M/S DIVAKAR LEASING & FINANCE PVT. LTD., JAIPUR V. INCOME TAX OFFICER, WARD-2-5, JAIPUR

ITA 1304/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9897 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-02-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 22-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA JCIT DHK
• Assessee Lawyers: RAJIV SOGANI
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1304/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2013-14 M/S DIVAKAR LEASING & FINANCE PVT. LTD., D-5, KALWAR SCHEME, BEHIND GOPAL BARI, JAIPUR-302001. CUKE VS. I.T.O., WARD 2(5), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACD 8522 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : MS. SHIVANGI SAMDHANI (CA) & SHRI RAJIV SOGANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : MS. ANURADHA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/03/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/03/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A)-I, JAIPUR DATED 18/09/2018 FOR THE A.Y. 20 13-14 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR TH E ADDITION MADE ON THE BASIS OF VALUATION OF DVO U/S 50C(2) OF THE ACT . 3. I HAVE HEARD THE RIVAL CONTENTION AND PERUSED TH E MATERIAL PERUSED ON RECORD AND FOUND THAT THE ASSESSEE COMPANY SOLD AN IMMOVEABLE ITA 1304/JP/2018 DIVAKAR LEASING & FINANCE CO. VS ITO 2 PROPERTY SITUATED AT UNIT NO. 202, 2 ND FLOOR SDC VINAY II, PLOT NO. 38/39, MOJI COLONY, MALVIYA NAGAR, JAIPUR. THE SUB-R EGISTRAR CALCULATED THE STAMP DUTY VALUE TO BE RS. 81,11,472 AND DVO CA LCULATED THE FAIR MARKET VALUE TO BE RS. 86,11,300. HOWEVER, THE ASSES SING OFFICER MADE ADDITION BY TAKING STAMP DUTY VALUE. BY THE IMPUGNE D ORDER, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAIN BY TAKING THE VALUATION MADE BY THE DVO. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. IT WAS ARGUED BY THE LD AR THAT IN THE PRESENT CA SE THE ASSESSEE HAS SUBMITTED 2 COMPARABLE SALE DEEDS. IT IS PERTIN ENT TO NOTE THAT THE SALE DEEDS WERE OF THE SAME BUILDING I.E. SDC VINAY II, PLOT NO. 38/39, MOJI COLONY, MALVIYA NAGAR, JAIPUR. FURTHER, THE CO MPARABLE SALE DEEDS WERE CONTEMPORANEOUS TO THE CASE OF THE ASSESSEE. THE DETAILS ARE AS UNDER: S. NO UNIT NO. DATE OF SALE AREA SOLD (A) SALES CONSIDERATION (B) FAIR VALUE (B/A) % INCREASE 1. UNIT NO. 602, 6 TH FLOOR [PB 59] 02.09.2011 [PB 55] 525 SQ FT [PB 59] 26,07,400 [PB 63] 4,966.47 - 2. UNIT NO. 702, 7 TH FLOOR [PB 41] 24.02.2012 [PB 33] 529 SQ FT [PB 41] 29,10,000 [PB 43] 5,500.94 10.76% 3. UNIT NO. 202, 2 ND FLOOR [PB 8] 23.10.2012 [PB 2] 1085 SQ FT [PB 22] AS PER SALE DEED 76,00,000 [PB 10] 7,004.61 27.33% STAMP DUTY VALUE 81,11,472 [PB 15] 7,476.01 VALUE ADOPTED BY DVO 86,11,300 [PB 19] 7,936.68 IF THE ABOVE DATA IS ANALYZED, IT IS CLEAR THAT AS ON 02.09.2011 FAIR VALUE PER SQ FEET WAS RS. 4966 AND AFTER APPROXIMATELY 6 M ONTHS I.E. AS ON ITA 1304/JP/2018 DIVAKAR LEASING & FINANCE CO. VS ITO 3 24.02.2012 THE FAIR VALUE PER SQ FEET INCREASED APP ROX. 10% AND WAS RS. 5500 (4966*110%=5462). THE ASSESSEE COMPANY SOLD THE PROPERTY ON 23.10.2012 I.E. APPROX. AFTER 8 MONTHS FROM 24.02.2012 AND, THEREFORE, THE FAIR VALUE PER SQ FEET AT THE MAXIMU M COULD HAVE INCREASED BY 15%-17%. AS A RESULT THE FAIR VALUE PE R SQ FEET WAS RS. 6325 (5500*115%= 6325 ) AND OF THE PROPERTY WAS RS. 68,62,625 (1085 SQ FEET * 6325).THE ASSESSEE COMPANY SOLD THE PROPER TY FOR A SALES CONSIDERATION OF RS. 7,004 PER SQ FEET I.E. RS. 76, 00,000/-. ACCORDINGLY, IT WAS PRAYED THAT FOR A MARGINAL DIFFERENCE, NO ADDITI ON IS WARRANTED. 5. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT T HERE IS A DIFFERENCE IN THE SALE VALUE ADOPTED BY THE STAMP DUTY VIS A VIS SALE VALUE TAKEN BY THE ASSESSEE AMOUNTING TO RS. 5,11,472/- AND THUS D IFFERENCE BETWEEN THE SAME WAS JUST 6.73%. I ALSO FOUND THAT THE LD. C IT(A) HAS NOT CONSIDERED THE SALE DEED DATED 24.02.2012 TO BE COM PARABLE WITH THAT OF ASSESSEE COMPANY ON THE BASIS THAT THE PROPERTY SOL D THROUGH THAT SALE DEED WAS SITUATED AT 7 TH FLOOR WHERE AS THE PROPERTY SOLD BY THE ASSESSEE COMPANY WAS SITUATED AT 2 ND FLOOR AND THE PROPERTIES AT LOWER FLOORS HAVE HIGHER VALUE. NOWADAYS THERE IS NO SUCH DISTINCTION AS THE BUILDINGS ARE EQUIPPED WITH LIFTS. FURTHER, THE PROPERTY AT HIGHER FLOOR GETS BETTER VIEW, ITA 1304/JP/2018 DIVAKAR LEASING & FINANCE CO. VS ITO 4 LIGHT, VENTILATION, ETC. THE LD. CIT(A) ALSO HELD THE SALE DEED DATED 24.02.2012 NOT COMPARABLE WITH THE CASE OF THE ASSES SEE COMPANY AS THE ASSESSEE COMPANY HAD NOT SPECIFIED THE LOCATION OF THE UNITS. THE ASSESSEE SOLD FLAT NO. 202 AND GAVE COMPARABLE DEED OF 702 AND 603. THE NUMBERS THEMSELVES SUGGEST THAT THE UNITS WERE SI MILARLY LOCATED. THE LD. CIT(A) FURTHER HELD THAT THE AREA OF THE SAL E DEED DATED 24.02.2012 IS NOT COMPARABLE WITH THE AREA OF THE UN IT SOLD BY THE ASSESSEE. 7. KEEPING IN VIEW THE OBSERVATION MADE ABOVE, THE D IFFERENCE OF 6.73% IN THE SALE VALUE ADOPTED ON THE STAMP DUTY V IS A VIS THE VALUE TAKEN BY THE ASSESSEE COMPANY DOES NOT MATTER MUCH. 8. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCU MSTANCES OF THE CASE, I DO NOT FIND ANY MERIT IN THE ADDITION SO MADE BY THE LOWER AUTHORITIES; THEREFORE, THE SAME IS DELETED. I ORDER ACCORDINGLY . 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2019 SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH MARCH, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S DIVAKAR LEASING & FINANCE PVT. LT D., JAIPUR. ITA 1304/JP/2018 DIVAKAR LEASING & FINANCE CO. VS ITO 5 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 2(5), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1304/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR