The Commissioner Of Income Tax,Chennai v. Smt Jgadeesan Sangeetha Lavanyano

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYANT.C.A.No.217 of 2020 The Commissioner of Income Tax,Chennai... Appellant/Respondent Versus Smt Jgadeesan Sangeetha LavanyaNo.4, Nawab Abibullah AvenueIII Street, Thousand LightsChennai 600 006PAN ATMPS3370A.. Respondent/ Appellant Prayer:- Tax Case Appeal filed under Section 260-A of the IncomeTax Act, 1961, against the order of the Income Tax AppellateTribunal, Madras 'A' Bench, Chennai, dated 05.09.2019 made inI.T.A.No.818/Chny/2019 relating to the Asst Year 2014-15 andagainst the order of the Income Tax Officer, Non Corporate Ward3(3), Chennai dated 11.04.2019, made in GIR No.PA.No./AIMPS3370Afor the Assessment year 2014-15 and against the order of thePrincipal Commissioner of Income tAx-5, Chennai-34, dated01.10.2018, made in No.PCIT-5/ITO(HQ)/JSL/263/2/2018-19 for theAssessment year 2014-15. For Appellant: Ms.Hemalatha Senior standing counsel For Respondent :Mr.G.Baskar JUDGMENT [Order of the Court was made by T.S.SIVAGNANAM, J.]This appeal filed by the assessee under Section 260 A ofthe Income Tax Act, 1961 ('the Act' for brevity) is directedagainst the order dated 05.09.2019 passed by the Income TaxAppellate Tribunal, Madras, 'A' Bench ('Tribunal' for brevity),in I.T.A.No.818/Chny/2019 for the assessment year 2014-15. Theappeal has been filed raising the following substantialquestions of law.1. Whether on the facts and in thecircumstances of the case, the Tribunal was right inholding that the additions made by the AO as directed https://hcservices.ecourts.gov.in/hcservices/ by the Pr CIT in his order u/s.263 was unsustainableespecially when the guideline value prescribed by theTamil Nadu Government came into force with effect onlyfrom June 2017 which operated prospectively andtherefore not applicable to the present assessmentyear? 2. Whether on the facts and circumstances ofthe case, the Tribunal was right in not consideringthe provisions of Sec.56(2)(vii)(b) of the I.T. Actwhich clearly states that the difference in valueadopted by the Stamp Valuation authority viz a viz theactual consideration paid by the assessee has to bebrought to tax under the heading income from othersources? 3.Is not the finding of the Tribunal bad byholding that the benefit of revised guide line valuehad to be given to the assessee based on a StateGovernment guideline value which came into effect witheffect from June 2017 ignoring the fact that the lawas it stood on the date of purchase and the actualsale consideration paid by the assessee on the date ofpurchase and the actual sale consideration paid by theassessee on the date of purchase which are allundisputable facts and the revised guide line valuecannot be adopted to the present assessment yearespecially when the same was prospective and notretrospective in operation? 2. We have elaborately heard Ms.R.Hemalatha, learnedSenior Standing Counsel appearing for the appellant / Revenueand Mr.G.Baskar, learned counsel accepting notice for therespondent/assessee. 2. We have elaborately heard Ms.R.Hemalatha, learnedSenior Standing Counsel appearing for the appellant / Revenueand Mr.G.Baskar, learned counsel accepting notice for therespondent/assessee. 3. The assessment was completed under Section 143(3) byorder dated 29.12.2016, determining total income atRs.12,18,010/-. The assessee during the previous year relevantto the assessment year under consideration, AY 2014-15, hadpurchased Plot in Sholinganallur Village, Tambaram Taluk, for asale consideration of Rs.144,00,000/- by Sale Deed dated14.09.2013. For the purpose of Stamp Duty, the value of thedocuments was fixed at Rs.168,00,000/-. After the assessment wascompleted by order dated 29.12.2016, the Principal Commissionerof Income Tax Appellate Tribunal-V, Chennai ('the PCAT' forbrevity), invoked his power under Section 263 of the Act on theground that there is differences between actual saleconsideration paid and market value fixed by the RegisteringAuthority and this difference amounted to Rs.24,00,000/- andthis was omitted to be treated as an income of an assessee chargeable to tax under the head 'Income from Other Sources'.The assessee on receiving notice from the PCIT, submitted thatthe Government of Tamil Nadu had abnormally increased theGuideline Value with effect from 01.04.2012 for the purpose ofassessing the Stamp Duty payable and these rates were broughtdown only after five years with effect from 09.06.2017 and ifthe escalated rates are to be adopted, the assessee, anindividual would be put to irreparable loss and hardship. Withregard to the proposal of the PCIT to invoke Section 56(2)(vii)of the Act, the assessee contended that the said provision willhave no application to her case as 50% of the Sale considerationhad already been paid and the assessee could not withdraw fromthe transaction and therefore, she should not be penalised. 4. On a reading of the order passed by the PCIT underSection 263 of the Act, dated 01.10.2018, we find that theCommissioner has not dealt with the aspects with regard to theargument that 'transfer' within the meaning of Section 2(47)(v)had taken place as there has been part performance of theContract of Sale. Nevertheless, the Commissioner interfered withthe Assessment Order and directed the Assessing Officer toassess differential amount of Rs.24,00,000/-. On appeal beforethe Tribunal, the Tribunal in our considered view took a correctdecision by examining the factual aspects in its entirety andalso noted the legal position as to the effect of guidelinevalue fixed by the Government. The settled legal position isthat the guideline value has been fixed by the Government forthe purpose of computing the Stamp Duty payable on an instrumentand the guideline value would not reflect the market value ofthe property. In support thereof, several decision has beenreferred. As pointed out, the Tribunal has rightly noted thelegal position and considering the entire facts found that theadditions made by the PCIT and the order passed under Section263 of the Act is unsustainable. 5. We find there are no Questions of Law much lessSubstantial Questions of Law arises for consideration in thisAppeal. The Tax Case Appeal fails and the same is dismissed. Nocosts. sk Sd/-Assistant Registrar(CS-VI)//True copy//Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 2. The Income Tax Officer, Non Corporate Ward -3(3), Chennai. Non Corporate Ward -3(3), Chennai. 3. The Principal Commissioner of Income Tax-5, Chennai. Chennai. +1cc to Ms.Hemalatha, Senior Standing Counsel for Income TAx,SR.No.27215+1cc to Mr.G.Baskar, Advocate SR.No.27280T.C.A.No.217 of 2020MR(CO)GMY(19/10/2020)