K.JEYAKUMAR-HUF, MADURAI V. ADDL./JOINT CIT NON CORPORATE RANGE 2, MADURAI

ITA 1385/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6090 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARI GOVIND
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Set aside
• Section: 50C

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1385/CHNY/2019 ' #$' / ASSESSMENT YEAR : 2009-10 SHRI K. JAYAKUMAR HUF, NO.32, JEEVAN NAGAR 2 ND STREET, KARPAGA VINAYAGAR STREET, PONMENI, MADURAI 625 016. PAN : AAGHK 7833 M V. THE INCOME TAX OFFICER, NON CORPORATE WARD 2(3), MADURAI 625 002. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : NONE ()&' * + / RESPONDENT BY : SHRI K. HARI GOVIND, JCIT , # * -. / DATE OF HEARING : 11.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 02.08.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, MADURAI, D ATED 06.03.2019 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. NO ONE APPEARED FOR THE ASSESSEE INSPITE OF ISSU E OF NOTICE. THEREFORE, I HEARD THE LD. D.R. AND PROCEEDED TO DI SPOSE THE APPEAL ON MERIT. 2 I.T.A. NO.1385/CHNY/19 3. SHRI K. HARI GOVIND, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT TWO ISSUES ARISE FOR CONSIDERATION I N THIS APPEAL. THE FIRST ISSUE IS WITH REGARD TO ESTIMATION OF MARKET VALUE AS ON 01.04.1981 FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. THE SECOND ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ESTIMATION OF SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING CAPITAL GAIN UNDER SECTION 50C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. AS FAR AS THE FIRST ISSUE IS CONCERNED, THE LD. D.R. SUBMITTED THAT THE ASSESSEE INHERITED THE PROPERTY FROM HIS FATHER . IN FACT, THE ASSESSEE ACQUIRED THE PROPERTY DURING THE YEAR 1965-1967. A CCORDING TO THE LD. D.R., THE ASSESSEE ADOPTED THE COST OF ACQUISITION AS ON 01.04.1981 AT 125/- PER SQ.FT. AND THE COST OF BUILDING AT 100/-. THE ASSESSING OFFICER ACCEPTED THE COST OF ACQUISITION OF THE BUILDING AT 100/- PER SQ.FT. HOWEVER, ON THE BASIS OF GUIDELINE VALUE, HE REDUCE D THE COST OF ACQUISITION OF THE LAND AT 50/- PER SQ.FT. IN THE ABSENCE OF ANY MATERIAL, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HA S RIGHTLY ADOPTED THE COST OF ACQUISITION AT 50/-. THE LD. D.R. FURTHER SUBMITTED THAT EVEN THOUGH THE ASSESSEE RAISED A GROUND WITH REGARD TO ADOPTION OF SALE CONSIDERATION UNDER SECTION 50C OF THE ACT, THERE W ERE NO FACTS COMING OUT FROM THE ASSESSMENT ORDER. 3 I.T.A. NO.1385/CHNY/19 5. I HEARD THE LD. D.R. AND PERUSED THE RELEVANT MA TERIAL AVAILABLE ON RECORD. AS REGARDS THE FIRST ISSUE OF ESTIMATIO N OF FAIR MARKET VALUE AS ON 01.04.1981, AS RIGHTLY SUBMITTED BY THE LD. D.R. , THE ASSESSEE ADOPTED 125/- PER SQ.FT. IN RESPECT OF THE LAND. HOWEVER, THE ASSESSING OFFICER RESTRICTED THE SAME AT 50/- PER SQ.FT. ON THE BASIS OF THE GUIDELINE VALUE OF STATE REGISTRATION DEPARTMENT. AS REGARDS THE COST OF BUILDING, THE ASSESSING OFFICER ACCEPTED THE VALUATION OF THE ASSESSEE AT 100/- PER SQ.FT. FROM THE OBSERVATION MADE BY THE ASSESS ING OFFICER AT PARA 5 OF HIS IMPUGNED ORDER, IT APPEARS THERE WAS REFEREN CE ABOUT PARTITION DEED ON THE PROPERTY AT TAMIL SANGAM ROAD. FOR THE PURPOSE OF PARTITION, THE PROPERTY WOULD BE VALUED AMONG THE F AMILY MEMBERS AND THERE WAS NO TRANSFER OF PROPERTY AS SUCH. IN THE PARTITION, THERE WOULD BE DIVISION OF PROPERTY BY METES AND BOUNDS, AND THERE IS NO TRANSFER OF PROPERTY, THEREFORE, THE VALUE ADOPTED FOR REGISTRA TION OF PARTITION DEED MAY NOT ALWAYS REFLECT THE FAIR MARKET VALUE OF THE LAND FOR OTHER TRANSACTIONS. 6. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FAIR MARKET VALUE OF THE LAND AND BUILDING WOULD DEPEND UPON VARIOUS FAC TORS SUCH AS LOCATION OF THE PROPERTY, AREA OF THE LAND, INFRASTRUCTURE A VAILABLE AROUND THE PROPERTY, POTENTIAL FOR FUTURE DEVELOPMENT AND ALSO THE PUBLIC INFRASTRUCTURE FACILITIES, ETC. OF COURSE, GUIDELI NE VALUE OF THE STATE REGISTRATION DEPARTMENT IS ALSO ONE OF THE FACTORS TO BE TAKEN INTO 4 I.T.A. NO.1385/CHNY/19 CONSIDERATION ALONG WITH COMPARATIVE SALE INSTANCE AT THE LOCALITY. IN THIS CASE, THE COMPARATIVE SALE INSTANCE WAS NOT TAKEN I NTO CONSIDERATION. THE ASSESSING OFFICER HAS TAKEN ONLY THE GUIDELINE VALUE OF THE STATE REGISTRATION DEPARTMENT. THE OTHER FACTORS AS REFE RRED ABOVE WERE NOT TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR DETE RMINING THE FAIR MARKET VALUE AS ON 01.04.1981, IT IS A BOUNDEN DUTY OF THE ASSESSING OFFICER TO BRING ON RECORD ALL THOSE FACTORS AND THEREAFTER DE TERMINE THE FAIR MARKET VALUE AS ON 01.04.1981. 7. THE CIT(APPEALS), HOWEVER, HAS NOT DISCUSSED ANY THING ON MERIT. THE CIT(APPEALS) SIMPLY REJECTED THE APPEAL ON THE GROUND THAT NO ONE APPEARED FOR THE ASSESSEE. EVEN THOUGH THE CIT(A) OBSERVED THAT HE PROCEEDED TO DISPOSE THE APPEAL ON MERIT BASED ON T HE MATERIAL AVAILABLE ON RECORD, THERE IS NO DISCUSSION IN THE IMPUGNED O RDER OF THE CIT(APPEALS) ABOUT THE CASE ON MERIT. THE CIT(APPE ALS) SIMPLY SAYS NOTHING ON RECORD TO JUSTIFY ANY OF THE GROUNDS OF APPEAL OF THE APPELLANT. THIS KIND OF OBSERVATION CANNOT BE CONSTRUED DISPOS AL OF APPEAL ON MERIT. THIS TRIBUNAL TIME AND AGAIN POINTS OUT THAT THE CI T(APPEALS) HAS NO POWER TO DISMISS THE APPEAL FOR NON-PROSECUTION. A MERE REFERENCE IN THE ORDER THAT THE APPEAL IS DISPOSED ON MERIT DOES NOT, IN FACT, MEAN THAT THE APPEAL IS ACTUALLY DISPOSED ON MERIT. DISPOSAL OF APPEAL ON MERIT MEANS THAT THE CIT(APPEALS) HAS TO INDEPENDENTLY EX AMINE THE FACTS, RE- 5 I.T.A. NO.1385/CHNY/19 APPRECIATE THE MATERIAL AVAILABLE ON RECORD AND REC ORD HIS OWN REASONING FOR CONCLUSION BY PASSING A SPEAKING ORDER. THESE THINGS ARE APPARENTLY LACKING IN THE ORDER OF THE CIT(APPEALS). THEREFOR E, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE OF DETERMINING THE FAIR MARKET VALUE AS ON 01.04.1981 IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE OBSERVATION MADE BY THIS TRIBUNAL AND THEREAFTER DETERMINE THE FAIR MARKET VALUE AS ON 01 .04.1981 AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. NOW COMING TO THE ISSUE OF DETERMINATION OF SALE CONSIDERATION BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. THIS ISSUE ALSO HAS NOT BEEN DISCUSSED BY BOTH THE AUTHORITIES BELOW. NO F ACTS WERE COMING OUT OF THE ORDERS OF THE CIT(APPEALS) AND THE ASSESSING OFFICER AND THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THIS ALSO NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER AND DETERMI NE THE APPLICABILITY OF SECTION 50C OF THE ACT AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 I.T.A. NO.1385/CHNY/19 ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 2 ND AUGUST, 2019 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-2, MADURAI 4. PRINCIPAL CIT-1, MADURAI 5. 4#7 (- /DR 6. 8' 9 /GF.