Madras High Court
Commissioner Of Income Tax vs Mr.John Ettimootil Samuel on 3 August, 2021
T.C.A.No.497 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 03.08.2021
CORAM
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP
T.C.A.No.497 of 2013
Commissioner of Income Tax,
Coimbatore. .. Appellant
-vs-
Mr.John Ettimootil Samuel,
202, Rathna Mount Enclave,
Race Course Road,
Coimbatore-641 018.
PAN: ALMPS6292b .. Respondent
Appeal under Section 260A of the Income Tax Act, 1961 against the
order dated 26.11.2012 made in I.T.A.No.1703(Mds)/2012 on the file of the
Income Tax Appellate Tribunal 'D' Bench, Chennai for the assessment year
2005-06.
For Appellant : Ms.K.G.Usha Rani,
Standing Counsel
For Respondent : No appearance
******
Page 1 of 7
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T.C.A.No.497 of 2013
JUDGMENT
(Delivered by T.S.Sivagnanam, J.)
This appeal, by the appellant/Revenue, filed under Section 260A of
the Income Tax Act, 1961 (hereinafter referred to as “the Act”), is directed
against the order dated 26.11.2012 made in I.T.A.No.1703(Mds)/2012 on
the file of the Income Tax Appellate Tribunal 'D' Bench, Chennai (for
brevity “the Tribunal”) for the assessment year 2005-06.
2.The appeal was admitted on 29.08.2013, on the following
substantial questions of law:-
“1.Whether under the facts and circumstances of
the case, the Income Tax Appellate Tribunal was right in
setting aside the assessment made under Section 147?
and
2.Whether under the facts and circumstances of
the case, the Income Tax Appellate Tribunal was right in
holding that there was no failure on the part of the
assessee to disclose fully and truly the details and
particulars necessary for completing the assessment
under Section 143(3)?”
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T.C.A.No.497 of 2013
3.Heard Ms.K.G.Usha Rani, learned Standing Counsel for the
appellant/Revenue.
4.Though the respondent/assessee has been served and his name is
printed in the cause list, none appears for the assessee.
5.The assessment for the year under consideration, viz., 2005-06 was
completed by order dated 28.12.2007, under Section 143(3) of the Act. The
assessment was subsequently reopened under Section 147 and notice under
Section 148 of the Act was issued. The Assessing Officer stated that for the
subject assessment year, long term capital gain of Rs.1,62,74,689/- was
computed by taking sale consideration of Rs.1,74,00,000/- and from the
copy of the Sale Deed, it is seen that the Registering Authority has charged
compounding fee on the document of Rs.89,000/- under Section 70(2) of the
Indian Stamp Act, which is inclusive of 8% stamp duty and 1% registration
fee. Therefore, the sale consideration to be adopted, as per Section 50C of
the Act for computation of capital gain, should be Rs.1,83,89,000/- and the
increase of capital gain of Rs.9,89,000/- should accordingly be brought to
tax.
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T.C.A.No.497 of 2013
6.The assessee submitted their explanation dated 08.11.2011,
explaining that the said amount is not a determination of the market value
under Section 47A of the Indian Stamp Act, but it is only compounding fee
levied under Section 70(2) of the Indian Stamp Act. This compounding fee
has been levied for not mentioning the correct built-up area of the existing
structure in the document, upon inspection of the property and not because
of under-valuation of the property transferred even after taking the correct
built-up area. The Assessing Officer did not agree with the assessee and
held that the compounding fee is inclusive of 8% stamp duty and 1%
registration fee and therefore, it is clear that it pertains to the value of the
property and the amount of Rs.1,83,84,367/- deemed to be the full value of
consideration under Section 50C of the Act and accordingly, completed the
assessment vide order dated 30.11.2011.
7.The assessee, being aggrieved, filed appeal before the
Commissioner of Income Tax (Appeals)-I, Coimbatore (for brevity “the
CIT(A)”), which was dismissed by order dated 01.06.2012. Before the
CIT(A), the assessee questioned the reopening of the assessment, after a
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T.C.A.No.497 of 2013
period of four years without any tangible material to establish that the
assessee failed to disclose fully and truly all facts. The assessee contended
that all the documents with regard to the payment of stamp duty and
additional stamp duty have been disclosed before the Assessing Officer and
the copy of the Sale Deed has been filed and the dispute with regard to the
sale consideration is not open for revision. Furthermore, the assessee
contended that the order passed under Section 147 is bad in law, since the
matter was not referred for valuation in terms of Section 50C(2) of the Act.
The CIT(A), did not agree with the assessee and dismissed the appeal by
order dated 01.06.2012. Aggrieved by the same, the assessee preferred
appeal before the Tribunal.
8.The Tribunal, in our view, rightly took note of the fact that the
reopening of the assessment was after years and there was no tangible
material to establish that the assessee failed to disclose fully and truly all
materials, which are required for the assessment at the first instance.
Furthermore, the Tribunal took note of the fact that the assessee has
furnished all necessary details required for completing the assessment
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T.C.A.No.497 of 2013
including the photostat copies of the Sale Deed. Further, the Tribunal
observed that the original Sale Deed will always be with the buyer of the
property and the assessee will have only a certified copy and the Assessing
Officer did not insist upon production of the original Sale Deed while
completing the assessment under Section 143(3) of the Act. Therefore, it
was held that there was no case for reopening the assessment.
9.In our considered view, the Tribunal was fully justified in holding
that the reopening of the assessment could not have been made in the facts
and circumstances of the case and we find no question of law, much less
substantial question of law arising for consideration in this appeal.
Accordingly, the appeal stands dismissed. No costs.
(T.S.S., J.) (S.S.K., J.)
03.08.2021
Index: Yes/ No
Speaking Order : Yes/ No
abr
To
The Income Tax Appellate Tribunal 'D' Bench, Chennai.
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T.C.A.No.497 of 2013
T.S.Sivagnanam, J.
and
Sathi Kumar Sukumara Kurup, J.
(abr)
T.C.A.No.497 of 2013
03.08.2021
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