COMMISSIONER OF INCOME TAX vs. BALUJA SHOE CO (EXPORTS)

IN THE HIGH COURT OF DELHI AT NEW DELHI . 31.05.2011 . Present: Ms. Prem Lata Bansal, Sr. Advocate with Mr. Deepak Anand, Advocate for the appellant. . . + ITA No. 782/2011 . 1. During the assessment proceedings, the Assessing Officer noticed that the assessee had sold one property situated at Noida for a consideration of `80 lakhs vide sale deed dated 16th September, 2005. It was further noticed that the land was purchased on 23rd November, 1995 for a stated consideration of `14,97,005/- on which, no depreciation had been claimed and building was constructed by the assessee. Thereafter, WDV of which as on 1st April, 2005 was declared at `20,01,285/-. Further assessee had bifurcated sale consideration of `80 lakhs towards land and building at `54,02,000/- and `25,98,000/- respectively, in support of which, assessee had filed Government Approved Valuer?s Report. 2. The Assessing Officer further noticed that for stamp duty purposes, property was valued at `87,62,000/- on which, assessee had paid . . stamp duty @ 8%. As per this valuation, land value was determined at `32,72,544/- and building value at `53,60,301/-. 3. On being asked, assessee admitted to valuation at `66,32,845/- and also the building valuation at `53,60,301/-. Thus, he re-determined Short Term Capital Gain at `33,59,016/- as against `5,96,714/- declared originally.Thus, addition of `27,62,302/- was made by the Assessing Officer to the Short Term Capital Gain. 4. Similarly, Assessing Officer required the assessee as to why valuation attributed to land be not taken at `53,55,000/- as determined by the Government Approved Valuer as he being the expert in valuation. The valuation remained un-rebutted and therefore, Assessing Officer treated the amount of `53,55,000/- as sale consideration towards land as declared by the assessee itself and determined Long Term Capital Gain at `27,07,272/-. 5. The Assessing Officer also set off unabsorbed depreciation only to the extent of `11,107/- being the business income and did not allow the same against other income. 6. In appeal filed by the assessee before the CIT(A), the CIT(A) held additions. Insofar as first in respect of sale of property with respect to land at Noida is concerned, CIT(A) held that the provision of Section 50-C of the Income Tax Act, applicable to the present case as value of property determined by the Stamp Duty Authority was higher than the value declared by the assessee. However, we observe that the Assessing Officer should not have taken sale consideration of `1,07,15,301/- [`53,60,301/- value of building + `53,55,000/- for land]. He also directed Assessing Officer to allow set off of unabsorbed depreciation not only against the disclosed income but also against other rights of income. This order of the CIT(A) has been upheld by the ITAT relying upon the judgments in CIT v. Jaipur China Clay (SC) 59 ITR 155 and CIT v. Mother India Refrigeration (SC) 155 ITR 711. 7. We do not find any question of law which arises in this case. 8. Dismissed. . . . A.K. SIKRI, J. . M.L. MEHTA, J. MAY 31, 2011 AK . . . . . 04 #