Sudha Garg, Ghaziabad V. ITO, Ward- 2(3), Ghaziabad

ITA 141/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4249 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR TIWARI
• Assessee Lawyers: AMRESH VASHISHT
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 50C; 148

Judgement Text

ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC + C NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 141/DEL/2018 (A.Y 2009 - 10) SUDHA GARG R - 16/369, VASUNDARA GHAZIABAD BEFPG7247H (APPELLANT) VS ITO WARD - 2(3) GHAZIABAD (RESPONDENT) APPELLANT BY SH. AMRESH VASHISHT, CA & MS. SUNAINA SHARMA, ADV RESPONDENT BY SH. VIJAY KUMAR TIWARI, SR. DR ORDER PER PRASHANT M MAHARISHI A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - GHAZ IABAD FOR ASSESSMENT YEAR 2009 - 10 RAISING FOLLOWING GROUNDS OF APPEA L AS UNDER: - 1 . BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL AS ON FACTS NOT TO ACKNOWLEDGE THE REPORT OF ASSISTANT VALUATION OFFICER MEERUT AT RS. 2178000/ - AGAINST ASSESSEE SALE PRICE OF RS 2000000/ - BUT VALUED AT CIRCLE RATE OF RS.3485000/ - ADDING RS. 14,82,000/ - UNDER SECTION 50 C OF INCOME TAX ACT , 1961 READ WITH SECTION 1 6A (4) OF THE WEALTH TAX ACT 1961 BEFORE HIM AS EVIDENCE AND DATE OF HEARING 09.08.2018 DATE OF PRONOUNCEMENT 1 4 .08.2018 ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 2 OF 9 PASSED THE ORDER IN ARBITRARY MANNER. 2. BECAUSE THE LEARNED CIT (APPEALS) HAS ERRED IN OVERLOOKING AND IN SUMMARILY REJECTING THE DETAILED STATEMENT OF FACTS SUBMITTED ALONG WITH MEMORANDUM OF APPEAL, DOCUMENTS, AND EVIDENCES WHILE ACCEPTING THE FACTUALLY INCORRECT VERSION OF THE LEARNED ASSESSING OFFICER. 3. THAT THE VALUATION AS GIVEN BY THE ASSISTANT VALUATION OFFICER BE ACCEPTED AS SALE PRICE IN THE INTEREST OF JUSTICE OR THE MATTER BE RE FERRED BACK TO ASSESSING OFFICER FOR FRESH ASSESSMENT CONSIDERING REPORT OF ASSISTANT VALUATION OFFICER. 4. THE ASSESSEE CRAVES LEAVE TO ADD/ALTER ANY OF GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 . THE ASSESSEE IS AGGRIEVED THAT THE LD. ASSESSING OFFICER HAS COMPUTED THE CAPITAL GAINS BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT . 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL . ON THE BASIS OF THE AIR INFORMATION, THE LD. ASSESSING OFFICER NOTED THAT SHE HAS SOLD A PROPERTY FOR SALE CONSIDERATION OF RS.36,83,000/ - . THEREFORE, NOTICE U/S 148 OF THE ACT WAS ISSUED. CONSEQUENTLY , IT WAS FOUND THAT THE ASSESSEE AND HER SON HAVE JOINTLY SOLD A RESIDENTIAL PLOT AT VASUNDHRA, GHAZIABAD FOR A SA LE OF CONSIDERATION OF RS. 20 L A KH S FOR WHICH THE STAMP DUTY VALUE IS ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 3 OF 9 RS.34.85 LACS AS PER THE REGISTERED SALE DEED DATED 13/5/2008 . THEREFORE, THE LD. ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN OF RS. 15 , 96 , 410/ - TAKING THE DEEMED SALE CONSIDERATION U/S 50C OF RS. 34,85,000/ - . BEFORE THE LD AO ASSESSEE SUBMITTED THE REPORT OF REGISTERED VALUER SHRI R N BANSAL WHO VALUED THE PROPERTY AT RS. 19.52 LAKHS. LD AO WAS NOT SATISFIED WITH THE REPORT OF RV. THEREFORE, PRIOR TO PASSING ASSESSMENT ORDER ON 26/12/2106 U / 143 (3) RWS 148 OF THE ACT, THE LD. ASSESSING OFFICER ON 28/10/2016 REFERRED TO THE DISTRICT VALUATION OFFICER FOR DETERMINING THE MARKET VALUE OF THE ABOVE PROPERTY . THE LD. ASSISTANT VALUATION OFFICER (MEERUT) DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY VIDE LETTER DATED 7/3/2017 AT RS.21.78 LACS. AS THE ASSESSMENT WAS GETTING TIME BARRED THE LD AO PASSED ASSESSMENT ORDER WITHOUT WAITING FOR THE REPORT OF DVO TAKING THE CIRCLE RATE FOR STAMP DUTY PURPOSES AS DEEMED SALES CONSIDERATION. 4 . MEANWHILE, THE ASSESSEE - PREFERRED APPEAL AGAINST THE ORDER OF THE LD. ASSESSING OFFICER BEFORE THE LD. CIT ( A) AND DURING THE COURSE OF THE HEARING, THE ASSESSEE SUBMITTED THAT THE DIFFERENCE IN THE MARKET VALUE IS BECAUSE OF THE CONDITION OF THE PROPERT Y . THE LD. CIT ( A ) DID NOT ACCEPT THE ARGUMENT O F THE ASSESSEE AND CONFIRM ED THE ADDITION . BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE DEPARTMENTAL VALUER HAS VALUED THE PROPERTY VIDE LETTER DATED 7/3/2017 AT RS 21.78 LAKHS ONLY, THEREFORE ON LY THAT CAN BE TAKEN AS DEEMED SALES CONSIDERATION FOR WORKING OUT CAPITAL GAIN . HOWEVER, THE LD. CIT ( A) REJECTED IT, AS ACCORDING TO HIM, THE APPELLANT HAS NOT CLAIMED BEFORE THE A.O THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY HAS EXCEEDE D THE FAIR MARKET VALUE PROPERTY . THEREFORE, HE REJECTED THE APPEAL OF THE ASSESSEE. ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 4 OF 9 5 . THE LD. AUTHORIZED REPRESENTATIVE REITERATED THE SAME ARGUMENTS AND FACTS BEFORE US. IT WAS THE CLAIM OF THE ASSESSEE THAT LD. ASSESSING OFFICER HAS ONLY REFERRED THE MATT ER TO THE DEPARTMENTAL VALUER ONLY WHEN THE ASSESSEE HAS OBJECTED BEFORE THE LD. ASSESSING OFFICER THAT THE STAMP DUTY VALUATION IS HIGHER SIDE BY SUBMITTING THE REPORT OF THE REGISTERED VALUER WHO VALUED THE PROPERTY AT RS. 21.78 LACS, HE SUBMITTED THAT A SSESSEE HAS MADE PROPER CLAIM BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THERE IS NO PROPER MANNER PROVIDED UNDER THE LAW FOR MAKING A CLAIM BEFORE THE ASSESSING OFFICER IT MAY BE IN THE RETURN OF INCOME OR BY VARIOUS COMMUNICATIONS ADDRESSED TO THE L D. ASSESSING OFFICER. HE SUBMITTED THAT WHEN THE ASSESSEE HAS DISPUTED THE APPLICABILITY OF THE STAMP DUTY VALUE IS THE DEEMED CONSIDERATION FOR WORKING OUT THE CAPITAL GAIN OF THE PROPERTY BY SUBMITTING THE REPORT OF THE REGISTERED VALUER IT IS A PROPER C LAIM MADE BY THE ASSESSEE BEFORE AO. HE THEREFORE SUBMITTED THAT TO THAT EXTENT THE ORDER OF THE LD. CIT A IS ERRONEOUS HOLDING THAT ASSESSEE HAS NOT MADE ANY CLAIM BEFORE THE LD. ASSESSING OFFICER. WITH RESPECT TO THE DIFFERENCE IN VALUATION ADOPTED BY THE DISTRICT VALUATION OFFICER OF RS. 21.78 LACS AND THE ACTUAL SALE CONSIDERATION OF RS. 20 LAKHS IS SUBMITTED THAT THE DIFFERENCES VERY SMALL AND THEREFORE SAME SHOULD BE IGNORED. 