Shri Bhupatlal Chhaganlal Jariwala, Surat V. The Dy.CIT.,Circle-3, Surat

CO 179/AHD/2011

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0136 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 29-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIR B KULSHRESTHA
• Assessee Lawyers: MK PATELAR
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.1747/AHD/2011 ( / ASSESSMENT YEAR : 2005-06) THE DCIT CIRCLE-3 SURAT / VS. SHRI BHUPATLAL C.JARIWALA (HUF) 121, NEHRUNAGAR SOCIETY OPP.SVR ENGG.COLLEGE ICHANATH, SURAT ./ ./ PAN/GIR NO. : AABHB 5950M ( # / APPELLANT ) .. ( $% # / RESPONDENT ) AND CROSS OBJECTION NO.179/AHD/2011 AY 2005-06 (IN ITA NO.1747/AHD/2011 A.Y. 2005-06) SHRI BHUPATLAL C.JARIWALA(HUF) VS. THE ACIT SURAT CIR-3, SURAT (CROSS OBJECTOR .. (RE SPONDENT) REVENUE BY : SHIR B.KULSHRESTHA, SR.DR ASSESSEE BY : SHRI M.K. PATEL, AR &'() / DATE OF HEARING 10/12/2014 *+,-() / DATE OF PRONOUNCEMENT 19/12/2014 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THE REVENUE AND THE ASSESSEE BOTH HAVE CHALLENGED THE ORDER OF THE COMMISSIONER-OF INCOME TAX (APPEALS)-II, SUR AT (CIT(A) IN SHORT) DATED 19/04/2011 BY WAY OF APPEAL AND CROSS- OBJECTION RESPECTIVELY. BOTH THE APPEAL AND THE CROSS OBJECT ION ARE TAKEN UP ITA NO.1747/AHD/2011 (BY REVENUE) AND CO NO.179/AHD/2011 (BY ASSESSEE) DCIT VS. SHRI BHUPATLAL C.JARIWALA (HUF) ASST.YEAR 2005-06 - 2 - TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL FILED BY THE REVENU E, I.E. ITA NO.1747/AHD/2011 FOR AY 2005-06. THE REVENUE HAS R AISED THE FOLLOWING GROUNDS OF APPEAL:- [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A)-II, SURAT HAS ERRED IN DELETING THE PENAL TY LEVIED U/S.271(1)(C) OF THE I.T.ACT 1961, IN SPITE OF THE ASSESSEES FAILURE TO ADOPT VALUE OF PROPERTY DETERMINED BY SV A INSTEAD OF SALE CONSIDERATION TO MINIMIZE ITS TAX. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. [3] IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. 3. AT THE OUTSET, IT IS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE THAT IN QUANTUM PROCEEDINGS ON WHICH PENALTY WAS LE VIED WAS RESTORED TO THE FILE OF AO FOR DE NOVO CONSIDERATION BY THE COORDINATE BENCH OF THIS TRIBUNAL (ITAT BENCH A AHMEDABAD) IN ITA NO.3154/AHD/2008 FOR AY 2005-06 VIDE ORDER DATED 29 /07/2011. THE LD.SR.DR COULD NOT CONTROVERT THIS FACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION OF COORDINATE BENCH P ASSED IN ITA NO.3154/AHD/2008(SUPRA). WE FIND THAT THE COORDINA TE BENCH IN ITA ITA NO.1747/AHD/2011 (BY REVENUE) AND CO NO.179/AHD/2011 (BY ASSESSEE) DCIT VS. SHRI BHUPATLAL C.JARIWALA (HUF) ASST.YEAR 2005-06 - 3 - NO.3154/AHD/2008 VIDE PARA-6 OF ITS ORDER HAD RESTO RED THE ISSUE BACK TO THE FILE OF AO, BY OBSERVING AS UNDER:- 6. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. W E HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILATION FILED. ADMITTED FACTUAL POSITION IS TH AT THE AO HAD REFERRED THE MATTER TO VALUATION OFFICER, BARODA, V IDE HIS OFFICE LETTER DATED 30 TH OF NOVEMBER, 2007 AS IS EVIDENT FROM PARAGRAPH NO.4.4 OF THE IMPUGNED ASSESSMENT ORDER. IT IS ALS O EVIDENT FROM THAT PARA THAT THE DEPARTMENTAL VALUATION REPORT WA S WANTING AT THE TIME WHEN THE ASSESSMENT WAS FINALISED. IN VIEW OF THIS ADMITTED FACT, WE ARE OF THE VIEW THAT ONCE AS PER THE PROVI SIONS OF SECTION 50C(2) OF THE ACT, THE AO IS REQUIRED, AS PER THE S TATUTE, TO REFER THE MATTER TO VALUATION OFFICER WHERE THE ASSESSEE CLAI MS THAT THE STAMP VALUATION AUTHORITY HAS NOT CORRECTLY ADOPTED THE V ALUE AND THAT HAD EXCEEDED THE FAIR MARKET VALUE, THEN THE RIGHT RECO URSE FOR THE AO IS TO REFER THE MATTER TO DVO. HENCE IT WAS EXPECTED F ROM THE A.O. TO WAIT FOR THE REQUISITE REPORT BEFORE FINALIZATION O F THE IMPUGNED ASSESSMENT ORDER. UNDER THE CIRCUMSTANCES TO ARRIVE AT THE CORRECT FIGURE OF VALUATION, WE HEREBY RESTORE THIS ISSUE B ACK TO THE AO TO TAKE THE ASSISTANCE OF THE DVO AND CALL FOR THE VAL UATION REPORT WHICH HAD ALREADY BEEN REFERRED BY HIM. AS FAR AS THE SECOND PLANK OF THE ARGUMENT OF THE LD.AR IS CONCERNED, SINCE TH E MATTER HAS ALREADY BEEN REFERRED BACK TO AO, THEREFORE LEGALLY HE IS ENTITLED TO CLAIM BEFORE THE AO THE CORRECT METHOD OF COMPUTATI ON OF LONG TERM CAPITAL GAIN. IN THIS REGARD, ON PAGE NO.45 OF THE COMPILATION, THERE WAS AN ACCOUNT OF FACTORY BUILDING PURCHASED WHER EIN AS ON 01/04/2004, BALANCE BROUGHT FORWARD WAS RS.4,53,717 /-. THE LD.AR HAS ASSERTED THAT IT WAS RELATED TO THE FACTORY BUI LDING. LD. A.R. HAS ALSO TRIED TO DEMONSTRATE THAT IN ADDITION TO THE FACTORY BUILDING, THE ASSESSEE HAS ALSO SOLD THE APPURTENANT LAND. FOR T HIS FACTUAL PROPOSITION, LD.AR HAS MENTIONED FEW CLAUSES OF THE IMPUGNED SALE DEED TO DEMONSTRATE THAT THE PROPERTY IN QUESTION WAS NOT ONLY THE LAND BUT LAND ALONG WITH FACTORY BUILDING WHICH WAS SOLD BY THE ASSESSEE. ONCE WE HAVE ALREADY DECIDED TO RESTORE THIS ISSUE BACK TO AO WITH THE DIRECTION TO FOLLOW THE PROVISIONS OF S ECTION 50C OF THE ACT, THEREFORE, ALL THESE FACTUAL ASPECTS CAN ALSO BE ASCERTAINED BY THE AO AFTER DUE INVESTIGATION. IN THE RESULT, T HE ENTIRE ISSUE IS ITA NO.1747/AHD/2011 (BY REVENUE) AND CO NO.179/AHD/2011 (BY ASSESSEE) DCIT VS. SHRI BHUPATLAL C.JARIWALA (HUF) ASST.YEAR 2005-06 - 4 - RESTORED BACK TO AO FOR DE NOVO CONSIDERATION, HENC E THIS GROUND MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPO SES. 4.1. THIS FACT IS NOT CONTROVERTED BY THE REVENUE. UNDER THESE FACTS, GROUNDS RAISED IN REVENUES APPEAL ARE REJECTED. A S A RESULT, REVENUES APPEAL IS DISMISSED. 5. NOW, WE TAKE UP THE CROSS-OBJECTION NO.179/AHD /2011 FOR AY 2005-06 FILED BY THE ASSESSEE. THE ASSESSEE HAS RA ISED THE FOLLOWING GROUNDS IN ITS CROSS-OBJECTION. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL S LAW ON THE SUBJECT, THE LEARNED CIT(A)-II, SURAT HAS RIGHT LY DELETED THE PENALTY LEVIED BY THE A.O. TO THE TUNE OF RS.5,76, 060/- U/S.271(1)(C) RELYING ON THE DECISION OF THE HONBLE ITAT AHD IN THE CASE OF HARESH P SHAH VIDE ITA NO.2154/AHD/2010. THE RESPONDENT, THEREFORE, PRAYS THAT LOOKING TO TH E FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY LEVIED HAS B EEN RIGHTLY DELETED BY THE CIT(A)-II SURAT. YOUR RESPONDENT, FURTHER, RESERVES HIS RIGHT TO ADD , ALTER OR TO AMEND ANY OF THE AFORESAID GROUNDS AT THE TIME OF H EARING OF AN APPEAL. 6. IT IS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESS EE THAT THE CROSS OBJECTION WAS IN SUPPORT OF THE ORDER OF THE LD.CIT (A). HE SUBMITTED THAT THIS ISSUE ON WHICH THE PENALTY HAS BEEN CONFI RMED IS RESTORED TO THE FILE OF AO FOR DE NOVO CONSIDERATION. THEREFORE, THE PENALTY INITIATED ON THIS ISSUE IN EARLIER ROUND OF LITIGAT ION DOES NOT SURVIVE. THE LD.SR.DR COULD NOT CONTROVERT THIS FACT THAT IN THE QUANTUM PROCEEDINGS THE ITEM ON WHICH PENALTY WAS LEVIED IN EARLIER ROUND IS ITA NO.1747/AHD/2011 (BY REVENUE) AND CO NO.179/AHD/2011 (BY ASSESSEE) DCIT VS. SHRI BHUPATLAL C.JARIWALA (HUF) ASST.YEAR 2005-06 - 5 - RESTORED TO THE FILE OF AO. SINCE THE PENALTY LEVI ED IN EARLIER ROUND DOES NOT SURVIVE, THEREFORE CROSS OBJECTION FILED B Y THE ASSESSEE HAS BECOME INFRUCTUOUS. 7. IN THE COMBINED RESULT, REVENUES APPEAL AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 19 TH DAY OF DECEMBER, 2014 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD; DATED 19/ 12 /2014 1)..,&.../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 234 5 / CONCERNED CIT 4. 5 ( ) / THE CIT(A)-II, SURAT 5. 6&7 $34 , )34- , 2 / DR, ITAT, AHMEDABAD 6. 79:;' / GUARD FILE. / BY ORDER, %6$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD