Income Tax Appellate Tribunal - Rajkot
Babulal Shambhubhai Rakholia, ... vs Asstt. Commr. Of Income Tax, Morbi ... on 14 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
RAJKOT BENCH, RAJKOT
[Conducted through E-Court at Ahmedabad]
(BEFORE SHRI P. K. KEDIA, ACCOUNTANT MEMBER
& SHRI MAHAVIR PRASAD, JUDICIAL MEMBER)
ITA. No: 338/Rjt/2017
(Assessment Year: 2014-15)
Babulal Shambhubhai V/S The Assistant
Rakholia Blockl No. A, 5 Commissioner of Income-
Shiv Shakti Duplex, Shakti tax, Morbi Circle, Morbi
Societym, Zanzarda Road,
PP Mahila Swami Mandir,
Junagadhs
(Appellant) (Respondent)
PAN: AMGPR5625Q
Appellant by : Shri D.M. Rindani, AR
Respondent by : Shri K. L. Solanki, Sr. D.R.
(आदे श)/ORDER
Date of hearing : 16 -03-2018
Date of Pronouncement : 14 -05-2018
PER MAHAVIR PRASAD, JUDICIAL MEMBER
1. This appeal by the Assessee is directed against the order of the Ld. CIT(A)-3, Rajkot dated 31.07.2017 pertaining to A.Y. 2014-15 and following grounds have been taken:.
2 ITA No. 338/RJT/2017. A.Y. 2014-15
1. The Ld. Commissioner of Income-tax (Appeals) - 3, Rajkot erred in confirming action of assessing officer in making addition of Rs. S,16,208/- u/s 56(2)(vii)(b) of the Act being difference between Stamp duty Valuation and purchase consideration as per registered sale deed of immovable property @ 8% share of the appellant.
2. Both, the Assessing Officer and the Ld. Commissioner of Income-tax (Appeals)
- 3, Rajkot failed to appreciate that on date of transfer of immovable property i.e. on 31-03-2013, provisions of Sec. 56(2)(vii)(b) were not in force.
2. The facts of the case are on verification of the details filed by the assessee, it is seen that only the purchase of property valued at Rs. 18,00,000/- on 01.04.2013 being 8% share in the property is reflected in his balance sheet. However, as per ganatri-patrak furnished by the sub-registrar, the property is valued at RS. 3,27,02,600/-. From the details furnished by the assessee, it is seen that the assessee has 8% share in the said property. Hence the 8% share of Rs. 3,27,02,600/- comes to Rs. 26,16,208/- whereas as per the balance sheet furnished by the assessee, the value of the said property is reflected at Rs. 18,00,000/-. In these circumstances, the difference of an amount of Rs. 8,16,208/- is added to total income of the assessee as per provisions of section 56(vii)(b)of the Income Tax Act.
3. Assessee filed reply stating that Section 56(vii)(b), as substituted by Finance Act, 2013, came into effect from the 01.04.2014 which provide for the effect of immovable property purchased for inadequate consideration in the hand of purchaser and requested that my case does not come in Financial Year 2014-15. Hence, the same section does not apply in my case. But ld. A.O. was not agreed with the contention of the assessee and made addition of Rs. 8,16,208/-.
3 ITA No. 338/RJT/2017. A.Y. 2014-15
4. Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the order of the ld. A.O.
5. We have gone through the relevant record in the impugned order. Undisputedly, Section 56(2)(vii)(b) was brought by amendment in Finance Act, 2013 which was to be made effect from 01.04.2014 and appellant contended that the date of sale is not 01.04.2013 but 30.03.2013 and in support of its contention. Appellant filed copy of sale deed on which transferor and transferee has put their signature along with dated 30.03.2013 . But same sale deed was registered in the record of sub-registrar on 01.04.2014.
6. In support of its contention, the ld. A.R. cited a judgment of Gujarat High Court CIT Vs. Mormasji Mancharji Vaid wherein it has been held by the Hon'ble High Court:
"Capital gains-- Accrual-- Transfer vis-a-vis registration of immovable property-- Capital gains are deemed to be the income of the previous year in which the transfer of capital asset is effected-- Expression "effected" in this context refers to the stage when the transfer of asset becomes complete or operative in the sense that the title of the transferor is extinguished and the title of the transferee is created-- Word 'transfer' as defined in the Act is to be given the simple meaning as indicated-- In respect of transfer of leasehold rights, transferee was put in possession and was enjoying the property as a lease-holder-- Transfer could be said to have been effected on the date of execution of the conveyance document-- It cannot be held that the transfer was effected on the date on which the document was copied out in the books of Registrar."
7. As we can see, the Hon'ble High Court is very much in favour f the appellant wherein in the judgment it is held that the transfer was effected on the date on which the document was copied out in the books of Registrar will not be date of transfer. In this case, stamp papers were purchased on or before 30.03.2013 4 ITA No. 338/RJT/2017 . A.Y. 2014-15 transferor and transferee both put signature on the sale deed on 30.03.2013. Therefore, in our considered opinion, Section 56(2)(vii)(b) of Income Tax Act will not be applicable in case of the appellant.
8. In the result, the appeal filed by the appellant is allowed.
Order pronounced in Open Court on 14 - 05- 2018
Sd/- Sd/-
(P.K. KEDIA) (MAHAVIR PRASAD)
ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER
Ahmedabad: Dated 14/05/2018
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.
5. The DR., ITAT, Ahmedabad.
6. Guard File.
By ORDER
Deputy/Asstt.Registrar
ITAT,Ahmedabad