S.D.Vimal Chand Jain, CHENNAI V. ITO, CHENNAI

ITA 1207/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8287 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 02-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-05-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLIJCITD R
• Assessee Lawyers: D ANAND
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1207 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2009-10) MR.S.D.VIMALCHAND JAIN , NO.55,NSC BOSE ROAD, CHENNAI 600 079. VS. INCOME TAX OFFICER, BUSINESS WARD-XII(3), CHENNAI. PAN AAKHS 9450 E ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.D.ANAND,ADVOCATE ()$% & ' / RESPONDENT BY : MR.A.B.KOLI,JCIT, D.R * + & ,- / DATE OF HEARING : 02.11.2015 .# & ,- /DATE OF PRONOUNCEMENT : 01.01.2016 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED ITA NO.1207/MDS/2015 2 20.03.2015 IN ITA NO.306/2013-14 PASSED UNDER SEC. 143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN HI S APPEAL. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V IS WRONG, ILLEGAL AND OPPOSED TO FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OUGHT TO HAVE SEEN THAT THE SUBJECT MENTIONED PROPERTY ON WHICH SECTION 50C WAS APPLIED TO ASCERT AIN THE CAPITAL GAINS HAD INHERENT DRAW BACK WHICH THE ASSESSING OFFICER FAILED TO APPRECIATE DESPITE SPECIFIC PLEAS WERE TAKEN BY THE APPELLANT EXPLAINING THE INHERENT DRAW BACKS IN THE PROPERTY. 3. THE LEARNED ASSESSING OFFICER ERRED IN APPLYING THE GUIDELINE VALUE OF THE PROPERTY RELEVANT TO THE YEAR ENDING MARCH 2009 FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS BY INVOKING SECTION 50 C OF THE INCOME TAX ACT WHILE THE APPELLANT HAD ENTERED INTO AGREEMENT TO S ELL THE SUBJECT PROPERTY AS EARLY AS 5.11.2004. 4. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE A SSESSING OFFICER ERRED IN NOT CONSIDERING THE VARIOUS FACTORS THAT DETERMINED THE MARKET PRICE OF THE PROPERTY WHILE ARRIVING AT THE VALUE OF THE PROPERT Y. THE VALUE ARRIVED BY THE ASSESSING OFFICER IS ERRONEOUS AND WITHOUT PROPER R EASONING. 5. THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT THE ASSESSING OFFICER HAS NOT CONSIDERED VARIOUS FACTORS WHILE ARRIVING AT THE FA IR MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF APPLICATION OF 50C.THE LEARNED CIT (A) OUGHT TO ITA NO.1207/MDS/2015 3 HAVE SEEN THAT THE ASSESSING OFFICER FAILED TO CONS IDER THE INHERENT DRAW BACK IN THE PROPERTY SUCH AS LOW RENT, PROTRACTED L ITIGATION FOR FIXATION OF FAIR RENT AND FOR EVICTION OF TENANTS AND LITIGATION BEF ORE THE DEBTS RECOVERY TRIBUNAL. 6. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE V ALUATION OF THE PROPERTY STANDS QUESTIONED WHEN THERE IS VARIANCE IN DETERMI NATION OF THE VALUE OF THE PROPERTY BY THE ASSESSING OFFICER BY APPLYING T HE VALUE AS FIXED BY THE REGISTERING AUTHORITY TO THE VALUE OF THE PROPERTY DECLARED BY THE APPELLANT, CONSEQUENTLY THE CONDITIONS STIPULATED INN SECTION 50C(2) OF THE INCOME TAX ACT STANDS SATISFIED AND THE ASSESSING OFFICER OUGH T TO HAVE REFERRED THE MATTER OF VALUATION OF THE PROPERTY TO THE VALUATIO N OFFICER AS DEFINED IN THE STATUE. 7. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE S TAMP DUTY WAS PAYABLE BY THE PURCHASER AND IT WAS FOR THE PURCHASER TO EITHE R ACCEPT IT OR DISPUTE IT. THE APPELLANT COULD NOT, ON THE BASIS OF THE PRICE FIXED BY THE SUB-REGISTRAR CLAIMED ANYTHING MORE THAN THE AGREED CONSIDERATION WHICH, ACCORDING TO THE APPELLANT WAS HIGHEST PREVAILING MARKET PRICE. IN SUCH AN EVENT IF THE ASSESSING OFFICER REASONABLY BELIEVED THE GUIDELINE VALUE FIXED BY THE REGISTERING AUTHORITY AS THE MARKET VALUE , THAN, T HE ASSESSING OFFICER SHOULD, IN ALL FAIRNESS GIVEN AN OPTION TO THE APPELLANT TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER CONTEMPLATED UND ER SECTION 50C. 8. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT WHEN THERE IS VARIANCE IN DETERMINATION OF THE VALUE OF THE PROPERTY BY THE A SSESSING OFFICER TO THE VALUE OF THE PROPERTY DECLARED BY THE APPELLANT THA N THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE PROPERTY TO THE VALUATIO N OFFICER FOR DETERMINING THE VALUE OF THE PROPERTY BEFORE INVOKING SECTION 5 0C OF THE INCOME TAX ACT. ITA NO.1207/MDS/2015 4 FOR THESE AND OTHER GROUND THAT MAY BE RAISED AT TH E TIME OF HEARING IT IS MOST HUMBLY PRAYED THAT THE HONBLE TRIBUNAL MAY BE PLEA SE TO ALLOW THE APPELLANTS APPEAL AND THUS RENDER JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A HUF, ENGAGED IN THE BUSINESS OF MONEY LENDING , FILED HI S INCOME-TAX RETURN ELECTRONICALLY ON 18.02.2011 ADMITTING TOTAL INCOME AS ` 1,49,350/-. SUBSEQUENTLY, THE CASE WAS SELECTED F OR SCRUTINY UNDER CASS AND THE ASSESSMENT U/S.143(3) OF THE ACT WAS C OMPLETED ON 31.12.2011 WHEREIN THE LD. A.O ADOPTED THE GUIDELI NE VALUE OF THE PROPERTY SOLD AS ON THE DATE OF EXECUTION OF SALE D EED BY INVOKING PROVISIONS OF THE SECTION 50C OF THE ACT. 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. ASSESSING OFFICER FOUND THAT THE ASSESSEE SOLD AN I MMOVABLE PROPERTY FOR ` 85 LAKHS ON 02.06.2008. FROM THE AIR INFORMATION, I T WAS REVEALED THAT THE SALE HAD BEEN REGISTERED IN T HE RECORDS OF SUB- REGISTRAR, TRIPLICANE. WHEN THIS FACT WAS INFORMED TO THE ASSESSEE, THE ASSESSEE STATED THAT THE SALE DEED WAS NOT RELE ASED AFTER ITA NO.1207/MDS/2015 5 REGISTRATION OWING TO SUDDEN DISPUTE AND THE CASE W AS PENDING BEFORE THE COURT OF LAW. THEREAFTER, THE LD. ASSESS ING OFFICER AFTER CONFIRMING THE MARKET VALUE OF THE LAND FROM THE SU B-REGISTRAR OFFICE INVOKED THE PROVISIONS OF SECTION-50C OF THE ACT AN D COMPUTE THE CAPITAL GAIN ON THE SALE OF THE IMMOVABLE PROPERTY, WHICH CONSISTED OF LAND AND BUILDING. 3.2 ON APPEAL THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER BY HOLDING AS UNDER:- 4. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ADOPT ION OF GUIDELINE VALUE OF THE PROPERTY SOLD FOR COMPUTING CAPITAL GAIN BY INV OKING SECTION.50C OF THE ACT AGAINST THE ACTUAL SALE VALUE OF RS.85 LAKHS AD MITTED BY THE ASSESSEE. WHERE THE ASSESSEE QUESTIONED ADOPTION OF STAMP V ALUE AS AGAINST THE APPARENT CONSIDERATION DISCLOSED BY HIM AND HAD QUE STIONED SUCH ADOPTION DURING THE COURSE OF ASSESSMENT IN THE CONTEXT OF THE ASSESSEE NOT HAVING TAKEN UP THE STAMP VALUE BY WAY OF APPEAL OR REVISI ON AGAINST STAMP AUTHORITIES, IT WAS FOR THE ASSESSING OFFICER TO RE FER THE MATTER TO THE VALUATION OFFICER U/S.50C(2) OF THE I.T.ACT. IN TH IS CASE, IT SEEMS THAT THE ASSESSEE DID NOT RAISE THE ISSUE AT THE ITEM OF ASS ESSMENT PROCEEDINGS. HENCE THE ASSESSING OFFICER IS DUTY BOUND TO ADOPT THE GUIDELINE VALUE FIXED BY THE REGISTERING AUTHORITY FOR STAMP VALUE PURPOSE AS PER SECTION.50C (1) OF THE ACT. THE ASSESSING OFFICER DID IT ACCORDINGLY. HENCE, THERE IS NO INFIRMITY IN THE ACTION OF THE A SSESSING OFFICER TO ADOPT ITA NO.1207/MDS/2015 6 THE GUIDELINE VALUE OF RS.1,28,78,625/- FOR COMPUTI NG LONG TERM CAPITAL GAINS. THEREFORE I DECLINE TO INTERFERE IN THE ORDE R OF THE ASSESSING OFFICER. THE METHOD ADOPTED BY THE ASSESSING OFFICER FOR COM PUTING LTCG IS CORRECT, VALID AND AS PER THE PROVISIONS OF THE ACT . THE ORDER OF THE ASSESSING OFFICER IS CONFIRMED FULLY. 4. AT THE OUTSET THE LD. A.R. SUBMITTED BEFORE US THAT THE LD. ASSESSING OFFICER HAD NOT CONSIDERED THE LITIGATION INVOLVED IN THE TITLE OF IMMOVABLE PROPERTY BUT SIMPLY ADOPTED THE MARKET VALUE OF THE PROPERTY BY INVOKING SECTION 50C OF THE ACT, WITHOU T REFERRING THE MATTER TO THE LD. DVO TO ASCERTAIN THE MARKET VALUE OF THE IMMOVABLE PROPERTY. HE FURTHER ARGUED BY STATING THAT THE MAR KET VALUE AS ON 01.04.1981 WAS ALSO NOT CORRECTLY ADOPTED BY THE LD . ASSESSING OFFICER WHILE ARRIVING AT THE INDEXED COST OF ACQUI SITION FOR THE PURPOSE COMPUTING CAPITAL GAINS. WITH THE ABOVE SUBMISSIO N, HE PLEADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD. ASSESSING OFFICER FOR DENOVO CONSIDERATION. THE LD. D.R ON TH E OTHER HAND RELIED UPON THE ORDERS OF THE REVENUE AND PLEADED T HAT THE SAME MAY BE CONFIRMED. ITA NO.1207/MDS/2015 7 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE ORDER OF TH E LD. ASSESSING OFFICER IT IS APPARENT THAT THE LD. ASSESSING OFFIC ER HAS NOT REFERRED THE MATTER TO THE LD.DVO FOR VALUING THE PROPERTY A S PER SECTION 50C(2) OF THE ACT. THE ASSESSEE HAD SUBMITTED BEFOR E THE LD. ASSESSING OFFICER REGARDING THE LITIGATION INVOLVED IN THE TITLE OF THE PROPERTY WHICH WAS NOT CONSIDERED BY THE LD. ASSESS ING OFFICER. WHEN THE ASSESSEE HAD CHALLENGED THE VALUE DETERMIN ED BY THE LD. ASSESSING OFFICER CITING THE VARIOUS REASONS IT WAS THE PRIMARY DUTY OF THE LD. ASSESSING OFFICER TO REFER THE MATTER TO LD . DVO FOR VALUATION OF THE IMMOVABLE PROPERTY. THE LD. CIT(A) HAS ALSO SIMPLY BRUSHED ASIDE THE CONTENTION OF THE ASSESSEE BY STATING IN HIS ORDER THAT AT THE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS NOT REQUESTED THE LD. ASSESSING OFFICER TO REFER THE MATTER TO THE LD .DVO. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER HAS TO BE REFERRED BACK TO THE FILE OF LD. ASSESSING OFFICER WITH A DIRECTI ON TO REFER THE MATTER TO THE LD.DVO AND THEREAFTER PASS AN APPROPRIATE OR DER AS PER LAW AND MERIT AFTER AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF ITA NO.1207/MDS/2015 8 BEING HEARD. IT IS ORDERED ACCORDINGLY. SINCE WE H AVE REMITTED BACK THE CASE TO THE FILE OF LD. ASSESSING OFFICER FOR F RESH CONSIDERATION, THE ASSESSEE IS AT LIBERTY TO RAISE ANY OTHER GROUN DS BEFORE THE LD. ASSESSING OFFICER TO JUSTIFY HIS STAND ON THE ISSUE . 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 1 ST JANUARY,2016AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 1 ST JANUARY,2016. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF