ACIT CIR 12(3), MUMBAI V. RAJKUMAR L DARYANANI, MUMBAI

ITA 1091/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71114 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 15-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK RAI POTE
• Assessee Lawyers: G P MEHTA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Fair market value; Valuation report
• Section: 143(3); 50C; 154

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 1091/M/2012 ( / ASSESSMENT YEAR : 2006 - 20 0 7 ) ACIT - CIR - 12(3), R.N O.137, 1 ST FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. / VS. RAJKUMAR L DARYANANI , 209, TULSIANI CHAMBER, FREE PRESS ROAD, NARIMAN POINT, MUMBAI 400 021. ./ PAN : ABAPD 1238 Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DIPAK RAI POTE, DR / RESPONDENT BY : SHRI G.P. MEHTA / DATE OF HEARING : 21 .8.2013 / DATE OF PRONOUNCEMENT : 20. 9 .2013 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 15.2.2012 IS AGAINST THE ORDER OF CIT (A) - 10, MUMBAI DATED 9.12.2011 FOR THE ASSESSMENT YEAR 2006 - 07. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DECIDING THAT THE AOS EXERCISE IN INVOKING THE POWERS UNDER SECTION 155(15) OF THE ACT FOR SUBSTITUTING THE STAMP VALUATION AUTHORITYS VALUATION BY THE VALUATION OFF ICERS AS CLEARLY INCORRECT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN DECIDING THE ACTION OF THE AO UNDER SECTION 155(15) AS INCORRECT BECAUSE THE REPORT OF THE VALUATION OFFICER IS BINDING ON THE AO, ONC E THE MATTER HAS BEEN REFERRED TO THE VALUATION OFFICER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN NOT APPRECIATING THE LAW AS PER SECTION 155(15) WHICH ITSELF HAS THE INBUILT PROVISION FOR RECTIFICATION O F THE ORDER PASSED BY THE AO AFTER THE REFERENCE MADE TO THE VALUATION OFFICER, IS COMPLETED AND THE REPORT OF VALUATION OFFICER HAS BEEN RECEIVED. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE DERIV ES INCOME FROM COMMISSION AND BROK ERAGE FROM REAL ESTATE TRANSACTIONS. ASSESSEE FILED THE RETURN DECLARING THE TOTAL INCOME OF RS. 24,53, 750/ - . ASSESSMENT WAS COMPLETED U/S 143(3) DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 35,69,588/ - . THE 2 INCREASE IN ASSESSED INCOME IS MAINLY ON ACCOUNT OF CAPITAL GAINS COMPUTED APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT AND ADOPTED FMV FIGURES AS PER THE STAMP VALUATION AUTHORITIES (SVA) OF THE STATE GOVERNMENT . ASSESSMENT WAS COMPLETED ON 26.12.2008 BEFORE THE DVO REPORT IS RECEIVED . DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE MADE A REQUEST FOR MAKING A REFERRAL TO THE DVO AND A CCORDINGLY, AO REFERRED THE MATTER TO THE DVO . VALUATION OFFICERS REPORT WAS RECEIVED ON 28.2.2009 AND HE ENHANCED THE VALUE OF THE REFERRED ASSET . SUBSEQUENT LY, AO INVOKED THE PROVISIONS OF SECTION 155(15) OF THE ACT AND PASSED THE MODIFICATION ORDER ON 1.6.2009, RECTIFYING HIS ASSESSMENT ORDER. THE TOTAL INCOME OF THE ASSESSEE WAS THUS DETERMINED AT RS. 32,18,628/ - . IN THESE FACTUAL MATRIX OF THE CASE, ASSE SSEE FILED AN APPEAL BEFORE THE CIT (A) OBJECTING TO THE INVOKING OF PROVISIONS OF SECTION 155(15) OF THE ACT . 4. DURING THE PROCEEDING BEFORE THE FIRST APPELLATE AUTHORITY, IT IS THE CLAIM OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 155(15) SHOULD N OT BE INVOKED TO GIVE EFFECT TO THE VALUATION REPORT OF THE DVO. IT WAS SUBMITTED THAT THE PROVISIONS OF C LAUSE (B) TO SECTION 50C(2) REFERS TO ONLY VALUES ADOPTED BY THE SVA AND NOT TO THE VALUES ADOPTED BY THE DVO . CIT (A) CONSIDERED THE SAME AND GRANTE D RELIEF TO THE ASSESSEE. CONTENTS OF PARA 5 OF THE IMPUGNED ORDER ARE RELEVANT HERE. 5. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT (A), REVENUE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 6. DURING THE PROCEED ING BEFORE US, LD DR RELIED ON THE ORDERS OF THE AO. 7. ON THE OTHER HAND, SHRI G.P. MEHTA, LD COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES IN GENERAL A ND PARA 5 OF THE CIT (A)S ORDER IN PARTICULAR. IN THIS REGARD, WE HAVE ALSO PERUSED THE PROVISIONS OF SECTION 155(15) OF THE ACT, WHICH READ AS UNDER: SECTION 155 (15) WHERE IN THE ASSESSMENT FOR ANY YEAR, A CAPITAL GAIN ARISING FROM THE TRANSFER OF A C APITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS COMPUTED BY TAKING THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER TO BE THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF 3 PAYMENT O F STAMP DUTY IN ACCORDANCE WITH SUB - SECTION (1) OF SECTION 5 0C , AND SUBSEQUENTLY SUCH VALUE IS REVISED IN ANY APPEAL OR REVISION OR REFERENCE REFERRED TO IN CLAUSE ( B ) OF SUB - SECTION (2) OF THAT SECTION , THE ASSESSING OFFICER SHALL AMEND THE ORDER OF ASSES SMENT SO AS TO COMPUTE THE CAPITAL GAIN BY TAKING THE FULL VALUE OF THE CONSIDERATION TO BE THE VALUE AS SO REVISED IN SUCH APPEAL OR REVISION OR REFERENCE; AND THE PROVISIONS OF SECTION 154 SHALL, SO FAR AS MAY BE, APPLY THERETO, AND THE PERIOD OF FOUR YE ARS SHALL BE RECKONED FROM THE END OF THE PREVIOUS YEAR IN WHICH THE ORDER REVISING THE VALUE WAS PASSED IN THAT APPEAL OR REVISION OR REFERENCE. 9. FURTHER, WE HAVE ALSO PERUSED THE PROVISIONS OF SECTION 50C(2)(B) AND THE SAME READ AS FOLLOWS. 50C(2) W ITHOUT PREJUDICE TO THE PROVISIONS OF SUB - SECTION (1), WHERE ( A ) ( B ) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT , THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER 10. FROM THE ABOVE, IT IS EVIDENT THAT THE PROVISIONS SECTION 155(15) IS INVOKED ONLY IN CASES OF SITUATIONS COVERED IN SECTION 50C(2)(B) OF THE ACT. THE ABOVE CLAUSE (B) OF SECTION 50C(2) OF THE ACT REFERS TO THE VALUES ADOPTED OR ASSESSED BY THE SVA, WHICH HAVE NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY AUTHORITY, COUR T OR THE HIGH COURT. THE SAID PROVISION DOES NOT COVER THE SITUATIONS OF THE PRESENT APPEAL WHERE THE REFERRA L WAS MADE U/S 55A TO THE DVO. THERE IS DIFFERENCE BETWEEN THE DISPUTE ON THE VALUE OF SVA AND THE VALUE OF THE DVO. THUS, THE DVO S VALUE IS OUTSIDE THE S COPE OF SECTION 155(15) OF THE A CT. THEREFORE, THE PROVISIONS OF SECTION 155(15) WERE WRONGLY INVOKED BY THE AO FOR GIVING EFFECT TO THE FINDINGS OF THE REPORT BY THE VALUATION OFFICER. THEREFORE, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) I S FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED . 11. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOU NCED IN THE OPEN COURT ON 20 TH SEPTEMBER , 2013. SD/ - S D/ - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 20.9 .2013 . . ./ OKK , SR. PS 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI