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Income Tax Appellate Tribunal, “SMC” BENCH,
Before: SHRI ABY T. VARKEY, JM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 19.04.2022 for the assessment year 2010-11.
2. At the outset, the Ld. AR does not press ground no. 1 and drew our attention to the ground nos. 2, 3 & 4 which reads as under: - “2. On the facts and in the circumstances of the case, the CIT(A) erred in confirming the action of Ld. Assessing officer in invoking Section 50C without appreciating that the price at which the Capital Asset was sold was the fair market value as per the highest bid received in response to Public Advertisement in July 2003 and was approved by the Honourable Bombay High Court on 01.10.2004 considering the same to be in interest of the beneficiaries of Appellant Trust. In the circumstances, the 2 A.Y. 2010-11 Shabanu Siddick Trust assessment order passed by the learned Assessing Officer is liable to be set aside. 3. On the facts and in the circumstances of the case, the CIT(A) erred in confirming addition u/s 50C on the basis of DVO Report obtained determining Fair Market Value as at date of Registration of Agreement i.e. 10.08.2010 without appreciating that the Memorandum of Intent MOI to sale the property was already entered into on 18.12.2003 when the transaction price was finalized and for which separate DVO Report was also obtained to determine Fair Market Value on the date of MOI and therefore addition if any had to be based on the Fair Market Value determined on the date of MOI. 4. On the facts and in the circumstances of the case, the CIT(A) erred in confirming addition u/s 50C on the basis of DVO Report obtained determining fair market value as at date of Registration of Agreement i.e. 10.08.2010 without appreciating that the said DVO Report was based on incorrect facts and presumption as drawn without any basis.”
According to the Ld. AR, the issue raised by the aforesaid grounds of appeal
of the assessee is no longer res-integra. According to him, the only issue in this appeal is regarding the Long Term Capital Gain (LTCG) of an immovable property wherein assessee trust was entitled to 1/6 right of the said property, which was encumbered for long time by unauthorized occupants. According to assessee, the title to the immovable property itself was not perfect. And the assessee sold the property in question on as –is- wherein-basis after calling for open bid from public (Public notice in News paper in Hindustan Times
3. A.Y. 2010-11 Shabanu Siddick Trust and Urdu News paper). And after going through the bids, the bid of M/s. Essa Associates was accepted and consequently executed MOI dated 18.12.2003 for sale consider of Rs.27.93,285/-. However, Stamp Valuation Authority determined the value of property at Rs.11,76,35,500/-. The AO took note of the valuation made by DVO, who determined the 1/6th value of shares of assessee at Rs.75,51,167/-. And the AO computed the LTCG at Rs.54,75,575/- after giving deduction of Rs.5 Lakhs on account REC bond and finally computed the capital gain at Rs.49,75,574/-, which was confirmed by the Ld. CIT(A). Aggrieved by the action of Ld. CIT(A)/NFAC, the assessee is before this Tribunal.
Having heard both the parties, the Ld AR, in order to show that the issue of capital gain regarding this immovable property is no longer res-integra, he drew my attention to the fact that the impugned action/addition is based on the immovable property/land which was owned by four (4) Trusts (and assessee is also one owner); and out of which, the case of the one owner who held 50% of the immovable property in question has already been adjudicated by this Tribunal in favour of the assessee Sir Mohd Yusuf Trust by deleting the additions which are identical/similar as made by the AO in the hands of the present assessee. And for supporting this contention, he drew my attention to the order of this Tribunal in for AY. 2011-12 in the case of Sir Mohd. Yusuf Trust Vs. ACIT and Tribunal’s order dated 08.03.2019, wherein I note that similar addition was made by the AO u/s 50C of the Act; and it is noted that the 4 A.Y. 2010-11 Shabanu Siddick Trust immovable property in question is the very same property viz immovable property which is part and parcel of land together with the structure standing there on at village Tungwa, Taluka Kurla, MSD Mumbai bearing CTS No. 119G/B1 admeasuring four (4) Acres and eleven (11) Gunthas (i.e. 17,300 sqm approx.) [hereinafter termed as scheduled property]. It is noted that the assessee’s share in the scheduled property was 1/6th [where Sir Mohd. Yusuf Trust had 50% interest] of the immovable property (scheduled property) the AO computed similar LTCG which has been deleted by this Tribunal by passing the order on 08.03.2019 (ITA. No. 2243/Mum/2015 for AY. 2011-12) wherein the Tribunal has held as under: - 1. “This appeal by assessee under section 253 of Income-tax Act (‘Act’) is directed against the order of ld. Commissioner of Income-tax (Appeals)-29, hereinafter referred as ld CIT (A), Mumbai dated 09.01.2015. the appeal before ld CIT(A) arises from the assessment order passed by assessing officer under section 143(3) dated 31/12.2013 for Assessment Year 2011-12. The assessee has raised the following grounds of appeal: The grounds mentioned hereunder are without prejudice one another:
1. The Commissioner of Income Tax (Appeals) erred in confirming the order of learned assessing office invoking section 50C without appreciating that the price at which the capital asset was sold was the fair market value as per the highest bid received in response to public advertisement in July 2003 and was approved by the Honorable Bombay high court on 1-10-2004 considering the same to be in interest of the beneficiaries of Appellant trust. In the circumstances the 5 A.Y. 2010-11 Shabanu Siddick Trust Assessment order passed by the Learned Assessing Officer is liable to be set aside.
2. The Commissioner of Income Tax (Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the Memorandum of intent (Mal) to sale the property was already entered into 18-12-2003 when the transaction price was finalised and for which separate ova report was also obtained to determine fair market value on the date of Mal and therefore addition if any had to be based on the fair market value determined on the date of Mal.
3. The Commissioner of Income Tax '(Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the said ova report was based on incorrect facts and presumptions' drawn without any basis.
4. The learned assessing officer erred in imposing capital gains in hands of the appellant trust during the AY 2011-12, without appreciating that the capital asset was transferred during the AY 2010-11 in accordance with the Hon Bombay High Court order and only registration of the same was done in AY 2011- 12.
5. The learned assessing officer erred in making addition of capital gains in hand of the appellant trust without appreciating that the trust was non-discretionary trust and the shares of beneficiaries where determinate and therefore the addition if any can be made only in the hands of the beneficiaries.
6 A.Y. 2010-11 Shabanu Siddick Trust 6. The Commissioner of Income Tax (Appeals) erred in confirming addition of Rs. 4,80,000/- the amount distributed to the beneficiaries of the Appellant trust and who had already offered the same to the tax in their individual returns.
Brief facts of the case as gathered from the orders of the lower authority are that the assessee is a Non-discretionary Trust. The income of the assessee is assessed as association of person (AOP). The assessee filed its return of income for Assessment Year 2011-12 on 17.10.2012 declaring total income of Rs. 25,41,756/-. The return was selected for scrutiny. The assessment was completed by Assessing Officer on 31.12.2013 under section 143(3) of the Act. The Assessing Officer while passing the assessment order made addition of Long Term Capital Gain (LTCG) of Rs. 5.88 Crore and addition of Rs. 4,80,000/- under the head Income from ‘Other Sources’. The facts leading to the additions of LTCG are that while filing return of income the assessee claimed long term capital loss (LTCL) of Rs. 30,765/- on sale of investment in mutual fund. The assessee assessing officer during the assessment noted that the information was received from the office of