Shri Tushar Jhunjhunwala, Kolkata V. ITO, WD-30(3), KOLKATA, Kolkata

ITA 1126/KOL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3253 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2014
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU
• Assessee Lawyers: MANOJ KATARUKA
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: K OLKATA [BEFORE SHRI MAHAVIR SINGH, JM] I.T.A NO.1126/KOL/2014 ASSESSMENT YEAR: 2007-08 SHRI TUSHAR JHUNJHUNWALA VS. INCOME-TAX OFFICER , WD-30(3), KOLKATA (PAN: ACVPJ4487H) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 01.02.2016 DATE OF PRONOUNCEMENT: 01.02.2016 FOR THE APPELLANT: SHRI MANOJ KATARUKA, ADVOCATE FOR THE RESPONDENT: SHRI DAVID Z CHAWNGTHU, ADDL . CIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XIV, KOLKATA VIDE APPEAL NO. 253/CIT(A)-XIV/KOL/09-10 DATED 12.03.2014. ASSESSME NT WAS FRAMED BY ITO, WD-30(3), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 29.12. 2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF AO IN ADOPTING THE MARKET VALUE AS DETERM INED BY REGISTERING AUTHORITY IN RESPECT OF SALE DEED DATED 30.03.2007 TO RS.26,70,750/- AS AGA INST SALE VALUE DECLARED IN THE SALE DEED AT RS.15 LACS FOR THE PURPOSE OF COMPUTATION OF LONG T ERM CAPITAL GAINS. 3. I HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE PURCHASED ONE FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSEE PURCHASED ONE FLA T ON 09.10.2002 FOR A CONSIDERATION OF RS.8.21 LACS AND THE SAME WAS REGISTERED THROUGH SALE DEED WITH THE REGISTERING AUTHORITY. THIS FLAT WAS SOLD BY ASSESSEE ON 30.03.2007 RECORDING THE SALE C ONSIDERATION IN THE SALE DEED AT RS.15 LACS AS AGAINST THE REGISTERING AUTHORITY DETERMINED THE V ALUE OF STAMP DUTY PURPOSES AT RS.26,70,750/-. THE ASSESSEE WHILE DECLARING CAPITAL GAINS ARISING OUT OF SALE OF THIS PROPERTY I.E. LTCG, HE CONSIDERED THE SALE VALUE CONSIDERATION AT RS. 15 L AKHS BUT THE AO ADOPTED THE SALE VALUE EX PARTE AS ADOPTED BY REGISTERING AUTHORITY FOR REGIS TRATION OF SALE DEED AT RS.26,70,750/- AND AFTER INDEXING COST IN TURN HE VALUED LTCG AT RS.11,61,9 31/- AFTER ALLOWING THE DEDUCTION U/S. 54EC OF THE ACT ALSO. 4. AGGRIEVED, AGAINST THE ADOPTION OF SALE VALUE AS ADOPTED BY REGISTERING AUTHORITY FOR REGISTRATION OF SALE DEED AT RS.26,70,750/- AS AGAI NST VALUE DECLARED BY ASSESSEE AT 2 ITA NO.1126/KOL/2014 TUSHAR JHUNJHUNWALA, AY 2007-08 2 RS.15,00,000/-, THE ASSESSEE PREFERRED APPEAL BEFOR E CITA), WHO ALSO CONFIRMED THE ACTION OF THE AO. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEA L BEFORE THE TRIBUNAL. 5. I FIND FROM THE FACTS OF THE CASE THAT THE AO AS WELL AS CIT(A) HAS APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT FOR THE PURPOSE OF COMPUT ATION OF LTCG BY TAKING THE VALUE DETERMINED BY REGISTERING AUTHORITY WHILE REGISTERI NG THE SALE DEED AT RS.26,70,750/-. NOW THE ONLY OBJECTION OF THE ASSESSEE BEFORE ME WAS THAT T HE PROPERTY WAS NOT REFERRED TO DVO FOR ASCERTAINING THE FAIR MARKET VALUE AND FOR THIS, HE RELIED ON THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KR. AGARWAL VS. CIT (2014) 272 CTR 0332 (CAL), WHEREIN IT HAS BEEN HELD AS UNDER: 9. FOR THE AFORESAID REASONS, WE ARE OF THE OPINI ON THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SH OULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PU RPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR T REATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATUR E SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PR AYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PR OPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION HAS THE BOUND EN DUTY TO ACT FAIRLY AND IN GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVID ED BY LAW. 6. IN TERM OF THE ABOVE, LD. COUNSEL FOR THE ASSESS EE REQUESTED THE BENCH FOR SETTING ASIDE THE MATTER TO THE FILE OF THE AO AND FOR REFERENCE OF THIS PROPERTY TO DETERMINE THE FAIR MARKET VALUE TO THE DVO. ON QUERY FROM THE BENCH, LD. SR. DR HAS NOT RAISED ANY OBJECTION FOR SETTING ASIDE THE ASSESSMENT TO THE FILE OF AO FOR THE PURP OSE OF COMPUTATION OF FAIR MARKET VALUE TO BE DETERMINED AFTER ASCERTAINING THE VALUE FROM DVO. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, I RESTORE THE MATTER BACK TO THE FIL E OF THE AO WITH A DIRECTION THAT FOR THE PURPOSE OF COMPUTATION OF LTCG IN TERMS OF SECTION 50C OF T HE ACT, THE MATTER SHOULD BE REFERRED TO DVO TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPE RTY AND THEN DECIDE IN TERM OF THE PROVISION OF SECTION 50C OF THE ACT. I ORDER ACCORDINGLY. T HIS APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (MAHAVIR SINGH) JUDICIAL MEMBER DATED : 1 ST FEBRUARY, 2016 JD. SR. P.S 3 ITA NO.1126/KOL/2014 TUSHAR JHUNJHUNWALA, AY 2007-08 3 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI TUSHAR JHUNJHUNWALA, 2/2, BRIGHT S TREET, BALLYGUNGE, KOLKATA-700 019 2. RESPONDENT ITO, WARD-30(3), KOLKATA. 3. CIT(A) , KOLKATA 4. CIT , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .