HARPHOOL JAT, Jaipur V. ITO, Jaipur

ITA 1080/JPR/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6405 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Corroborative evidences; Valuation report
• Section: 50C; 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO.1080/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI HARPHOOL JAT 35, JATON KI DHANI, TEELAVAS, AJMER ROAD, JAIPUR CUKE VS. THE INCOME TAX OFFICER, WARD-7(2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADUPJ3646A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. MAHENDRA GARGIEYA JKTLO DH VKSJ LS @ REVENUE BY : SH. J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 25/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 06/07/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-III, JAIPUR DATED 22.09.2016 FOR ASSESSM ENT YEAR 2008-09 WHEREIN HE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN C ONFIRMING THE SALE CONSIDERATION AT RS. 66,29,838/- AS VALUED BY THE S UB - REGISTRAR AS AGAINST DECLARED SALE CONSIDERATION OF RS. 32,71,000/- IN R ESPECT OF PROPERTY SITUATED AT PLOT NO. E-2 & E-3, KRISHI VIHAR, UNIT NO. 14, G OPAL PURA BYE PASS ROAD, JAIPUR. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE REGISTRAR HAS ADOPTED HIGH VALUE OF SALE CONSIDERATION THAN THE DECLARED SALE CONSIDERATION IN RESPECT OF AFORE SAID PROPERTY. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PROV ISIONS OF SECTION 50C ARE ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 2 APPLICABLE IN THE INSTANT CASE AND SALE CONSIDERATI ON CAN BE TAKEN AT RS. 66,29,838/-. THE ASSESSEE WAS ISSUED A SHOW CAU SE AND IN RESPONSE, THE ASSESSEE SUBMITTED AS UNDER:- IT IS SUBMITTED THAT THE DLC RATES ADOPTED AT RS. 66,29,838/- FOR THE TOTAL LAND IS HIGHLY EXCESSIVE AND DO NOT REPRESENT THE C ORRECT MARKET VALUE FOR THE SIMPLE REASON THAT THE SUBJECTED LAND COULD NOT HAV E COMMANDED SUCH HIGH RATES, MORE PARTICULARLY WHEN THE SIZE OF THE PLOT IS ABNORMAL BEING 60 X 90 AND NOT A POPULAR SUITABLE SIZE. FINDING A BUYER FO R SUCH SIZE OF PLOT WAS A DIFFERENT TASK AND COULD NOT FACED THE SALE PRICE A S PER DLC RATES. A BIG DISADVANTAGE ATTACHED WITH THE PLOT WAS THAT THE SA ME WAS SOUTH FACING WHICH IS COMPLETELY AGAINST THE VASTU NORMS. IT IS A MATTER OF COMMON KNOWLEDGE THAT NOW A DAY EVERY BUYER ENSURE AND DES IRE TO PURCHASE ALWAYS A VASTU COMPLIANT PROPERTY AND THEREFORE, SUCH (SUB JECTED) PROPERTY ARE RATED DEFECTIVE AND COMMANDS MUCH LESSER PRICES. MOREOVER THE LOCALITY WAS NOT POPULAR WITH THE BUILDERS/COLONIZERS IN THE NEARBY AREA ALSO THE TRANSACTION WAS MADE MORE OR LESS AT THE SAME PRICES COMMENSURA TING WITH THOSE DECLARED BY THE ASSESSEE. THERE ARE MANY OTHER DRA WBACKS. HENCE, BEFORE ADOPTING DLC RATES MERELY ON THE BASIS OF THE STAMP VALUATION, IT IS REQUESTED THAT A JUDICIAL DECISION KINDLY BE TAKEN AFTER MAKI NG REQUISITE ENQUIRIES. THE ASSESSEE ALSO WANTS FURNISH REPORT OF VALUER AND OT HER SUPPORTING EVIDENCES. THE ASSESSEE IS APPLYING TO THE CONCERNED AUTHORITY UNDER RTI ACT TO GET THE RELEVANT PAPERS. HOWEVER, IN THE INTEREST OF JUSTIC E THE MATTER MAY PLEASE BE REFERRED TO THE DVO. 3. THE REPLY FILED BY THE ASSESSEE WAS NOT FOUND AC CEPTABLE BY THE AO FOR THE REASON THAT THE ASSESSEE HAS NOT FILED ANY EVI DENCE THAT EITHER HE OR THE PURCHASER OF THE PROPERTY WAS AGGRIEVED WITH THE ST AMP DUTY CHARGED BY THE REGISTERING AUTHORITY. THE AO FURTHER OBSERVED THAT DESPITE A PERIOD OF ALMOST 6 YEARS, THE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE PROVING THAT THE STAMP ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 3 DUTY CHARGED HAS BEEN CHALLENGED BY HIM. IT WAS ACC ORDINGLY HELD BY THE AO THAT STAMP DUTY CHARGED BY THE REGISTERING AUTHORIT Y IS VERY WELL AS PER LAW AND AGREED UPON BY THE ASSESSEE. ACCORDINGLY, THE C APITAL GAIN ARISING ON THE SALE OF LAND WAS CALCULATED ON THE SALE CONSIDERATI ON AS PER VALUE ADOPTED BY THE STAMP AUTHORITY AT RS. 66,29,838/-. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL AND REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER. FURTHER, HE FILED A COPY OF THE VALUATION REPORT DATED 14.01.20 16 WHEREIN THE VALUE OF THE PROPERTY WAS DETERMINED BY THE REGISTERED VALUER. T HE LD. CIT(A) HOWEVER, CONFIRMED THE FINDING OF THE ASSESSING OFFICER AND HELD THAT THE VALUE ADOPTED BY THE AO IS AS PER THE VALUE DETERMINED BY THE SUB -REGISTRAR AT RS. 66,29,838/- WHICH IS IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(1) OF THE ACT. 5. DURING THE COURSE OF HEARING, THE LD. AR REITERA TED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THA T THE ASSESSEE HAS SPECIFICALLY OBJECTED TO THE VALUATION AS DETERMINE D BY THE STAMP DUTY AUTHORITIES BEFORE THE ASSESSING OFFICER AND IN TER MS OF PROVISIONS OF SECTION 50C(2) OF THE ACT, WHICH ARE CLEARLY ATTRACTED IN T HE INSTANT CASE, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER T O THE DVO. IT WAS SUBMITTED BY THE LD AR THAT WHEN AN AUTHORITY UNDER THE PROVISIONS OF LAW IS REQUIRED TO EXERCISE POWERS OR TO DO AN ACT IN A PA RTICULAR MANNER, THEN THAT POWER HAS TO BE EXERCISED AND THE ACT HAS TO BE PER FORMED IN THAT MANNER ALONE AND NOT IN ANY OTHER MANNER. IN SUPPORT, RELI ANCE WAS PLACED ON ITO VS. M/S ADITYA NARAIN VERMA (HUF) IN ITA NO. 4166/DEL/2013 VIDE ORDER DATED 07.06.2017 AND ACIT VS. LALITHA KARAN, HYDERABAD IN ITA NO. 1130/HYD/2015 VIDE ORDER DATED 04.01.2017 . IT WAS FINALLY SUBMITTED BY THE LD AR THAT THE ORDER PASSED BY THE AO SHOULD THEREFORE BE QUASHED AS NOT IN ACCORDANCE ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 4 WITH PROVISIONS OF LAW OR THE MATTER MAY BE SET-ASI DE TO THE FILE OF THE AO FOR REFERRING TO THE DVO. 6. THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE AO WAS DUTY BOUND TO ADOPT THE V ALUATION AS ADOPTED BY THE STAMP DUTY AUTHORITY BEING HIGHER THAN THE DECL ARED VALUED IN TERMS OF SECTION 50C OF THE ACT. HOWEVER, HE DIDNT RAISE AN Y OBJECTION WHERE THE MATTER IS REMANDED BACK TO THE AO FOR REFERENCE TO THE DVO. 7. IN ORDER TO APPRECIATE THE RIVAL CONTENTION, WE REFER TO THE PROVISIONS OF SECTION 50C OF THE ACT WHICH ARE REPRODUCED AS UNDE R:- 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRU ING AS 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 86 BY ANY A UTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO A S THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUT Y IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED 86 SHALL , FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE C ONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. 'PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXI NG THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH T RANSFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEE N RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 5 CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFOR E THE DATE OF THE AGREEMENT FOR 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 86 BY THE STAMP VALUATION AUTHO RITY UNDER SUB- SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PR OPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED 86 BY THE STAM P 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 CAPITAL 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-SECTIONS (6) AND (7) OF SECTION 23A, SU B-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 I N RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY TH E ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION 1.FOR THE PURPOSES OF THIS SECTION, 'V ALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF T HE WEALTH-TAX ACT, 1957 (27 OF 1957). (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED 88 BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB -SECTION (1), THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKE N AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER. ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 6 8. IN THE INSTANT CASE, IT IS UNDISPUTED FACT THAT THE SALE CONSIDERATION DETERMINED BY THE STAMP DUTY AUTHORITY IS HIGHER TH AN THE DECLARED SALE CONSIDERATION AS PER THE REGISTERED SALE DEED. IT I S ALSO UNDISPUTED FACT THAT NEITHER THE ASSESSEE NOR THE PURCHASER HAS DISPUTED THE STAMP DUTY AUTHORITY VALUATION BY THE STAMP DUTY AUTHORITY. HOWEVER, IT IS ALSO AN ACCEPTED FACT THAT THE ASSESSEE HAS DISPUTED SUCH VALUATION AS AD OPTED BY THE STAMP DUTY AUTHORITY BEFORE THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. 9. THE QUESTION THAT ARISES FOR CONSIDERATION IS WH ERE THE ASSESSEE DISPUTES SUCH VALUATION AS ADOPTED BY THE STAMP DUT Y AUTHORITY BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, WHAT SHOULD BE THE COURSE OF ACTION WHICH SHOULD BE ADOPTED BY THE ASSESSING OFFICER. IN THIS REGARD, CLAUSE (A) OF SUB- SECTION (2) OF SECT ION 50C PROVIDES THAT WHERE THE ASSESSEE CLAIMS THAT THE VALUE ADOPTED BY THE S TAMP VALUE AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE ON THE TRANSFER, AND VALUE SO ADOPTED BY THE STAMP VALUATION AUTHORI TY HAS NOT BEEN DISPUTED IN ANY APPEAL/ REVISION OR NO REFERENCE HAS MADE BE FORE ANY AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSETS TO THE VALUATION OFFICER. IN THE INSTANT CAS E, AS WE HAVE NOTED ABOVE, WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSEE HAS SPECIFICALLY OBJECTED BEFORE THE ASSESSING OFFICER THAT THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR M ARKET VALUE OF THE PROPERTY AND GIVEN THE UNDISPUTED FACT THAT THE SAID VALUATI ON HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION, THE ASSESSING OFFICER IS RE QUIRED TO REFER THE MATTER TO THE VALUATION OFFICER. WE, THEREFORE, DEEM IT APPRO PRIATE TO REMAND THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHA LL DETERMINE THE VALUATION OF CAPITAL ASSET SO TRANSFERRED, AFTER CALLING FOR THE REPORT FROM THE VALUATION OFFICER AND AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. ITA NO. 1080/JP/2016 SHRI HARPHOOL JAT, JAIPUR VS ITO, JAIPUR 7 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/07/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 06/07/2018 *GANESH KR VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - SHRI HARPHOOL JAT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT - THE ITO, WARD-7(2), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 1080/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.