DCIT, Allahabad V. Shri Tej Narain Chaddha, Allahabad

ITA 107/ALLD/2011

• Counselvise Citation: 10720714 RSA 2011
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 20-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTA VA
• Assessee Lawyers: N C AGARWAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Cost of acquisition; Fair market value; Valuation report; Tax effect
• Section: 50C; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 106/ALLD./2011 ASSTT. YEAR : 2006-07 DY. C.I.T., CIRCLE-1, VS. SHRI DEEPAK CHADDHA, ALLAHABAD. 52/28, LOWTHER ROAD, ALLAHABAD. (PAN : ABSPC 2744 C) ITA NO. 107/ALLD./2011 ASSTT. YEAR : 2006-07 DY. C.I.T., CIRCLE-1, VS. SHRI TEJ NARAIN CHADDH A, ALLAHABAD. 34 GEORGE TOWN, ALLAHABAD. (PAN : AAKPC 0342 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y.P. SRIVASTAVA, DR RESPONDENT BY : SHRI N.C. AGARWAL, C.A. DATE OF HEARING : 01.11.2012 DATE OF PRONOUNCEMENT OF ORDER : 08.11.2012 ORDER PER BHAVNESH SAINI, JM: BOTH THE DEPARTMENTAL APPEALS ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(A), ALLAHABAD DATED 24.03.2011 FOR THE ASSESSMENT YEAR 2006-07. ITA NO. 106 & 107/ALLD./2011 2 2. IN BOTH THE APPEALS, THE GROUNDS OF APPEALS ARE SIMILARLY RAISED BY THE REVENUE. THEREFORE, FOR THE PURPOSE OF DISPOSAL OF BOTH THE APPEALS, THE FACTS ARE TAKEN FROM THE APPEAL IN THE CASE OF SHRI DEEPAK CHADDHA. ITA NO. 106/ALLD./2011 (SHRI DEEPAK CHADDHA) : 3. THIS DEPARTMENTAL APPEAL IS FILED ON THE FOLLOWI NG GROUNDS : 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADO PTING THE FMV / SALE VALUE OF THE PROPERTY FOR THE YEAR UNDER CONSIDERATION AT RS.73,78,372/- ON THE BASIS OF DVOS REPORT FOR EAR LIER ASSESSMENT YEAR I.E., A.Y. 2005-06, AS THE PROCEEDINGS FOR DIFFEREN T YEARS ARE TREATED AS SEPARATE PROCEEDINGS. 2. THE AO HAS TAKEN SALE VALUE AS PER STAMP VALUE AUTHORITY AT RS.1,05,40,521/ AS AGAINST THE SALE VALUE SHOWN BY THE ASSESSEE AT RS.50,78,713/-. IN THIS CONTEXT THE CONTENTION OF T HE ASSESSEE THAT THE VALUE OF PROPERTY SOLD IS LESS THAN THE VALUE AS PER STAM P VALUE AUTHORITY IS NOT ACCEPTABLE SINCE THE ASSESSEE HIMSELF HAS GOT CONVE RTED HIS LEASE LAND INTO FREEHOLD AND MADE PAYMENTS AS PER PREVALENT MARKET RATE. FURTHER, A PERUSAL OF THE VARIOUS SALE DEEDS REVEAL THAT BOTH THE SELLER AND THE PURCHASER HAVE PAID THE STAMP DUTY AS PER STAMP VAL UATION AUTHORITY AND NO DISPUTE REGARDING VALUATION OF PROPERTY WAS RAIS ED BEFORE STAMP VALUATION AUTHORITY. 3. THE CIT(A) HAS ERRED ON FACTS IN ALLOWING A DED UCTION ON ACCOUNT OF COMPENSATION, WHILE WORKING OUT THE TOTA L LONG TERM CAPITAL GAIN DURING THE YEAR UNDER CONSIDERATION, WHEN THE ASSESSEE DURING ASSESSMENT PROCEEDINGS COULD NOT SUBSTANTIATE HIS C LAIM. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME SHOWING INCOME AT RS.17,81,540/-. THE ASSESSING OFFICER PRO CEEDED TO COMPUTE CAPITAL GAINS OF IMMOVABLE PROPERTY BY TAKING MARKET VALUE FOR STAMP DUTY PURPOSE WITHOUT REFERRING IT TO THE VALUATION OFFICER OF THE DEPARTMENT. THIS IS DESPITE THE FACT THAT DURING THE COURSE ITA NO. 106 & 107/ALLD./2011 3 OF ASSESSMENT PROCEEDINGS, COMPLETE DETAILS WERE FU RNISHED AS REQUIRED AND EVEN VALUATION REPORT OF THE GOVERNMENT APPROVED VALUER WAS FURNISHED TO ESTIMATE FAIR MARKET VALUE FOR THE PURPOSE OF CAPITAL GAIN UNDER THE IT ACT. MOREOVER, THE STAMP DUTY IS PAID BY THE BUYER AND HENCE, AS SELLER, THERE IS NO QUESTION OF CHALLENGING THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. ALSO, THE COMPENSATION PAID IN FAMILY SETTLEMENT THROUGH COURT TO PROTECT THE RIGHT OVER THE PROPERTY IS NOTHING EXCEPT THE COST OF IMPROVEMENT. THE ASSESSEE HAS SHOWN CAPITAL GAIN S AT RS.17,81,540/-, BUT THE ASSESSING OFFICER WORKED OUT THE CAPITAL GAINS AT R S.41,18,115/- AND MADE ADDITION OF RS.23,36,575/-. THE INCREASE IN CAPITAL GAIN BY THE ASSESSING OFFICER IS ON ACCOUNT OF ADOPTION OF VALUE AS PER STAMP VALUATION AUTHORITY OF RS.1,05,40,541/- AS AGAINST FAIR MARKET VALUE SHOWN BY THE ASSESSEE AT RS.50,78,713/ - BY THE ASSESSEE AND FURTHER NON DEDUCTION FOR PROPORTIONATE PAYMENT MADE TO PROTECT THE RIGHTS OVER THE PROPERTY, I.E., COST OF IMPROVEMENT OF RS.4,12,956/-. THE ASSESSEE HOLDS ONE HALF SHARE IN PROPERTY. THE ASSESSEE CHALLENGED THE COMPUTATION OF LONG TER M CAPITAL GAINS BEFORE THE LD. CIT(A) AND THE VALUATION ADOPTED AS PER STAMP VALUA TION AUTHORITY BECAUSE THE ASSESSING OFFICER FAILED TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. THE LD. CIT(A), CONSIDERING THE EXPLANATION OF THE ASSE SSEE IN THE LIGHT OF PROVISIONS OF LAW CONFIRMED THE ADDITION TO THE EXTENT OF RS.11,49,83 5/- AND ALLOWED THE APPEAL OF THE ASSESSEE PARTLY. THE FINDINGS OF THE LD. CIT(A) IN THE IMPUGNED ORDER IN PARA 4 TO 5 ARE REPRODUCED AS UNDER : ITA NO. 106 & 107/ALLD./2011 4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE MATERIAL ON RECORD. IT IS SEEN THA T THE WHOLE APPEAL RELATES TO ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN ON TH E SALE OF QUESTIONED PROPERTIES. THE AO NOTED DURING THE COURSE OF SCRUT INY ASSESSMENT PROCEEDINGS THAT AREA OF LAND, SALES CONSIDERATION, BROKERAGE & MISC. SALES EXPENSES HAVE BEEN TAKEN AS DISCLOSED BY THE ASSESSEE, TAKING THE RATE PER SQ. MTR. AS ON 01.04.1981 AT RS.110 PER SQ.MTR., BY APPLYING THE FORMULA-AREA OF LAND X (1991.73X110/4.97), MARKET VALUE FOR STAMP DUTY PURPOSES HAVE BEEN TAKE N FROM RESPECTIVE COPIES OF SALE DEEDS ENCLOSED ALONG WITH THE RETURN OF INCOME . IN ADDITION, THE ASSESSEE HAS ALSO CLAIMED COST OF ACQUISITION OF BUILDING MEASURING 697.9 SQ. MTR. AN D THE RATE AS ON 01.04.1981 HAS BEEN TAKEN @ RS.100 PER SQ.MTR ., WHICH COMES TO RS.3,41,971/- AND AFTER INCLUDING THE CONNECTED EXPENSES, INDEXED COST OF B UILDING HAS BEEN SHOWN AT RS.3,46,855/-. THE ASSESSEE ALSO CONTENDED BEFOR E THE AO, AS ALSO ACCEPTED BY HIM THAT IN THE YEAR UNDER CONSIDE RATION A SALE DEED WAS ALSO EXECUTED IN FAVOUR OF SRI RAM SAJEEVAN MAURYA FOR 3 12.58 SQ. MTR. OF LAND, AS REFLECTED ABOVE ALSO, WHICH WAS ACTUALLY SOLD TO PU RCHASER VIDE AGREEMENT DATED 25.02.1985 AND THE ENTIRE CONSIDERATION OF RS.1,50, 000/- WAS RECEIVED BY THE ASSESSEE IN 1985 & VIDE DEED OF POSSESSION DATED 19 .01.1985, POSSESSION OF PLOT AS WELL AS CONSTRUCTED PORTION WAS DELIVERED TO THE PURCHASER IN F.Y. 1984-85 & DELIVERY OF POSSESSION WAS ALSO GIVEN IN F.Y. 1984- 85, THE TRANSACTION WAS COMPLETE IN F.Y. 1984-85 FOR INCOME TAX PURPOSES & THE SALE DEED EXECUTED IN F.Y. 2005-06 WAS MERELY FOR SPECIFIC PERFORMANCE OF THE CONTRACT. THE SALE CONSIDERATION AS PER THE ASSESSEE FOR THE COMPUTATION OF LTCG WAS RS.50,78,713/- BUT THE FMV FROM RESPECTIVE SALE DEEDS FOR REGISTRATION PURPOSES BY THE STAMP VALUATION AUTHORITIES (SVA), REFLECT T HE SAME AT RS. 1,05,40,531/- (FULL SHARE); OUT OF SALE PROCEEDS SHOWN AT RS.50,78,713/-(FULL SHARE), COMPENSATION ALLEGEDLY PAID TO SRI NAVIN CHAND SETH , PRAVEEN CHAND SETH AND POONAM KAKKAR AMOUNTING TO RS.4,12,956/- HAS BEEN C LAIMED AS DEDUCTION BY THE ASSESSEE. THE AO OBSERVED THAT AS PER THE PROVISIONS CONTAINED IN SE CTION 50C(1) OF THE IT. ACT, 1961, THE VALUE OF THE ASSET IS TO BE ADOPTED ON THE BASIS OF VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY & TH AT A PERUSAL OF VARIOUS SALE DEEDS REFLECT THAT THE PURCHASER/SELLER HAVE PAID STAMP DUTY AS P ER STAMP VALUATION ADOPTED BY THE REVENUE AUTHORITY AND NO D ISPUTE AROSE BEFORE THE STAMP VALUATION AUTHORITY REGARDING THE VALUATION OF THE IMMOVABLE PROPERTY SOLD DURING THE YEAR. THE AO FURTHER NOTED THAT THE PROPERTY IS LOCATED ON THE PRIME LOCATION OF ALLAHABAD & HE WAS CONVINCED THAT THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY IS THE CORRECT VALUATION OF THE PROPERTY IN QUESTION. THE AO ALSO NOTED THAT ON THE SAME LOCATI ON, THE ASSESSEE GOT CONVERTED LEASED LAND INTO FREEHOLD LAND WITHIN THE LAST YEAR OR SO AND MADE PAYMENTS AS PER PREVALENT MARKET RATES & THEREFORE HE HELD THAT THE CONTENTION OF THE ASSESSEE THAT THE VALUE OF PROPERTY SOLD IS LES S THAN THE VALUE ADOPTED BY THE ITA NO. 106 & 107/ALLD./2011 5 STAMP VALUATION AUTHORITY IS NOT ACCEPTABLE & HE AL SO CAME TO THE CONCLUSION THAT THERE IS NO NEED TO REFER THE MATTER TO THE DE PARTMENTAL VALUATION OFFICER (DVO) & IN CONSONANCE WITH THE PROVISIONS OF SECTIO N 50C(1) OF THE I.T. ACT, 1961, THE SALE CONSIDERATION OF THE PROPERTY IN QUE STION WAS TAKEN BY HIM AT RS.1,05,40,531/- AGAINST RS.50,78,713/- AS SHOWN BY THE ASSESSEE. HOWEVER, HE ACCEPTED THE COST OF ACQUISITION OF THE LAND AS ON 01.04.1981 AT THE RATE OF RS.110/- PER SQ.MTR. AS IN THE ASSESSMENT PROCEEDIN GS FOR THE A.Y. 2005-06, THE SAME VALUE WAS ACCEPTED BY THE DEPARTMENT. SIMILARL Y, THE COST OF ACQUISITION OF CONSTRUCTED PORTION AS ON 01.04.1981 AT THE RATE OF RS.100/- PER SQ. MTR., WAS ALSO ACCEPTED BY HIM. HOWEVER, THE AO DISALLOWED RS .4,12,956/- AS COMPENSATION PAID TO SRI NAVEEN SETH, PRAVEEN SETH & SMT. POONAM KAKKAR PAID AS COMPENSATION AFTER ASKING THE ASSESSEE TO S UBSTANTIATE ITS CLAIM AND NOT RECEIVING ANY CONVINCING REPLY IN THIS REGARD. THIS ISSUE WAS ALSO INVOLVED IN THE A.Y. 2005-06, WHEREIN ALSO, THE AO DISALLOWED THESE EXPENSES FOR THE DETAILED REASONS MENTIONED IN THE ASSESSMENT ORDER FOR A.Y. 2005-06. THE AO, THEREFORE DISALLOWED THE SAID EXPENSES AS THEY WERE HELD NOT INCURRED WHOLLY & EXCLUSIVELY FOR THE TRANSFER OF ASSET AS REQUIRED U /S 48 OF THE I,T. ACT, 1961. 4.2) A SIMILAR ISSUE AROSE IN THE A.Y. 2005-06, IN THE CASE OF THE ASSESSEE, WHERE MY PREDECESSOR IN APPEAL NO.23/ITO/R-L(1)/ALL D/07-08 DATED 25.02.2010 HAS, INTER ALIA, TAKEN THE FOLLOWING DECISIONS AS R ELEVANT TO DECIDING THE APPEAL UNDER CONSIDERATION AS WELL. 4.2.1) DIRECTIONS WERE GIVEN IN THAT A.Y. BY THE AD DL CIT/JCIT, RANGE 1, ALLAHABAD TO THE AO TO REFER THE MATTER TO THE VALU ATION CELL AND ACCORDINGLY REPORT FROM THE DVO WAS RECEIVED IN THAT YEAR. THE CIT(APPEAL), ALLAHABAD ACCEPTED THE VALUATION OF THE DVO & REJECTED THE OB JECTIONS RAISED IN THIS REGARD BY THE ASSESSEE. 4.2.2) REGARDING DEDUCTION FOR PAYMENT MADE TO SRI NAVEEN SETH, PRAVEEN SETH & SMT. POONAM KAKKAR, I.E. ALLOWABILITY OF PRO PORTIONATE COMPENSATION, THE C1T (APPEALS), ALLAHABAD, ACCEPTED THE PLEA OF THE APPELLANT I.E. PROPORTIONATE COMPENSATION SHOULD BE ALLOWED AS THE Y WERE PAID TO PROTECT THE RIGHTS OVER THE PROPERTY AND HENCE ARE IN THE NATUR E OF COST OF IMPROVEMENT. ITA NO. 106 & 107/ALLD./2011 6 4.3) FOR THE RELEVANT ASSESSMENT YEAR UNDER APPE AL THE MATTER HAS, HOWEVER, NOT BEEN REFERRED TO THE DEPARTMENTAL VALUATION OFF ICER AT ANY POINT OF TIME. THE AO HAS MADE THE ADDITION IN THE CASE FOR THE AS SESSMENT YEAR UNDER CONSIDERATION BY RESORTING TO THE PROVISIONS OF SEC TION 50C OF THE I.T. ACT, 1961, WHICH READS AS UNDER: '(1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING A S A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED (OR ASSESSA BLE) BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFER RED TO AS THE STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VA LUATION AUTHORITY UNDER SUB-SECTION(1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE ] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY O THER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITA! ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTION (6) AND (7) OF SECTION 23A, SUB -SECTION(5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEAL TH -TAX ACT, 1957 {27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THE ACT. 4.3.1) FROM THE PROVISIONS OF THE SAID SECTION IT I S SEEN THAT THE FOLLOWING ELEMENTS ARE ESSENTIAL BEFORE ANY VALID ADDITION CAN BE MADE UND ER THE SAID SECTION, AS ALSO ENDORSED BY VARIOUS COURTS OF LAW. ITA NO. 106 & 107/ALLD./2011 7 'IT IS MANDATORY ON THE PART OF THE AO TO MAKE REFE RENCE TO VALUATION OFFICER AS PER PROVISIONS OF SECTION 50C WHERE THE ASSESSEE CONTENDED THAT VALUATION AS DONE BY STAMP VALUATION AUTHORITY IS NOT ACCEPTABLE TO HIM. THE DECISION OF THE AO WAS NOT CORRECT WHERE H E HELD THAT REFERENCE TO VALUATION OFFICER IS OPTIONAL SINCE THE ASSESSEE HAD NOT OBJECTED TO VALUE ADOPTED BY THE STATE VALUATION AUTHORITY, THERE WAS NO NEED TO REFER MATTER TO THE VALUATION OFFICER [KALPATARU INDUSTRIES VS. ITO IT AT NO.5540/MURN/07 DECIDED ON 24.08.2009. 'CLAUSES (A) & (B) OF SUB-SECTION (2) OF SECTION 50 C ARE CONTINUATION TO EACH OTHER AND THEREFORE, CONDITIONS LAID DOWN IN B OTH THE CLAUSES ARE REQUIRED TO BE SATISFIED TOGETHER - AO HAS TO REFER THE VALUATION TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE IF THE PR OPERTY UNDER TRANSFER IS LESS THAN VALUATION MADE BY THE STATE VALUATION AUTHORITY AND FURTHER THAT HE HAS NOT DISPUTED THE VALUATION BY THE STATE VALUATION AUTHORITY BEFORE APPELLATE AUTHORITIES UNDER STAMP DUTY ACT [ MOHD.SHOIB VS DCIT [2009] 29 DTR 306 (LKO - B) 'IN A CASE WHERE THE AO APPLIED PROVISIONS OF SECTI ON 50C(1) AND CAME TO A CONCLUSION THAT THE VALUE OF SALE CONSIDERATION H AD TO BE TAKEN AT A VALUE AS PER THE SALE DEED OF SUB REGISTRAR BUT THE MATTE R WAS NOT REFERRED TO THE DVO, IT WAS HELD THAT THE MATTER SHOULD HAVE BEEN R EFERRED TO THE DVO FOR GETTING ITS MARKET RATE ESTABLISHED AS ON DATE OF S ALE TO ARRIVE AT A CORRECT SALE CONSIDERATION. [2008] 23 SOT 25 (JODH.) (URO) MEGHR AJ BAID V. ITO/114 TTJ 841 (JODH)' 4.4) 'IF AN ASSESSEE OBJECTS TO STAMP DUTY VALUATIO N, THE ASSESSING OFFICER IS DUTY BOUND TO REFER THE MATTER TO THE VA LUATION OFFICER - [2009] 34 SOT 57 (MUM) - AJMAL FRAGRANCES & FASHIONS (P) LTD. V. C.I.T. CONSIDERING THE JUDGMENTS ABOVE AND ALSO CONSIDERIN G THE JUDGMENT IN THE CASE OF CIT VS. CHANDANI BHOCHAR [2010] 323 ITR 510 (P&H ) AS WELL AS THE JUDGMENT OF THE HON'BIE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SMT.RAJ KUMAR VIMLA DEVI [2005] 279 ITR 360 (ALLD), I AM OF THE FIRM VIEW THAT THE STAND TAKEN BY THE AO THAT THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY ALONE IS TAKEN TO BE THE FAIR MARKET VALU E IS ITA NO. 106 & 107/ALLD./2011 8 NOT CORRECT SINCE HE SHOULD HAVE REFERRED THE MATTER IN ASSESSMENT TO TH E DVO AS IN THE PRESENT CASE, BOTH THE INGREDIENTS OF PROVISIONS OF SECTION 50C(2) ARE PRESENT WHICH COMPELS THE AO TO REFER SUCH MATTER FOR VALUATION B Y DVO IN ACCORDANCE WITH PROVISIONS OF SECTION 55A OF THE I.T. ACT, 1961 AND THE SAID PROVISIONS OF SECTION 50C(2) ARE ESSENTIALLY TO BE READ IN CONJUNCTION WITH THE PROVISIONS OF SECTION 50C(1) OF THE I.T. ACT. HOWEVER, CONSIDERING THE FACT THAT THE AS SESSEE VIDE LETTER DATED MARCH 7, 2011, AGREED TO THE COMPUTATION OF THE LONG TERM CAPITAL GAIN ON THE BASIS OF THE APPEAL DECIDED BY THE CIT(APPEALS), ALLAHABAD FOR T HE ASSESSMENT YEAR 2005-06 BASED ON THE REPORT OF THE DVO AND MATERIAL ON RECORD AND WHICH IS MOST APPROPRIAT E IN THE GIVEN SET OF CIRCUMSTANCES, THE REVISED LONG TERM CAPITAL GAIN I S WORKED OUT AS FOLLOWS. MOREOVER, AS CATEGORICALLY SUBMITTED BY TH E ASSESSEE, IT HAS ALSO NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF CIT(APPEA LS) BEFORE THE HON'BLE ITAT FOR THE A. Y. 2005-06. S.NO. PARTICULARS A.Y. 2005-06 A.Y. 2006-07 (UNDER PPEAL) (I) VALUE AS PER SVA 27,98,505/- 1,05,40,531/- (II) VALUE AS PER DVO 18,86,500/- -- (III) RELIEF ALLOWED (A.Y. 05-06) 9,12, 005/- -- (IV) RELIEF ALLOWABLE (A.Y. 06-07) 31,62,159/- (32.59%) OR SAY 30% IN VIEW OF RISE IN CIRCLE RATES IN A.Y. 2006-07) 4.5) THEREFORE, FMV/SALE VALUE FOR THE PURPOSE O F WORKING OUT CAPITAL GAINS IS REFLECTED AT RS.73,78,372/- AND THE SHARE OF THE APPELLANT IS THUS WORKED OUT AT RS.36,89,186/- (50%) AND SUCH VALUE HAS TO B E SUBSTITUTED FOR THE VALUE ADOPTED BY THE AO, BEING VALUATION AS PER SVA AT RS.52,70,265.50 (50%). 4.6) LIKE WISE, I ALSO ALLOW THE DEDUCTION FOR P ROPORTIONATE COMPENSATION OF A SUM OF RS.4,12,956/- IN WORKING OUT THE CAPITAL G AIN AS THE SAME WAS PAID TO PROTECT & IMPROVE THE RIGHTS OVER THE PROPERTY BY T HE ASSESSEE WHICH IS NOTHING BUT COST OF IMPROVEMENT I.E. RS.4,12,956/-. ITA NO. 106 & 107/ALLD./2011 9 4.7) THE LONG TERM CAPITAL GAIN IS THEREFORE REQ UIRED TO BE WORKED OUT AS FOLLOWS: (AMOUNT IN RS.) FMV/SALE VALUE OF THE PROPERTY AS DISCUSSED 73,78,372 LESS:- INDEXED COST OF ACQUISITION 10,88,853 - INDEXED COST OF BUILDING . 3.46,855 - BROKERAGE & OTHER EXPENSES 8,68,000 - COMPENSATION PAID 4,12.956 27,16,662 27,16.662 LONG TERM CAPITAL GAINS 46,61,710 ASSESSEE'S ONE HALF SHARE OF LTCG 23,30,855 OR SAY 23,30,860 4.8) THEREFORE, THE ASSESSES SHALL GET A RELIEF OF RS. 17,87,250/- (RS.41,18,110 - 23,30,860) ON ACCOUNT OF WORKING OUT OF LONG TERM C APITAL GAINS WHILE ADDITION TO THE EXTENT OF RS.11,49,835/-(RS.23,30,8 60 - 11,81,025) IS HEREBY CONFIRMED, IN THIS REGARD. 5.) IN THE RESULT, THE APPEAL IS PARTLY ALLOWE D. 5. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND SUBMITTED THAT IF THE ASSESSING OFFICER HAS NOT REFERRED THE MATTER T O THE DVO, AT THIS STAGE, THE MATTER FOR VALUATION OF PROPERTY MAY BE REFERRED TO THE DV O AS PER SECTION 50C OF THE IT ACT. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT WHEN THE A SSESSEE RAISED THE OBJECTION REGARDING VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE DVO FOR VALU ATION PURPOSES, BUT THE ASSESSING OFFICER FAILED TO DO SO. THE ASSESSEE FILED COMPLET E DETAILS AND REPORT OF REGISTERED VALUER BEFORE THE ASSESSING OFFICER ALONG WITH HIS REPLY (PB-1 PARA 3). THE ASSESSEE ITA NO. 106 & 107/ALLD./2011 10 FILED FURTHER REPLY BEFORE THE ASSESSING OFFICER (P B-286) AND IN PARA 3 OF PAPER BOOK PAGE 287, THE ASSESSEE OBJECTED BEFORE THE ASSESSIN G OFFICER ABOUT THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND ALSO R EQUESTED THAT THE MATTER COULD BE REFERRED TO THE VALUATION CELL OF THE DEPARTMENT, B UT THE ASSESSING OFFICER DID NOT DO SO. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE MADE REP RESENTATION BEFORE THE LD. CIT(A) (PB-68 DATED 07.03.2011), WHEREBY HE AGREED TO THE COMPUTATION OF LONG-TERM CAPITAL GAINS ON THE BASIS OF APPEAL DECIDED BY THE LD. CIT (A), ALLAHABAD FOR PRECEDING ASSESSMENT YEAR 2005-06 BASED ON THE REPORT OF THE DVO AND THE MATERIAL ON RECORD, IN WHICH THE LD. CIT(A) GRANTED RELIEF OF 32.59% IN AS SESSMENT YEAR 2005-06 AND AS PER THE SAME WORKING, THE ASSESSEE WAS ENTITLED FOR REL IEF IN A SUM OF RS.34,35,159/- IN ASSESSMENT YEAR UNDER APPEAL ON THE SAME PROPORTION OF 32.59%. BUT THE LD. CIT(A) GRANTED LESSER RELIEF TO THE ASSESSEE IN THE ASSESS MENT YEAR UNDER APPEAL. THEREFORE, THERE SHOULD NOT HAVE ANY GRIEVANCE TO THE REVENUE TO FILE THE PRESENT APPEAL. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. THE ASSESSEE FILED REPORT OF REGISTERED VALUER AND OTHE R DETAILS BEFORE THE ASSESSING OFFICER EXPLAINING THE LONG TERM CAPITAL GAINS WORKED OUT B Y THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, WANTED TO ADOPT VALUATION OF THE PROPERTY AS PER VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. THE ASSESSEE OBJECTED TO THE VALUATION OF STAMP VALUATION AUTHORITY BEFORE THE ASSESSING OFFICER AND PRODUCED SUFFICIENT MATERIAL BEFORE THE ASSESSING OFFICER TO SHOW THAT THE STAMP VALUATION AUTHORITY HAS GIVEN EXCESSIVE FAIR ITA NO. 106 & 107/ALLD./2011 11 MARKET VALUE. THEREFORE, IN SUCH CIRCUMSTANCES, IT WAS THE DUTY OF THE ASSESSING OFFICER TO REFER THE MATTER OF THE VALUATION OF PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER ACCORDING TO SECTION 50C OF THE IT ACT, BUT THE ASS ESSING OFFICER FAILED TO DO SO. THEREFORE, WHAT THE ASSESSING OFFICER HAS NOT DONE AT THE ASSESSMENT STAGE, COULD NOT BE ALLOWED TO DO SO BY REMANDING THE MATTER TO THE ASSESSING OFFICER AT THIS STAGE. THEREFORE, THE CONTENTION OF THE LD. DR IS REJECTED THAT THE MATTER MAY BE REFERRED TO THE DVO AT THIS STAGE. FURTHER, THE LD. CIT(A) CONSIDER ED THE SIMILAR ISSUE IN PRECEDING ASSESSMENT YEAR 2005-06 AND ON THE BASIS OF THE REP ORT OF THE DVO, GRANTED RELIEF TO THE ASSESSEE IN ABOUT 32.59%. THOUGH THE ASSESSEE WAS E NTITLED FOR HIGHER RELIEF IN ASSESSMENT YEAR UNDER APPEAL BECAUSE THE MATTER WAS NOT REFERRED TO THE DVO, THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) VIDE HIS L ETTER DATED 07.03.2011 TO GRANT SIMILAR RELIEF BASED ON THE FINDING GIVEN IN ASSESS MENT YEAR 2005-06. THE LD. CIT(A) ON THAT BASIS WORKED OUT THE LONG-TERM CAPITAL GAINS. THEREFORE, THERE SHOULD NOT HAVE BEEN ANY GRIEVANCE TO THE REVENUE DEPARTMENT TO FILE THE PRESENT APPEAL, CHALLENGING THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) ON PROPER A PPRECIATION OF LAW AND FACTS OF THE CASE, RIGHTLY ALLOWED PART RELIEF IN FAVOUR OF THE ASSESSEE. IT IS ADMITTED FACT THAT THE DEPARTMENT DID NOT FILE ANY APPEAL BEFORE THE TRIBU NAL IN PRECEDING ASSESSMENT YEAR 2005-06 BECAUSE THE TAX EFFECT WAS BELOW THE PRESCR IBED LIMIT FOR FILING THE APPEAL BEFORE THE TRIBUNAL. THEREFORE, IF THE LD. CIT(A) G RANTED LESSER RELIEF TO THE ASSESSEE IN ASSESSMENT YEAR UNDER APPEAL AND THE ASSESSEE ACCEP TED THE ORDER OF THE LD. CIT(A) IN THIS REGARD, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LD. CIT(A) IN ALLOWING PART ITA NO. 106 & 107/ALLD./2011 12 RELIEF TO THE ASSESSEE. WE, THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. IN THE RESULT, APPEAL IN ITA NO. 106/ALLD./2011 IS DISMISSED. ITA NO. 107/ALLD./2011 (SH. TEJ NARAIN CHADDHA): 7. THE DEPARTMENT RAISED SIMILAR GROUNDS AS HAVE BE EN RAISED IN THE CASE OF SHRI DEEPAK CHADDHA ABOVE. THE FINDINGS OF THE LD. CIT(A ) ARE IDENTICAL TO THAT GIVEN IN THE CASE OF DEEPAK CHADDHA. THEREFORE, FOLLOWING THE OR DER IN THE CASE OF SHRI DEEPAK CHADDHA (SUPRA), WE DISMISS THIS DEPARTMENTAL APPEA L AS WELL. IN THE RESULT, APPEAL IN ITA NO. 107/ALLD./2011 IS DISMISSED. 8. IN THE RESULT BOTH THE DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, ALLAHABAD 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY