Narendra R Merchant, Mumbai vs Assessee
- CitationITA No.5994/M/2011
Ratio decidendi
The rule this decision rests on
The Tribunal's decision rests on a single line of reasoning: where the assessee contends that only a life interest, and not the underlying property, was transferred, and that contention has not been examined by the lower authorities, the matter must be remitted to the Assessing Officer to decide the contention afresh on the material produced, rather than the Tribunal deciding the question of valuation or the applicability of section 50C itself.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Shri Narendra R. Merchant, I.T.O. 12(1)(4), C/o. M/s. Narendra & Co., Mumbai 201, Dhun Building, Vs. 23/25 Ghoga Street, Fort, Mumbai - 400 001 PAN: AACPM6073B (Appellant) (Respondent)
Assessee by : Shri Rajiv Khandelwal, A.R. Revenue by : Shri Asghar Zain V.P., D.R.
Date of Hearing : 13.01.2015 Date of Pronouncement : 18.03.2015
ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 01.07.2011 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 2008-09.
2. The assessee has taken the following grounds of appeal:
"1. On the facts and the circumstances of the case and in law the learned CIT(A) has erred in confirming the order passed by the A.O. with regard to the addition of Rs.42,41,476/- on account of Long Term Capital Gains. Reasons assigned by him for confirming the same are wrong and insufficient.
2. He has further erred in treating the sale of Life Interest in the property as sale of property and thereby erred in confirming the application of Sec.50C made by the A.O. without properly applying the ratio of the decisions cited by the appellant.
3. He has further erred in confirming the value as on 1.4.1981 at Rs.41,293/- as against Rs.3,00,000/- shown by the appellant without 2 ITA No.5994/M/2011 Shri Narendra R. Merchant
appreciating the contention of the appellant that the A.O. has determined the value of the Life Interest as on 1.4.1981 and not the value of the property as on 1.4.1981 in contrast to the fact that while determining the sale value A.O. has adopted the value of the property as per stamp duty authority but did not index the value of the property as on 1.4.1981 as per approved valuer's certificate.
4. He has further erred in not accepting the value made by the Registered Valuer without bringing any material to the contrary on the record and further erred in holding that the A.O. can not resort to Sec.5A once the assessment is completed.
5. He has further erred in confirming the charge of interest u/s.234A and 234B.
6. Order passed is bad in law and contrary to the provisions of the Act.
7. The appellant craves leave to add, alter and/or modify the grounds of appeal."
3. A perusal of the above grounds of appeal reveals that the sole issue taken by the assessee is with regard to the addition in respect of long term capital gains by way of application of section 50C of the Income Tax Act. The contention of the assessee has been that the assessee had not sold the property in question but had transferred only the life interest in the property. The lower authorities have assessed the value of the property and not of the life interest. It has been contended that the assessee has been the beneficiary of the trust and not the owner of the property. The assessee has got no right to transfer the property in question. His rights are limited to his life interest in the property. The lower authorities have assessed the capital gains taking the value of the property as per section 50C of the Act and even have not considered the sale value as estimated by the approved valuer. The Ld. A.R. has invited our attention to the trust deed dated 19.10.1935 and further transfer deed dated 22.03.2007 between N.R. Merchant and Harsha A Zaveri. It has been contended that since only the life interest has been transferred by the assessee and the said interest/property will devolve back to the trust after the death of the assessee and that the purchaser will not have absolute right over 3 ITA No.5994/M/2011 Shri Narendra R. Merchant
the property. The consideration for the transfer was to be assessed by the lower authorities in relation to life interest of the assessee in the said property and not that of the property itself.
4. We find that the above contentions raised by the assessee have not been looked into by the lower authorities. The matter needs re-examination at the hands of the Assessing Officer with regard to the contentions raised by the assessee in this respect. We accordingly restore the matter to the file of the Assessing Officer for decision afresh after considering the contentions of the assessee as discussed above and also the necessary evidences produced in this respect.
5. In view of our above observations, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18.03.2015.
Sd/- Sd/- (B.R. Baskaran) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 18.03.2015. * Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
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