ITO, Ward - 29(4), Kolkata, Kolkata V. Shri Jayanta Kumar Mitra, Kolkata

ITA 1021/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54639 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-07-2011
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: U DASGUPTA
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Set aside; Capital Gains
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE . . , ! '# '# '# '# /AND ' $# , ! ) [BEFORE SHRI S. V. MEHROTRA, AM & SRI MAHAVIR SINGH , JM] #% #% #% #% / I.T.A NO. 1021/KOL/2011 $&' '() $&' '() $&' '() $&' '()/ // / ASSESSMENT YEAR: 2007-08 INCOME-TAX OFFICER, WD-29(4), KOLKATA VS. SHRI JAY ANTA KUMAR MITRA (PAN:ADIPM 6411 C) (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 22.11.2011 DATE OF PRONOUNCEMENT: 22.11.2011 FOR THE APPELLANT: SHRI P. S. DUTTA FOR THE RESPONDENT: S/SHRI U. DASGUPTA & SUMIT G HOSH / / ORDER PER MAHAVIR SINGH, JM ( ' $# ' $# ' $# ' $#, , , , ! ! ! ! ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XVI, KOLKATA IN APPEAL NO.46/CIT(A)-XVI/WD.29(4)/09-10 DATED 28.02.2011. A SSESSMENT WAS FRAMED BY ITO, WD- 29(4), KOLKATA U/S.143(3) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 14.12. 2009. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION MADE BY ASSESSING OFFICER BY INVOKING THE DEEMING PROVISIONS OF SEC. 50C OF THE ACT FOR COMPUTING LONG TERM CAPITAL GAIN ON THE BASIS O F DEEMED SALE CONSIDERATION ADOPTED BY STAMP VALUATION AUTHORITY FOR THE PURPOSE OF COMPUT ING STAMP DUTY. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NOS. 1 AND 2: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN FACT AND LAW BY DELETING ADDITION MADE UNDER THE HEAD LTCG BY INVOKING THE PROVISIONS OF SEC. 50C OF I. T. ACT, 1961 IN WHICH THE A.O. HAS R IGHTLY TAKEN THE DEEMED SALE CONSIDERATION AS DERIVED BY THE STAMP VALUATION AUT HORITY WITHIN THE MEANING OF SEC. 50C AND THE DIFFERENCE OF CAPITAL GAINS WAS ADDED T O THE TOTAL INCOME. 2 ITA 1021/K/2011 JAYANTA KR. MITRA. A.Y.07-08 2. THE LD. CIT(A) HAS ERRED IN FACT AND ALSO IN LAW BY ALLOWING THE SUBMISSION OF THE ASSESSEE THAT HIS CASE WAS NOT REFERRED TO DVO AS P ROVIDED IN SEC. 50C(2)(A) WHEREAS THE ASSESSEE NEVER REQUESTED FOR THE SAME IN COURSE OF ASSESSMENT PROCEEDING. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT DURIN G THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD HIS IMMOVABLE PROPERTY LOCATED AT 34A, SHYAMPU KUR STREET, KOLKATA ADMEASURING 9 COTTAHS 6 CHITTAKS AND 11 SQ. FT. TO KUM CONSTRUC TION & FINANCE PVT. LTD., 62, BENTINCK STREET, KOLKATA-700 069 FOR A TOTAL CONSIDERATION OF RS. 28 LACS WITH ALL OUTSTANDING LIABILITIES PAYABLE TO KOLKATA MUNICIPAL CORPORATION. THE STAMP VALUATI ON AUTHORITY DETERMINED THE MARKET VALUE FOR THE PURPOSE OF COMPUTATION OF STAMP DUTY AT RS. 94,50,278/- AS AGAINST SALE CONSIDERATION DECLARED IN THE SALE DEED AT RS.28 LACS. THE ASSES SEE DECLARED THE SALE CONSIDERATION OF THIS PROPERTY AT RS.28 LACS AND DEPOSITED THE ENTIRE AMO UNT OF SALE CONSIDERATION IN RURAL ELECTRIFICATION CORPORATION BOND AND CLAIMED THE EN TIRE LTCG AS EXEMPT. THE ASSESSING OFFICER RECOMPUTED THE LTCG BY TAKING THE SALE CONS IDERATION ADOPTED BY STAMP VALUATION AUTHORITY AT RS.94,50,278/- AS THE ASSESSEE HAS NEV ER REQUESTED FOR REFERRING THE MATTER FOR VALUATION TO DVO AND DETERMINED THE LTCG AT RS.51,0 0,278/- BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. AGGRIEVED, ASSESSEE PREFER RED APPEAL BEFORE CIT(A), WHO ALLOWED THE CASE OF THE ASSESSEE BY STATING THAT LTCG HAS TO BE COMPUTED ON THE BASIS OF SALE CONSIDERATION AND NOT ON THE DEEMED CONSIDERATION WITHIN THE MEAN ING OF SECTION 50C OF THE ACT. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE FINDING OF CIT(A) IS WRONG THAT TH E DEEMED PROVISIONS OF SECTION 50C OF THE ACT WILL NOT APPLY. PROVISIONS OF SECTION 50C OF T HE ACT WILL APPLY AND LTCG IS TO BE COMPUTED ON THE BASIS OF DEEMED SALE CONSIDERATION ADOPTED BY STAMP VALUATION AUTHORITY FOR THE PURPOSE OF COMPUTATION OF STAMP DUTY. BUT IN T HIS CASE, ASSESSING OFFICER HAS NOT REFERRED THE MATTER TO DVO FOR ASCERTAINING THE FAIR MARKET VALUE AS THE ASSESSEES COUNSEL BEFORE US NOW CONTENDED THAT THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. HOWEVER, T HE PROVISIONS OF SECTION 50C OF THE ACT WILL APPLY IN THIS CASE AND ASSESSING OFFICER WILL DETER MINE THE VALUE ACCORDINGLY. WE FURTHER STATE THAT THE AO WILL ADOPT THE VALUE WHERE IT CLAIMS TH AT THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, AND HE HAS NOT DISPUTE THE VALUE SO ADOPTED OR ASSESSED IN ANY APPEAL OR REVISION OR REFERENCE BEFORE ANY AUTHORITY OR COURT, THE AO MAY REFER THE VALUATION OF THE RELEVANT ASSET TO A VALUATION OFFICER IN ACCORDANCE WITH SECTION 55A OF THE ACT. IF THE FAI R MARKET VALUE DETERMINED BY VALUATION OFFICER IS LESS THAN VALUE ADOPTED FOR STAMP DUTY P URPOSES, THE AO MAY TAKE SUCH FAIR MARKET VALUE TO BE THE FULL VALUE OF CONSIDERATION. HOWEV ER, IF THE FAIR MARKET VALUE DETERMINED BY THE 3 ITA 1021/K/2011 JAYANTA KR. MITRA. A.Y.07-08 VALUATION OFFICER IS MORE THAN THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES, THE AO SHALL NOT ADOPT SUCH FAIR MARKET VALUE AND SHALL TA KE THE FULL VALUE OF CONSIDERATION TO BE THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES I N THE PRESENT CASE. IN VIEW OF THESE DIRECTIONS, WE SET ASIDE THE ORDER OF CIT(A) AND RE STORE THE MATTER BACK TO ASSESSING OFFICER FOR PASSING ASSESSMENT ORDER AFRESH ACCORDINGLY. THE A PPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 5. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 6. ORDER PRONOUNCED IN OPEN COURT . SD/- SD/- . . ! ' ' ' ' $# $# $# $# , ! (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0) )) ) DATED : 22ND NOVEMBER, 2011 '12 $&34 $5' JD.(SR.P.S.) / 6 -$$7 87(9- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT ITO, WARD-29(4), KOLKATA . 2 -.+, / RESPONDENT, SHRI JAYANTA KUMAR MITRA, 10A, ALIPOR E AVENUE, KOLKATA-27. 3 . $/& ( )/ THE CIT(A), KOLKATA 4. $/& / CIT, KOLKATA 5 . '$? -$& / DR, KOLKATA BENCHES, KOLKATA .7 -$/ TRUE COPY, /&@/ BY ORDER, #4 /ASSTT. REGISTRAR .