Sri Karan Poddar, Kolkata V. ITO, Ward-37(3), Kolkata, Kolkata

ITA 1330/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6522 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 08-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 14-09-2012
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHAWNGTHU ADD
• Assessee Lawyers: SOMNATH GHOSH LD AR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value
• Section: 50C; 37

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH: KOLKATA ( ) , 1 , BEFORE HONBLE SRI SHAMIM YAHYA, AM & SRI HONBLE GEORGE MATHAN, JM I TA NO. 13 30 /KOL/20 1 2 A.Y 200 7 - 08 SRI KARAN PODDAR PAN : AKTPP 5995L - - - VERSUS - . I.T.O WARD 37(3), KOLKATA ( $ / APPELLANT ) ( %&$ / RESPONDENT ) $ / FOR THE APPELLANT/DEPARTMENT /SHRI SOMNATH GHOSH, ADVOCATE, LD.AR %&$ / FOR THE RESPONDENT/ASSESSEE: / SHRI DAVID Z. CHAWNGTHU,. ADDL.CIT /LD SR.DR * + /DATE OF HEARING: 11-07-2014 * + /DATE OF PRONOUNCEMENT: 11 -07--2014 / ORDER , SRI SHAMIM YAHYA, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), XXIV, KOLKATA DATED 29.05 .2012 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF A SU M OF RS.12,31,000/- IN THE INCOME ON A/C OF SALE OF OFFI CE FLAT UNDER THE HEAD SHORT TERM CAPITAL GAIN. 2) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE SALE VALU E OF OFFICER FLAT AT RS.32,31,000/- AS DETERMINED BY THE REGISTERING AUT HORITIES U/S. 50C OF THE I.T ACT, 1961. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PURCHASE VALUE OF OFFICE FLAT AT RS.17,08,248/- FOR CAPITAL GAIN TAX PURCHAS E. 3. IN THIS CASE THE ASESSEE HAS SOLD A FLAT AND DE CLARED SHORT TERM CAPITAL GAIN AMOUNTING TO RS. 2,91,752/-. DURING SCRUTINY THE A O OBSERVED THAT THE SAID PROPERTY IN ITA NO. 1330/KOL /2012A-AM SRI KARAN PODDAR 2 QUESTION WAS SOLD BY THE ASSESSEE AT RS. 20 LAKHS. HE ALSO OBSERVED THAT THE VALUE OF PROPERTY DETERMINED BY THE REGISTERING AUTHORITIES AT RS. 32,31,000/-. HE TOOK THAT THE SAID VALUE AS SALE CONSIDERATION IN TERMS OF SECTION 50 C OF THE I.T ACT 1961. HENCE, HE MADE AN ADDITION OF RS. 12.31 LAKH UNDER THE HEAD SHOR T TERM CAPITAL GAIN. 4. UPON THE ASSESSEES APPEAL, THE LD.CIT(A) HAS CO NFIRMED THE ABOVE ADDITION MADE BY THE AO. 5. AGAINST THE ABOVE ORDER OF THE LD.CIT(A), THE A SSESSEE HAS FILED APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE REFERRED THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH PROVIDES AS UNDER:- (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DAT E OF TRANSFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VA LUATION 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 M ADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTION1 6A, CLAUSE ( I ) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SU B-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEAL TH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY I N RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY TH E ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 6.1 THE LD. COUNSEL THEREAFTER REFERRED THE DECISIO N OF THE HONBLE HIGH COURT OF CALCUTTA (SPECIAL JURISDICTION-INCOME TAX) IN GA N O.3686 OF 2013 ITAT NO.221 OF 2013 IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT VIDE ORD ER DATED 13 TH MARCH, 2014. IN THE SAID ORDER THE HONBLE JURISDICTIONAL CALCUTTA HIGH CO URT HAD EXPOUNDED AS UNDER:- FOR THE AFORESAID REASONS, WE ARE OF THE OPINION THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CO NTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF J USTICE. 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 DIS TRICT SUB REGISTRAR ITA NO. 1330/KOL /2012A-AM SRI KARAN PODDAR 3 FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HA S TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHI NERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MAD E BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAV E BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGI NG A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND T O GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVID ED BY LAW. FOR THE AFORESAID REASONS, THE ORDER UNDER CHALLEN GE IS SET ASIDE. THE IMPUGNED ORDER INCLUDING ORDERS PASSED BY THE C IT(A) AND THE ASSESSING OFFICER ARE ALL SET ASIDE. THE MATTER IS REMANDED TO THE ASSESSING OFFICER. HE SHALL REFER THE MATTER TO TH E DEPARTMENTAL VALUATION OFFICER IN ACCORDANCE WITH LAW. AFTER SUC H VALUATION IS MADE, THE ASSESSMENT SHALL BE MADE DE NOVO IN ACCORDANCE WITH LAW. IN THE LIGHT OF ABOVE, THE LD. COUNSEL HAS PLEADED THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE AO SO THAT THE PROCEDURE OF PROVISIONS OF SECTION 50C(2) CAN BE FOLLOWED. 7. THE LD.DR IS HEARD. 8. UPON CAREFUL CONSIDERATION, WE OBSERVED THAT TH E HONBLE JURISDICTIONAL CALCUTTA HIGH COURT HAS EXPOUNDED THAT WHENEVER SECTION 50C IS BEING INVOKED, THE AO SHALL REFER THE ITEM INVOLVED FOR VALUATION TO THE VALU ATION OFFICER. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE ISSUE AND REMAND BACK TO THE FILE OF THE AO TO FOLLOW THE DIRECTION AS ABOVE. NEEDLESS TO ADD ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSE AS STATED ABOVE. . THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 11/07 /2014 SD/- SD/- ( 1 , ) ( , ) ( GEORGE MATHAN, JUDICIAL MEMBER) (SHAMIM YAHYA, ACCOUNTANT MEMBER) ( + ++ + ) DATE 11/07/2014 ITA NO. 1330/KOL /2012A-AM SRI KARAN PODDAR 4 ** PRADIP SPS * %1 21 / COPY OF THE ORDER FORWARDED TO: 1. $ /APPELLANT- SHRI KARAN PODDAR1A-37, SALT LAKE, S ECTOR-III, KOL-97. 2 %&$ / RESPONDENT : THE I T O W 37(3), RABINDRA SARANI, KOL-1. 3. / THE CIT, 4. ( )/ THE CIT(A), KOLKATA 5. % / DR, KOLKATA BENCHES, KOLKATA &1 % / TRUE COPY , / BY ORDER , /ASSTT. REGISTRAR