,
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "E" MUMBAI
[^ .., Û. /
BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER /AND
^ Û], ..
SHRI RAJENDRA, ACCOUNTANT MEMBER
. / ITA No. 7763/Mum/2010
[ [ /Assessment Year 2006-07
M/s. Shree Siyaram Textiles, Asst. Commissioner of
rd
307, 3 Floor, Trade World, Income Tax 18(1),
`B' Wing, Kamala City, Vs. MUMBAI.
Senapati Bapat Marg,
Lower Parel,
MUMBAI 400 013.
PAN: AAAFS 6337 C
( /Appellant) (× / Respondent)
/ Appellant by : Shri Sanjiv M. Shah
× /Respondent by : Shri P.K. Singh
/ Date of Hearing : 21-03-2013
/ Date of Pronouncement : 03-04-2013
/ O R D E R
PER RAJENDRA, A.M.
Following Grounds of Appeal have been filed by the Assessee against the
order dt. 30-09-2010 of CIT(A)-29, Mumbai:
1. (i) The learned CIT(Appeals) has grossly erred in confirming the action of
Assessing Officer in invoking the provisions of Section 50C of the Income tAx Act,
1961 for computation of capital gains in case of sale of depreciable assets
forming part of block assets u/s. 50.
(ii) The learned CIT(Appeals) has further erred in disregarding the
provisions of Section 43(6)(c) read with explanation 4 to Section 43(6) and also
explanation below Section 41(4).
(iii) The learned CIT(Appeals) has further erred in not directing the
2 ITA No. 7763/Mum/2010
M/s. Shree Siyaram Textiles
assessing officer to adopt W.D.V. of block of assets at Rs. 2,27,044/- instead of
Rs. 1,69,759/- adopted by him as per accounts.
2. The learned CIT(Appeals) has further grossly erred in not considering the
objections filed by the assessee against the valuation report of the DVO received
from the assessing officer by way of remand report.
3. The learned CIT(Appeals) has further erred in stating the figure of determined
loss by assessing officer at Rs. 11,89,100/- as against correct figure of Rs.
1,18,90,100/- directing the assessing officer to carry forward according to its
allowability.
4. The appellant craves leave to add, to/or amend and/or delete and/or modify
and/or alter the aforesaid grounds of appeal as and when the occasion demands.
5. All the aforesaid grounds of appeal are independent, in the alternative and
without prejudice to one another.
2. Assessee-firm dealing in Shares and Securities, filed its return of income on
31-10-2006 declaring loss at Rs. (-) 1.43 Crores. Assessment was finalised by the
Assessing Officer (AO) u/s. 143(3) of the Income Tax Act, 1961 (Act) on 12-12-2008
determining loss at Rs. (-) 1.18 Crores.
3. During the assessment proceedings, AO found that assessee had sold 03 units
bearing Nos. 308, 309 and 310 in Jogani Industrial Estate, Lower Parel, Mumbai
which were depreciable assets as per the provisions of Section 50 of the Act. He
further found that assessee had shown the net sale consideration received on sale of
these units at Rs. 46.53 Lakhs. He directed the assessee to produce the relevant sale
agreement along with value adopted by the Stamp Valuation Authorities. AO found
that the value adopted by the Stamp Valuation Authorities for the purpose of payment
of Stamp Duty in respect of relevant transfer was Rs. 71.54 Lakhs that was higher
than the net consideration of Rs. 46.53 Lakhs shown by the assessee. AO asked the
assessee as to why the value adopted by the Stamp Valuation Authorities should not
be taken as the full value of the consideration received/accrued as a result of such
transfer, as envisaged by Section 50C of the Act. After considering the submissions
of the assessee, AO held that provisions of Section 50C were applicable in the case
under consideration the language of the Section did not make any distinction between
depreciable/non-depreciable capital assets and Long Term/Short Term Capital Assets,
that Section 50C was not applicable only in the cases where the assets were stock-in-
trade, that the Gala premises forming the part of block of assets had been transferred
by the assessee, value adopted by the Stamp Valuation Authorities was to be taken as
the full consideration received as a result of transfer of assets. He re-calculated the
Capital Gains accruing to the assessee at Rs. 22.60 Lakhs.
4. Assessee preferred an appeal before the First Appellate Authority (FAA). He
found that his predecessor in office had written letter to the AO about assessee's
objections with regard to valuation done by the Stamp Duty Authorities, his
predecessor had directed the AO to refer the matter to the District Valuation Officer
3 ITA No. 7763/Mum/2010
M/s. Shree Siyaram Textiles
(DVO) for valuation of the property as on the date of sale and submit a report. DVO
vide his report dt. 25-11-2009 valued the property, as on 02-05-2005 being the date of
sale, at Rs. 75.05 Lakhs. FAA allowed the assessee to file written submission in this
regard on 23-04-2010.
5. After considering the submissions of the assessee, FAA held that provisions of
Section 50C made no distinction between depreciable and non-depreciable assets, that
said section was applicable to all Capital Assets, that it was special provision for
certain capital assets/land/building/both, that as per the provisions of the Section
matter could be referred to the Valuation Officer, that as per Sub-Section 3 of Section
50C of the Act if the value determined by the DVO was higher than the value adopted
by Stamp Duty Authorities the value determined by Stamp Duty Authorities had to be
taken for determining the tax liability. Upholding the order of the AO, he dismissed
the appeal filed by the assessee.
6. Before us, Authorised Representative (AR) fairly considered that Ground No.
1(i) and 1(ii) were decided against him and he was not interested in pursuing the
same. As both the issues are decided against the assessee same stand dismissed.
Ground No. 1(iii) is about adopting WDV of block of assets at Rs. 2.27 Lakhs
instead of Rs. 1.69 Lakhs. We find that the said Ground is not arising out of the
order of the FAA. We have perused the Form No. 35 filed by the assessee before the
FAA. We find that assessee had not raised the said issue before the FAA and he has
also adjudicated the same.
In these circumstances, Ground No.1(iii) stands dismissed.
7. Ground No.2 is about non-consideration of objections filed by the assessee
against the Valuation Report of the DVO received from the AO by way of Remand
Report. Before us, AR submitted that assessee had raised objections before the DVO,
that vide its letter dt. 09-01-2010, to the FAA, assessee had requested him to consider
his objections raised against the report of the DVO (Pg. 59-71 & 72-85 of the PB),
that FAA had passed the order without considering the objections. Departmental
Representative (DR) relied upon the order of the FAA.
8. After hearing the rival submissions, we are of the opinion that matter should
be restored back to the file of the FAA for fresh adjudication. He is directed to pass
fresh and speaking order after considering the Pg. 59-85 of the PB. From his order, it
does not appear that objection to the report were considered and if considered, same
were not commented upon when he decided the issue. Therefore, in the interest of
justice, matter is remitted back to him as stated earlier. FAA will provide reasonable
opportunity of hearing to the assessee.
Ground No.2 is Partly allowed in favour of the assessee.
9. Last Ground of Appeal pertains to adopting of the correct figure for carrying
forward of loss. Before us, AR submitted that correct figure for carrying forward loss
was Rs. 1,18,90,100/- and not 11,89,100/- as mentioned by the FAA. We find that in
Form No. 35, assessee had mentioned that loss determined by the AO was Rs. 1.18
4 ITA No. 7763/Mum/2010
M/s. Shree Siyaram Textiles
Crores. We remit the matter to the file of the FAA for issuing fresh directions to the
AO with regard to para No.4 of his order dt. 30-09-2010.
Ground No. 3 is allowed in part.
As a result, appeal filed by the assessee stands partly allowed.
[ .
Order pronounced in the open court on 3rd April, 2013.
Û 3 April, 2013
Sd/- Sd/-
(.. / B.R. MITTAL) (Û] / RAJENDRA)
Û / JUDICIAL MEMBER / ACCOUNTANT MEMBER
/Mumbai, /Date: 3rd April, 2013
TNMM
/Copy of the Order forwarded to :
1. Appellant
2. Respondent
3. The concerned CIT (A)
4. The concerned CIT
5. DR "E" Bench, ITAT, Mumbai
6. Guard File
× //True Copy//
/ BY ORDER,
Registrar
/ Dy./Asst.
, / ITAT, Mumbai
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