ANNAMMA JOSEPH,KOCHI V. ACIT, NON CORP CIR 1(1), KOCHI

ITA 632/COCH/2024

AI Insights

The case involves Annamma Joseph, the appellant, who contested the assessment of capital gains on the sale of an immovable property for the assessment year 2016-2017. The appellant initially declared a Fair Market Value (FMV) of Rs.50,000 per cent for the property, which was not substantiated with evidence. The AO, after consulting the Sub-Registrar's Office (SRO), adopted a significantly lower FMV of Rs.7,260 per cent, leading to a higher assessed capital gain. The CIT(A) upheld the AO's decision, prompting the appeal to the Tribunal. The Tribunal found that the matter required further examination of the FMV and directed a reassessment through the DVO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47007 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Other Referred Cases: CIT v. Ayyappa Roller Flour Mills Ltd. ITA No.458/Coch/2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: K.SANKARANARAYANAN
• Keywords: Fair market value; Capital Gains

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri George George K, Vice-President & Shri Inturi Rama Rao, Accountant Member ITA No.632/Coch/2024 :Asst.Year 2016-2017 Annamma Joseph 9F, SFS, Eternia Changapuzha Nagar PO Edappally, Ernakulam-682 033. PAN : AJYPJ6806E. v. The Assistant Commissioner of Income-tax, Corporate Circle 1(1) Kochi. (Appellant) (Respondent) Appellant by : Sri.K.Sankaranarayanan, CA Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing :02.04.2025 Date of Pronouncement : 08.04.2025 O R D E R Per Inturi Rama Rao, AM : This appeal at the instance of the assessee is directed against National Faceless Assessment Centre / Commissioner of Income-tax (Appeals) [“CIT(A)”] order dated 15.05.2024 passed u/s.250 of the Income-tax Act, 1961 [“the Act”] for the assessment year 2016-2017. 2. The appellant is an individual. The return of income for the assessment year 2016-2017 was filed on 5th August, 2016 disclosing income of Rs.7,22,42,630. Against the said return of income, the assessment was completed by the Assessing Officer (“the AO”) vide order dated 10th December, 2018 passed u/s.143(3) of the Income-tax Act, 1961 (“the Act”) at a total income of Rs.8,86,66,783. While doing ITA No.632/Coch/2024. Annamma Joseph. 2 so, the AO made addition under the head capital gains of Rs.1,62,34,158. 3. The factual background leading to the above addition is that during the previous year relevant to the assessment year the appellant sold an immovable property for a consideration of Rs.9,51,00,000 and offered long term capital gains of Rs.7,42,37,563. While arriving at the capital gains, the appellant had adopted Fair Market Value (“FMV”) of the property as on 01.04.2081 at Rs.50,000 per cent. However, the appellant could not furnish any basis for adopting the FMV at Rs.50,000 as on 01.04.2081. Therefore, the matter was referred to the SRO Edapally for furnishing the FMV as on 01.04.2081. The SRO stated the FMV of the land in the area comprises under Survey No.695/7/1 Thrikkakara North Village during the year 1981 is Rs.7,260. Based on this value, the AO adopted the FMV at Rs.7,260 per cent. Accordingly, computed the capital gain and made addition of Rs.1,61,34,158. 4. Being aggrieved by the above assessment order, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 5. Being aggrieved, an appeal was preferred before the Tribunal. During the course of hearing, the learned Authorised Represent submits that this Tribunal in the case of CIT v. Ayyappa Roller Flour Mills Ltd. ITA No.458/Coch/2018 accepted the FMV of the property on the same locality at Rs.50,000 per cent, therefore, the same value may be adopted. ITA No.632/Coch/2024. Annamma Joseph. 3 6. On the other hand, the learned Senior DR relied upon the orders of the authorities below and submits that no interference is called therein. 7. We heard the rival submissions and perused the material available on record. The only issue that arises for our consideration is determinative of the FMV as on 01.04.2081 in respect of the property sold by the appellant during the previous year relevant to the assessment year under consideration. The appellant adopted the FMV at the rate of Rs.50,000 per cent, whereas the AO based on the sale instance furnished by the SRO adopted the FMV at Rs.7,260 per cent. It is an undisputed fact that the appellant could not produce any evidence in support of the FMV adopted by him. Equally, it is settled position of law the guidance value issued by the SRO does not always represents FMV. Under these circumstances, we are of the considered opinion that matter requires to be remanded back to the file of the AO with a direction to arrive at the FMV by referring the matter to the DVO for the purpose of ascertaining the correct FMW as on 01.04.2081. It is ordered accordingly. 8. In the result, the appeal filed by the assessee is partly allowed. Order pronounced on this 08th day of April, 2025. Sd/- (George George K) Sd/- (Inturi Rama Rao) VICE-PRESIDENT ACCOUNTANT MEMBER Cochin; Dated : 08th April, 2025. Devadas G* ITA No.632/Coch/2024. Annamma Joseph. 4 Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "