Long term capital gain under section 50C of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “Friday” NEW DELHI

BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND

SHRI C.M. GARG, JUDICIAL MEMBER

MA N. 49/Del/2012

(IN ITA NO. 2532/DEL/2008)

A.Y. 2003-04

Dr. S.P. Mittal (HUF),

Meerut

C/o O.P. Sapra & Associates,

C0763, New Friends Colony,

New Delhi – 110 025

(PAN: AADHSD-8901-B)

(Appellant)

Vs.

Income Tax Officer,

Ward 2(3), Meerut.

 (Respondent)

Assessee by: Sh. O.P. Sapra, Adv.

Department by: Sh. Deepak Sehgal, Sr. D.R.

ORDER

PER SHAMIM YAHYA, AM

This Misc. application by the assessee is directed against the order of this Tribunal in I.T.A. No. 2532/Del/2008 for assessment year 2003-04 vide order dated 30.3.2010. In the said appeal the grounds of appeal read as under:-

“1. That on the facts and in the circumstances of the case, the Assessing Officer had erred in invoking provision of section 50C of the I.T. Act thereby computing the long term capital gain at Rs. 74,15,381/-. The Ld. Commissioner of Income Tax (A) is also not justified in confirming the addition made by the Assessing Officer.

2. That the appellant denies its liability to pay any long term capital gain tax on various factual and legal grounds.

3. That without prejudice to above grounds, the long term capital gain worked out by the Assessing Officer in respect of both the lands at Rs. 1,15,75,381/- is arbitrary, unjust and at any rate without prejudice, very excessive on various factual and legal grounds including the following:-

a) No justification subsisted to adopt the sale consideration of land at Rs. 1,16,27,000/- and Rs. 4,30,000/- in respect of appellant’s ½ share in the other land for purpose of section 50C of the I.T. Act.

b) Similarly, the cost of acquisition as on 1.4.81 in respect of both the lands as adopted by the Assessing Officer is very inadequate and consequently the indexed cost as worked out was very low.

c) The Ld. Commissioner of Income Tax (A) was not legally justified in taking the view that as the valuation under Stamp Duty Act was disputed before the Allahabad High Court, the Assessing Officer could not make reference to Valuation Cell u/s. 50C. The Assessing Officer should have referred the matter to DVO before working out LTC gain.

d) The authorities below had either ignored or had not given due weight to the submissions made and evidence filed before them thereby violating the principles of natural justice.

4. That the Ld. Commissioner of Income Tax (A) was not legally justified in refusing to admit Regd. Valuer’s report filed by the appellant vide its letter dated 18.3.2008. The same should have been taken into consideration while deciding the appeal.

5. Various observations made by the authorities below in their respective orders are either incorrect or are legally untenable.

6. That the Assessing Officer had erred in charging interest u/s. 234B at Rs. 2,80,782/-.

The above ground was argued before the Ld. Commissioner of Income Tax (A) but he has not decided the same.

7. That the appellant reserves its right to add, amend/modify the grounds of appeal.

2. From the above grounds, the Tribunal has culled out the issue as under:-

“The issue raised is that the Assessing Officer has erred in invoking provision of section 50C of the I.T. Act thereby computing the long term capital gain at Rs. 74,15,381/-. The Ld. Commissioner of Income Tax (A) is also not justified in confirming the addition made by the Assessing Officer.”

3. Now in the said order the tribunal had considered the issue and remitted the matter to the file of the Assessing Officer to consider the same afresh. The concluding portion of the tribunal’s order read as under:-

“6.4 We have carefully considered the submission and perused the records. A reading of clause (2) of section 50C makes it clear that as per the mandate of the Act when the assessee disputes that the value adopted by the stamp valuation authority, is higher than the fair market value, the AO may refer the case to the valuation officer. Now in this case the assessee has disputed the value adopted by stamping authorities as excessive, but AO has not followed the

provisions of Section 50C(2). Accordingly, we find that there is a considerable cogency in the submission of the ld. counsel of the assessee. Hence in the interest of justice, we remit this issue to the files of the AO to consider the same afresh in the light of the discussion in the preceding paragraph. Needless to add that the assessee should be given adequate opportunity of being heard.”

4. In light of the aforesaid, we find that the Tribunal has considered the entire gamut of grievance raised by the assessee and then the issue has duly remitted to the Assessing Officer for fresh consideration. Hence, the assessee’s plea that the Tribunal in its aforesaid order have not considered the Ground No. 3(b), 3(d) and 4, is not sustainable. The assessee in the garb of rectification of mistake in the tribunal’s order is seeking review of the tribunal’s aforesaid order, which is not sustainable. In our considered opinion, there is no mistake apparent on record in the tribunal’s order.

5. In the result, the Misc. application filed by the assessee stands dismissed.

Order pronounced in the open court on 03/1/2013.

Sd/- Sd/-

[C.M. GARG] [SHAMIM YAHYA]

JUDICIAL MEMBER ACCOUNTANT MEMBER

Date 03/1/2013

SRBHATNAGAR

Copy forwarded to: -

1. Appellant

2. Respondent

3. CIT

4. CIT (A)

5. DR, ITAT

TRUE COPY

By Order,

Assistant Registrar,

ITAT, Delhi Benchesa