SMT. PUKHRAJ DEVI PANSARI, Jaipur V. ACIT, Jaipur

ITA 1117/JPR/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6505 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL; D C SHARMA
• Assessee Lawyers: S L PODDAR
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Assessment record
• Section: 50C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 1117/JP/2011 ASSESSMENT YEAR : 2008-09 PAN : ABOPP 9651 M SMT. PUKHRAJ DEVI PANSARI VS. THE ACIT A-7, SHOWROOM, AGRA ROAD CIRCLE- 5 SETHI COLONY, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY: SHRI A.K. KHANDELWAL & SHRI D.C. SHARMA DATE OF HEARING: 07-07-2014 DATE OF PRONOUNCEMENT: 11-07-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST OR DER OF THE LD. CIT(A)- II, JAIPUR DATED 02-09-2011 FOR THE ASSESSMENT YEA R 2008-09 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THE AP PEAL. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 43,56,000/- IN COMPUTING THE CAPITAL GAIN INCOME ON THE BASIS OF DLC RATE WITHOUT CONSIDERING THE SUBMISSION OF T HE ASSESSEE. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN NOT ALLOWING BENEFIT OF RS. 50,000/- IN TRANSFER OF THE LAND FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. 2 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN NOT COMPUTING THE CAPITAL G AIN INCOME AS PER THE PROVISIONS OF SECTION 48 OF THE I.T. ACT , 1961. 4. THAT THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 2.1 THE GROUND NO. 2 OF THE ASSESSEE IS MISCONCEIVE D IN AS MUCH AS THE NECESSARY RELIEF HAS ALREADY BEEN GIVEN BY THE LD. CIT(A). THEREFORE, IT IS ACCORDINGLY DISMISSED. 3.1 THE GROUND NO. 4 OF THE ASSESSEE IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 4.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS SOLD TWO PIECES OF AGRICULTURAL LANDS AT VILLAGE HAJYAWAL, DISTT. SANG ANER, JAIPUR. THE APPARENT CONSIDERATION IN CONVEYANCE DEED WAS AS UNDER:- 1. RS. 73,56,000/- 2. RS. 61,44,000/- TOTAL RS. 1,35,00,000 HOWEVER, THE STAMP DUTY VALUATION/ DLC RATE FOR THE SE PROPERTIES WERE AS UNDER:- 1. RS. 1,17,12,000/- 2. RS. 61,44,000/- TOTAL RS. 1,78,56,000/- 3 SINCE THE DLC VALUATION WAS MORE THAN THE APPARENT CONSIDERATION, THE AO APPLIED THE PROVISION OF SECTION 50C OF THE ACT AN D HELD THE AMOUNT OF RS. 1,78,56,000/- TO BE THE SALE CONSIDERATION FOR COMP UTING THE CAPITAL GAIN. 4.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHERE IT WAS CHALLENGED THAT SECTION 50C HAS BEEN APPLIED WITHOUT GIVING OP PORTUNITY TO EXPLAIN THE REASONS FOR DIFFERENCE IN DLC RATE AND ACTUAL CONSI DERATION. THE RECOURSE OF SECTION 50C WITHOUT GIVING SUCH OPPORTUNITY WAS NOT PROPER. THE LD. CIT(A) HOWEVER, HELD THAT ON EXAMINATION OF THE ASSESSMENT RECORD FROM THE PROCEEDING SHEET, IT WAS FOUND THAT ASSESSEE WAS HE ARD ON 20-12-2010 FOR APPLICATION OF SECTION 50C AND ALSO FILE OF NECESSA RY PAPERS IN SUPPORT OF THE SUBMISSIONS, THE RELEVANT ORDER SHEET ENTRY IS AS U NDER:- 20-12-2010 AR MR. H.M. SINGHVI ATTENDED AND FI LED COPY OF SALE DEED OF THE PROPERTY, COT OF TRANSFER AND SUPPORTING FOR RATE OF GOLD (PURCHASE RATE- SALE RATE). IT IS NOTED THAT ONE PART OF THE PROPERTY WHICH IS SOLD TO (I) MR. RAMES H CHAND YADAV (II) SH.. RAVI SHANKAR YADAV (III) SH. SHYOJI RAM (IV) SH. HARI NARAYAN YADAV, THE ASSESSEE HAS RECEIVED R S. 73,56,000/- ON SHOW CAUSE CAPITAL GAIN CONSIDERING THE SAME WHILE DLC RATE OF THAT PROPERTY IS RS. 1,17,12,000/ -. HENCE PROVISIONS OF SECTION 50C ARE CLEARLY APPLICABLE AN D THE DIFFERENCE AMOUNT OF RS. 43,56,000/- IS ADDED BACK TO HER INCOME AS CAPITAL GAIN. APART FROM THIS, AR HAS SUB MITTED THAT RS. 2 LAKHS IS CLAIMED AS TRANSFER EXPENSES WHEREAS THIS AMOUNT 4 IS ACTUALLY COST OF LITIGATION FOR DEFENDING THE TI TLE OF THE PROPERTY SO PART OF THE COST OF LAND. AR FILED NECE SSARY PAPERS IN SUPPORT OF HIS SUBMISSIONS. CASE DISCUSSED.. THE LD. CIT(A) THUS CONCLUDED THAT THIS ORDER SHEET ENTRY PROPOSING TO ADOPT SECTION 50C IS SIGNED BY THE ASSESSEE AND NO OBJECT ION IN SUPPORT OF ADOPTION OF DLC RATE WAS RAISED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, THE AO WAS BOUND TO FOLLOW SECTION 50C(1) AND TO APPLY THE DLC RATE AS A CONSIDERATION FOR TRANSFER. THE RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS. 1. JITENDRA MOHAN SAXENA VS. ITO, 305 ITR (AT) 60 (LUCKNOW BENCH). 3. M/S. AMBATTUR CLOTHING CO.. LTD. 326 ITR 245 (MAD.) 3. K.R. PALANISAMY VS. UNION OF INDIA, 306 ITR 61 ( MAD.) 4.3 IN VIEW THEREOF, THE LD. CIT(A) HELD THAT THE A SSESSEE HAVING NOT RAISED ANY OBJECTION AND BEING BOUND BY SECTION 50C, THE APPLICATION THEREOF WAS UPHELD AND ASSESSEE'S REQUEST TO REFER THE MATTER T O DVO IN TERMS OF SECTION 50C(2) OF THE ACT WAS REJECTED. HOWEVER, THE LD. CI T(A) UPHELD THE COMPUTATION OF CAPITAL GAIN U/S 48 OF THE ACT BY AP PLYING THE PROVISION OF SECTION 50C OF THE ACT. 5 4.4 AGGRIEVED, THE ASSESSEE IS BEFORE US. 4.5 THE LD. COUNSEL FOR THE ASSESSEE REITERATED TH E ARGUMENTS TAKEN BEFORE THE LD. CIT(A) AND FAIRLY CONCEDED THAT THE ORDER S HEET ENTRY DATED 20-12- 2010 AS REPRODUCED BY THE LD. CIT(A) WAS CORRECT AN D IT WAS ALSO SIGNED BY THE LD. COUNSEL FOR THE ASSESSEE. HOWEVER, IT IS P LEADED THAT THIS DOES NOT AMOUNT TO GIVING EFFECTIVE OPPORTUNITY OF HEARING T O RAISE THE OBJECTIONS WHICH IS NECESSARY AS HELD IN THE FOLLOWING CASES. 1. SMT. SHARDA DEVI, ALWAR VS. ITO, WARD- 1(4) (ITA NO. 670/JP/2012, A.Y. 2005-06, ITAT JAIPUR BENCH ORDER DATED 16-01-2013). 2. A SHAIK MOHINDEEN VS. ITO (ITA NO. 1659/MAD/2007 , A.Y. 2004-05, ITAT CHENNAI A BENCH ORDER DATED 28 - 01-2009) 3. SUNIL KUMAR AGARWAL VS. CIT, SILIGURI (GA NO.368 6 OF 2013 ITAT NO.221 OF 2013, HON'BLE CALCUTTA HIGH COURT ORDER DATED 13-03-2014) IT IS CONTENDED THAT THE ABOVE CASE LAWS SQUARELY L AY DOWN THAT OPPORTUNITY OF HEARING IS NECESSARY FOR APPLICATION OF SECTION 50C OF THE ACT AND OPPORTUNITY OF HEARING SHOULD BE EFFECTIVE AND MEAN INGFUL. IT IS PLEADED THAT THIS ISSUE MAY BE SET ASIDE AND RESTORED BACK TO TH E FILE OF THE AO TO REFER THE MATTER TO THE DVO AS PRESCRIBED U/S 50C(2) OF THE A CT. 4.6 THE LD. DR ON THE OTHER HAND VEHEMENTLY CONTEND S THAT FROM THE RECORDS IT IS VERY CLEAR THAT :- 6 (I) VIDE ORDER SHEET ENTRY DATED 20-12-2010, THE AS SESSEE WAS INFORMED ABOUT THE DIFFERENCE BETWEEN DLC RATE AND APPARENT CONSIDERATION AND THE APPLICABILITY OF PROVISION OF SECTION 50C OF THE ACT AND ALSO THE PROPOSAL TO ADD THE DIFFERE NCE FOR COMPUTATION OF CAPITAL GAIN. THE ASSESSEE FILED THE NECESSARY PAPERS IN SUPPORT OF HER SUBMISSIONS AND IN NONE OF THE SUBMISSIONS, THERE IS ANY OBJECTION ABOUT APPLYING THE SECTION 50C OF THE ACT. (II) THE ASSESSEE WAS INFORMED ABOUT THE APPLICABIL ITY OF SECTION 50C OF THE ACT AND WAS ASKED TO FILE THE SU BMISSION. THE PROCEEDING ENTRY SHEET IS SIGNED BY THE LD. AR OF THE ASSESSEE. NO OBJECTION IS RAISED FOR APPLYING THE P ROVISION OF SECTION 50C OF THE ACT. IN THESE CIRCUMSTANCES, THE OPPORTUNITY OF HEARING IS GIVEN BY THE AO. THE ASSESSEE CHOSE N OT TO FILE ANY OBJECTION AND SIGNED ON THE PROCEEDING SHEET. T HUS DUE PROCESS OF LAW IS COMPLETED. (III) NOW THE ASSESSEE IS RETRACTING HER OWN ADMIS SION BY ONE PRETEXT OR THE OTHER. THE ASSESSEE IS TRYING TO DEF END THE ISSUE BY SAYING THAT OPPORTUNITY SHOULD BE MEANINGFUL AND EFFECTIVE BUT THE RECORD PROVES THAT MEANINGFUL AND EFFECTIVE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. THEREFORE, THE CASE LAWS RELIED ON BY THE ASSESSEE ARE NOT APPLICABLE AS THE AO HAS COMPL IED WITH NECESSARY PROVISIONS OF LAW AND THE ORDER OF THE LD . CIT(A) IS RELIED ON. 7 4.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. SECTION 50C OF THE ACT HAS TW O LIMBS. THE FIRST LIMB PROVIDES THAT IN CASE OF DIFFERENCE BETWEEN DLC RAT E AND ACTUAL CONSIDERATION, THE HIGHER OF THEM IS TO BE ADOPTED AS A SALE CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN. THE SECOND LIMB PROVID ES THAT WHERE THE ASSESSEE CLAIMS BEFORE THE AO THAT DLC RATE IS EXCE SSIVE THAN FAIR MARKET VALUE THEN THE AO IN THAT CASE MAY REFER THE VALUAT ION OF THE ASSET TO THE DVO. IT HAS BEEN ADMITTED BY THE ASSESSEE'S COUNSEL THAT NO DISPUTE ABOUT UNREASONABLENESS OF THE DLC RATE WAS RAISED BEFORE THE SUB-REGISTRAR. FROM THE RECORD WHICH EMERGES FROM THE ORDER OF THE LD. CIT(A) AND CONTENTS WHEREOF ARE NOT DISPUTED BY ASSESSEE'S COUNSEL, IT EMERGES THAT THE AO INFORMED THE ASSESSEE ABOUT THE APPLICABILITY OF SE CTION 50C OF THE ACT AND THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE CONSIDE RED. IN THE SUBMISSIONS FILED, THERE IS NO MENTION OF ANY REASONS ABOUT THE DLC RATE BEING EXCESSIVE TO FAIR MARKET VALUE AND ON TOP OF IT THERE IS NO W HISPER OF ANY OBJECTION. FROM THE PERUSAL OF THE RECORDS AND THE ORDER OF TH E LD. CIT(A), WE ARE OF THE CONSIDERED VIEW THAT DUE OPPORTUNITY WAS GIVEN TO T HE ASSESSEE AND NO OBJECTION IS RAISED EITHER ORALLY OR IN WRITING BEF ORE THE AO. THIS FACT CLEARLY EMERGES FROM THE FACT THAT THE ASSESSEE'S COUNSEL H AS SIGNED ON ORDER SHEET AND THIS FACT IS NOT DISPUTED BY THE ASSESSEE'S COU NSEL. THUS WE ARE OF THE 8 VIEW THAT IT CANNOT BE HELD THAT THE ASSESSEE WAS N OT GIVEN AN OPPORTUNITY OF BEING HEARD. APROPOS THE CASE LAWS:- (I) SHARDA DEVI VS. ITO, WARD- 1(4), JAIPUR BENCH (SUPRA) IN THAT CASE THE ASSESSEE CLEARLY OBJECTED BY MENTI ONING THAT DLC RATE WAS EXCESSIVE AND THE ASSESSEE'S RATE WAS COMPARABLE TO FAIR MARKET VALUE. UNDER THESE CONDITIONS, ITAT HAS SET ASIDE THE ISSUE. (II) A SHAIK MOHINDEEN VS. ITO, CHENNAI BENCH (SUPRA) IN THIS CASE ALSO, THE ASSESSEE WAS NOT GIVEN AN OP PORTUNITY WHEREAS IN THE CASE BEFORE US, AN EFFECTIVE CHANCE IS GIVEN TO THE ASSESSEE. (III) SUNIL KUMAR AGARWAL VS. CIT (CAL.) (SUPRA ) IN THIS CASE THE CONVEYANCE DEED CONTAINED THE RECI TAL THAT APPARENT CONSIDERATION WAS THE HIGHEST PREVAILING M ARKET PRICE. IN CONVEYANCE DEED OF THE ASSESSEE, NO SUCH RECITALS A RE MENTIONED THUS THE CASE LAWS CITED BY THE ASSESSEE ARE CLEARL Y DISTINGUISHABLE AND IT DOES NOT HELP THE CAUSE OF THE ASSESSEE. HENCE IN V IEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO UPHOL D THE ORDER OF THE LD. CIT(A) AND THE APPEAL OF THE ASSESSEE DISMISSED. 9 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED THE ORDER PRONOUNCED IN OPEN COURT ON 11TH J ULY, 2014. SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 11 TH JULY, 2014 *MISHRA COPY FORWARDED TO:- 1. SMT. PUKHRAJ DEVI PANSARI, JAIPUR 2. THE ACIT , CIRCLE- 5, JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (ITA NO. 1117/JP/2011) BY ORDER AR ITAT, JAIPUR 10