×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
08-03-2019, Sir Mohd. Yusuf Trust, Section 254(1), 253, Tribunal Mumbai
1. This appeal by assessee under section 253 of Income-tax Act (‘Act’) is directed against the order of ld. Commissioner of Income-tax (Appeals)- 29, hereinafter referred as ld CIT (A), Mumbai dated 09.01.2015. the appeal before ld CIT(A) arises from the assessment order passed by assessing officer under section 143(3) dated 31/12.2013 for Assessment Year 2011-12. The assessee has raised the following grounds of appeal: The grounds mentioned hereunder are without prejudice one another:
1. The Commissioner of Income Tax (Appeals) erred in confirming the order of learned assessing office invoking section 50C without appreciating that the price at which the capital asset was sold was the fair market value as per the highest bid received in response to public advertisement in July 2003 and was approved by the Honorable Bombay high court on 1-10-2004 considering the same to be in interest of the beneficiaries of Appellant trust. In the circumstances the Assessment order passed by the Learned Assessing Officer is liable to be set aside.
2. The Commissioner of Income Tax (Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the Memorandum of intent (Mal) to sale the property was already entered into 18-12-2003 when the transaction price was finalised and for which separate ova report was also obtained to determine fair market value on the date of Mal and therefore addition if any had to be based on the fair market value determined on the date of Mal.
3. The Commissioner of Income Tax '(Appeals) erred in confirming the addition U/s 50C on the basis of ova report obtained determining fair market value as at date of registration of agreement i.e. 10-8-2010 without appreciating that the said ova report was based on incorrect facts and presumptions' drawn without any basis.
4. The learned assessing officer erred in imposing capital gains in hands of the appellant trust during the AY 2011-12 without appreciating that the capital asset was transferred during the AY 2010-11 in accordance with the Hon Bombay High Court order and only registration of the same was done in AY 2011-12.
5. The learned assessing officer rred in making addition of capital gains in hand of the appellant trust without appreciating that the trust was nondiscretionary trust and the shares of beneficiaries where determinate and therefore the addition if any can be made only in the hands of the beneficiaries
6. The Commissioner of Income Tax (Appeals) erred in confirming addition of Rs 4,80,000/- the amount distributed to the beneficiaries of the Appellant trust and who had already offered the same to the tax in their individual returns.
2. Brief facts of the case as gathered from the orders of the lower authority are that the assessee is a Non-discretionary Trust. The income of the assessee is assessed as association of person (AOP). The assessee filed its return of income for Assessment Year 2011-12 on 17.10.2012 declaring total income of Rs. 25,41,756/-. The return was selected for scrutiny. The assessment was completed by Assessing Officer on 31.12.2013 under section 143(3) of the Act. The Assessing Officer while passing the assessment order made addition of Long Term Capital Gain (LTCG) of Rs. 5.88 Crore and addition of Rs. 4,80,000/- under the head Income from ‘Other Sources’. The facts leading to the additions of LTCG are that while filing return of income the assessee claimed long term capital loss (LTCL) of Rs. 30,765/- on sale of investment in mutual fund. The assessee assessing officer during the assessment noted that the information was received from the office of Registrar regarding the sale of immovable property by assessee at Rs. 27,93,285/-, however, the market value of the said property was Rs. 11,76,35,500/-. The assessing officer confronted the facts of discrepancy in the sale consideration and the value of the immovable property. The assessee vide its reply dated 18.09.2013 filed revised statement of income declaring LTCG on sale of land of Rs. 13 96,274/- after claiming adjustment of LTCL on mutual fund of Rs 13,65,877/-. The assessee was asked to substantiate as to why the piece of land of 17,300 Sq Meter was sold at Rs. 27,93,285/-, whereas the stamp value of the said land is or Rs. 11.76 Crore. The assessee was also show caused as to why the provisions of section 50 C be not invoked. The assessee filed its reply dated 31.03.2013. in the reply the assessee contended that the stamp valuation authority has value the land at the current rate, however, the property was conveyed at the price agreed in 2003 and the consideration under the sale agreement was