Verender Chand Dhoundiyal, New Delhi V. ITO, Ward-72(1), New Delhi

ITA 138/DEL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6894 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 09-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Valuation report
• Section: 143(3); 72(1); 142(1); 143(1); 143(2); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 138/DEL/2019 ASSESSMENT YEAR: 2015-16 VERENDER CHAND DHOUNDIYAL C/O CA H.L. MADAN, A-3/76, SECTOR-3, ROHINI, NEW DELHI. PAN NO. AAPPD7495R VS ITO WARD 72(1) NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SHRI MAYANK JAIN, ADVOCATE REVENUE BY MS. EKTA VISHNOI, SR. DR ORDER THIS APPEAL FILED BY THE ASSESSEE AGAINST THE IMPUG NED ORDER DATED 15.11.2018 PASSED BY THE LD. CIT(APPEALS)-21, NEW DELHI IN RELATION TO ASSESSMENT YEAR 2015-16 ON THE FOLLOWIN G GROUNDS: 1. THAT LD. AO ERRED BOTH IN LAW AS WELL AS ON FACTS OF THE CASE IN ACCEPTING VALUATION OF FLAT MADE BY AVO-II AT RS. 25,11,740/- IGNORING THE WRITTEN OBJECTIONS SUBMITT ED BY THE ASSESSEE AND WITHOUT RECORDING ANY REASON IN TH E ASSESSMENT ORDER. 2. THAT LD. AO ERRED IN NOT CONSIDERING THE CLOSER COM PARABLE INSTANCE OF AY 2015-16 SUBMITTED BEFORE HIM BY THE ASSESSEE AND ACCEPTING THE VALUATION MADE BY AVO-II ON THE BASIS OF A DISTANT COMPARABLE INSTANCE OF AY 20 18-19. 2 ITA NO . 138/DEL/2019 3. THAT LD. AVO-II ERRED IN STATING THAT VALUE OF THE FLAT IS LOWER IN THE AY 2018-19 AS COMPARED TO AY 2015-16 A ND, THEREFORE, ENHANCING THE VALUATION BY 16.5% WITHOUT HAVING ANY EVIDENCE PLACED ON RECORD. LD. AO ALSO ERRED IN ACCEPTING THIS REPORT. 4. LD. CIT(A) ALSO ERRED IN IGNORING THE CLOSER COMPAR ATIVE INSTANCE OF AY 2015-16 FOR VALUATION OF FLAT AND IN ACCEPTING THE VALUATION MADE BY AVO-II BASED ON DIS TANT COMPARATIVE INSTANCE OF AY 2018-19 AND IGNORING THA T VALUATION IN AY 2018-19 WAS HIGHER THAN AY 2015-16 BASED ON THE COMPARATIVE INSTANCES FOR RESPECTIVE Y EARS. 5. LD. CIT(A) HAS ERRED IN MAKING OBSERVATION THAT BOT H ASSESSEES APPROVED VALUER AS WELL AS AVO-II HAS NO T CONSIDERED THAT FLAT BEING VALUED IS A FREEHOLD PRO PERTY. 6. THAT ASSESSEE CRAVES LEAVE TO ADD/AMEND/DELETE ANY OF THE GROUND AT THE TIME OF HEARING OF APPEAL. 2. ASSESSEE FILED HIS RETURN OF INCOME ON 18.03.201 7 OF RS. 2,86,940/-. AFTER CLAIMING THE DEDUCTION UNDER CHA PTER VIA OF THE I.T. ACT, 1961 OF RS. 57,868/-. THE AO PROCESSED T HE RETURN OF INCOME U/S 143(1) OF THE ACT AND LATER ON THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS WITH REASON WHETHER CAPITAL GAIN/LOSS ON SALE OF PROPERTY HAS B EEN CORRECTLY SHOWN IN THE RETURN OF INCOME. THE AO ISSUED NOTIC E U/S 143(2) AND 142(1) OF THE ACT WHICH WAS SERVED UPON THE ASS ESSEE IN RESPONSE TO THE SAME. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED DETAILS. 3. AO PERUSED THE AIR INFORMATION AND NOTICE THAT A SSESSEE HAS SOLD THE PROPERTY FOR AN AMOUNT OF RS. 18,50,000/- AND AFTER INDEXATION COST OF ACQUISITION OF RS. 19,92,482/- S HOWN LOSS OF RS. 1,42,482/- IN HIS RETURN OF INCOME UNDER THE HEAD LONG TERM 3 ITA NO . 138/DEL/2019 CAPITAL GAIN. ASSESSEE HAS SHOWN SALE CONSIDERATI ON OF RS. 18,50,000/- AS AGAINST THE CIRCULAR RATE OF THE PRO PERTY VALUE AT RS. 36,89,280/-. THE AO ASKED THE ASSESSEE TO GIVE THE JUSTIFICATION REGARDING DIFFERENCE OF RS. 18,39,280 /- BETWEEN THE SALE CONSIDERATION OF RS. 18,50,000/- MADE BY HIM A ND CIRCLE RATE OF THE PROPERTY OF RS. 36,89,280/- ALONG WITH DOCUM ENTARY EVIDENCE. AR OF THE ASSESSEE SUBMITTED REPLY DATED 17.11.2017 BY STATING THAT THE ACTUAL SALE CONSIDERATION OF PROPE RTY IS LESS THAN CIRCLE RATE BECAUSE THE PROPERTY UNDER CONSIDERATIO N IS SITUATED IN POOR/MIDDLE LOCALITY AND BASIC AMENITIES LIKE PUBLI C TRANSPORT, SCHOOL MARKET ARE FAR AWAY FROM THE LOCALITY AND PR EVAILING MARKET PRICE OF THE PROPERTY WAS VERY LOW AS COMPARED TO T HE VALUE AS PER STAMP DUTY AUTHORITY. ASSESSEE ALSO SUBMITTED COPY OF VALUATION REPORT ISSUED FROM APPROVED VALUER AND ALSO REQUEST ED THAT FOR DETERMINE THE CORRECT VALUE OF PROPERTY, THE MATTER MAY BE REFERRED TO THE VALUATION OFFICER U/S 50C(2) OF THE INCOME T AX ACT, 1961. 4. THE AO REFERRED THE MATTER TO THE VALUATION OFFI CER AND IN COMPLIANCE OF THE SAME THE VALUATION OFFICER VIDE R EPORT DATED 21.12.2017 SUBMITTED THE VALUATION REPORT OF THE SA ID PROPERTY AND ASSESSED THE VALUE AT RS. 25,11,740/- AGAINST T HE DECLARED VALUE OF RS. 18,50,000/- BY THE ASSESSEE. 5. AFTER CONSIDERING THE FACTS OF THE CASE AND SUBM ISSION MADE BY THE ASSESSEE THE AO HELD THAT THE SAME CONSIDERA TION OF PROPERTY AT RS. 25,11,740/- AND WORKED OUT THE CALC ULATION OF LONG TERM CAPITAL GAIN AND WORKED OUT THE DIFFERENCE OF RS. 6,61,740/- 4 ITA NO . 138/DEL/2019 AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 8,06 ,200/- VIDE ORDER DATED 28.12.2017 U/S 143(3) OF THE I.T. ACT, 1961. 6. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE I MPUGNED ORDER DATED 15.11.2018 DISMISSED THE APPEAL FILED BY THE ASSESSEE. NOW THE ASSESSEE HAS FILED THE APPEAL BEFORE THE TRIBUN AL. 7. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE STATED THAT ASSESSEE IS AN INDIVIDUAL AND A SALARIED PERSO N FILED ITS RETURN OF INCOME SHOWING LONG TERM CAPITAL LOSS ON 18.03.2 017 AND CLAIM A LOSS OF RS. 182,482/- BECAUSE THE ASSESSEE SOLD T HE PLOT ON 16.02.2015 FOR RS. 18,50,000/- AS AGAINST THE CIRCL E RATE OF RS. 36,90,000/- AS SALE VALUE OF THE SAID PROPERTY WAS MUCH BELOW THE CIRCLE RATE AT THE TIME OF SALE. ASSESSEE HAS ALSO PRODUCED THE SALE DEED AT PAGE NO. 29 TO 132 OF THE PAPER BOOK. LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT DURING THE COURSE OF A SSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED BEFORE THE AO TH AT VALUATION REPORT FROM THE GOVERNMENT APPROVED VALUER AT RS. 1 7,70,000/- THE COPY OF THE SAME ASSESSEE HAS ALSO ATTACHED IN THE PAPER BOOK AT PAGE 39 TO 45 OF THE PAPER BOOK. HE STATED THAT LD. ASSESSING OFFICER HAS IGNORED THE VALUATION REPORT OF THE APP ROVED VALUER AND DETERMINING THE COST OF RS. 25,11,470/-. 8. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED T HAT THE LETTER OF THE ASSESSEE FROM DDA HOUSING SCHEME ALLOTTED IN 2014 AT THAT TIME THE AVERAGE PRICE OF RS. 17,81,000/- AND AFTER THAT THE VALUATION OF THE SALE COUNTDOWN VERY LOW DUE TO THE REASON 5 ITA NO . 138/DEL/2019 MENTIONED IN THE REPLY OF THE ASSESSEE. HE FINALLY STATED THAT ALLOTMENT OF SIMILAR FLATS IN THE SAME LOCALITY AT AVERAGE PRICE OF RS. 17,81,000/- IN AY 2015-16 BUT THE REVENUE AUTHO RITY HAS NOT CONSIDERED THE SAME AND WRONGLY ACCEPTED THE VALUE MADE AT RS. 25,11,740/- WITHOUT ANY REASON. FINALLY THE LD. CO UNSEL FOR THE ASSESSEE STATED THAT FILE A CHART AND STATED THAT D IFFERENCE OF VALUE OF ASSESSEE AS WELL AS THE VALUATION OFFICER IS ONL Y 84,060/- I.E. LESS THAN 5% WHICH CAN BE IGNORED. HE REQUESTED TH AT THE APPEAL FILED BY THE ASSESSEE MAY BE ACCEPTED AND ADDITION IN DISPUTE MAY BE DELETED IN SUPPORT OF HIS CONTENTION. HE FILED VARIOUS CASE LAWS BUT SPECIALLY DRAW MY ATTENTION TOWARDS THE FOLLOWI NG JUDGMENTS: 359 ITR 314 (P&H) IN THE CASE OF ATM FORGINGS VS. COMMISSIONER OF INCOME-TAX, ITAT DELHI BENCHES A BENCH, NEW DELHI IN THE CASE OF ITO VS. LATE SHRI ASHA DALMIA IN ITA NO. 3117/DEL/2007 FOR AY. 1993-94 9. I HAVE HEARD THE BOTH PARTIES AND PERUSED THE OR DERS PASSED BY THE REVENUE AUTHORITIES ESPECIALLY THE DOCUMENTA RY EVIDENCE FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK CO NTAINING PAGE 1 TO 55 IN WHICH THE ASSESSEE HAS ATTACHED FORM NO. 3 6, FACTS OF THE CASE, GROUNDS OF APPEAL, ORDER AT CIT(A)-21, FO RM NO. 35 WITH GROUNDS OF APPEAL (CIT), ASSESSMENT ORDER, ACKNOWLE DGEMENT OF RETURN FILED, COMPUTATION OF INCOME, SALE DEED OF F LAT SOLD, VALUATION REPORT BY ASSTT. VALUATION OFFICER-II OF INCOME TAX DEPARTMENT, LETTER FILED BY ASSESSEE DATED 08.12.20 17, VALUATION REPORT BY APPROVED VALUER SUBMITTED BY ASSESSEE, FI NAL SHOW CAUSE NOTICE BY ITO, LETTER FILED BY ASSESSEE DT. 2 7.12.2017 IN 6 ITA NO . 138/DEL/2019 RESPONSE TO SHOW CAUSE NOTICE, BROCHURE FOR DDA HOU SING SCHEME 2014, BROCHURE FOR DDA HOUSING SCHEME 2017, PROOF OF DRAW OF LOTS HELD ON 30.11.2017, PROOF OF DRAW OF L OTS HELD ON 25.11.2014, COURT FEE, POWER OF ATTORNEY AND ASSESS EE HAS ALSO FILED ONE COMPARATIVE INSTANCE IN WHICH THE ASSESSE E HAS SHOWN THE DIFFERENCE OF TOTAL COST OF THE FLAT INCLUDING SOME CHARGES AND SALE PRICE OF THE FLAT AND ESTABLISHED THAT THE ONL Y DIFFERENCE BETWEEN THE BOTH IS RS. 84,060/- I.E. LESS THAN 5% AND REQUESTED THAT IT MAY BE IGNORED. KEEPING IN VIEW OF VARIOUS DECISIONS RENDERED BY THE ITAT, DELHI BENCHES AND OTHER BENCH ES IN THE COUNTRY FOR THE SAKE OF CONVENIENCE, A CHART OF COM PARATIVE INSTANCE FILED BY THE LD. COUNSEL FOR THE ASSESSEE IS REPRODUCED AS UNDER: VERENDER CHAND DHOUNDIYAL A.Y. 2015-16 FLAT SOLD ON 16.02.2015 FOR RS. 18,50,000/- COMPARATIVE INSTANCE GIVEN BY ASSESSEE TO LD. AA AVASIYA YOJNA 2014 DRAW OF LOTS DONE ON 25.11.2014 (PG 49 OF PB) AVERAGE PRICES-RS. 17.81 LACS (16.58+19.04)/2 (PAGE 50 OF PB) ADD: CONVERSION CHARGES PAYABLE TO DDA (AS PER ANNEXURE A AT PAGE NO. 5 OF SCHEME OF CONVERSION FROM LEASEHOLD TO FREEHOLD OF DDA) - CONVEYANCE DEED 6% OF 17,81,000/- (PAYABLE TO COLLECTOR OF STAMP/SDM) - AFFIDAVIT & INDEMNITY BOND (STAMP DUTY) - REGISTRATION FEE 1% OF RS. 17,81,000 28,080 1,06,860 210 APPLIED BY DVO-II AVASIYA YOJNA 2017 DRAW OF LOTS ON 30.11.2017 (PG 52 OF PB) AVERAGE PRICE= 20.33+22.78 2 = 21.56 LACS ADD: GAP CHARGES FROM 2017 TO 2015 (33 MONTHS) *0.5% I.E. 16.5 3.55 LACS 25.11 LACS RS. 25,11,740/- NOTE SINCE THE SALE PRICE AS PER DDA ALLOTMENT SCHEME IN 2014 WAS LOWER THAN 2017, HENCE GAP CHARGES SHOULD HAVE BEEN REDUCED FROM THE AVERAGE PRICE DETERMINED BY 7 ITA NO . 138/DEL/2019 RS. 17,81,000/ - (PAYABLE TO SUB REGISTRAR) - PASTING FEE (PAYABLE TO SUB REGISTRAR) FLAT SOLD FOR DIFFERENCE DIFFERENCE BEING LESS THAN 5% TO BE IGNORED. 17,810 100 1,53,060 19,34,060 18,50,000 RS. 84,060 DVO-II. IN THAT CASE, VALUATION SHOULD HAVE BEEN RS. 18.01 LACS (RS. 21.56 LACS RS. 3.55 LACS) 10. AFTER GOING THROUGH THE AFORESAID COMPARATIVE C HART GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE AND I AM OF THE VI EW THAT THE ASSESSEE HAS PURCHASED A FLAT IN DISPUTE ON 27.01.2 011 WHICH WAS SOLD ON 16.02.2015 FOR CONSIDERATION OF RS. 18,50,0 00/- AS AGAINST THE CIRCLE RATE OF RS. 36,90,000/-. AS PER THE REG ISTERED SALE DEED THE VALUE OF SALE CONSIDERATION OF RS. 18,50,000/-. THE ASSESSEE FILED ITS OBJECTION BEFORE THE ASSESSING OFFICER AN D MATTER WAS REFERRED TO THE DVO, WHO DETERMINED THE VALUE AT RS . 25,11,740/- AND THE ASSESSEE HAS NOT ACCEPTED THE SAME AND STAT ED THAT IN VIEW OF THE AFORESAID CHART THIS 5% DIFFERENCE IS V ERY MINOR CAN BE IGNORED AND VALUE DECLARED BY THE ASSESSEE MAY BE A CCEPTED. LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ACTUAL SAL E CONSIDERATION OF THE PROPERTY IS LESS THAN THE CIRCLE RATE BECAUS E THE PROPERTY UNDER CONSIDERATION IS SITUATED IN POOR/MIDDLE LOCA LITY AND BASIC AMENITIES LIKE PUBLIC TRANSPORT, SCHOOL MARKET ARE FAR AWAY FROM THE LOCALITY AND PREVAILING MARKET PRICE OF THE PRO PERTY WAS VERY LOW AS COMPARED TO THE VALUE AS PER STAMP DUTY AUTH ORITY. HE ALSO SUBMITTED COPY OF VALUATION REPORT ISSUED FROM APPROVED VALUER AND REQUESTED TO DETERMINE THE CORRECT VALUE OF THE 8 ITA NO . 138/DEL/2019 PROPERTY WHICH WAS WRONGLY DETERMINED BY THE DVO AT RS. 25,11,740/-. KEEPING IN VIEW THE EVIDENCE FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK AND THIS COMPARATIVE INSTAN CE CHART AND THE ARGUMENT ADVANCED BY THE LD. COUNSEL FOR THE AS SESSEE DESERVES TO BE ACCEPTED. KEEPING IN VIEW OF THE LO CALITY OF THE PROPERTY IN DISPUTE AND OTHER NON AVAILABILITY OF A MENITIES, NO ADVERSE EVIDENCE HAS BEEN FILED BY THE REVENUE AUTH ORITY CONTRARY TO THE EVIDENCE FILED BY THE LD. COUNSEL FOR THE AS SESSEE. THEREFORE, THE IMPUGNED ORDER PASSED BY THE REVENUE AUTHORITIES ESPECIALLY THE LD. FIRST APPELLATE AUTHORITY MADE T HE ADDITION IN DISPUTE WITHOUT ANY BASIS WHICH DESERVES TO BE CANC ELLED. IN MY VIEW THE ADDITION IN DISPUTE IS MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND WITHOUT ANY EVIDENCE AND IS NOT SUS TAINABLE IN THE EYE OF LAW. I DELETE THE ADDITION IN DISPUTE A ND BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 31/10/2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 9 ITA NO . 138/DEL/2019 TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI