Nayana Jayesh Jain, Pune V. Income-tax Officer, Ward - 6 (4), Pune

ITA 1388/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8880 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 19-09-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHAILESH OSWAL
• Keywords: Fair market value; Valuation report
• Section: 55A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1388/PUN/2019 / ASSESSMENT YEAR : 2015-16 NAYANA JAYESH JAIN, KANCHAN BUILDING, 512, GURWAR PETH, GAWRI ALI, PUNE-411042. PAN : ATPTJ4910J VS. ITO, WARD-6(4), PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-4, PUNE DATED 10-07-2019 IN RELATION TO THE ASSESSMENT YEAR 2015-16. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE ADDITION ON ACCOUNT OF VALUATION OF A PROPERTY, NAMELY, OFFICE UNITS NO .18 & 19, 5 TH FLOOR, D TOWER, VEGA CENTRE, GULTEKADI, PUNE PURCHASED BY THE ASSESSEE. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE JOINTLY PURCHASED THE AFORE-REFERRED COMMERCIAL P ROPERTY. ASSESSEE BY SHRI SHAILESH OSWAL REVENUE BY SMT. SHRADDHA NICHAL SMT. NISHTHA TIWARI DATE OF HEARING 28-07-2020 DATE OF PRONOUNCEMENT 28-07-2020 ITA NO.1388/PUN/2019 NAYANA JAYESH JAIN 2 THE SAID PROPERTY WAS PURCHASED BY THE ASSESSEE, HAVING 1/6 TH SHARE ALONG WITH THE OTHER FIVE CO-OWNERS, FOR A TOTAL CONS IDERATION AT RS.1,80,00,000/-. RESULTANTLY, THE ASSESSEE SHOWED A P AYMENT OF RS.30,00,000/- AS HER SHARE TOWARDS INVESTMENT IN THE P ROPERTY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESS ING OFFICER OBSERVED THAT THE STAMP VALUE OF THE PROPERTY WAS RS.2,61,73,956/- AS AGAINST THE PROPERTY SHOWN TO HAVE B EEN PURCHASED AT RS.1.80 CRORE. CONSIDERING THE PROVISIONS O F SECTION 56(2)(VII) OF THE ACT, THE ASSESSING OFFICER WORKED OUT TH E ASSESSEES 1/6 TH SHARE IN THE SAID EXCESS AMOUNT AT RS.13,62,326/-. ON CONFRONTED, THE ASSESSEE REQUESTED THE ASSESSING OFFIC ER FOR MAKING A REFERENCE TO THE DVO FOR DETERMINING THE FAIR MARK ET VALUE OF THE PROPERTY U/S 55A OF THE ACT. THE ASSESSMENT WAS GETTING TIME BARRED ON 31.12.2017. SINCE NO VALUATION REPO RT WAS RECEIVED TILL THE DATE OF PASSING OF THE ASSESSMENT ORDER ON 20.12.2017, THE ASSESSING OFFICER ADDED THE DIFFERENTIAL A MOUNT OF RS.13,62,326/- TO THE TOTAL INCOME OF THE ASSESSEE. DUR ING THE COURSE OF THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE SUB MITTED THAT THE REPORT OF THE DVO WAS RECEIVED DETERMINING FAIR MARK ET VALUE OF THE PROPERTY AT RS.2,11,42,000/-. THE ASSESS EE ALSO ITA NO.1388/PUN/2019 NAYANA JAYESH JAIN 3 CHALLENGED THE DVOS REPORT ON SEVERAL COUNTS. NOT CONVIN CED, THE LD. CIT(A) WORKED OUT THE ASSESSEES SHARE IN THE EXCESS BY ADOPTING FAIR MARKET VALUE OF RS.2,11,42,000/- AS AGAINST THE STAMP VALUE TAKEN BY THE ASSESSING OFFICER AT RS.2,61,73,956/- IN THE ASSESSMENT. AGGRIEVED THEREBY, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE ADDITION HAS PRIMARILY BEEN SUSTAINED IN THE FIRST APPEAL ON THE B ASIS OF THE DVOS REPORT, WHOSE COPY IS AVAILABLE AT PAGE 1 ONWARDS OF THE PAPER BOOK. IT CAN BE SEEN FROM ANNEXURE-1 TO THE DVO S REPORT THAT RATE OF RS.77,640/- HAS BEEN ADOPTED BY HIM FOR VA LUING THE COMMERCIAL AREA AS WELL AS CAR PARKING DETERMINING THE TOTAL VA LUE OF THE PROPERTY AT RS.2,11,42,000/-. THE LD. AR CONTEND ED THAT THERE IS NO BASIS FOR COMPUTING RS.77,640/- PER SQ. MTR IN THE DVOS REPORT. THE BENCH DIRECTED THE LD. DR TO POINT OUT T HE BASIS OF THE DVOS REPORT THROUGH WHICH THE RATE OF RS.77, 640/- PER SQ. MTR WAS ARRIVED AT. SHE ALSO COULD NOT CORRELATE TH IS FIGURE WITH ANY FINDING FROM THE DVOS REPORT. THUS, IT CAN BE SE EN THAT THE RATE ADOPTED IN THE DVOS REPORT AT RS.77,640/- PER S Q. MTR IS ITA NO.1388/PUN/2019 NAYANA JAYESH JAIN 4 WITHOUT ANY BASIS. OUR ATTENTION HAS ALSO BEEN DRAWN TOWARD S THE PRELIMINARY VALUATION REPORT BY THE DVO, WHOSE COPY HAS B EEN MADE AVAILABLE AT PAGE 5 ONWARDS OF THE PAPER BOOK. ANNE XURE-2 TO THE SAID REPORT REFERS TO SEVEN COMPARABLE SALE INSTANCES WITH PER SQ. MTR SALE RATE AT RS.84,859/-, RS.57,498/-, RS.63,2 23/-, RS.56,740/-, RS.71,443/-, RS.59,613/- AND RS.41,130 /- IN THE ABSENCE OF ANY ELABORATION OF THE RATE ADOPTED BY THE DVO IN HIS FINAL REPORT, WE CONSIDER IT EXPEDIENT TO RESTRICT THE FAIR MARK ET VALUE RATE AT THE AVERAGE OF THE SEVEN SALES INSTANCES GIVEN IN THE PRELIMINARY REPORT, WHICH COMES TO RS.62,073/-. THE AS SESSING OFFICER IS DIRECTED TO ADOPT THIS AS PER SQ. MTR. FAIR MARKE T RATE AND THEN WORK OUT ADDITION, IF ANY, U/S 56(2)(VII) OF THE ACT ACCORDINGLY. THE IMPUGNED ORDER IS SET-ASIDE TO THIS EXTE NT. 4. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JULY, 2020. SD/- SD/- (S.S. VISWANETHRA RAVI) (R.S.SY AL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 28 TH JULY, 2020 SUJEET ITA NO.1388/PUN/2019 NAYANA JAYESH JAIN 5 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-4, PUNE 4. THE PR. CIT-3, PUNE , , / DR SMC, ITAT, PUNE 5. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 28-07-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28-07-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *