Sri Amrutlal Jain Hundia, Guntur V. ACIT, Circle-1(1), Guntur

CO 54/VIZ/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4027 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Gift; Fair market value; Competent authority
• Section: 50C; 54F; 37

Judgement Text

ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.149/VIZAG/2017 ( / ASSESSMENT YEAR: 2012-13) ACIT, CIRCLE - 2(1), GUNTUR SRI KISHORE KUMAR GUNTUR [PAN NO. AFVPK 7725E ] ( ' / APPELLANT) ( ()' / RESPONDENT) C.O. NO.56/VIZAG/2017 (ARISING OUT OF I.T.A.NO.149/VIZAG/2017) ( / ASSESSMENT YEAR: 2012-13) SRI KISHORE KUMAR GUNTUR ACIT, CIRCLE - 2(1), GUNTUR ( ' / APPELLANT) ( ()' / RESPONDENT) ./I.T.A.NO.190/VIZAG/2017 ( / ASSESSMENT YEAR: 2012-13) ACIT, CIRCLE - 1(1), GUNTUR SRI MADANLAL GHEVARCHAND JAIN GUNTUR [PAN NO.AJFPM2825F] ( ' / APPELLANT) ( ()' / RESPONDENT) ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 2 C.O. NO.55/VIZAG/2017 (ARISING OUT OF I.T.A.NO.190/VIZAG/2017) ( / ASSESSMENT YEAR: 2012-13) SRI MADANLAL GHEVARCHAND JAIN GUNTUR ACIT, CIRCLE-1(1), GUNTUR ( ' / APPELLANT) ( ()' / RESPONDENT) ./I.T.A.NO.191/VIZAG/2017 ( / ASSESSMENT YEAR: 2012-13) A CIT, CIRCLE - 1(1), GUNTUR SRI AMRUTLAL JAIN HUNDIA GUNTUR [PAN NO.ABUPJ3814G] ( ' / APPELLANT) ( ()' / RESPONDENT) C.O. NO.54/VIZAG/2017 (ARISING OUT OF I.T.A.NO.191/VIZAG/2017) ( / ASSESSMENT YEAR: 2012-13) SRI AMRUTLAL JAIN HUNDIA GUNTUR ACIT, CIRCLE - 1(1), GUNTUR ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 03.07.2018 / DATE OF PRONOUNCEMENT : 1 1 .07.2018 ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 3 / O R D E R PER BENCH: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 1, GUNTUR {CIT(A)} DATED 30.11.2016 FOR THE ASSESSMENT YEAR 2012-13. THE CROSS OBJECTIONS FILED BY DIFFERENT ASSESSEES ARE IN SUPP ORT OF THE ORDERS PASSED BY THE LD. CIT(A). SINCE THE FACTS ARE IDEN TICAL ALL THE APPEALS ARE CLUBBED TOGETHER, HEARD AND DISPOSED OFF IN COM MON ORDER FOR THE SAKE OF CONVENIENCE. 2. ALL THE GROUNDS OF APPEALS ARE RELATED TO THE FA IR MARKET VALUE ADOPTED BY THE A.O. AS PER THE PROVISIONS OF SECTIO N 50C OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAINS ON SALE OF IM MOVABLE PROPERTY. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE A LONG WITH THREE OTHER CO-OWNERS SOLD THE PROPERTY SITUATED AT NAHUR VILLAGE, MUMBAI AND DISCLOSED THE TOAL SALE CONSIDERATION OF THE PROPER TY AT ` 12.00 CRORES AND OFFERED 1/4TH OF HIS SHARE OF ` 3.00 CRORES TO CAPITAL GAINS. THE A.O. COLLECTED THE SALE DEED BEARING NO.ADJ/2092/11/K DA TED 29.9.2011 AND FOUND THAT THE VALUE ADOPTED BY THE STAMPS VALUATIO N AUTHORITY OF STATE ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 4 GOVERNMENT (HEREIN AFTER REFERRED TO AS SRO) WAS VA LUED AT ` 21,69,07,000/-. ACCORDINGLY, 1/4TH SHARE OF THE AS SESSEE WORKED OUT TO ` 5,42,26,750/- AGAINST THE CAPITAL GAINS ADMITTED B Y THE ASSESSEE AT ` 3.00 CRORES. THE A.O. HAS CALLED FOR THE EXPLANATI ON OF THE ASSESSEE AS TO WHY THE SALE CONSIDERATION SHOULD NOT BE ADOPTED AS DETERMINED BY THE SRO AND THE DIFFERENCE AMOUNT SHOULD NOT BE BRO UGHT TO TAX. IN RESPONSE TO THE NOTICE ISSUED BY THE A.O., THE ASSE SSEE SUBMITTED THEIR EXPLANATION STATING THAT THE PROPERTY IN QUESTION W AS LEASED OUT ON 2.1.1975 FOR A PERIOD OF 94 YEARS AND THE LEASE PER IOD HAS NOT YET EXPIRED. THE ASSESSEE IS THE CO-OWNER FOR 1/4TH OF THE SHARE OF 3 ANNAS OUT OF 16 ANNAS AND THE TOTAL RENT RECEIVABLE FROM THE PROPERTY WAS ` 3,700/- PER MONTH OUT OF WHICH THE ASSESSEES SHARE OF RENT WAS ` 2,081.25PS. P.A. THE REMAINING PERIOD OF LEASE IS ABOVE 58 YEARS AND THERE IS NO OTHER WAY FOR THE ASSESSEE TO GET BETTE R PRICE FOR THE SAID PROPERTY. THE ASSESSEE STATED BEFORE THE A.O. THAT THE OTHER CO-OWNERS SMT LEELAVATI LEELADHAR TUCKER AND FOUR OTHERS HAVE ALSO DISPOSED OF THEIR SHARE OF 8 ANNAS BEING 50% ON 31.10.2010 FOR A CONSIDERATION OF 15.00 CRORES AND THE PROPERTY WAS VALUED BY THE SRO AT ` 23,500/- PER SQ.FT. FURTHER, THE ASSESSEE ARGUED THAT IN THE OT HER CO-OWNERS SHARE OF PROPERTY, THE SUB-REGISTRAR HAS REDUCED THE AREA OC CUPIED BY THE TENANT ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 5 AND VALUED THE SAME ON RENT CAPITALIZATION METHOD. IN THE CASE OF OTHER CO-OWNERS SMT. LEELAVATI LEELADHAR TUCKER AND OTHER S FOR THE SHARE OF 50% (8 ANNAS) OF THE PROPERTY, THE MARKET VALUE DET ERMINED BY THE SUB-REGISTRAR WAS ` 9,93,94,000/- AND IN THE CASE OF THE ASSESSEE, THE MARKET VALUE DETERMINED BY THE SRO WAS ` 21,69,07,000/-, WHICH WAS REPRESENTING THE SHARE OF 3 ANNAS OUT OF TOTAL 16 A NNAS. IN THE ASSESSEES CASE, THE SUB-REGISTRAR HAS NOT REDUCED THE AREA OCCUPIED BY THE TENANT. THE LD. A.R. ARGUED BEFORE THE A.O. THA T THE VALUE ADOPTED BY THE SUB-REGISTRAR IN THE CASE OF THE ASSESSEE WA S EXCEEDING FAIR MARKET VALUE, THEREFORE REQUESTED THE A.O. TO ACCEP T THE ACTUAL SALE CONSIDERATION AS PER THE SALE DEED AND TO COMPLETE THE ASSESSMENT PROCEEDINGS. NOT BEING CONVINCED WITH THE EXPLANAT ION OF THE ASSESSEE, THE A.O. ADOPTED THE VALUATION ADOPTED BY THE SRO F OR THE PURPOSE OF PAYMENT OF STAMP DUTY AT ` 21,69,07,000/- AND ASSESSED THE ASSESSEES SHARE OF ` 5,42,26,750/- TO THE LONG TERM CAPITAL GAINS AND T AXED THE BALANCE AMOUNT OF ` 3,33,98,588/- 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) OBSERVED THAT THE ASSESSEE ALONG WITH THREE OTHERS IS HOLDING THE TOTAL LANDED PROPE RTY OF 30,244.07 SQ.MTS REPRESENTING THE SHARE OF 3 ANNAS AND THE OTHER CO-OWNERS ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 6 SMT. LEELAVATI LEELADHAR TUCKER AND 4 OTHERS WERE H OLDING 50%( 8 ANNAS) OF THE UNDIVIDED SHARE IN THE ENTIRE PROPERT Y. THEY SOLD AND REGISTERED THEIR RIGHT IN THE PROPERTY ON 30.10.201 0 IN FAVOUR OF M/S. D.B. CHANDAK REALTORS, MUMBAI FOR A CONSIDERATION O F RS.15.00 CRORES VIDE DOCUMENT NO.ADJ/3430/10/K. THEIR SHARE OF 50% WAS VALUED BY SUB-REGISTRAR AT ` 9,93,94,000/- CRORES. WHILE VALUING THE 50% OF UNDIVIDED SHARE BELONGING TO SMT. LEELAVATI LEELADH AR TUCKER AND 4 OTHERS, THE SUB-REGISTRAR REDUCED THE AREA OCCUPIED BY THE TENANT AND VALUED THE SAME ON RENT CAPITALIZATION METHOD, WHER EAS IN THE CASE OF THE ASSESSEE, NO SUCH REDUCTION WAS ALLOWED. THE L D. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS RAISED THE OBJECTION DURING THE ASSESSMENT PROCEEDINGS FOR ADOPTION OF THE VALUATI ON MADE BY THE SUB- REGISTRAR AS EXCESSIVE, HENCE, THE ASSESSING OFFICE R SHOULD HAVE REFERRED THE VALUATION TO THE DVO AS PROVIDED BY SUB-SECTION 2 OF SECTION 50C OF THE ACT. ACCORDINGLY, THE LD. CIT(A) ALLOWED THE AP PEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E CARRIED THE MATTER TO THE TRIBUNAL. DURING THE APPEAL HEARING, THE LD. D.R. SUBMITTED THAT THE ASSESSEE OWNS 3 ANNAS ( OUT OF 1 6 ANNAS) SHARE OF IMMOVABLE PROPERTY IN SURVEY NOS.33(1), 34(1), 37, 38, 44(1), 54(3) AND 102 SITUATED AT NAHUR VILLAGE, MUMBAI IN THE REGIST RATION DISTRICT AND ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 7 SUB- DISTRICT OF MUMBAI CITY, MUMBAI WITHIN THE LIM ITS OF MUNICIPAL CORPORATION OF GREATER MUMBAI. THE PROPERTY WAS HE LD JOINTLY AND THE ASSESSEES SHARE WAS TH SHARE 3 ANNAS OUT OF 16 AN NAS. THE ASSESSEE ALONG WITH AMRUTLAL JAIN HUNDA, MADANLAL GHEVARCHAN D JAIN AND SMT. JADAVI BAI SOLD THE PROPERTY TO THE EXTENT OF 30,24 4.07 SQ. MTRS. TO M/S. MANCHAND DEVELOPERS PVT. LTD., CHEMBUR, WEST MUMBAI VIDE DOCUMENT NO.ADJ/2092/11/K DATED 29.9.2011. THE VALUE OF THE PROPERTY ASSESSED BY SRO FOR THE PURPOSE OF COLLECTING THE STAMP DUTY WAS AT ` 21,69,07,000/- AGAINST THE ACTUAL CONSIDERATION OF ` 12 CRORES. THE ASSESSEES 1/4TH SHARE WORKED OUT TO ` 5,42,26,750/- AS PER THE RATE ADOPTED BY THE SRO AGAINST WHICH THE ASSESSEE HAD A DMITTED A SUM OF ` 3.00 CRORES IN THE INCOME TAX RETURN. OUT OF THE LONG TERM CAPITAL GAINS ADMITTED, THE ASSESSEE ALSO CLAIMED DEDUCTION U/S 54F OF THE ACT AMOUNTING TO ` 1,61,14,559/-. AS PER SECTION 50C OF THE ACT, THE ASSESSEE REQUIRED TO ADOPT THE VALUE DETERMINED BY THE AUTHORITY OF STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAM P DUTY IN RESPECT OF THE TRANSFER OF THE PROPERTY. THE ASSESSEE HAS NOT MADE ANY DISPUTE WITH REGARD TO THE STAMP VALUATION AUTHORITIES FOR FIXING THE VALUATION AT HIGHER RATE. THEREFORE, THE LD. D.R. ARGUED THAT T HE A.O. HAS RIGHTLY ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 8 BROUGHT TO TAX THE DIFFERENCE AMOUNT, ACCORDINGLY, SUBMITTED THAT THE A.O.S ORDER REQUIRED TO BE UPHELD. 5. ON THE OTHER HAND, THE LD. A.R. SUBMITTED THAT T HE PROPERTY WAS UNDER OCCUPATION OF THE TENANT. THERE WAS NO APPRO ACH ROAD AND THE LAND WAS MARKED FOR GOVERNMENT ACQUISITION AND ALSO UNDER RAILWAY BUFFER RESERVE SYSTEMS. ALL THESE FACTORS CONTRIBU TED TO FETCH THE LEAST PRICE COMPARED TO THE PREVAILING MARKET RATE. FURT HER, THE LD. A.R. ARGUED THAT THE ASSESSEE BROUGHT TO THE NOTICE OF T HE A.O. WITH REGARD TO THE SALE OF PROPERTY BY THE CO-OWNER ON 31.3.201 0, WHEREIN THE SUB- REGISTRAR OFFICE HAS VALUED THE 50% PROPERTY AT ` 9,93,94,000/- AND REDUCED THE AREA OCCUPIED BY THE TENANT AND VALUED THE SAME ON RENT CAPITALIZATION METHOD. IN THE CASE OF THE ASSESSEE , THOUGH ASSESSEES WERE HOLDING THE SHARE OF 3 ANNAS OUT OF 16 ANNAS, THE PROPERTY WAS VALUED AT ` 21,69,07,000/- WHICH WAS EXORBITANTLY EXCESSIVE. THE LD. A.R. FURTHER ARGUED THAT THOUGH ALL THESE FACTORS W ERE BROUGHT TO THE NOTICE OF THE A.O., THE A.O. IGNORED PLEA MADE BY T HE ASSESSEE WITH REGARD TO THE EXCESSIVE VALUATION MADE BY THE STAMP S AND REGISTRATION AUTHORITIES AND COMPLETED THE ASSESSMENT ADOPTING T HE VALUE ADOPTED BY THE SUB-REGISTRAR OFFICE. SINCE THE ASSESSEE HA S RAISED THE OBJECTION FOR ADOPTING THE VALUATION, THE LD. A.R. ARGUED THA T THE A.O. SHOULD ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 9 HAVE REFERRED THE VALUATION TO THE DEPARTMENTAL VAL UATION OFFICER. NON REFERENCE TO THE DEPARTMENTAL VALUATION CELL RENDER S THE ADDITION MADE UNSUSTAINABLE, ACCORDINGLY, ARGUED THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION AND NO INTERFERENCE IS CALLED FOR. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE HAVE GONE THROUGH THE PAPERS AND DOCUMENTS PLACED B EFORE US. AS PER THE DETAILS IN THE ASSESSMENT ORDER, ON 2.12.1940, SRI NARSINGJI MANRUPJI, SRI GULABCHAND NARSINGJI AND SRI REKABCHA ND BHUTAJI AS PARTNERS OF M/S. BHUTA MANRUPJI & CO AND SRI PRAGJI RAMJI THAKKAR HAVE PURCHASED THE IMMOVABLE PROPERTIES BEARING S.NOS.33 (1), 34(1), 37, 38, 44(1), 54(3) AND 101(2) SITUATED AT NAHUR VILLAGE, MUMBAI IN THE REGISTRATION DISTRICT AND SUB DISTRICT OF MUMBAI CI TY AND MUMBAI SUB- URBAN WITHIN THE LIMITS OF MUNICIPAL CORPORATION OF GREATER MUMBAI. LATER, DUE TO DIFFERENCES OF OPINION AMONG THE PART NERS, THE DISPUTE WAS REFERRED TO THE ARBITRATORS FOR EFFECTING DISSOLUTI ON AND DISTRIBUTION OF ASSETS OF M/S. BHUTA MANRUPJI & CO AMONG THE PARTNE RS. THE ARBITRATORS PASSED THEIR AWARD AND DECREE ON 5TH DECEMBER, 1946 STATING THAT THE FIRM M/S. BHUTA MANRUPJI & CO WAS DISSOLVED AND ITS ASSETS WERE DISTRIBUTED AMONG THE PARTNERS IN ACCORDANCE THEREO F. SINCE THE ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 10 PARTNERSHIP FIRM M/S. BHUTA MANRUPJI & CO WAS HOLDI NG UNDIVIDED SHARE IN THE LANDS DESCRIBED IN THE SCHEDULE TO THE DEED OF CONVEYANCE DATED 2ND DECEMBER, 1940, THE SAME COULD NOT BE PAR TITIONED BY METES AND BOUNDS AMONG THE PARTNERS OF M/S. BHUTA MANRUPJ I & CO AND AS PER THE PROPORTION FIXED BY THE AWARD, THE PARTNERS OF THE SAID FIRM ON DISSOLUTION BECAME CO-OWNERS AS TENANTS IN COMMON I N THE SAID LANDS DESCRIBED IN THE SCHEDULE TO THE DEED OF CONVEYANCE DATED 2ND DECEMBER, 1940 AND EACH OF THEM WERE HOLDING UNDIVI DED SHARE IN THE FOLLOWING PROPORTION: SL.NO. NAME OF THE PARTY SHARE OF PROPERTY 1. NARASINGJI MANRUPJI 3 ANNAS 2. GULABCHAND NARSINGJI 2 ANNAS 3. REKABCHAND BHUTAJI 3 ANNAS THE HEIRS OF SRI REKABCHAND BHUTAJI (3 ANNAS SHAR E HOLDER) ARE AS UNDER: SL.NO. NAME RELATIONSHIP WITH REKABCHAND BHUTAJI 1. SMT. JADAVI BAI W/O (LATE) SRI GHEWARCHAND DAUGHTER-IN-LAW 2. MADANLAL GHEWARCHAND JAIN DAUGHTER-IN-LAW 3. KISHORE KUMAR GHEWARCHAND JAIN GRAND SON 4. AMRUTLAL GHEWARCHAND JAIN GRAND SON 5. SMT. KANCHAN DEVI GRAND DAUGHTER 6. SMT. USHA DEVI GRAND DAUGHTER 7. SMT. VINA DEVI GRAND DAUGHTER 8. SMT. TRISHALA DEVI GRAND DAUGHTER ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 11 FROM THE DETAILS DESCRIBED ABOVE, LATE SRI REKABCHA ND BHUTAJI WAS HOLDING 3 ANNAS SHARE IN THE SAID PROPERTY SITU ATED AT NAHUR VILLAGE, WHICH WAS 30,244.07 SQ.MTRS. OF LAND. SMT. JADAVI BAI, W/O (LATE) SRI GHEWARCHAND, SRI MADANLAL GHEWARCHAND JAIN, SRI AMR UTLAL GHEWARCHAND JAIN AND SRI KISHORE KUMAR ARE THE LEGA L HEIRS OF THE PROPERTY WHO SOLD THE PROPERTY TO M/S. MAN CHANDAK DEVELPERS PRIVATE LIMITED, CHEMBUR (WEST), MUMBAI VIDE DOCUMENT NO.ADJ /2092/11/K DATED 29.9.2011 FOR A CONSIDERATION OF ` 12.00 CRORES AGAINST WHICH THE SUB-REGISTRAR VALUED THE PROPERTY AT ` 21,69,07,000/- FOR THE PURPOSE OF STAMP DUTY. ON FINDING THE FACT THAT THERE WAS A DI FFERENCE IN VALUATION MADE BY THE SUB-REGISTRAR FOR THE PURPOSE OF PAYMEN T OF STAMP DUTY AND THE CONSIDERATION ADMITTED BY THE ASSESSEE FOR THE PURPOSE OF INCOME TAX, THE A.O. ISSUED THE NOTICES TO ALL THE CO-OWNERS OF THE PROPERTY PROPOSING TO ADOPT THE STAMP DUTY VALUATIO N FOR THE PURPOSE OF CAPITAL GAINS AS PER SECTION 50C OF IT ACT.. IN RE SPONSE TO THE NOTICES ISSUED BY THE A.O., THE ASSESSES HAVE FILED THEIR OBJECTIONS EXPLAINING THE REASONS FOR RECEIPT OF LESS CONSIDERATION AND A LSO SUBMITTED THAT VALUATION MADE BY THE SUB-REGISTRAR FOR THE PURPOS E OF STAMP DUTY IS IN EXCESS OF MARKET VALUE. THE ASSESSEE ALSO FURNISHE D A CHART EXPLAINING THAT THE VALUE OF THE PROPERTY OF THE OTHER CO-OWNE RS I.E LEELAVATI ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 12 LEELADHAR TUCKER AND OTHERS WHICH WAS ABOUT 50% OR 8 ANNAS WAS SOLD ON 30.10.2010 AND THE SRO VALUED THE PROPERTY AT ` 9,93,94,000/- @ ` 23,500/- PER SQ.MTR AND REDUCED THE MARKET VALUE OF THE AREA OCCUPIED BY THE TENANT AND VALUED THE SAME ON RENT CAPITALIZ ATION METHOD, WHEREAS, IN THE CASE OF ASSESSEE NO SUCH REDUCTION WAS ALLOWED. THE LD. A.R. ARGUED THAT THOUGH THE CO-OWNERS HAVE SOLD THE PROPERTY ONE YEAR PRIOR TO THE SALE OF THE PROPERTY BY THE ASSES SEE AND THERE WAS NO SUCH STEEP INCREASE OF PRICES IN THE LAND IN THE IN TERVENING PERIOD. HOWEVER, THOUGH THE ASSESSEE RAISED THE OBJECTION, THE A.O. PROCEEDED TO COMPLETE THE ASSESSMENT ADOPTING VALUE ADOPTED B Y THE SUB-REGISTRAR OFFICE. AS OBSERVED FROM THE ORDER OF THE LD. CIT( A), 50% SHARE OF THE PROPERTY BELONGING TO SMT. LEELAVATHI TUCKER AND 4 OTHERS COMPRISING OF 8 ANNAS OR 50% IN THE TOTAL PROPERTY WAS SOLD FOR A CONSIDERATION OF ` 15 CRORES AND THE SUB-REGISTRAR VALUED THE PROPERTY AT ` 9,93,94,000/- ON 20/10/2010 AS UNDER: A) TOTAL AREA - 33,247.57 SQ.MTRS. B) OCCUPIED TENANT - 24,823.80 SQ.MTRS. C) BALANCE FSI (33247.57 24,823.80) - 8,423.77 SQ.MTR S. D) VALUE OF BALANCE OF FSI 8,423.77 X 23,500 - 19,79, 58,595/- E) VALUE OF 50% SHARE (19,79,58,595 X 50%) - 9,89,79,2 97/- F) RENTAL VALUE (3700X112) - ` 4,14,400/- G) MARKET VALUE SAY ` 9,93,94,000/- ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 13 7. IN THE CASE OF THE ASSESSEE, AS SUBMITTED BY THE LD. A.R., THE SUB- REGISTRAR DID NOT REDUCE THE MARKET VALUE OCCUPIED BY THE TENANT AND THE VALUE ADOPTED BY THE SUB REGISTRAR IS FAR EXCES SIVE THAN THE PROPERTY OF THE CO-OWNER. THOUGH WE ARE OF THE VIEW THAT TH E RATE ADOPTED IN THE CASE OF OTHER CO-OWNER LEELAVATI LEELADHAR TUCK ER CANNOT BE ADOPTED IN THE CASE OF THE ASSESSEE, DUE TO A TIME GAP BETWEEN BOTH THE TRANSACTIONS, CONSIDERING THE ENTIRE FACTS AND MERITS OF THE CASE IT IS EVIDENT THAT THE ASSESSEE HAS BROUGHT ON RECORD THE OBJECTIONS FOR RECEIVING THE LESSER CONSIDERATION THAN THE VALUE A DOPTED BY SRO. THE A.O. WITHOUT REFERRING TO THE VALUATION OF THE PROP ERTY TO THE DEPARTMENTAL VALUATION CELL COMPLETED THE ASSESSMEN T IGNORING THE PLEAS MADE BY THE ASSESSEE. 8. LD. CIT(A), WHILE DELETING THE ADDITION RELIED O N THE DECISION OF HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT FARIDABAD VS. CHANDNI BUCHAR 323 ITR 510 WHICH IS RELATED TO THE UNEXPLAINED INVESTMENT IN PURCHASE OF LAND BUT NOT RELATED TO T HE ASSESSMENT OF CAPITAL GAINS AND APPLICATION OF SECTION 50C OF THE ACT. SIMILARLY, ANOTHER CASE LAW RELIED UPON BY THE LD. CIT(A) WAS CIT VS. MADHO PROPERTIES LTD. OF HONBLE HIGH COURT OF KOLKATA, W HICH WAS RELATED TO ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 14 SECTION 269UC R.W.S. 269UD OF THE ACT I.E. ACQUISIT ION OF PROPERTY BY COMPETENT AUTHORITY BUT NOT RELATED TO THE COMPUTAT ION OF CAPITAL GAINS. THE DECISIONS WERE RENDERED BEFORE INTRODUCTION OF SECTION 50C OF THE ACT. ANOTHER DECISION RELIED UPON BY THE LD. CIT(A ) IS CIT VS. RAJKUMARI VIMALADEVI 279 ITR 360 PERTAINING TO DEEMED GIFT AN D THE ASSESSMENT YEAR INVOLVED WAS 1981-82 PRIOR TO INSERTION OF SE CTION 50C OF THE ACT. THE HONBLE HIGH COURT OF ALLAHABAD DECISION IN THE CASE OF DINESH KUMAR MITTAL VS. ITO 193 ITR 770 (1991) WAS ALSO RE LATED TO UNEXPLAINED INVESTMENT AND THE ASSESSMENT YEAR INVO LVED IS 1984-85 BEFORE INTRODUCTION OF SECTION 50C OF THE ACT. THE REFORE, ALL THE CASE LAWS RELIED UPON BY THE LD. CIT(A) HAS NO RELEVANCE TO THE ASSESSEES CASE AND HAS NO APPLICATION. 9. IN THIS CONNECTION, IT IS PERTINENT TO GO THROU GH SECTION 50C OF THE ACT WHICH READS AS UNDER: (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED 91 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UN DER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED 91 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS 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 SECT ION 24, SECTION 34AA, SECTION 35 ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 15 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1 957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFIC ER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 92 [ 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). 93 [ 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 AU THORITY 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 93 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERR ED TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED 93 [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF THE TRANSFER.] AS PER SECTION 50C OF THE ACT FOR COMPUTING THE CAPITAL GAINS IN CASE OF A CAPITAL ASSET BEING LAND OR BUILDING OR B OTH, IF IT IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STA TE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY IN RESPECT OF SUCH TRANSF ER THE VALUE SO ADOPTED OR ASSESSED SHALL FOR THE PURPOSE OF SECTIO N 48 OF THE ACT BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIV ED OR ACCRUING AS A RESULT OF TRANSFER. IN CASE OF DISPUTE, THE ASSESS EE IS FREE TO APPROACH THE STAMP VALUATION AUTHORITY. IN CASE THE ASSESSE E DID NOT DISPUTE IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MAD E BEFORE ANY HIGH COURT, AND OBJECTS BEFORE THE AO FOR ADOPTING THE S RO VALUE FOR CAPITAL GAINS AS PER SECTION 50C, THE A.O. MAY REFER THE VA LUATION OF THE CAPITAL ASSET TO VALUATION OFFICER AND THE VALUE DETERMINED BY THE VALUATION ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 16 AUTHORITY SHALL BE TAKEN AS FULL VALUE FOR THE PURP OSE OF CAPITAL GAINS. IN THE INSTANT CASE, THE ASSESSEE HAS NOT DISPUTED THE VALUATION MADE BY THE STAMP VALUATION AUTHORITIES FOR THE PURPOSE OF STAMP DUTIES BUT OBJECTED FOR ADOPTION OF THE SAME FOR CAPITAL GAINS . THE ASSESSEE EXPLAINED THAT SRO VALUE WAS NOT DISPUTED BECAUSE O F PAYMENT OF STAMP DUTY BY THE BUYER. THE ASSESSEE ALSO DID NOT REQUEST THE AO FOR MAKING REFERENCE TO THE DEPARTMENTAL VALUATION OFFI CER (DVO) FOR VALUING THE PROPERTY. HOWEVER THE ASSESSEE BROUGHT ON RECORD REGARDING THE NON EXCLUSION OF TENANTS SHARE AND CO MPLEXITIES INVOLVED IN SALE OF THE PROPERTY AND FOR GETTING THE LESSER RATE. THEREFORE IN ALL FAIRNESS THE AO SHOULD HAVE REFERRED TO THE DEPARTM ENTAL VALUATION CELL FOR VALUING THE PROPERTY AS PROVIDED IN SECTION 50C (2) OF IT ACT. SINCE THE AO HAS IGNORED THE OBJECTIONS OF THE ASSESSEE A ND FAILED TO REFER THE VALUATION OF PROPERTY TO THE DVO, WE ARE OF THE OPI NION THAT THE CASE SHOULD BE REMITTED BACK TO THE FILE OF THE A.O. TO MAKE REFERENCE TO THE DVO TO DETERMINE THE FAIR MARKET VALUE OF THE PROPE RTY FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. 10. ON THE SIMILAR FACTS THE COORDINATE BENCH OF IT AT A BENCH CHENNAI IN ITA NO.2115/MDS/2016 FOR THE ASSESSMENT YEAR 2005-06 ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 17 DATED 28.10.2016 REMITTED THE MATTER BACK TO THE FI LE OF THE A.O. FOR RE- ADJUDICATION. SIMILARLY HONBLE COORDINATE BENCH O F CHENNAI TRIBUNAL IN THE CASE OF S.D. VIMALCHAND JAIN VS. ITO, (2016) 45 ITR (TRIB) 0628 (CHENNAI), REFERRED THE MATTER BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION . THE COORDINATE BENCH OF AGRA TRIBUNAL IN UDHA JAIN VS. ITO, REPORTED IN (2016) 46 CCH 0573 TAKEN THE SIMIL AR VIEW AND REMITTED THE MATTER BACK TO THE FILE OF AO. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK T O THE FILE OF THE A.O. TO RE-ADJUDICATE THE ISSUE AFRESH AFTER THE REFERE NCE MADE TO THE VALUATION OFFICER ON MERITS AND AS PER LAW. SINCE WE HAVE REMITTED BACK THE CASE TO THE FILE OF LD. ASSESSING OFFICER FOR FRESH CONSIDERATION, THE ASSESSEE IS AT LIBERTY TO RAISE ANY OTHER GROUNDS BEFORE THE LD. ASSESSING OFFICER TO JUSTIFY HIS STAND ON THE ISSUE. 11. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. THE ASSESSEE HAS FILED CROSS OBJECTIONS SUPPORT ING THE ORDER OF THE CIT(A). SINCE WE HAVE REMITTED MATTER BACK TO THE FILE OF THE A.O., NO ITA NOS.149, 190 & 191 /VIZAG/2017 &CO 54 TO 56/VIZAG/2017 SRI KISHORE KUMA, SRI MADANLAL GHEVARCHAND JAIN & SRI AMRUTLAL JAIN HUNDIA, GUNTUR 18 SEPARATE ADJUDICATION IS CONSIDERED NECESSARY IN RE SPECT OF CROSS OBJECTIONS, ACCORDINGLY, BOTH THE APPEALS OF THE RE VENUE AND CROSS OBJECTIONS OF THE ASSESSEES ARE ALLOWED FOR STATIST ICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 TH JUL18. SD/- SD/- ( . . ' ) ( . ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER # /VISAKHAPATNAM: ' /DATED : 11.07.2018 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ACIT, CIRCLE-2(1), GUNTUR 2. / THE APPELLANT THE ACIT, CIRCLE-1(1), GUNTUR 3. / THE RESPONDENT SRI KISHORE KUMAR, PROP: KISHOR E JEWELLERY MART, D.NO.5-37-17, 4 TH LINE, BRODIPET, GUNTUR. 4. / THE RESPONDENT SRI MADANLAL GHEVARCHAND JAIN, C/O KISHORE JEWELLERY MART, D.NO.5-37-17, MAIN ROAD, 4/1, BRODIPET, GUNTU R 5. / THE RESPONDENT SRI AMRUTLAL JAIN HUNDIA, D.NO. 5-21-174, 1 ST FLOOR, 2/9, BRODIPET, GUNTUR 6. + / THE PRINCIPAL CIT, GUNTUR 7. + ( ) / THE CIT (A)-1, GUNTUR. 8. # . , . , # / DR, ITAT, VISAKHAPATNAM 9 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM