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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
आदेश / O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of assessee is arising out of the order of the Commissioner of Income Tax (Appeals)]-16, Mumbai, [in short CIT(A)], in ITA No. CIT(A)-16.10192/ACIT-9(3)(1)/2018-19 dated 28.06.2019. The assessment was framed by the Asst. Commissioner of Income Tax (in short ACIT/ITO/ AO), Central Circle-9(3)(1), Mumbai for the A.Y.
The first issue in this appeal of assessee is against the order of CIT(A) in restricting the disallowance of expenses relatable to exempt income by invoking the provision of section 14A of the Act read with Rule 8D(2) of the Income Tax rule, 1962 (hereinafter referred to as ‘Rules’) to the extent of exempt income only. At the time of hearing the learned counsel for the assessee has not pressed this issue, hence, the same is dismissed as not pressed.
The second issue in this appeal of assessee is against the order of CIT(A) upholding the action of the Assessing Officer on account of depreciation by adopting the stamp value as per the provision of Section 50C of the Act instead of value declared as per WDV. For this assessee has raised the following ground No.2:-
“2. On the facts and circumstances of the case and in law, the learned CIT(A), erred in upholding the disallowance of depreciation of Rs.2,07,226/- made by the A.O.; by adopting the stamp value of Rs.1,73,85,500/- of property sold instead of Rs.1,53,00,000/-, the value declared by the Appellant." 4. Briefly stated facts are that during the Financial Year the assessee sold his property for a consideration of Rs.1,53,00,00/- situated at 501, 5th Floor, K.L. Accolade, 6th Road, Santacruz (E), Mumbai-400 055 for a consideration of Rs. 1,53,00,000/-. The Assessing Officer deducted the
“4.2.3 I have considered the submissions of the appellant and perused the materials available on record. It is seen that appellant has put his contention through words not through documentary evidences. The provision of sec 50C is analyzed hereunder: -
The provisions of the Section 50C are applicable in the case of transfer of land and building including depreciable capital asset. The provision of section 5OC contains a special provision for determining full value of consideration and as per provisions of section 5OC when the consideration received or accruing as a result of the transfer by an appellant of capital asset being land or building or both, is less than the value adopted or assessed by an authority of the State Government for the payment of stamp duty in
4.2.4 Further, Section 50C is a measure provided to bridge the gap as it was found that the appellant were not correctly declaring the full value of consideration or in other words resorting to the practice of under valuation. Further, the decision of jurisdictional ITAT Special Bench in the case of ITO vs. United Marines Academy (2011)138 TTJ 129(Mum) has made it clear that section SOC will be applicable on the sale value of depreciable asset.
4.2.5 Also, Under Section SOC when stamp duty valuation of a property is higher than apparent sale consideration shown in the instrument of transfer then onus to prove that fair market value of the property is lower than such valuation by the SVA is on the appellant who can reasonably discharge this onus by submitting necessary material before the Ld. Assessing Officer, such as valuation by an approved valuer. Thereafter onus shifts to the Assessing Officer to show that material submitted by the appellant of the property is false or not reliable. The Hon’ble Delhi ITAT in case of Ravi Kant vs. ITO (2007) 110 TTJ Delhi 297, 297, held the same. In tis
4.2.6 In view of above discussion and by considering the totality of the peculiar facts and circumstances of the case, it is established that the appellant has failed to discharge his owns by submitting necessary material before the L.D. AO. Therefore, it is held that no interference is called for in the decision of assessing officer as the appellant has failed to discharge the onus required under Section 50C of the Act and the Assessing Officer was justified in disallowance and added back to the appellant's income of Rs. 2,07,226/- Therefore, addition u/s 50C of the Act is confirmed. The appeal of the assessee on this ground is dismissed.”
We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the AO and CIT(A) has taken the value as per the provision of Section 50C of the Act and disallowed the differential depreciation claimed of ₹2,07,226/-. In our view, while computing the amount of depreciation allowable for a year, what is to be reduced from the opening WDV is the price for which an asset, comprising with a particular block of assets, is sold during the year. There is no provision to substitute this money payable by any other value, either expressly or by implication, much less substantiating fair
“6. When an asset is sold, section 43(6)(c)(i )(B) of the Act provides that the written down value of the block of assets shall be reduced by "moneys payable" in respect of the asset that is sold. The expression "moneys payable" as per Explanation 4 to section 43(6) shall have the meaning as in the Explanation below sub-section (4) of section 41.
As per Explanation below section 41(4) the expression "moneys payable" in relation to the sale of a building, machinery, plant or furniture would be the price for which it is sold and not the fair market value of the asset. Therefore, on a plain reading of the above provisions, it is clear that the written down value of all the assets falling within that block of assets at the beginning of the previous year has to be adjusted by the amount at which the asset is actually sold and not by the fair market value of the asset that is sold.
Similarly, on identical facts the ITAT Kolkata Bench in the case of Eveready Industries India Ltd. vs. PCIT (2020) 181 ITD 528 (Kol.) held in Para 40 as under:-
“40. After considering the rival submissions, we find merit in the ld. AR's submissions that, for the reasons set out in Para 4.3 of the impugned order, the AO's order could not be held to be erroneous. Although in the impugned order, the AO's order was considered erroneous for not making reference to the registered valuer for determination of fair market value of the factory building, the order of the Ld. Pr. CIT is silent about the applicable legal provision in terms of which the reference was required to be made. We find that reference to the DVO or to the circle valuation adopted by stamp duty authorities
Sd/- Sd/- (ए रयफ़ौय यहभान / S RIFAUR RAHMAN) (भहावीय स िंह /MAHAVIR SINGH) (रेखा दस्म / ACCOUNTANT MEMBER) (उऩाध्मक्ष / VICE PRESIDENT) भुिंफई, ददनािंक/ Mumbai, Dated: 15.03.2021 ुदीऩ यकाय, व. ननजी चिव/ Sudip Sarkar, Sr.PS आदेश की प्रतिलऱपप अग्रेपिि/Copy of the Order forwarded to : 1. अऩीराथी / The Appellant 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A) 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननचध, आमकय अऩीरीम अचधकयण, भुिंफई / DR, ITAT, Mumbai 6. गार्ा पाईर / Guard file. आदेशान सार/ BY ORDER, त्मावऩत प्रनत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुिंफई / ITAT, Mumbai