Laxmi Ice & Cold Storage Vs ITO (ITAT Lucknow)
Section 50C speaks about transfer of land or building or both and the adoption of deemed valuation being valuation of stamp purposes as the full value of consideration. It does not speak of plant and this contention was put on record vide reply of the assessee dated 23/11/2015, which is placed at pages 120 to 122 of the paper book as well as by reply dated 23/12/2015, which is placed at pages 123 to 125 of the paper book whereby it has been put on record that it was a depreciable business assets duly disclosed in the return of income. The cold storage was sold as a whole and constituted plant under section 43(3) of the Act. The term “plant” has been interpreted as including cold storage building also and this line of reasoning is established by the Hon’ble jurisdictional High Court in the case of CIT vs. Kanodia Cold Storage (supra). We are, therefore, of the considered view that provisions of section 50C of the Act is not applicable to the cold storage building so to substitute actual sale consideration by deemed sale consideration and the order of the Assessing Officer passed under section 147/143(3) of the Act cannot be a subject matter of section 263.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal is preferred by the assessee against the order passed under section 263 of the Act by the Principal Commissioner of Income-tax-1, Kanpur dated 29/1/2016.
2. The assessee has challenged the assumption of jurisdiction by the Principal Commissioner of Income-tax-1, Kanpur under section 263 of the Act.
3. The facts in this case as appearing on record are that the return of income was filed by the assessee-firm on 24/9/2009 declaring Nil income. Subsequently assessment was completed on 13/2/2015 under section 147/143(3) of the Act on the returned income. An information was gathered from AIR that the assessee has sold assets worth Rs.3,41,23,200/- as per stamp valuation and registration deed was executed on 8/6/2009. However, assessee has not reflected this amount in its return of income, therefore, the Assessing Officer issued notice under section 147 of the Act for assessment year 2009-10 to the assessee on account of escapement of income after duly recording the reasons. During the assessment proceedings, assessee claimed that it had already shown income from sale of assets in the return of income and has treated the surplus of sale of fixed assets as business profit and has credited the profit of Rs.55,85,092/- in the profit & loss account of the firm in assessment year 2009-10. The Assessing Officer has accepted this claim of the assessee and completed the assessment on the returned income. The Principal Commissioner of Income-tax-1, Kanpur observed that as per sale deed executed on 8/6/2009, the assets sold by the assessee included land and building and machinery. The sale value of these assets, for stamp duty purposes, is as under:-
