Shri Chaudhary Abdul Samad, Pune V. ACIT, Pune

ITA 1058/PUN/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6816 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H C LEUVA
• Assessee Lawyers: S N DOSHI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 1058/PN/2010 (ASSTT. YEARS: 2006-07) SHRI CHAUDHARY ABDUL SAMAD NAWABALI, .. APPELLANT GAT NO 15, CHIKHLI MOSHI ROAD, CHOUDHARY NAGAR, CHIKHALI, PUNE PAN AARPC2458F VS. ASSTT. COMMISSIONER OF I.T. .. RESPONDENT CIR.9, PUNE APPELLANT BY: SHRI S.N. DOSHI RESPONDENT BY: SHRI H.C. LEUVA ORDER PER I C SUDHIR, J.M THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE OR DER ON SEVERAL GROUNDS INVOLVING THE SOLE ISSUE AS TO WHETHER THE LD CIT ( A) WAS JUSTIFIED IN CONFIRMING THE SALE VALUE OF BUILDING AT RS 34,72,160/- ADOPTE D BY THE AO BY INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT,196 1 (IN SHORT THE ACT) DISREGARDING THE FAIR MARKET VALUATION MADE BY THE APPROVED VALUER AND THE OBJECTION RAISED BY THE ASSESSEE. 2. AT THE OUTSET OF HEARING, THE LD AR POINTED OUT THAT THE ISSUE RAISED IN THE GROUND IS FULLY COVERED BY THE FOLLOWING DECISIONS: (I) BHATIA NAGAR PREMISES CO-OP. SOCIETY LTD. V. UN ION OF INDIA & ORS (2010) 44 DTR 19 (BOM); (II) K K PALANISAMY & ORS V UNION OF INDIA & ORS. (2008) 13 DTR 121 (MAD); (III) AJMAL FRAGRANCES & FASHIONS (P) LTD. V ACIT ( 2009) 34 SOT 57 (MUM); (IV) MEGHRAJ BAIDV ITO (2008) 4 DTR 509 (JODH.), (V) N MEENAKSHI V ACIT (2010) 326 ITR 229 (MAD). 3. THE LD DR, ON THE OTHER HAND, TRIED TO JUSTIFY T HE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. HE PLACED RELIANCE ON THE DECIS ION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ITO V SMT MANJURANI JAIN (2 008) 24 SOT 24 (DEL). ITA NO 1058/PN/10 CHAUDHARY ABDUL SAMAD NAWABALI,CHIKHI 2 4. CONSIDERING THE ABOVE SUBMISSIONS IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS RELIED UPON BY THE PARTIES, WE FIND THAT THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN ITS RECENT DECI SION IN THE CASE OF BHATIA NAGAR PREMISES CO-OP. SOCIETY LTD. V. UNION OF INDI A & ORS (SUPRA) HAS BEEN PLEASED TO HOLD THAT UNDER SECTION 50C THE VALUE AD OPTED BY STAMP VALUATION AUTHORITY OR ASSESSED FOR THE PURPOSE OF SECTION 48 , SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER. APART FROM THAT, UNDER SUB-SECTION (2) TO SECTION 5 0C, WHERE THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER AND THE VALUE SO ADOPTED BY STAMP VALUATION AUTHORITY HAS NOT BEEN DISPUTED BY IN APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY AUTHORITY, TH E COURT OR THE HIGH COURT, THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET S TO THE VALUATION OFFICER. THUS, EVEN THOUGH AN APPEAL HAS NOT BEEN PREFERRED, THE PETITIONER HAS A REMEDY OF CALLING ON THE AO TO APPOINT THE VALUER F OR THE PURPOSE OF DETERMINING THE FAIR MARKET VALUE. UNDER SECTION 50C THE VALUE SO ADOPTED OR ASSESSED BY ANY AUTHORITY OF THE STATE GOVERNMENT, REFERRED TO AS THE STAMP VALUATION AUTHORITY IS ONLY A MEASURE OF TAX AND NOT THE SUBJ ECT-MATTER OF A TAX. THE VALUATION RULE OF THE STAMP ACT IS FOR THE PURPOSE OF COMPUTATION OF INCOME WHICH IS ONLY A STANDARD OF MEASURE FOR IMPOSING TAX. IN VIEW OF THIS DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, THERE IS NO DOUB T ON THE CONTENTION OF THE ASSESSEE THAT EVEN THOUGH AN APPEAL HAS NOT BEEN PR EFERRED AGAINST THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY, THE PETIT IONER HAS A REMEDY OF CALLING ON THE AO TO APPOINT A VALUER FOR THE PURPOSE OF DE TERMINING THE FAIR MARKET VALUE UNDER THE PROVISIONS OF SECTION 50C OF THE ACT ITSE LF. DENIAL OF SUCH REQUEST OR IGNORING OF SUCH OBJECTION OF THE ASSESSEE AGAINST THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY BY THE AO IS AGAINST THE SPIRIT OF LEGISLATION UNDER THE PROVISIONS OF SECTION 50C OF THE ACT. THE DELHI BEN CH OF THE TRIBUNAL IN THE CASE OF ITO V SMT MANJRANI JAIN (SUPRA) UNDER SIMILAR CI RCUMSTANCES HAS UPHELD THE ITA NO 1058/PN/10 CHAUDHARY ABDUL SAMAD NAWABALI,CHIKHI 3 ACTION OF THE LD CIT (A) IN DIRECTING THE AO TO FIR ST REFER THE PROPERTY TO THE VALUATION CELL AND THEN DO SO IN VIEW OF THE PROVIS IONS OF SECTION 48(2) OF THE ACT. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF AJM AL FRAGRANCES & FASHIONS (P) LTD. V ACIT (SUPRA) HAS HELD THAT ONCE THE ASSE SSEE RAISES OBJECTION AS REGARDS VALUATION ADOPTED AS PER SECTION 50C, NO HA RM WOULD BE CAUSED TO THE REVENUE IF THE MATTER IS REFERRED TO THE VALUATION OFFICER FOR THE PROPER VALUATION OF THE PROPERTY. RESPECTFULLY FOLLOWING THE DECISIO NS OF THE HONBLE JURISDICTIONAL HIGH COURT ON THE ISSUE AND DECISION OF CO-ORDINATE BENCHES OF THE TRIBUNAL, WE FIND SUBSTANCE IN THE CONTENTION OF THE ASSESSEE TH AT BEFORE ADOPTING VALUATION OF THE PROPERTY SOLD, BY THE STAMP VALUATION AUTHORITY THE AO SHOULD HAVE CONSIDERED THE OBJECTIONS RAISED BY THE ASSESSEE AG AINST THE SAME AND SHOULD HAVE REFERRED THE MATTER TO THE DVO UNDER SUB-SECTI ON (2) OF SECTION 50C OF THE ACT. WE THUS IN THE INTEREST OF JUSTICE, WHILE SETT ING ASIDE THE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD, REMAND THE MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH FOLLOWING THE PROVISIONS LAID DOWN U/S 50C OF THE ACT AND OTHER CITED DECISIONS ESPECIALLY THE DECISION OF THE HON BLE JURISDICTIONAL BOMBAY HIGH COURT IN THIS REGARD. THE ISSUE IS THUS DECIDED IN FAVOUR OF THE ASSESSEE AND RELATED GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSE S. 5. CONSEQUENTLY, THE APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF APRIL, 2011. SD/- SD/- (D KARUNAKARA RAO) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE: DATED: 21 ST APRIL, 2011 B P COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ACIT, CIR. 9, PUNE 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE D.R, B BENCH, PUNE ITA NO 1058/PN/10 CHAUDHARY ABDUL SAMAD NAWABALI,CHIKHI 4 TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE