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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI N.K. BILLAIYA, & SMT BEENA A. PILLAIShri Manish Upnejay, CA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the Revenue is preferred against the order of the ld. CIT(A) – 4, Kolkata dated 18.12.2015 pertaining to A.Y 2007-08.
The grievances of the Revenue read as under:
“1. The Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of Rs.86,73,392/- made by AO on account of disallowance of 40(a)(ia) of the IT Act, 1961, without correctly appreciating the facts of the case.
2. Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in directing the AO to reconsider the working of long term capital gain on the basis of revised computation filed by the assessee in the course of assessment and in not confirming the LTCG as compared u/s 50C of the IT Act.”
During the course of scrutiny assessment proceedings, the A.O observed that the tax deducted by the assessee from the contractors and sub-contractors was deposited in the month of May 2007 when the tax was deducted in the month of February 2007. Invoking the provisions of section 40(a)(ia) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short], the Assessing Officer disallowed Rs. 86,73,392/- since the tax was not deposited before 31st March.
The assessee agitated the matter before the ld. CIT(A) and brought to his notice that the tax deposited in the month of May 2007 was before the date of filing of return of income and hence, allowable as per several decisions on this point.
The ld. CIT(A) was convinced with the contention of the assessee and directed the Assessing Officer to delete the addition of Rs. 86,73,392/-.
Before us, the ld. DR supported the findings of the Assessing Officer.
The ld. counsel for the assessee relied upon the findings of the ld. CIT(A).
It is true that the TDS was made in the month of February 2007. It is equally true that TDS so made was deposited in the month of May 2007. The return of income was filed on 31.10.2007, which means that tax has been deposited well before the filing of return of income. Since the tax has been deposited before the filing of the return of income, we do not find any error or infirmity in the deletion of addition made by the Assessing Officer by the ld. CIT(A). Ground No. 1 stands dismissed.
Second grievance relates to adjustment on account of long term capital gain by restricting the carried forward loss to Rs. 8,27,137/- instead of Rs. 24,50,040/-, which was directed by the ld. CIT(A) to reconsider the working of long term capital gain on the basis of revised computation filed by the assessee in the course of assessment.
While scrutinising the return of income, the Assessing Officer noticed that the assessee has claimed carried forward of long term capital loss of Rs. 4,48,768/-, which was calculated on the basis of actual sale proceeds. The assessee, during the course of assessment proceedings itself, furnished a revised calculation considering the provisions of section 50C of the Act. The Assessing Officer noticed that the assessee has adjusted the gains with brought forward loss of assessment year 2005-06. The Assessing Officer further noticed that in the revised calculation, deemed value for consideration u/s 50C of the Act was taken at Rs. 13,41,177/- instead of stamp duty value of Rs. 26,02,239/- in respect of Flat No. FFB-2/4. The Assessing Officer further noticed that in respect of Flat FFB/13 the consideration was shown at Rs. 2,62,346/- instead of Rs. 6,28,190/-.
When called for an explanation, the assessee explained that capital arose in F.Y. 2006-07 and, therefore, the stamp duty value has been taken as applicable in that F.Y. The Assessing Officer did not accept this contention of the assessee and adopted stamp duty value for the year under consideration and recomputed the capital gain liability and carried forward of long term capital gain.
The assessee agitated the matter before the ld. CIT(A) and reiterated its contentions.
After considering the facts and submissions, the ld. CIT(A) held as under:
“I have considered the submission of the appellant’s AR in the backdrop of the assessment order. As per s. 50C of the Act, where the consideration received or accruing as a result of the transfer of land and/or building is less than the value adopted or assessed or assessable by an authority of the state govt, for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain. Sub section (2) of said section provides that where the assessee claims before any assessing officer that the value adopted or assessed by the authority exceeds the fair market value of the property as on date of transfer and the value so adopted or assessed by the authority has not been disputed in any appeal or revision or no reference has been made before any other authority, court or a high court, the Assessing offer may refer the valuation of the capital asset to a valuation officer. The scope of s. 50C of the Act is limited to computation of capital gains on long term assets within the meaning of s. 48 of the Act. Thus, the application of this provision precedes an unequivocal “transfer” within the scope of s. 2(47). It was found that the appellant filed a revised long term capital gains computation during thecourse of the assessment proceedings, wherein such computation is based on the valuation adopted by the Valuation Officer in respect of the property in that financial .year, though the two properties referred herein above were registered subsequently i.e. in the assessment year 2009-10 and 2010-11. Since the AO has not considered the factual issue in the correct perspective, he is directed to verify contention of the appellant and accede relief, it at all, available to it under the law. The ground of appeal is allowed for statistical purpose.”
Pursuant to the direction of the first appellate authority, while giving appeal effect, the Assessing Officer verified the working of long term capital gain and accepted the claim of the assessee.
Since, after verification the Assessing Officer has accepted the working of long term capital gain and set off of brought forward losses/carried forward losses, this grievance of the revenue becomes otiose.
In the result, the appeal of the Revenue in is dismissed.
The order is pronounced in the open court on 08.02.2019.