ITO, Ward - 13(2), Kolkata, Kolkata V. Sita Sonkar, Howrah

ITA 1370/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6258 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Keywords: Sale consideration of property below Jantri Value; Salary income; Fair market value
• Section: 143(3); 50C; 133(6); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI M.BAL AGANESH, AM ] I.T.A NO. 1370/KOL/20 17 ASSESSMENT YEAR : 2012-1 3 ITO, WARD-13(2), KOLKATA -VS- SITA SONKAR [PAN: ALPPS 3166 B] (APPELLANT) (RESPOND ENT) FOR THE APPELLANT : SHRI A. BHATTACHAR JEE, ADDL. CIT FOR THE RESPONDENT : NONE DATE OF HEARING : 11.06.2018 DATE OF PRONOUNCEMENT : 04.07.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-5, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO. 150/CIT(A)- 5/W-13(4)/15-16 DATED 10.03.2017 AGAINST THE ORDER PASSED BY THE ITO, WARD-13(4), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30.03.2015 FOR THE ASSESSM ENT YEAR 2012-13. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL OF T HE REVENUE IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION BY THE LD AO BY ADOPTING THE VALUE U/S 50C OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE C ASE. 2 ITA NO.1370/KOL/2017 SITA SONKAR A.YR. 2012-13 2 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSES SEE IS AN INDIVIDUAL DERIVING SALARY INCOME AND INCOME FROM OTHER SOURCES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ALSO HAD INCOME FROM CAPITAL GAINS. THE A SSESSEE FILED HER RETURN OF INCOME FOR THE ASST YEAR 2012-13 ON 27.3.2014 DECLARING TOTAL INCOME OF RS 4,43,640/-. THE LD AO OBSERVED THAT THE ASSESSEE HAD SOLD A FLAT FOR C ONSIDERATION OF RS 1,60,77,600/- DURING THE YEAR UNDER CONSIDERATION AND NO CAPITAL GAINS WAS OFFERED BY THE ASSESSEE IN THIS REGARD. THE ASSESSEE WAS SHOW CAUSED ACCORDIN GLY BY THE LD AO. THE ASSESSEE GAVE A REPLY TO THE SHOW CAUSE NOTICE BY GIVING THE COMPUTATION OF CAPITAL GAINS AND CLAIM OF EXEMPTION U/S 54 OF THE ACT AS UNDER:- 4. THE LD AO ISSUED NOTICE U/S 133(6) OF THE ACT TO THE ADDITIONAL REGISTRAR OF ASSURANCES I, KOLKATA WHO CERTIFIED THE VALUE OF THE PROPERTY ON THE DATE OF TRANSFER AT RS 1,78,07,940/-, BEING THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY U/S 50C OF THE ACT. THE LD AO SUBSTITUTED THE FULL VALUE O F CONSIDERATION OF FLAT SOLD AT RS 1,78,07,940/- AS AGAINST THE FIGURE DISCLOSED BY TH E ASSESSEE AT RS 1,60,77,600/- AND REWORKED THE CAPITAL GAINS ACCORDINGLY. THE LD CIT A DELETED THE ADDITION BY OBSERVING AS UNDER:- 3 ITA NO.1370/KOL/2017 SITA SONKAR A.YR. 2012-13 3 3.2. THE AO HAS NOT OFFERED THE APPELLANT OPPORTUN ITY OF VALUATION BY THE APPROVED DEPARTMENTAL VALUER. HE HAS SIMPLY ADOPTED THE STAM P VALUE FIGURE, WHOSE 10% IS ABOUT OR MORE THAN THE DIFFERENCE BETWEEN THE STAMP VALUE AND AGREEMENT/SALE VALUE. THE AO HAS DENIED THE APPELLANT OPPORTUNITY OF THE ABOVE REFERENCE AND HE HAS ALSO DENIED THE BENEFIT OF DIFFERENCE BEING LESS THAN 10 % AS DESCRIBED ABOVE. I, THEREFORE, FIND IT DIFFICULT TO UPHOLD THE AOS DECISION OF M ECHANICALLY APPLYING STAMP VALUE FIGURES FOR THE PURPOSE OF SECTION 50C. THESE GROUN DS ARE, THEREFORE, ALLOWED. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE LD DR. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE FIND THAT THE VALUE OF FLAT (I.E TRANSFERRED PROPERTY) DETERMINED BY STAMP VALUATION AUTHORITY U/S 50C OF THE ACT WAS RS 1,78,07,940/- AND WHEREAS THE ASS ESSEE HAD RETURNED THE FULL VALUE OF CONSIDERATION OF THE SAID FLAT AT RS 1,60,77,600/-. IN THIS SCENARIO, THE PROVISIONS OF SECTION 50C(2) OF THE ACT WOULD COME INTO PLAY WHER EIN THE LD AO OUGHT TO HAVE REFERRED THE VALUATION OF THE FLAT TO DEPARTMENTAL VALUATION OFFICER (DVO) FOR ASCERTAINING THE FAIR MARKET VALUE. THIS VIEW OF O URS IS ALSO ENDORSED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F SUNIL KUMAR AGARWAL VS CIT REPORTED IN (2015) 372 ITR 83 (CAL) WHEREIN IT WAS HELD AS UNDER:- 7. WE HAVE ALREADY SET OUT HEREINABOVE THE RECITAL APP EARING IN THE DEEDS OF CONVEYANCE UPON WHICH THE ASSESSEE WAS RELYING. PRE SUMABLY, THE CASE OF THE ASSESSEE WAS THAT PRICE OFFERED BY THE BUYER WAS THE HIGHEST PREVAILING PRICE IN THE MARKET. IF THIS IS HIS CASE THEN IT IS DIFFICULT TO ACCEPT THE PROP OSITION THAT THE ASSESSEE HAD ACCEPTED THAT THE PRICE FIXED BY THE DISTRICT SUB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. NO SUCH INFERENCE CAN BE MADE AS AGAINST THE ASSESSEE BECAUSE HE HAD NOTHING TO DO IN THE MATTER. STAMP DUTY WAS PAYABLE BY THE PURCHASER. IT WAS FOR THE PURCHASER TO EITHER ACCEPT IT OR DISPUTE IT. THE AS SESSEE COULD NOT, ON THE BASIS OF THE PRICE FIXED BY THE SUB-REGISTRAR, HAVE CLAIMED ANYT HING MORE THAN THE AGREED CONSIDERATION OF A SUM OF RS.10 LAKHS WHICH, ACCORD ING TO THE ASSESSEE, WAS THE HIGHEST PREVAILING MARKET PRICE. IT WOULD FOLLOW AUTOMATICA LLY THAT HIS CASE WAS THAT THE FAIR MARKET VALUE OF THE PROPERTY COULD NOT BE RS.35 LAK HS AS ASSESSED BY THE DISTRICT SUB REGISTRAR. IN A CASE OF THIS NATURE THE ASSESSING O FFICER SHOULD, IN FAIRNESS, HAVE GIVEN AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MAD E BY THE DEPARTMENTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C. AS A MATTER OF COURSE, IN ALL SUCH CASES THE 4 ITA NO.1370/KOL/2017 SITA SONKAR A.YR. 2012-13 4 ASSESSING OFFICER SHOULD GIVE AN OPTION TO THE ASSE SSEE TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER. 8. FOR THE AFORESAID REASONS, WE ARE OF THE OPINION TH AT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INT END THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MA DE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKE N CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/T AXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PR OPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUN CTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM A N OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. 9. FOR THE AFORESAID REASONS, THE ORDER UNDER CHALLENG E IS SET ASIDE. 10. THE IMPUGNED ORDER INCLUDING ORDERS PASSED BY THE CIT(A) AND THE ASSESSING OFFICER ARE ALL SET ASIDE. THE MATTER IS REMANDED TO THE AS SESSING OFFICER. HE SHALL REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN ACC ORDANCE WITH LAW. AFTER SUCH VALUATION IS MADE, THE ASSESSMENT SHALL BE MADE DE NOVO IN ACCORDANCE WITH LAW. 6.1. RESPECTFULLY FOLLOWING THE DECISION OF HONBL E JURISDICTIONAL HIGH COURT SUPRA, WE DIRECT THE LD AO TO MAKE A REFERENCE TO DISTRICT VA LUATION OFFICER (DVO) OF THE SUBJECT MENTIONED PROPERTY (I.E FLAT AT SOUTHERN AVENUE) W HICH WERE SOLD BY THE ASSESSEE FOR DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2) OF THE ACT. ACCORDINGLY, THE GROU NDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 04.07.2018 SD/- SD/- [S.S. GODARA] [ M .BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 04.07.2018 SR. PS 5 ITA NO.1370/KOL/2017 SITA SONKAR A.YR. 2012-13 5 COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-13(2), KOLKATA, 4 TH FLOOR, 110, SHANTIPALLY, AAYAKAR BHAWAN(POORVA), KOLKATA-700107. 2. SITA SONKAR, 5/1/1A, DR. ABANI DUTTA ROAD, HOWRA H-711101. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S