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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Nashik, dated 08.09.2016 for the Assessment Year 2009-10.
Condonation: The captioned appeal is filed after a delay of 158 days. In this regard, the assessee filed an affidavit in Marathi language along with English translation. Extract of Affidavit in English translation is reproduced hereunder:- “ENGLISH TRANSLATION OF AFFIDAVIT I, Ratnaprabha Satish Muthal, Age - 60 years, wife of Late Shri Satish Muthal, residing at Hirawadi, Nashik solemnly affirm as hereunder -
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I hereby state that the appellate order passed by CIT(A) - 1, Nashik for A.Y.2009 - 10 was received by my daughter in law through post on 05.10.2016 and she had handed over the envelope to me. At that time, I was suffering through medical issues and was advised complete bed rest by my Doctor. I wish to state that I am an old widow and I am educated only upto 4th standard. I do not understand English. In view of the above facts and due to the medical issues, the envelope received through post remained unopened and it got misplaced in the house. I wish to state that the said envelope was found by my son, in around the last week of April 2017. I hereby state that only at that time, we became aware of the fact that the appeal has been dismissed by the CIT(A) - 1, Nashik vide her order dated 08.09.2016. On being aware of the fact, my son approached a Chartered Accountant, Shri Sanket Milind Joshi for the purposes of taking further action. Thereafter, the said appeal is being filed in third week of May 2017 after due consultation with the C.A. I hereby affirm that in view of the above facts, there was a delay of 158 days in filing the appeal before Hon'ble Income Tax Appellate Tribunal, Pune. Whatever is stated above is true and correct to the best of my knowledge and belief. Sd/- Ratnaprabha Satish Muthal (Affiant) Place – Nashik Date – 16.05.2017”
On perusal of contents of Affidavit, it is noted that since the assessee was un-educated old woman and was suffering from health issues, she could not file the appeal before the Tribunal within stipulated time. We find merit in the plea of assessee and considering the fact, the delay is condoned and we proceed to hear the case on merits.
Grounds are extracted as under:- 1] The learned CIT(A) erred in confirming the addition of Rs.39,60,988/- on account of long term capital gains arising on transfer of development rights in plot at S.No. 207/2/1, Nashik without appreciating that the said addition was not at all justified on facts of the case. 2] The learned CIT(A) erred in holding that the sale consideration of the impugned land was to be considered at Rs.2,01,00,000/- i.e. the govt. valuation by applying the deeming provisions of section 50C as against the actual sale consideration ofRs.25,01,000/- received by the co-owners on transfer of development rights in the above land and thereby computing the long term capital gains at Rs.39,60,988/-.
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3] The learned CIT(A) failed to appreciate that the provisions of section 50C are applicable only in respect of transfer of land or building and the said provisions are not applicable to transfer of (development) rights in land and hence, for the purposes of determining the long term capital gains, the sale consideration in the hands of the assessee co-owner should have been considered at Rs.5,00,000/- i.e. the actual consideration and hence, the long term capital gains arising in the hands of the assessee should have been assessed at Rs. Nil. Without prejudice to the above grounds, assuming without admitting that the provisions of section 50C are attracted in the instant case, the assessee submits that - 4] The learned CIT(A) erred in not appreciating that the Nashik Municipal Corporation had placed reservation on the entire land for DP Road and Play Ground and the said fact was also stated in the regt. development agreement and therefore, the fair market value of the impugned land was only Rs.25,01,000/- i.e. the actual sale consideration received by the various co-owners and hence, for the purposes of determining the long term capital gains, there was no reason to adopt the govt. valuation of Rs.2,01,00,000/- as deemed sale consideration. 5] Without prejudice to the above ground, the assessee submits that in the course of asst. proceedings in case of one of the co-owners, the valuation of the impugned land as on the date of transfer was referred to the DVO and in the DVO's report, the fair market value of the said land has been determined at 55,49,000/- and thus, for the purposes of computing the long term capital gains, the deemed sale consideration u/s 50C should have been adopted at Rs.55,49,000/- as against Rs.2,01,00,000/- adopted by the A.O. 6] The appellant requests that it may be allowed to furnish additional evidences, if required, in support of his claim. 5. Briefly stated relevant facts are that the assessee is a house wife, dependent on her son Shri Sandip Muthal, Nashik. The return of income was not filed by the assessee. Notice under section 148 of the Income Tax Act, 1961 (in short „the Act‟), dated 06.03.2014 was issued to the assessee for bringing capital gains on sale of land / development rights. In the re-assessment proceedings, none appeared before the Assessing Officer. The Assessing Officer made ex-parte assessment and made addition of Rs.39,60,988/- as per discussion given in para 3.3 of the assessment order. As per document, the value of the property is Rs.25 lakhs. However, as per Stamp Duty Authority, the value is
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Rs.2.01 crores. The Assessing Officer computed long term capital gains on the share of assessee (1/4th share) and Rs.39,60,988/- is the taxable income in the case of assessee.
The CIT(A) confirmed the same based on written submissions made by assessee and the assessee did not appear either before the Assessing Officer or CIT(A).
Before us, at the outset, the learned Counsel for assessee deviating from the aforesaid referred grounds and focusing on ground No.3, submitted the property in question relates to the development rights and the transfer thereof. Stating that the said development rights and the transfer of the same, falls outside the scope of provisions of section 50C of the Act, learned Counsel for assessee submitted this issue requires remanding to the file of Assessing Officer / CIT(A) as this issue is raised before the Tribunal for the first time in this form. The learned Authorized Representative submitted this aspect was not properly examined by the authorities.
On the other hand, the learned DR fairly submitted that this aspect was not directly raised before the CIT(A). In any case, this aspect was never examined by the Assessing Officer nor adjudicated by the CIT(A) by passing a speaking order on the issue.
On hearing both the parties, without going into merits of the case and for want of speaking order, we proceed to remand this issue and the grounds to the file of Assessing Officer for one more round of
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proceedings before the Assessing Officer. Accordingly, grounds are allowed for statistical purposes. The Assessing Officer shall afford reasonable opportunity of hearing to the assessee while deciding the issues.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 22nd day of June, 2018.
Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) न्याययक सदस्य /JUDICIAL MEMBER लेखा सदस्य / ACCOUNTANT MEMBER पुणे Pune; ददनाांक Dated : 22nd June, 2018 GCVSR आदेश की प्रयिलऱवऩ अग्रेवषि/Copy of the Order forwarded to : अपीऱाथी / The Appellant 1. प्रत्यथी / The Respondent 2. 3. The CIT(A)-1, Nashik 4. The Pr.CIT-1, Nashik 5. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “SMC” Pune; 6. गार्ड फाईऱ / Guard file.
आदेशानुसार/ BY ORDER,स
सत्यापपत प्रतत //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune