R.Sankar, Legal Heir: B.Venkatesan, CHENNAI V. ITO, CHENNAI

ITA 1411/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8117 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 14-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2016
• Court: TRIBUNAL
• Assessee Lawyers: M KARUNAKARAN SHRI A V
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report; Reassessment proceedings
• Section: 143(3); 50C; 148

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 1411 /MDS/201 6 / ASSESSMENT YEAR :20 08 - 09 MRS. R. SANKARI , BY L/R B. VENKATESAN, 133, PEDARIAR KOIL STREET, CHENNAI 600 001. [PAN: A BEPS6529H ] VS. THE INCOME TAX OFFICER , NON CORPORATE WAR D 12 (1) CHENNAI 34. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI M. KARUNAKARAN , ADVOCATE / RESPONDENT BY : SHRI A.V. SREEKANTH , J CIT / DATE OF HEARING : 14 . 0 9 .201 6 / DATE OF P RONOUNCEMENT : 31 . 1 0 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) 1 3 , C HENNAI , DAT ED 15 . 0 2 .20 1 6 RELE VANT TO THE ASSESSMENT YEAR 20 08 - 09 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SALE CONSIDERATION OF THE PROPERTY SOLD AT .56,54,000/ - UNDER SECTION 50C OF THE INCOM E TAX ACT, 1961 [ ACT IN SHORT]. I.T.A. NO . 1411 /M/ 16 2 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME AT .1,37,836/ - . THE ASSESSEE HAD LONG TERM CAPITAL GAINS ON ACCOUNT OF PROPERTY SOLD. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE A SSESSEE SMT. R. SANKARI IS A JOINT CO - OWNER IN A PROPERTY WITH SMT. R. PARVATHY. IN A ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT IN THE CASE OF SMT. R. PARVATHY, THE PROPERTY IN QUESTION WAS SUBJECT MATTER OF LONG TERM CAPITAL GAINS AND HALF A SHARE I N THE PROPERTY WAS ARRIVED AT .47,01,222/ - . HOWEVER, IN THE RETURN OF INCOME, THE ASSESSEE HAS NOT DECLARED THE SALE CONSIDERATION TO THAT EXTENT. THEREFORE, THE ASSESSEE S CASE WAS REOPENED UNDER SECTION 148 OF THE ACT AND AFTER REASSESSMENT PROCEEDINGS, THE INCOME WAS ASSESSED AT . 21,72,141/ - . 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE NOTIFICATION OF THE REGISTRATION DEPARTMENT WITH REGARD TO ADOPTION OF GUIDELINE VALUE, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY CONTENDED THAT THE ASSESSING OFFICER HAS WRONGLY ADOPTED THE VALUE AGAINST THE GUIDELINE VALU E NOTIFIED BY THE REGISTRATION DEPARTMENT AND PLEADED THAT SUITABLE DIRECTIONS MAY KINDLY BE PASSED TO FOLLOW THE GUIDELINE VALUE AS NOTIFIED BY THE REGISTRATION DEPARTMENT. I.T.A. NO . 1411 /M/ 16 3 5. ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE AND SMT. R. PARVATHY, JOINTLY SOLD THE PROPERTY AT SUNDARA MUDALI STREET, VYASARPADI CHENNAI FOR A CONSIDERATION OF .73,00,000/ - . HOWEVER, IN THE RETURN OF INCOME THE ASSESSEE HAS NOT DECLARED THE SALE CONSIDERATION. THEREFORE, THE ASSESSEE S CASE WAS REOPENED UNDER SECTION 148 OF THE ACT. IN THE CASE OF SMT. R. PARVATHY, THE ASSESSMENT WAS COMPLETED BY ADOPTING THE SA LE VALUE AT .415/ - PER SQ.FT. AS FIXED BY THE STAMP VALUATION AUTHORITY. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE OBJECTED TO THE SAID VALUATION OF THE SUB - REGISTRAR AS ADOPTED IN THE CASE OF SMT. R. PARVATHY AND REQUESTED FOR VA LUATION BY DVO. AFTER INSPECTION OF THE PROPERTY, THE DVO HAS REPORTED THAT THE GUIDELINE VALUE OF THE PROPERTY ADOPTED BY THE SUB - REGISTRAR SHOULD BE REDUCED BY 25% TOWARDS SHAPE, LOCATION AND SIZE OF THE PLOT SOLD BY THE ASSESSEE. HOWEVER, THE DVO HAS TA KEN THE GUIDELINE VALUE OF THE PROPERTY AT .550/ - PER SQ.FT. INSTEAD OF .415/ - PER SQ.FT. AS ADOPTED BY THE SUB - REGISTRAR WHILE REGISTERING THE SALE DEED IN BOTH THE ASSESSEE S CASE. SINCE THE VALUE FIXED BY THE DVO WAS LOWER THAN THE VALUE OF REGISTRATION AUTHORITY, THE ASSESSING OFFICER HAS TAK EN ASSESSEE S HALF I.T.A. NO . 1411 /M/ 16 4 SHARE IN THE PROPERTY AT .56,54,000/ - AS FAIR MARKET VALUE AS PER VALUATION REPORT. 6.1 AS PER SALE DEED EXECUTED BY THE ASSESSEE AND SMT. R. PARVATHY ON 04.04.2007, AS PER SCHEDULE - A, THE PROPERTY AT SUNDARA MUDALI STREET, VYASARPADI CHENNAI WAS SOLD. THE LAND VALUE ADOPTED BY THE SUB - REGISTRAR WAS @ . 415/ - PER SQ.FT. BY FILING THE NOTIFICATIONS ISSUED BY THE REGISTRATION DEPARTMENT FIXING THE GUIDELINE VALUE OF THE PROPERTY OF VARIOUS PLACES, THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT TO ASCERTAIN THE FAIR MARKET VALUE, THE VALUE NOTIFIED BY THE GOVERNMENT SHOULD BE ADOPTED ALONG WITH OBSERVATION OF THE DVO TO REDUCE 25% TOWARDS SHAPE, LOCATION AND SIZE OF THE PLOT SOLD BY THE ASSESSEE. WE HAVE GONE THROUGH THE NOTIFICATIONS ISSUED BY THE REGISTRATION DEPARTMENT AND FOUND THAT FROM 01.04.2003 TO 31.07.2007 THE GUIDELINE VALUE OF THE PROPERTY LOCATED AT VARIOUS STREETS OF SUNDRA MUDALI STREET WAS FIXED AT .461/ - PER SQ.FT. [PAPER BOOK PAGE 36] AND THE GUIDELINE VALUE FOR THE PERIOD FROM 01.08.2007 TO 31.03.2012 FOR THE SAME LOCATION WAS FIXED AT .550/ - PER SQ.FT. [PAPER BOOK PAGE 42]. ADMITTEDLY, THE PROPERTY SOLD WAS REGISTERED ON 04.04.2007 AND THE VALUE OF THE PROPERTY AS NOTIFIED BY THE REGISTRATION DEPARTMENT WAS .461/ - , WHEREAS, THE DVO HAS TAKEN .550/ - PER SQ.FT. AS VALUE OF THE PROPERTY, WHICH WAS NOTIFIED FOR APPLYING THIS RATE FOR REGISTRATION AFTER 01.08.2007 TO 31.03.2012 WITHOUT ASSIGNING ANY REASON. CONSIDERING THE LOCATION AND SIZE I.T.A. NO . 1411 /M/ 16 5 OF THE PROPERTY, THE DVO HIM SELF HELD TO REDUCE BY 25% OF GUIDELINE VALUE. UNDER THESE FACTS AND CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO ADOPT THE GUIDELINE VALUE AS NOTIFIED BY THE REGISTRATION DEPARTMENT AT .461/ - PER SQ.FT. AND TO REDUCE 25% THEREFROM AS HELD BY THE DVO CONSIDERING THE LOCATION AND SIZE OF THE PLOT SOLD BY THE ASSESSEE AND REWORK OUT THE FAIR MARKET VALUE OF THE PROPERTY. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 31 ST OCTOBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 31 . 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.