SRI RAJ KUMAR BAID,KOLKATA vs. ACIT/DCIT, CIRCLE-36, KOLKATA, KOLKATA

- This assessee’s appeal for assessment year 2012-13 calls into question correctness of Commissioner of Income Tax (Appeals)-10, Kolkata’s order dated 30.03.2017 passed in case No.119/CIT(A)-10/Cir-36/15-16/Kol upholding Assessing Officer’s action making long term capital gains addition of ₹37,85,396/- after invoking section 50C as well as the disallowance the expenditure claimed in question of ₹2 lac allegedly incurred on transfer of property and claim as deduction involving proceedings u/s. 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

Learned counsel has filed an additional ground first of all pleading therein that both the lower authorities have erred in applying section 50C of Sh Raj Kumar Baid Vs. DCIT, Cir-36, Kol. Page 2 the Act qua his right to acquire the flat / capital asset in question since the same is neither in the nature of land nor a building. Learned Departmental Representative strongly opposes admission of this additional ground. His argument is that the same raise altogether new question of law and fact which cannot be entertained at this stage belated stage as per hon'ble apex court’s decision in NTPC vs. CIT 229 ITR 383 (SC). We find the Revenue’s sole contention against admission of assessee’s additional ground to be devoid of merit. This Tribunal’s special bench’s decision in All Cargo Global Logistics Ltd. vs. DCIT (2012) 137 ITD 26 (Mum) holds that we can very well entertain such an additional ground for ascertaining an assessee’s correct tax liability in terms with hon'ble apex court’s decision hereinabove. Learned Departmental Representative fails to rebut the fact that the assessee seeks to argue non- application of section 50C only in case of only right to acquire the residential flat in question. We therefore admit taxpayer’s additional ground.

There is no dispute between the parties about the basic fact that assessee had been allotted an unfurnished flat in a society way-back in year 1984. The same remained as it is for a very long time. The assessee never occupied this flat till sale of his allotment rights on 03.08.2011 in the relevant previous year. The Assessing Officer invoked section 50C of the Act to make reference to the DVO who ascertained its fair market value to be ₹75,85,396/- as against the agreed sale consideration of₹ 40 lac. This followed the impugned long term capital gains addition of ₹37,85,396/- made in the assessment order dated 26.03.2015 as upheld in the lower appellate proceedings.

We have given our thoughtful consideration to rival contention regarding applicability of section 50C in the given facts and circumstances of the case. There is no dispute that the assessee had acquired / transferred his right a unfurnished flat which was never registered in his name. It was therefore only in the nature of an allotment right what was transferred in the relevant previous year forming subject-matter in the instant lis. This tribunal’s decision in case of M/s Baniaria Eng. Pvt. Ltd. Vs. ITO decided