SHRI RAMKISAN RAMGOPAL KABRA, Nagpur V. ITO-WARD-2(4), Nagpur

ITA 129/NAG/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2149 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 20-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: R V LOYA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 50C; 234B; 147; 37; 2

Judgement Text

1 ITA NO. 129/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 129/N AG/201 4 . ASSESSMENT YEAR : 200 4 - 05 . SHRI RAMKISAN RAMGOPAL KABRA, THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 2(4), NAGPUR. PAN AGQPK5786R. APPELLANT. RESPONDENT. APPELLANT BY : SHRI R.V. LOYA. R ESPONDENT BY : SHRI A.R., NINAWE. DATE OF HEARING : 18 - 07 - 2016 DATE OF PRONOUNCEMENT : 19 TH JULY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 10 - 12 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2004 - 05. THE GROUNDS OF APPEAL READ AS UNDER : 1. THAT THE ORDER OF THE ASSESSING OFFICER IS BAD IN LAW AND ON FACTS AND LEARNED C.I.T.(A) HAS ERRED IN CONFIRMING THE SAME. ON THE FACTS AND CIRCUMSTANCES OF THE CASE ACTION OF BOTH THE AUTHORIT IES IS UNJUSTIFIED. 2. THAT THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN REOPENING THE ASSESSMENT U/S 147 AND THE LEARNED CIT(A) WAS UNJUSTIFIED IN UPHOLDING THE ACTION OF THE AO. 3. THAT THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN MAKING ADDITION O F RS. 22 LAKHS BY HOLDING THAT THE ASSESSEE HAS UNDERSTATED THE SALE CONSIDERATION OF THE PROPERTY SOLD BY RS.44 LAKHS (50% ASSESSEES SHARE) AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.6,08,061/ - . ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE ACTION OF BOTH THE AUTHORITIES IS ARBITRARY AND WITHOUT ANY SOUND BASIS. 4. THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN ADOPTING THE FAIR MARKET VALUE OF THE IMPUGNED PROPERTY AT RS.73 , 16,122/ - AS SALE 2 ITA NO. 129/NAG/2014. CONSIDERATION IN PLACE OF THE ACTUAL SALE CONSIDERATION RECEIVED AND THEREBY CONFIRMING THE ADDITION TO THE INCOME AT RS.6,08,061/ - . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ACTION OF THE LEARNED CIT(A) IS UNWARRANTED AND UNJUSTIFIED. 5. TH A T THE AO ERRED IN LAW AND ON FACTS IN CHARGING INTEREST U/S 234A AND 234B AND THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO. 2. AT THE OUTSET LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING FOR GROUND NO. 1 AND 2. HENCE THE ONLY EFFECTIVE GROUND IS THAT TH E L E ARNED CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 6,08,061/ - . 3. IN THIS CASE THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE BY THE AO ON ACCOUNT OF AN UNSIGNED AGREEMENT FOR PURCHASE WHICH SHOWED THE PRICE CONSIDERATION IN EXCESS OF S ALE VALUE CONSIDERATION OF RS.22 LAKHS. THIS ADDITION WAS DELETED BY THE LEARNED CIT(APPEALS) ON THE BASIS THAT THE UNSIGNED AGREEMENT CANNOT BE A BASIS FOR ADDITION. HOWEVER, THE LEARNED CIT(APPEALS) CONFIRMED THE ADDITION OF RS.6,08,061/ - . 4. AGAINST THE AB OVE ORDER, THE ASSESSEE HAS APPEALED BEFORE THE ITAT. 5. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITION SUSTAINED BY THE LEARNED CIT(APPEALS) HAS NO BASIS AS THE SAME IS IN CONTRAVENTION TO THE PROVISION OF SECTION 50C(3). LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. UPON CAREFUL CONSIDERATION I FIND THAT THE OBSERVATION OF THE LEARNED CIT(APPEALS) IN THIS REGARD MAY BE GAINFULLY REFERRED HEREUNDER : IT, HOWEVER, IS PERUSED FROM RECORDS THAT THE PROPERTY IN QUESTION WAS R EFERRED TO VALUATION OFFICER FOR DETERMINATION OF FMV OF THE PROPERTY AS ON 23.03.2003. THE FMV WAS DETERMINED AT RS.73,16,122/ - VIDE VALUATION REPORT DATED 22.10.2010. HOWEVER, THE LEARNED AO OMITTED TO CONSIDER THE SAME IN THE IMPUGNED ORDER UNDER APPEAL . THE AR OF THE APPELLANT HAS NOT DISPUTED THE FMV DETERMINED BY THE VALUATION OFFI C E R AT RS.73,16,122/ - , THEREFORE, THE AO IS DIRECTED TO ADOPT THE VALUE OF THE PROPERTY TRANSFERRED IN QUESTION AT RS.73,16,122/ - , AS AGAINST 3 ITA NO. 129/NAG/2014. RS.61,00,000/ - AND ACCORDINGLY, THE ADDITION TO THE TUNE OF RS.6,08,061/ - (ASSESSEES SHARE BEING 50%) STANDS CONFIRMED. THUS, THE ADDITION OF RS.22,00,000/ - , MADE ON THE BASIS OF UNSIGNED AGREEMENT TO SALE, IS DIRECTED TO BE DELETED. BUT, THE ADDITION TO THE TUNE OF RS.6,08,061/ - ON AC COUNT OF DIFFERENCE IN VALUATION OF THE PROPERTY IS CONFIRMED. 7. I FIND THAT SECTION 50C READS AS UNDER : 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY' ) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB - SECTION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] B Y THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I ) OF SUB - SECTION (1) AND SUB - SECTIONS (6) AND (7) OF SECTION 23A, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTI ON 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB - SECTION (1) OF SECTION 16A OF THAT ACT. [ EXPLANATION 1 ]. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R ) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957). [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEAN S THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.] (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB - SECTION (2), WHERE THE VALUE ASCERTAINED UNDER SUB - SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED 18 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB - SECTION (1), THE VALUE SO ADOPTED OR ASSESSED 18 [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER.] 4 ITA NO. 129/NAG/2014. 8. THUS I FIND THAT SECTION 50C (3) MANDATES THAT IN A SITUATION AS A PRESENT ONE WHEN THE VALUE ADOPTED BY THE VALUATION OFFICER IS HIGHER THAN THE STAMP VALUATION FIGURE, THE STAMP VALUATION FIGURE SHOULD BE ADOPTED. HENC E I MODIFY THE CIT(APPEALS) ORDER AND DIRECT THAT THE AO SHOULD ADOPT THE STAMP VALUATION FIGURE OF RS.62,15,000/ - AND MAKE THE COMPUTATION ACCORDINGLY. 9 . IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JULY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 19 TH JULY, 2016. COPY FORWARDED TO : 1. SHRI RAMKISAN RAMGOPAL KABRA, C/O LOYA BAGRI & CO., C.AS. GANDHIBAGH, NAGPUR. 2. I.T.O. WARD - 2 ( 4 ), NAGPUR. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSIST ANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.