R.K.Vittoba, Tuticorin V. ITO, Tuticorin

CO 184/CHNY/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8224 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 14-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: S CHANDRASEKARAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Revised return
• Section: 50C; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 1896/MDS/2012 (ASSESSMENT YEAR : 2009-10) THE INCOME TAX OFFICER, WARD I(4), THOOTHUKUDI. (APPELLANT) V. SHRI R.K. VITTOBA, 453, VICTOREA EXTENSION ROAD, THOOTHUKUDI 628 002. PAN : ACVPV 7606 G (RESPONDENT) C.O. NO. 184/MDS/2012 (IN I.T.A. NO. 1896/MDS/2012) (ASSESSMENT YEAR : 2009-10) SHRI R.K. VITTOBA, 453, VICTOREA EXTENSION ROAD, THOOTHUKUDI 626 002. (CROSS-OBJECTOR) V. THE INCOME TAX OFFICER, WARD I(4), THOOTHUKUDI. (RESPONDENT) REVENUE BY : SHRI T.N. BETGIRI, JCIT ASSESSEE BY : SHRI S. CHANDRASEKA RAN, CA DATE OF HEARING : 23.01.2013 DATE OF PRONOUNCEMENT : 23.01.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS AND CROSS-OBJECTION OF THE REVE NUE AND ASSESSEE RESPECTIVELY, BOTH ARE DIRECTED AGAINST AN ORDER DATED I.T.A. NO. 1896/MDS/12 C.O. NO. 184/MDS/12 2 31.7.2012 OF COMMISSIONER OF INCOME TAX (APPEALS)-I , MADURAI. APPEAL OF THE REVENUE IS CONSIDERED FIRST FOR DISPO SAL. 2. FACTS APROPOS ARE THAT ASSESSEE HAD SOLD TWO PRO PERTIES DURING THE RELEVANT PREVIOUS YEAR. THE DETAILS OF THE PROP ERTIES SOLD WERE AS UNDER:- DOC NO. DATE VALUE AS PER DOC. VALUE AS PER STAMP VALUATION AUTHORITY 7787/2008 31.10.208 ` 14,00,000 ` 53,12,500 7788/2008 31.10.2008 ` 20,00,000 ` 62,50,000 SINCE ASSESSEE DID NOT GIVE ANY INFORMATION ON THE ABOVE TRANSACTIONS, ASSESSING OFFICER REQUIRED THE SUB-RE GISTRAR OF SIVAKASI TO FURNISH DOCUMENT COPIES. FROM THE DOCU MENTS, IT WAS NOTED THAT SALE CONSIDERATION MENTIONED WAS ONLY ` 34 LAKHS. HOWEVER, MARKET VALUE FIXED BY THE STAMP AUTHORITIE S WAS ` 1,15,62,500/-. THOUGH THE ASSESSEE DID NOT RETURN ANY INCOME FROM LONG TERM CAPITAL GAINS IN HIS ORIGINAL RETURN, HE FILED A REVISED RETURN WHEREBY HE ADMITTED LONG TERM CAPITAL GAINS OF ` 4,90,000/-. ASSESSING OFFICER WAS OF THE OPINION THAT SECTION 5 0C OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') HAD TO BE APPLIED SI NCE THE SALE CONSIDERATION MENTIONED IN THE DOCUMENTS WERE LESS THAN THE VALUE ADOPTED BY AUTHORITIES FOR STAMP PURPOSES. ASSESSE E RAISED OBJECTIONS ON THIS, WHEREUPON THE ISSUE WAS REFERRE D TO VALUATION I.T.A. NO. 1896/MDS/12 C.O. NO. 184/MDS/12 3 OFFICER IN ACCORDANCE WITH SECTION 50C(2) OF THE AC T. THE VALUATION OFFICER, MADURAI, IN HIS REPORT DATED 16.12.2011, E STIMATED VALUE OF THE SAID PROPERTY TO ` 45,92,200/-. ASSESSING OFFICER DECLINED TO ACCEPT THE VALUE DETERMINED BY THE VALUATION OFFICE R AND WAS OF THE OPINION THAT THE FAIR MARKET VALUE HAS TO BE TAKEN AT ` 1,15,62,500/- AS FIXED BY THE STAMP AUTHORITIES. ASSESSMENT WAS COMPLETED ACCORDINGLY INCREASING THE LONG TERM CAPITAL GAINS BY A SUM OF ` 86,52,500/-, AFTER REDUCING INDEXED COST. 3. IN HIS APPEAL BEFORE CIT(APPEALS), ARGUMENT OF T HE ASSESSEE WAS THAT ONCE VALUE WAS OBTAINED FROM VALUATION OFF ICER, ASSESSING OFFICER COULD NOT ADOPT A DIFFERENT VALUE. CIT(APP EALS) WAS IMPRESSED BY THE ARGUMENT OF THE ASSESSEE. ACCORDI NG TO HIM, THE VALUE OF DVO WAS BOUND TO BE FOLLOWED BY THE ASSESS ING OFFICER. HE DIRECTED THE ASSESSING OFFICER TO ADOPT DVOS VALUE FOR COMPUTATION OF LONG TERM CAPITAL GAINS INSTEAD OF THE VALUE FIX ED BY THE STAMP AUTHORITIES. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT THE DVOS VALUE SUFFER ED FROM VARIOUS INFIRMITIES AND VALUE AS FIXED BY THE STAMP AUTHORI TIES ALONE COULD BE CONSIDERED FOR WORKING OUT LONG TERM CAPITAL GAINS. I.T.A. NO. 1896/MDS/12 C.O. NO. 184/MDS/12 4 5. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDER OF CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT AMOUNTS SHOWN BY THE ASSES SEE IN THE SALE DEEDS WAS ONLY ` 34 LAKHS. THERE IS ALSO NO DISPUTE THAT THE AMOUN TS FIXED BY THE STAMP AUTHORITIES WAS ` 1,15,62,500/-. WHEN ASSESSEE WAS PUT ON NOTICE, ASSESSEE RAISED OBJECTIONS AGAIN ST ADOPTION OF VALUE FIXED BY STAMP AUTHORITIES. THERE WAS A REFE RENCE MADE BY THE ASSESSING OFFICER TO THE VALUATION OFFICER, MADURAI , WHO FIXED THE VALUE OF PROPERTY ` 45,92,200/-. AT THIS JUNCTURE, A LOOK AT SECTION 50C IS REQUIRED, WHICH IS AS UNDER:- [ SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN C ERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY ANY AUT HORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER T HAT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUT HORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] B Y THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHOR ITY, COURT OR THE HIGH COURT, I.T.A. NO. 1896/MDS/12 C.O. NO. 184/MDS/12 5 THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PRO VISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I ) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957) , SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SE CTION (1) OF SECTION 16A OF THAT ACT. [ EXPLANATION 1 ]. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICE R' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R ) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'A SSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHO RITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.] (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERRE D TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY SUC H AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER.] 7. ONCE A REFERENCE IS MADE BY THE ASSESSING OFFICE R FOR VALUE OF CAPITAL ASSET, THEN RELEVANT SECTION OF WEALTH TAX ACT, 1957 WILL APPLY. SUB-SECTION (6) OF SECTION 16A OF WEALTH TA X ACT IS REPRODUCED HEREUNDER:- (6) ON RECEIPT OF THE ORDER UNDER SUB-SECTION (3) O R SUB- SECTION (5) FROM THE VALUATION OFFICER, THE [ASSESS ING OFFICER] SHALL, SO FAR AS THE VALUATION OF THE ASSET IN QUES TION IS CONCERNED, PROCEED TO COMPLETE THE ASSESSMENT IN CO NFORMITY WITH THE ESTIMATE OF THE VALUATION OFFICER.] IT IS CLEAR FROM THE ABOVE THAT THE ASSESSING OFFIC ER IS REQUIRED TO COMPLETE AN ASSESSMENT BASED ON THE ESTIMATE GIVEN BY THE I.T.A. NO. 1896/MDS/12 C.O. NO. 184/MDS/12 6 VALUATION OFFICER. IN OTHER WORDS, ASSESSING OFFIC ER WAS LEFT WITH NO CHOICE. HERE, THE CIT(APPEALS) DIRECTED THE ASSESS ING OFFICER TO COMPLETE THE ASSESSMENT OF LONG TERM CAPITAL GAINS TAKING THE VALUE FIXED BY THE VALUATION OFFICER. THIS IS IN ACCORDA NCE WITH PROVISIONS OF THE STATUTE. WE DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER CIT(APPEALS). 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 9. CROSS-OBJECTION OF THE ASSESSEE BEING IN SUPPORT OF THE ORDER OF CIT(APPEALS), DISMISSED AS INFRUCTUOUS. 10. TO SUMMARIZE THE RESULT, BOTH, APPEAL OF THE RE VENUE AS WELL AS CROSS-OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 23 RD OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 23 RD JANUARY, 2013. KRI. COPY TO: ASSESSEE/ASSESSING OFFICER/CIT(A)-I, MADU RAI/ CIT-I, MADURAI/D.R./GUARD FILE