 crore were paid through banking channels during June and July 2010 and supported by bank statements and financial records. The final BIFR sanctioned scheme dated 10.05.2012 confirmed the same consideration.
