Mahendra Kumar Agarwal, Siliguri V. ITO, WD-2(1), SILIGURI, Siliguri

ITA 1162/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2479 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S M TAUHEED
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S. GODARA, JM & DR. A.L.SAINI, AM ITA NO.1162/KOL/2016 (A.Y: 2006-07) LATE MAHENDRA KR. AGARWAL (L/H OF SUSMITA AGARWAL) R.C. BUILDING , SEVOKE ROAD SILIGURI-734001. VS. ITO, WARD-2(1), SILIGURI ./ ./PAN/GIR NO. : AFIPA 9472 M ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI SUBASH AGARWAL, ADVOCATE REVENUE BY : SHRI S.M. TAUHEED, ADDL. CIT / DATE OF HEARING : 06/06/2018 /DATE OF PRONOUNCEMENT: 29.08.2018. / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2006-07, IS DIRECTED AGAINST THE ORDER PASSED BY LD . COMMISSIONER OF INCOME TAX (APPEALS)-SILIGURI IN APPEAL NO.67/CIT(A)/SLG/2015 -16 DATED 12.04.2016 WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT ) DATED 31.03.2015. 2. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUS ED. IT EMERGES AT THE OUTSET THAT THE SOLE DISPUTE BETWEEN THE PARTIES IN THE INSTANT CASE IS QUA CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION MAKING LTCG ADDI TION OF RS.59,68,094/- AFTER INVOKING SECTION 50C OF THE ACT. OTHER ASPECTS OF THE ISSUE I.E. NATURE OF CAPITAL ASSET, ITS LOCATION AS WELL AS ITS TRANSFER IN TH E RELEVANT PREVIOUS YEAR ARE NOT QUESTION. WE PROCEED IN VIEW OF THIS ADMITTED FACT UAL BACKGROUND TO FIND THAT THE CIT(A) HAS AFFIRMED THE AOS ACTION VIDE FOLLOWING DISCUSSION : 4. FROM THE SUBMISSION OF THE ASSESSEE IT EMANATES THAT HIS ONLY GRUDGE AGAINST THE AO WAS FOR NOT SENDING THE MATTER TO TH E DVO AGAIN FOR RECONSIDERATION. THE ASSESSEE INFERRED THAT BY NOT DOING SO, THE AO VIOLATED LATE MAHENDRA KUMAR AGARWAL (L/H OF SUSMITA AGARWAL ) ITA NO.1162/KOL/2016 A.Y: 2006-07 2 THE ORDER OF THE HON'BLE ITAT. I AM NOT INCLINED T O ACCEPT ASSESSEE'S VERSION. NOWHERE IN THE ORDER OF THE TRIBUNAL WAS T HE AO DIRECTED TO TAKE UP THE VALUATION WITH DVO AGAIN. THE HON'BLE TRIBUNAL WAS UNDER IMPRESSION THAT 'THE OBJECTION OF THE ASSESSEE HAS NOT. BEEN C ONSIDERED BY THE DVO OR THE AO' AND THEREFORE, AO WAS ASKED TO GRANT OPPORT UNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE AND RE-ADJUDICATE THE MATTER AFTER CONSIDERING THE OBJECTION OF THE ASSESSEE IN RESPECT OF DVO' REPORT . HOWEVER, IT CLEARLY APPEARS FROM THE RECORD THAT THE DVO HAD DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY AT RS.4,65,70,000/-, VIDE NOTICE U/ S. 55A OF THE ACT, DATED 19/05/2010. THE ASSESSEE HAD FILED AN OBJECTION LET TER TO THE DVO ON 30/06/2010. THE OBJECTIONS WERE ON THE GROUNDS OF ( I) IRREGULAR SHAPE OF THE PLOT OF LAND, (II) LARGE LAND SIZE, (III) CO-OWNERS HIP OF LAND, (IV) SLOPING GROUND BELOW THE ROAD LEVEL, (V) UNAUTHORIZED STRU CTURES AT THE FRONTAGE. THE DVO HAD DEALT WITH ALL OBJECTIONS IN HIS FINAL REPORT DATED 20/07/2010 AND FOUND THE OBJECTIONS WERE ALREADY CONSIDERED IN HIS FIRST REPORT OR NOT VALID REASONS FOR CONSIDERATION AND ACCORDINGLY MAD E NO CHANGE TO THE ORIGINAL VALUATION. IT IS PERTINENT TO QUOTE FROM T HE 'REPLY TO THE OBJECTIONS' BY THE DVO TO THE ASSESSEE AS BELOW: ' THE ASSESSEE HAS SUBMITTED HIS OBJECTIONS VIDE HI S LETTER NO. NIL DATED NIL, RECEIVED BY THIS OFFICE ON 30.06.2010 ON NS-6 ISSUE D VIDE THIS OFFICE LETTER OF EVEN NO. 92 DATED 19.05.2010. THE PARA-WISE REPLY OF THE OBJECTIONS IS AS UNDER: 1. IRREGULAR SHAPE OF THE PLOT OF LAND :- THE ASSESSEE HAS CLAIMED A 10% DISCOUNT ON THIS ACCOUNT. THE SHAPE OF THE PLOT IS IRREGULAR BUT THE FRONTAGE OF THE PLOT IS 324' WHICH IS A VERY GOOD FRONTAGE. HENCE, THE DISCOUNT ALLOWED OF 3% IS QUITE FAIR AND JUSTIFIED. 2. LARGE LAND SIZE :- NOWADAYS SUCH BIG PLOTS OF LAND ARE NOT EASILY AVAILABLE, SINCE SUCH PLOTS ARE REQUIRED FOR CONSTR UCTION OF SHOPPING MALLS, RESIDENTIAL COMPLEX ETC. THE ASSESSEE HAS CLAIMED A 15% DISCOUNT ON THIS ACCOUNT. AS SUCH BIG PLOTS OF LANDS ARE NOT EASILY AVAILABLE EVEN THEN THIS OFFICE HAS ALLOWED A DISCOUNT OF 2% ON THIS ACCOUN T WHICH IS FAIR AND JUSTIFIED ESPECIALLY SINCE THESE DAYS EASY FINANCE FROM BANKS AND FINANCIAL INSTITUTIONS IS AVAILABLE AND ALSO DEVELOPMENT AGRE EMENT IS EASILY RESORTED TO. 3 & 4. CO-OWNERSHIP OF LAND, SLOPING GROUND BELOW THE ROAD LEVEL :- THE ASSESSEE HAS CLAIMED A 10% DISCOUNT FOR CO-OWNERSHI P AND 5% FOR LOW LYING LAND, BUT THIS OFFICE HAS ALREADY ALLOWED A DISCOUN T OF 3% FOR CO-OWNERSHIP AND 2% FOR LOW LYING. ALTHOUGH THE PLOT IS NOT SITU ATED ON MUCH LOW LYING AREA, ALSO THE LOW LYING PLOTS FROM THE ROAD HAS TH E ADVANTAGE THAT THE BASEMENT CAN BE CONSTRUCTED AT A LOWER COST. HENCE THE DISCOUNT ALLOWED BY THIS OFFICE IS FAIR AND JUSTIFIED. 5. UNAUTHORIZED STRUCTURES AT THE FRONTAGE :- THE ASSESSEE HAS CLAIMED A 25% DISCOUNT ON THIS ACCOUNT, BUT FAILED TO SUBMIT ANY CONCLUSIVE AND CLINCHING EVIDENCES OF UNAUTHORIZED STRUCTURES AT THE FRONTAG E. THE ASSESSEE HAS SUBMITTED A LETTER DATED 27.03.2009, FROM THE COUNC ILOR OF THE SILIGURI LATE MAHENDRA KUMAR AGARWAL (L/H OF SUSMITA AGARWAL ) ITA NO.1162/KOL/2016 A.Y: 2006-07 3 MUNICIPAL CORPORATION WHICH INDICATES THAT FEW STRU CTURES WERE PRESENT BUT ON PWD LAND. THE LAND WAS SOLD DURING JANUARY, 2006 . IT IS NOT CLEAR FROM ASSESSEE'S LETTER WHETHER THE STRUCTURE WAS CONSTRU CTED BEFORE THE SALE OR AFTER THE SALE. THERE IS NO ENCUMBRANCES INSIDE THE PLOT. HENCE DISCOUNT CANNOT BE ALLOWED ON THIS ACCOUNT. ACCORDINGLY, NS-7, I.E. THE FINAL VALUATION R EPORT IS ISSUED AS PER NS-6, WITHOUT CHANGE.' 5. THUS THE CRUX OF THE ISSUE IS THAT CONTRARY TO A SSESSEE'S CLAIM BEFORE THE HON'BLE TRIBUNAL THAT HIS POINTS OF OBJECTION WERE NOT CONSIDERED BY THE DVO, IT EMANATES BEYOND DOUBT THAT THE ASSESSEE IND EED FILED OBJECTIONS BEFORE THE AO AND THE DVO HAD NOT FOUND ANY MERIT I N SUCH OBJECTIONS OF THE ASSESSEE AND THEREFORE, DID NOT CHANGE THE ORIG INAL VALUATION. AS IT CAN BE SEEN FROM THE DVO'S REPLY AS QUOTED HEREINABOVE THA T IN THE FIRST VALUATION, THE ASSESSEE WAS ALREADY ALLOWED CERTAIN PERCENTAGE S OF DISCOUNTS ON ACCOUNT OF (I) IRREGULAR SHAPE OF THE PLOT OF LAND, (II) LA RGE LAND SIZE, (III) CO- OWNERSHIP OF LAND AND (IV) LOW LYING OF LAND. THE DVO DID NOT ALLOW DISCOUNT FOR UNAUTHORIZED FRONTAGE STRUCTURES, AS T HE ASSESSEE COULD NOT ESTABLISH THIS POINT. DUE TO THESE VERY REASONS, TH E AO DID NOT CONSIDER IT NECESSARY TO REFER THE MATTER AGAIN TO THE DVO AND ADOPTED THE FINAL VALUATION OF THE DVO. THE ASSESSEE CANNOT BE ALLOWE D TO PLAY INNINGS AFTER INNINGS AS PER HIS SWEET WILL. THE AO NEITHER HAD V IOLATED THE DIRECTIONS OF THE HON'BLE TRIBUNAL NOR COMPLETED THE ASSESSMENT O N SURMISES. I, THEREFORE, DO NOT FIND ANY REASON TO DISTURB THE ASSESSMENT. T HE ASSESSMENT MADE BY THE AO IS UPHELD. 3. IT IS THUS CLEAR THAT THE AUTHORITIES BELOW HAVE REJECTED THE ASSESSEES CHALLENGE TO THE DVOS VALUATION BASED ON VARIOUS ASPECTS. THE SAME APPEAR TO BE THE SHAPE OF THE RELEVANT CAPITAL ASSET, LAND SI ZE, CO-OWNERSHIP, SLOPING GROUND BELOW THE ROAD LEVEL AND UNAUTHORIZED STRUCTURES AT THE FRONTAGE. IT IS AN UNADMITTED FACT THAT THE ASSESSEE HAD CLAIMED THE S AID FACTORS TO BE HAVING 10%, 15%, 10% , 5% AND 25% DEPRECIATING VALUE ON THE REL EVANT CAPITAL ASSET. THE DVO ACCEPTED THE FORMER FOUR ISSUES TO THE EXTENT O F 3% IN FIRST AND 3 RD , 2% EACH QUA SECOND AND 4 TH WHEREAS 5 TH ISSUE OF UNAUTHORIZED STRUCTURES STANDS REJECTED. IT IS THEREFORE MORE A CASE OF QUANTIFICATION OF THE S AID DEPRECIATION FACTORS IN THE FORMER FOUR ISSUES ONLY. THE AUTHORITIES BELOW HA VE GONE BY THIS TRIBUNAL FORMER REMAND ORDER (SUPRA) IN REJECTING THE ASSESSEE PLEA TO THIS EFFECT. WE DO NOT FIND ANY MERIT IN THE SAME AS THE SAID ISSUE OF QUANTI FICATION WAS NEVER ADJUDICATED IN REMAND DIRECTIONS EARLIER. IT APPEARS THAT THERE IS A LOT OF DIFFERENCE BETWEEN ASSESSEES CLAIM OF QUANTIFICATION VIS--VIS AS THA T ACCEPTED BY THE LOWER LATE MAHENDRA KUMAR AGARWAL (L/H OF SUSMITA AGARWAL ) ITA NO.1162/KOL/2016 A.Y: 2006-07 4 AUTHORITIES. IT RANGES BETWEEN 3 TO 10% QUA 1 ST AND 3 RD ASPECTS, GOING AS HIGH AS I.E. 15% AND 2% QUA THE SECOND ASPECT OF LARGE LAN D SIZE AND 5% AND 2% QUA THE FOURTH ASPECT OF SLOPING GROUND. WE THEREFORE DEEM IT APPROPRIATE TO TREAT THIS ISSUE TO CONCLUDE THAT LARGER INTEREST OF JUSTICE WOULD BE MET IN CASE THE AO IS DIRECTED TO ADOPT FAIR MARKET PRICE OF THE RELEVANT CAPITAL ASSET TO BE AVERAGE OF ASSESSEES AND DVOS VALUATION S ISSUE. WE FURTHE R CLARIFY THAT OUR INSTANT AVERAGING BASED ON RELEVANT FACTS SHOULD NOT BE TAK EN AS A PRECEDENT. NECESSARY COMPUTATION TO FOLLOW AS PER LAW AFTER AFFORDING A DEQUATE OPPORTUNITY OF HEARING IN CONSEQUENTIAL PROCEEDINGS. 5.. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 29.08.2018. SD/- (S.S.GODARA) SD/- (DR. A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 29.08.2018. RG, SPS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT- LATE MAHENDRA KR. AGARWAL (L/H OF SUSMITA AGARWAL) 2. / THE RESPONDENT.- ITO, WARD-2(1), KOLKATA 3. ( ) / THE CIT(A)-SILIGURI. 4. / CIT-SILIGURI 5. ! $$% , % , / DR, ITAT, KOLKATA 6. ( / GUARD FILE. //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES,KOLKATA LATE MAHENDRA KUMAR AGARWAL (L/H OF SUSMITA AGARWAL ) ITA NO.1162/KOL/2016 A.Y: 2006-07 5