VINCENTJ. FERNANDES, MUMBAI V. ITO 19(1)2, MUMBAI

ITA 1102/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3025 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 07-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Question of law; Fair market value; Valuation report
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND RAMLAL NEGI , (JM) ./ I.T.A. NO. 1102 / MUM/20 1 1 ( / ASSESSMENT YEAR : 200 6 - 07 ) VINCENT J FERNANDES, 26, CHUIM, KHAR - WEST, MUMBAI - 400052 / VS. INCOME TAX OFFICER - 19 (1)(2), PIRAMAL CHAMBER, LALBAUG, MUMBAI. ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN : AAAPF2137M / APPELLANT BY SHRI M SUBRAMANIAN / RSPONDENT BY SHRI CHANDIP SINGH / DATE OF HEARING : 1 5 .10 . 201 5 / DATE OF PRONOUNCEMENT : 1 5 . 10 . 201 5 / O R D E R PER B.R. BASKARAN (AM) THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 23.11.2010 PASSED BY LD CIT(A) - 30, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2006 - 07. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE VALUE DETERMINED BY THE AO AS PER DVOS REPORT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN U/S 50C OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD THREE FLATS FOR A CONSIDERATION OF R S.25.00 LAKHS. THE AO NOTICED THAT THE VALUE DETERMINED BY THE STAMP ITA NO. 1102 / MUM/20 1 1 2 DUTY AUTHORITIES FOR THESE FLATS WAS RS.85.18 LAKHS. HENCE THE AO PROPOSED TO APPLY THE PROVISIONS OF SEC. 50C OF THE ACT AND ADOPT THE SALE CONSIDERATION AT RS.85.18 LAKHS. SINCE THE ASSESSEE OBJECTED TO THE SAME, THE AO REFERRED THE MATTER OF VALUATION TO THE DVO, WHO DETERMINED THE VALUE OF THE PROPERTY AT RS.80.69 LAKHS BY WAY OF HIS PRELIMINARY REPORT. IT IS PERTINENT TO NOTE THAT THE FINAL REPORT WAS GIVEN BY THE DVO AFTER THE COMPLETION OF THE ASSESSMENT, WHEREIN ALSO HE DETERMINED THE VALUE OF THE PROPERTY AT RS.80.69 LAKHS. THE AO COMPLETED THE ASSESSMENT ON THE BASIS OF PRELIMINARY REPORT BY ADOPTING THE SALE CONSIDERATION AT RS.80.69 LAKHS ON THE BASIS OF PRELIMINARY REPOR T GIVEN BY THE DVO. 3. BEFORE THE LD CIT(A), THE ASSESSEE FURNISHED A VALUATION REPORT OBTAINED FROM A REGISTERED VALUER, WHO HAD DETERMINED THE VALUE OF PROPERTY AT RS.23.05 LAKHS. THE ASSESSEE ALSO SUBMITTED THAT THE REPORT GIVEN BY THE DVO SUFFERS FRO M CERTAIN DEFICIENCIES, MORE PARTICULARLY, THE SALE INSTANCES NOTED BY THE DVO WERE UNCLEAR. HOWEVER, THE LD CIT(A) CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE DVO HAS ADDRESSED ALL THE OBJECTION IN HIS FINAL REPORT. 4. WE HEARD THE PARTIES A ND PERUSED THE RECORD. THE MAIN OBJECTION OF THE LD A.R WAS THAT THE DVO HAS FAILED TO ESTABLISH THE SIMILARITIES BETWEEN THE SALE INSTANCES AND THE PROPERTY SOLD BY THE ASSESSEE AND FURTHER THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE HAVE NOT BEEN PROP ERLY ADDRESSED. HE FURTHER SUBMITTED THAT THE LD CIT(A) DID NOT CONSIDER THE VALUATION REPORT FURNISHED BY THE ASSESSEE AT ALL. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE DVO HAS CONSIDERED ALL THE OBJECTIONS IN HIS FINAL REPORT. ITA NO. 1102 / MUM/20 1 1 3 5. HOWEVER, A P ERUSAL OF THE ORDER PASSED BY LD CIT(A) DOES NOT SHOW AS TO HOW THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE WAS ADDRESSED BY THE DVO. FURTHER, THE LD CIT(A) ALSO DID NOT CONSIDER THE VALUATION REPORT GIVEN BY THE ASSESSEE. THERE IS ALSO MERIT IN THE CO NTENTION OF THE LD A.R THAT THE SALES INSTANCES ADOPTED BY THE DVO SHOULD HAVE SIMILARITIES WITH THE PROPERTY OF THE ASSSESSEE AND IT IS NOT CLEAR AS TO HOW THE SAID OBJECTION WAS ADDRESSED BY THE TAX AUTHORITIES. UNDER THESE SET OF FACTS, WE ARE OF THE V IEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH BY DULY AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 6. BY WAY OF ADDITIONAL GROUND, THE ASSESSEE HAS RAISED A GROUND TO THE EFFECT THAT THE ASSESSING OFFICER SHOULD HAVE ADOPTED THE FAIR MARKET VALUE OF PROPERTY AS ON 1.4.1982 INSTEAD OF ADOPTING THE FAIR MARKET VALUE OF PROPERTY IN 1992. HE SUBMIT TED THAT EVEN THOUGH THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT, THE ASSESSEES PROPERTY WAS KEPT INTACT IN THE DEVELOPMENT PROCESS. HE SUBMITTED THAT THE DEVELOPER HAS CARRIED OUT CERTAIN REPAIRS ONLY IN THE FLATS. ACCORDINGLY, THE LD A.R PRA YED THAT THE ADDITIONAL GROUND BE ADMITTED AND THE CLAIM OF THE ASSESSEE SHOULD BE EXAMINED. HOWEVER, WE ARE UNABLE TO ADMIT THE ADDITIONAL GROUNDS, SINCE THE SAME IS RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND FURTHER IT REQUIRES VERIFICATION OF CE RTAIN FACTS WHICH ARE NOT AVAILABLE ON RECORD. THE HONBLE SUPREME COURT HAS HELD IN THE CASE OF NATIONAL THERMAL POWER CORPORATION (229 ITR 383) THAT ONLY QUESTION OF LAW CAN BE ADMITTED PROVIDED ALL THE FACTS RELATING THERETO ARE AVAILABLE ON RECORD. A CCORDINGLY, WE REJECT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. ITA NO. 1102 / MUM/20 1 1 4 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 1 5 TH OCT , 2015. 1 5 TH OCT , 2015 SD SD ( RAMLAL NEGI ) ( B.R. BASKARAN ) / J UDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI: 1 5 TH OCT , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI