C. Amarnath, Hyderabad V. ACIT, Hyderabad

ITA 102/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66120 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: S K PISSAY
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.102/HYD/2011 ASSESSMENT YEAR : 2006-07 SRI C. AMARNATH, HYDERABAD. .... APPELLANT PAN:ABBPC 5089-P VS. ACIT, CIR-9(1), HYDERABAD. RESPONDENT APPELLANT BY : SHRI S.K. PISSAY RESPONDENT BY : SHRI B.V. PRASAD REDDY DATE OF HEARING : 06-06-2012 DATE OF PRONOUNCEMENT : 03 -08-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 15-10-2010 OF CIT (A)-VI, HYDERABAD PAS SED IN ITA NO.0054/09-10/CIT(A)-VI/2010-11 AND IT PERTAINS TO THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS CHALLENGED THE COMPUTATION OF SHORT TERM AND LONG TERM CAPITAL GAIN ON THE BASIS OF VALUATIO N MADE BY THE DVO U/S 50C(2) OF THE ACT. 2 ITA NO. 102 OF 2011 SRI C. AMARNATH, HYDERABAD. 3. BRIEFLY THE FACTS ARE THE ASSESSEE IS AN INDIVID UAL. IN COURSE OF THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT T HE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR PURCHASED AND SOLD IMMOVABLE PROPERTIES AND DISCLOSED CONSIDERATION RECEIVED FOR COMPUTING SHORT TERM AND LONG TERM CAPITAL GAINS IN THE FOLLO WING MANNER:- 1. DOC. NO.3843/2005 DT.21-4-2005 RS.9,9 0,000 2. DOC. NO.3844/2005 DT.21-4-2005 RS.20,4 0,000 3. DOC. NO.3845/2005 DT.21-4-2005 R S.21,80,000 4. THE AO ON EXAMINING THE RELEVANT SALE DEEDS FOU ND THAT THE FAIR MARKET VALUE OF THE AFORESAID PROPERTIES FOR T HE PURPOSE OF STAMP DUTY HAVE BEEN MENTIONED AS RS.12,78,400,RS.2 6,11,500/- AND RS.24,80,000 RESPECTIVELY. THE AO FOR THE PURP OSE OF COMPUTING CAPITAL GAINS WHEN PROPOSED TO ADOPT THE FAIR MARKET VALUE MENTIONED IN THE SALE DEED FOR THE PURPOSE OF STAMP DUTY AS PER SEC. 50C OF THE ACT THE ASSESSEE OBJECTED TO IT AND STATED THAT THE VALUE MENTIONED FOR THE PURPOSE OF STAMP D UTY EXCEEDS THE FAIR MARKET VALUE. AS A RESULT OF THE OBJECTIO N RAISED BY THE ASSESSEE THE AO REFERRED THE VALUATION OF THE PROPE RTIES TO THE DVO U/S 50C(2) OF THE ACT. THE DVO SUBMITTED HIS R EPORT DETERMINING THE VALUATION OF THE PROPERTIES AT RS.1 2,78,400, RS.26,11,200 AND RS.29,90,130. THE AO INVITED OB JECTIONS OF THE ASSESSEE ON THE VALUATION MADE BY THE DVO AND A FTER CONSIDERING ASSESSEES OBJECTION ADOPTED THE VALUE DETERMINED BY THE DVO AND COMPUTED TOTAL SHORT TERM CAPITAL G AIN AT RS.12,49,900 AND LONG TERM CAPITAL GAIN AT RS.9,98, 148 WHICH RESULTED IN ADDITIONS OF RS.5,45,119 AND RS.5,71,50 0 RESPECTIVELY. THE ASSESSEE CHALLENGED THE ASSESSMENT SO MADE BY F ILING AN APPEAL BEFORE THE CIT (A). BEFORE THE CIT (A) THE ASSESSEE CONTENDED THAT BEFORE THE DVO THE ASSESSEE HAD STAT ED THAT THE 3 ITA NO. 102 OF 2011 SRI C. AMARNATH, HYDERABAD. ENTIRE PIECE OF LAND MEASURING AC.123.5 GUNTAS WAS PURCHASED IN 1991 AS AGRICULTURAL LANDS AND SINCE THEN NO IMPROV EMENT WAS MADE TO THE SAID LAND. 5. THE SAID LAND WAS NOT PLOTTED AND ROADS WERE NOT LAID. THERE WAS ALSO NO DEVELOPMENT WORK ON THE GROUND LE VEL AS IT WAS BELOW THE ROAD LEVEL AND WAS NOT FIT FOR CONSTR UCTION WORK. THE LAND WAS ALSO NOT SYMMETRICAL. THERE WERE ALSO SOME ISSUES REGARDING THE LEGAL STATUS OF THE PROPERTIES. BECA USE OF ALL THESE FACTORS THE LAND DID NOT FETCH GOOD PRICE. THE CIT (A) ON EXAMINING THE DVOS REPORT FOUND THAT THE LAND IS S ITUATED ON EXISTING 150SFT RING ROAD AND ON THE OTHER SIDE THE RE IS A 25FT., WIDE ROAD. THE PROPERTY IS ALSO LOCATED IN THE VIC INITY OF 1 TO 2 KILOMETERS FROM SCHOOLS AND COLLEGES. THE CIT (A) ALSO FOUND THAT THE DVO HAS DETERMINED THE FAIR MARKET VALUE BY TAKING INTO ACCOUNT VALUE IN COMPARABLE CASES IN THE NEIGHBOUR HOOD COLLECTED FROM SRO. ON THE AFORESAID CONSIDERATION , THE CIT (A) SUSTAINED THE COMPUTATION OF CAPITAL GAIN MADE BY T HE AO. 6. THE LD. AR REITERATING HIS STAND TAKEN BEFORE TH E CIT (A) SUBMITTED THAT THE DVO HAS NOT PROPERLY CONSIDERED THE OBJECTIONS OF THE ASSESSEE IN HIS VALUATION REPORT. THE LD. AR REFERRING TO HIS OBJECTION (PAGE 50 OF THE PAPER BO OK) RAISED BEFORE THE VALUATION OFFICER SUBMITTED THAT THE VAL UE DETERMINED BY THE VALUATION OFFICER IS MUCH HIGHER THAN THE FA IR MARKET VALUE OF LAND IN THAT LOCALITY. THE LD. AR CONTENDED THA T THE ASSESSEE HAD NOT BEEN PROVIDED THE DATA RELATING TO WHAT AR E THE COMPARABLE CASES EXAMINED BY THE DVO TO COME TO A C ONCLUSION THAT THE VALUE OF LAND IN THAT LOCALITY WAS THE RAT E ADOPTED BY HIM. HE THEREFORE REQUESTED FOR SETTING ASIDE THE CASE TO THE AO FOR ENABLING THE ASSESSEE TO EFFECTIVELY REBUT THE VALUATION MADE BY THE VALUATION OFFICER. 4 ITA NO. 102 OF 2011 SRI C. AMARNATH, HYDERABAD. 7. THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAVIN G OBJECTED TO THE FAIR MARKET VALUE FOR THE PURPOSE OF STAMP D UTY AS PER SRO THE VALUATION OF THE PROPERTY WAS REFERRED TO THE V ALUATION CELL U/S 50C(2). IF THE VALUATION MADE BY THE VALUATION OFFICER EXCEEDS THE VALUATION MADE BY THE STAMP VALUATION A UTHORITY, THE AO HAS NO OTHER OPTION BUT TO ADOPT IT. IN THIS CON TEXT THE LD. DR RELIED UPON A DECISION OF THE ITAT IN CASE OF NANDI TA KHOSLA VS. ITO IN ITA 1660/M/10 DATED 13-5-2011. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AFTER INTRODUCTION OF SEC. 50C, IF THE CONSIDERATION RECEIVED ON TRANSFER OF A CAPITAL ASSETS IS LESS TH AN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY THEN THE V ALUE ADOPTED BY THE STAMP VALUATION AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION RECEIVED FOR COMPUTING CAPITAL GAI N. HOWEVER SUB-SECTION 2 OF SECTION 50C PROVIDES AN OPTION TO THE ASSESSEE TO DISPUTE THE VALUATION MADE BY THE STAMP VALUATIO N AUTHORITY. IF SUCH AN OBJECTION IS RAISED BY THE ASSESSEE THE AO HAS TO REFER THE VALUATION OF PROPERTY TO THE VALUATION OFFICER. IF THE VALUATION MADE BY THE VALUATION OFFICER EXCEEDS THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY THEN AO HAS NO OTHER OPTI ON BUT TO ADOPT THE VALUATION MADE BY THE VALUATION OFFICER. WE AGREE WITH THE LD. DR IN THIS REGARD. HOWEVER AT THE SAME TIME THE ASSESSEE MUST BE GIVEN A FAIR CHANCE TO PROVE THAT THE VALUA TION MADE BY THE VALUATION OFFICER IS NOT BASED ON PROPER FACTS. WE THEREFORE ACCEPT THE CONTENTION OF THE LD. AR THAT THE ASSESS EE MUST BE MADE AVAILABLE WITH THE DATA REGARDING WHAT ARE THE COMPARABLE CASES THE VALUATION OFFICER HAS CONSIDERED FOR ADOP TING THE RATE FOR VALUATION OF THE PROPERTY. WE THEREFORE CONSID ER IT PROPER TO RESTORE THE MATTER BACK TO THE AO WHO SHALL MAKE AV AILABLE TO THE ASSESSEE THE COMPARABLE CASES TAKEN INTO CONSIDERAT ION BY THE 5 ITA NO. 102 OF 2011 SRI C. AMARNATH, HYDERABAD. VALUATION OFFICER FOR ADOPTING THE SQ. YARD RATE FO R VALUATION OF THE PROPERTY AND RE-COMPUTE THE CAPITAL GAIN AFTER CONSIDERING THE ASSESSEES OBJECTION, IF ANY RAISED IN THIS BEH ALF. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON - 8-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 3 RD AUGUST, 2012. COPY TO:- 1) C/O PISSAY & COMPANY, CAS, 5-8-548, ABID ROAD, HYDERABAD. 2) ACIT, CIR-9(1), HYDERABAD. 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 6 ITA NO. 102 OF 2011 SRI C. AMARNATH, HYDERABAD.