ITO, WARD-4(2), Nagpur V. DR. JATINDERPAL SINGH MEHTA, Nagpur

ITA 105/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93376 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Keywords: Value adopted by valuation officer; Cost of acquisition; Valuation report
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO .105/NAG/2013 ASSESSMENT YE AR : 2006-07 THE INCOME-TAX OFFICER, DR. JARINDERPAL SINGH MEHTA, WARD4(2), NAGPUR. V/S. DR. AMBEDKAR MARG, KAMAL CHOWK, NAGPUR. PAN AAVPM 6720C. APPELLANT. RESPONDENT. APPELLANT BY : SHRI S.R. KIRTANE.. RESPONDENT BY : SH RI MANOJ MORYANI. DATE OF HEARING - 23-04-2015 DATE OF ORDER 8 TH MAY, 2015. O R D E R PER SHRI MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF CIT(APPEALS)-19, MUMBAI (CAMP OFFICE NAGPUR) DATED 10 TH JAN., 2013 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BELOW: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN SNOT GIVING A CLEAR FINDING ON THE ISSUE AND LEAVING IT TO THE DISCRETION OF THE AO TO DECIDE AFRESH, BASED ON DIRECTIONS OF THE CIT(A ) WHICH IS BEYOND THE MANDATE OF THE CIT(A) AS PER SEC. 251(!)(A) OF THE ACT. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES SOF THE C ASE, LD. CIT(A) FAIALED TO APPRECIATE THE FACTS THAT AS PER SEC. 55A OF I.T. ACT 1961 R.W.SEC. 16A(6) OF W.T. ACT 1957, THE AO IS BOUND BY THE VALUATION D ONE BY THE DVO. 3. THE ASSESSMENT WAS MADE UNDER SECTION 143(3) DAT ED 31-12-2008 AND THE LONG TERM CAPITAL GAIN WAS ASSESSED AT ` .45,20,772/- AS PER THE FOLLOWING CALCULATION : SALE CONSIDERATION RECEIVED ` .66,00,000/- 1/3 RD SHARE IN ` .1,98,00,000/-) LESS : COST OF ACQUISITION : AS DETERMINED BY THE DVO ` .35,000/- (1/3 RD OF ` .1,05,000/-) INDEXED COST OF ACQUISITION 35,000 X 497/100 ` 1,73,950/- LONG TERM CAPITAL GAIN ` .64,26,050/- LESS : INVESTMENT IN NEW HOUSE PURCHASE D COST OF PURCHASE ` . 18,00,000/- REGISTRATION CHARGE ` . 18,000/- STAMP DUTY ` . 42,750/- EXTRA WORK ` . 4,528/- (-) ` .19,05,278/- TAXABLE LONG TERM CAPITAL GAIN ` . 45,20,772 4. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, THE ASSESSEE HAS SUBMITTED THE CALCULATION OF LONG TERM CAPITAL GAIN AS UNDER : 3 1. INCOME FROM CAPITAL GAIN SALE OF PLOT AT BYRAMJI TOWN 66,00,000 LESS: INDEXED COST OF ACQUISITION & IMPROVEMENT COST OF PLOT (A.Y. 1983-84) 38888 X 497 ---------------------- 1,88,860 100 984250 X 497 ----------------------- = 42,17,002 116 ---------------- 44,05,862 --------------- 21,94,138 LESS : INVESTMENT IN HOUSE PROPERTY 22,00,000 LONG TERM CAPITAL GAIN LOSS (-) 5,862 ========== AFTER CONSIDERING THE FACTS OF THE CASE AND THE REP ORTS FURNISHED, IT WAS DIRECTED AS UNDER : I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E, THE SUBMISSIONS SOF THE APPELLANT, ASSESSMENT ORDER, REMAND REPORT AND REJOINDER TO THE REMAND REPORT. ON PERUSING THE REMAND REPORT, IT I S APPARENT THAT THE ASSESSING OFFICER HAS RELIED ON DVO REPORT. THE D VO ACCORDING TO THE APPELLANT HAS ONLY VALUED THE LAND AND NOT THE PRO PERTY. THE REJOINDER TO THE REMAND REPORT AT PARA-3 CLEARLY STATES THAT T HE PROPERTY WAS IN EXISTENCE ON THE LAND SOLD. THE CHRONOLOGY OF THE EVENT CITED AT PARA-3 OF THE APPELLANT SUBMISSION STATES THE COMPLETE DETAI L ABOUT THE CONSTRUCTION 4 OF THE PROPERTY. IT IS FURTHER STATED BY THE APPEL LANT THAT THE ASSESSEE IS IN POSSESSION OF ALL THE EVIDENCES TO PROVE THE COST OF CONSTRUCTION ON THE PROPERTY. IN VIEW OF THIS FACT, THE AO IS DIRECTE D TO RECALCULATE THE COST OF ACQUISITION BY ALLOWING COST OF IMPROVEMENT SUBJECT TO VERIFICATION OF THE CLAIM MADE BY THE APPELLANT. THE APPELLANT IS DIRE CTED TO PRODUCE THE COMPLETE EVIDENCES REGARDING COST OF IMPROVEMENT T O THE PROPERTY TO THE ASSESSING OFFICER. FOR STATISTICAL PURPOSE, THE GR OUND IS ALLOWED. IN THE LIGHT OF THE ABOVE BACKGROUND, AT THE OUTSET , LEARNED A.R. MR. MANOJ MORYANI SUBMITTED THAT THE ASSESSING OFFICER HAD AL READY PASSED AN ORDER DATED 27 TH OF MARCH, 2014 GIVING EFFECT TO THE DIRECTIONS OF LEARNED CIT(APPEALS) ACCORDING TO WHICH THE REQUISITE RELIEF HAS ALREADY BEEN GRANTED. A COPY OF AN ORDER PASSED UNDER SECTION 250 DATED 27 TH OF MARCH, 2014 IS PLACED ON RECORD. FROM THE SIDE OF THE REVENUE, LEARNED D.R. MR. S.R. KIRTANE HAS NOTHING TO ADD, HOWEVER, ARGUED THAT THE ASSESSING OFFICER IS BOUND BY THE VALUATION DONE BY THE DVO. THEREFORE, THE ORDER AS PASSED BY THE ASSESSIN G OFFICER UNDER SECTION 143(3) IS TO BE UPHELD. 5. WE HAVE HEARD BOTH THE SIDES. WE HAVE PERUSED TH E MATERIAL PLACED ON RECORD. ON ONE HAND THE ASSESSEE HAS CLAIMED THAT T HERE WAS A COST OF IMPROVEMENT AND ON THE OTHER HAND THE REVENUE HAS DENIED THAT CLAIM. TO PUT THE FACTS ON RECORD AS ALSO THE EVIDENCES PRODUCED DURING THE APPELLATE PROCEEDINGS, IT WAS DECIDED BY LEARNED CIT(APPEALS) TO CALL FOR A REMAND REPORT. THEREFORE, IN A SITUATION WHEN A REMAND REPORT IS R EQUIRED, THEN THE REVENUE DEPARTMENT CANNOT HAVE GRIEVANCE THAT THE REQUISITE OPPORTUNITY HAD NOT BEEN GRANTED. FURTHER WE HAVE ALSO NOTED THAT THIS IS N OT A CASE WHERE THE LEARNED CIT(APPEALS) HAS SIMPLY SET ASIDE THE ISSUE, WHICH ACCORDING TO THE LEARNED DR IS NOT PERMISSIBLE AFTER THE AMENDMENT TOOK PLACE UNDE R SECTION 251(1)(A) OF I.T. 5 ACT. BUT WE HAVE NOTED THAT THE LEARNED CIT(APPEALS ) HAS EXAMINED THE MERITS OF THE CASE AND THEREUPON DIRECTED TO VERIFY AND RE CALCULATE THE COST OF ACQUISITION AFTER GIVING A FINDING IN THIS REGARD. RATHER IT IS THE CASE WHERE TWO VALUATION REPORTS WERE AVAILABLE ON RECORD, ONE WAS THE REPOR T OF DVO DATED 9-11-2008 AND THE OTHER IS VALUATION REPORT OF THE ASSESSEES VAL UER DATED 12-11-2009. AFTER EXAMINING THE ENTIRETY OF THE FACTS AND EVIDENCES L EARNED CIT(APPEALS) HAS FIRST ADJUDICATED THE ISSUE AND THEN GIVEN THE DIRECTION O NLY FOR THE PURPOSE OF CALCULATION. ON THE BASIS OF THE EVIDENCE ON RECORD , THE ASSESSING OFFICER HAS GRANTED RELIEF WHILE PASSING THE ORDER UNDER SECTIO N 250 OF I.T. ACT IN TERMS OF THE ORDER OF CIT(APPEALS). ONCE THE ASSESSING OFFICER H IMSELF IS SATISFIED WITH THE EVIDENCES AND THE CONTENTION OF THE ASSESSEE AND AC CORDINGLY GRANTED A RELIEF, WE ARE OF THE VIEW THAT NO GRIEVANCE IS LEFT ANY M ORE TO THE REVENUE DEPARTMENT FOR ANY FURTHER ADJUDICATION. RESULTANTLY, WE FIND N O FORCE IN THE GROUND OF THE REVENUE. HENCE DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2015. SD/- SD/- (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER. NAGPUR, DATED: 8 TH MAY, 2015. 6 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. T RUE COPY. BY ORDER ASSISTAN T REGISTRAR, ITAT, NAGPUR WAKODE