6 . THE LD. DEPARTMENTAL REPRESENTATIVE ALSO SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY, THE ASSESSEE HAS SOLD A PROPERTY AT RS. 20 LAKHS WHOSE CIRCLE RATE FOR STAMP DUTY PURPOSES WAS RS. 34.85 LACS . BEFORE THE ASSESSING OFFICER, THE GOVERNMENT - APPROVED VALUER S REPORT WAS SUBMITTED BY THE ASSESSEE OF SHRI DR. S.N . BANSAL WHO VALUED THE PROPERTY AT RS. 19.52 LAKHS. THE LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPORT OF THE REGISTERED ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 5 OF 9 VALUER AND THEREFORE HE CALLED FOR THE REPORT OF THE DISTRICT VALUATION OFFICER. HOWEVER, THE VALUATION AS PER THE REPORT OF THE ASST VALUATION OFFICER WAS RS. 21.78 LACS. BEFORE THE ASSESSING OFFICER THE REPORT OF THE ASSISTANT VALUATION OFFICER WAS NOT AVAILABLE AS THE ASSESSMENT OR DER WAS PASSED ON 26 /12/ 2016 WHERE AS THE VALUATION REPORT BY AVO WAS RECEIVED ON 7/3/2017 . HOWEVER IT WAS AVAILABLE BEFORE THE LD. CIT A BUT HE REJECTED IT FOR THE REASON THAT IT IS FOR THE ASSESSEE TO CLAIM BEFORE THE LD. ASSESSING OFFICER THAT THE VAL UE ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY A S ON THE DATE OF THE TRANSFER AND THE VALUE HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION BEFORE ANY OTHER AUTHORITY OR THE COURT. ACCORDING TO HIM SUCH CLAIM WAS NOT MADE BY THE ASSESSEE BEFORE THE AO. A CCORDING TO THE PROVISIONS OF SECTION 50 C OF THE INCOME TAX ACT , WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF THE CAPITAL ASSET BEING LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL FOR THE PURPOSE OF SECTION 48, BE DEEMED TO BE THE FULL V ALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. HOWEVER IF THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF THE TRANSFER THEN THE LD. ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER. FURTHER WHERE THE VALUATION ASCERTAINED BY THE DISTRICT VALUATION OFFICER EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY THEN THE VALUATION OF THE STAMP DUTY AUTHORITIES SHALL BE CONSIDERED AS A DEEMED SALE CONSIDERATION. FURTHER WHEN THE STAMP DUTY VALUE ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 6 OF 9 ADOPTED BY THE STAMP DUTY AUTHORITIES IS MORE THAN THE FAIR MARKET VALUE DETERMINED BY THE DEPARTMENT OF VALUATION OFFICER , THAN SUCH VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER IS TAKEN AS THE FULL VALUE OF CONSIDERATION. THE ONLY DIS PUTE REMAINS HERE IS WHETHER THE ASSESSEE HAS OBJECTED THE ADOPTION OF THE STAMP DUTY VALUE BEFORE THE LD. ASSESSING OFFICER OR NOT. BEFORE US THE ASSESSEE HAS SUBMITTED THAT ASSESSEE HAS SUBMITTED THE REPORT OF THE GOVERNMENT - APPROVED VALUER WHO VALUED TH E PROPERTY AT RS. 19.65 LACS. FURTHER, AS THE LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE VALUATION REPORT OF THE GOVERNMENT - APPROVED VALUER , HE REFERRED THE MATTER OR VALUATION TO THE DISTRICT VALUATION OFFICER. THERE IS NO SPECIFIC MANNER PROVIDED B Y THE ACT FOR MAKING A CLAIM BEFORE THE LD. ASSESSING OFFICER UNDER SECTION 50 C OF THE INCOME TAX ACT. SUCH CLAIM CAN ALSO BE MADE IN THE RETURN OF INCOME AS WELL AS IN VARIOUS COMMUNICATIONS BEFORE THE ASSESSING OFFICER. AS THE ASSESSEE HAS SUBMITTED THE REPORT OF THE REGISTERED GOVERNMENT APPROVED VALUER, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS NOT CLAIMED BEFORE THE LD. ASSESSING OFFICER THAT VALUATION ADOPTED BY THE STAMP DUTY AUTHORITIES IS NOT THE CORRECT VALUATION OF THE PROPERTY SOLD . OT HERWISE THERE WOULD HAVE BEEN NO OCCASION FOR THE LD. ASSESSING OFFICER TO REFER THE MATTER TO THE DISTRICT VALUATION OFFICER . THE LD. DEPARTMENTAL VALUER SUBMITTED ITS VALUATION REPORT DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY AT R S. 21.78 LACS. T HEREFORE ACCORDING TO US THE ASSESSEE HAS MADE PROPER CLAIM BEFORE THE ASSESSING OFFICER. FURTHER THE ARGUMENT OF THE LD. AUTHORIZED REPRESENTATIVE THAT WHERE THE DIFFERENCE BETWEEN THE ACTUAL SALE CONSIDERATION OF RS. 20 LAKHS AND THE VALUATION MADE BY TH E DEPARTMENTAL VALUATION OFFICER OF RS. 21.78 LACS IS NOMINAL AND THEREFORE IT SHOULD BE IGNORED AS THE REPORT OF THE DISTRICT VALUATION OFFICER IS MERELY AN OPINION. WE HAVE CAREFULLY CONSIDERED ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 7 OF 9 THIS ARGUMENT HOWEVER; IT DESERVES TO BE REJECTED, AS THERE IS NO SUCH PROVISION IN SECTION 50 C OF THE INCOME TAX ACT WITH RESPECT TO THE DIFFERENCE BETWEEN THE VALUE DETERMINED BY THE DISTRICT VALUATION OFFICER AND THE ACTUAL SALE CONSIDERATION. THE PROVISIONS OF SECTION 50 C ARE AMENDED W.E.F. 1/4/2019 ONLY FOR IGNORING THE STAMP VALUATION AUTHORITY VALUATION IF IT DOES NOT EXCEED 105% OF THE CONSIDERATION RECEIVED. HOWEVER, THAT APPLIES ONLY WHEN COMPARING THE STAMP DUTY VALUATION WITH THE ACTUAL SALE CONSIDERATION OF THE PROPERTY. IN VIEW OF ABOVE FACTS WE DIRECT THE LD. ASSESSING OFFICER TO WORK OUT THE CAPITAL GAIN BY CONSIDERING THE DEEMED SALE CONSIDERATION OF THE PROPERTY AT RS. 21.78 LACS AND THEN WORK OUT THE CAPITAL GAIN CHARGEABLE TO INCOME TAX ACT. ACCORDINGLY, WE REVERSE THE ORDERS OF THE LOWER AUTHORITIES. IN VIEW OF THIS GROUND NO. 1 3 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 4 . 0 8 . 2 0 1 8 . - S D / - - S D / - (BHAVNES H SAINI) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 4 / 08/2018 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO 141 DEL 2018 A Y 2009 - 10 SUDHA GARG V ITO PAGE 8 OF 9 DATE OF DICTATION 09.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.08.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS .08.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT .08.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .08.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER