Income Tax Appellate Tribunal - Kolkata
Griham Construction , Kolkata vs Assessee on 3 March, 2015
I .T.A . N o. 17 69 / KOL ./ 20 1 3
As ses sm e nt y e ar : 20 09 - 20 1 0
Page 1 of 4
IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA 'C' BENCH, KOLKATA
Before Shri Shamim Yahya, Accountant M ember
and Shri Ge orge M atha n, Judicia l M ember
I.T .A. No . 176 9 /KOL/ 2 01 3
Assess ment year : 2009 -2 01 0
M/s. Griha m Construction,. ..................................................Ap p ella n t
19, D.P. Na ga r Colony,
Ba ra na ga r,
Kol ka ta -700 050
[PA N : A AGFG 5840 G]
-Vs.-
Income Ta x Offic er,........ .............................. ........ ...................Resp ond e nt
Wa rd -41(2), Kolka ta ,
Pod da r Court,
18, Rab ind ra Sa ra ni, 4 t h Floor,
Kol ka ta -700 001
Appeara nces by :
Shri C. Goswam i, F. C. A. , f or the as sessee
Shri K.L. Kanak, JCIT, Sr. D.R., for th e Department
Dat e of concluding t he hearin g : M arch 03, 2 015
Dat e of pr onouncing th e order : M arch 03, 2 015
O R D E R
Per Ge orge M athan:
This is an app eal filed by the assess ee a gain st th e order of ld. Commissioner of Inco me T ax (App e als)-XII, Kolkata in Appe al No. 481/CIT(A)-XI I/41(2) /11-12 dated 12.03 .2013 for the assessment yea r 2009-10.
2. Sh ri C. Goswa mi, F.C.A., rep re sen ted on behalf of the asse ssee and Sh ri K.L. Kanak, JCIT, Sr. D.R. rep re sen ted on beh alf of th e R evenue.
I .T.A . N o. 17 69 / KOL ./ 20 1 3 As ses sm e nt y e ar : 20 09 - 20 1 0 Page 2 of 4
3. In the asse ssee's appeal, th e as ses se e has raised the fo llo win g grounds:-
(1) F or that the ord er s of the offices belo w are arbit rary, misco nceived, bad on merit s o f fa cts and in law.
(2) For that the Assessing Officer err ed in adding back Rs.23,96 ,000/- in terms of provisions of sectio n 50C of the Inco me Tax A ct, 1961 in as much as th e app ellant is en gaged in th e business of pro perty dev elopment and since the proper ty in the hands of the ap pellant was treat ed as busin ess a ss ets a nd not as capital asset s, there was no question of invoking the provisions of section 50C which p ertains to determining the full value o f the ca pital asset s. Provisions of section 50C of the Income Tax A ct, 1961 can not be imported while comp uting pro fits and gains of business or profession. In such a situation, only the income a ccruing to assess ee can be tax ed und er section 28 of the In come Tax Act, 196 1.
Admittedly the sale of th e flats was treated as busin ess income not as capital ga in s and hen ce th e p rovision of the section 50C was no t applicable. Therefore, th e a dditio ns of Rs.23,96,000/- on the plea of under valuatio n is liable to be deleted.
4. At the time of h earin g, it was sub mitted by the ld. A. R that th e as se sse e is a partne rship fi rm, which is doing in the busine ss of real est ate develop er. It was the submi ssio n that when compl etin g the as se ssm ent, the Assessin g Offic er had taken the market value o f the sal e of the prope rty do ne by th e as se sse e based on sta mp duty authority valu ation as taken und er s ection 50C. It was th e su bmi ssion that the as set rep resentin g the p rope rty sold by the as se ssee was the busine ss asset and not th e capital ass et, co n seq uently t he p rovisio ns of s ection 5 0C were not applicable. It was the submi ss ion that the addition a s made by the Assessing Of ficer a nd as confi rmed by the ld. CIT(Appeals ) was liable to be delet ed.
5. In reply , ld. Sr. D.R. v ehemently su pported th e ord er of th e Assessing Officer and ld. CIT(Appe als).
I .T.A . N o. 17 69 / KOL ./ 20 1 3 As ses sm e nt y e ar : 20 09 - 20 1 0 Page 3 of 4
6. We have con sidered the rival submis si ons. At the outs et, a p eru sal of the gro unds raised by the assessee clearly shows th at th e asse ss ee i s ch allenging th e applic ability of th e provision s of s ection 50C. A peru sal of the asses sment o rder, on the other h an d, does no t show any application of the p rov isions of s ection 5 0C of t he Inco me Tax Act, 1961 by the Assessing Officer. The A ssessing Offi cer has only reduced the g ros s ma rket v alue by 1 0% while fixin g th e sales p rice. Consequently the Assessing Officer had reduced the Deed value shown by the a ss ess ee from the mark et value so esti mated on the basis of the Governmen t Regist ration Authority and had brou ght th e tax the dif ference. Ad mitt edly the Govern men t Regi stration Autho rity 's value is an accepted guideline for determinin g at the market value. This estim ation as done by the Assessing Offi cer h as not be en dislodged by the as se sse e. Ad mittedly if the a ss ess ee want s to dislod ge th e scientifi cally computed est imation then the as se ssee sh ould do so with co gen t ev idence s. Further, a peru sal of the ord er of th e ld. CIT(Appe als) also shows th at the ld. CIT(App eal s) has taken into con side ration the fact that the A ssess ing Office r has no t used th e p rovisions o f s ection 50C fo r d eterminin g th e busin ess in co me of the as ses se e. Further the A ssessin g Off icer has utili zed the Govern men t fixed st amp value guidelines fo r asce rtainin g the tru e cost of the flats sold by the assessee in o rder to a rriv e at and d ete rmin e the co rrect business inco me of the assess ee. We fin d n o erro r in th e findin g of the ld. CIT(App eals) nor has the asses see been ab le to dislodge th is finding with any cog ent eviden ces.
7. In the result, the appeal of the as sessee stand s di smissed.
Orde r p ronounced in th e open Co urt on 3 r d Ma rch, 2015.
Sd /- Sd /-
Shamim Yahy a George Mathan
(Accountan t Member) (Judici al Me mber)
Kolkata, th e 3 r d day of March, 2015
I .T.A . N o. 17 69 / KOL ./ 20 1 3
As ses sm e nt y e ar : 20 09 - 20 1 0
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Co pies to : (1) M/s. Griha m Construction,
19, D.P. Na ga r Colony,
Ba ra na ga r,
Kol ka ta -700 050
(2) Income Ta x Office r,
Wa rd -41(2), Kolka ta ,
Pod da r Court,
18, Rab ind ra Sa ra ni, 4 t h Floor,
Kol ka ta -700 001
(3) Comm iss ioner of Income-tax (Appeal s) (4) Com mis sioner of Incom e Tax (5) The Depar tmental R epr es entative (6) Guard Fil e By order Assistant Registrar Income Tax App ellate Tribunal Kolkata Ben ch es, Kolkata Laha/Sr. P.S.