DCIT, Panchkula V. Smt. Kamla Rani, Panchkula

ITA 1414/CHANDI/2010

• Counselvise Citation: 141421514 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.1414/CHD/2010 ASSESSMENT YEAR: 2007-08 DCIT, PANCHKULA CIRCLE, V SMT. KAMLA RANI, PANCHKULA. # 516, SECTOR 21, PANCHKULA. PAN: ABAPR-1091D (APPELLANT) (RESPONDENT) DEPARTMENT BY: SMT. JYOTI KUMARI ASSESSEE BY : SHRI JASPAL SHARMA DATE OF HEARING : 15.03.2012 DATE OF PRONOUNCEMENT : 10.04.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 14.10.2010 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. ON THE BASIS OF THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING THE ASSESSEE'S APPEAL REGARDING ADDITION OF RS.1,80,58,334/- ON ACCOUNT OF LONG TERM CAPITAL GAIN WITH THE DIRECTIONS TO MAKE A REFERENCE TO THE VALUATION OFFICER IN TERMS OF SECTION 50C(2) OF THE IT ACT AND ASSESSEE THE CAPITAL GAINS EARNED BY THE ASSESSEE FROM THE SALE OF PROPERTY IN QUESTION IN VIEW OF THE REPORT OF THE VO AND THE PROVISION OF SECTION 50C(3) OF THE IT ACT DEPOSITS THE FACT THAT THE ASSESSEE HAS NOT FULFILLED THE 2 CONDITIONS LAID DOWN IN SECTION 50C AND THERE WAS HARDLY ANY CASE FOR INVOKING THE PROVISIONS OF SECTION 50(C)(2) OF THE IT ACT. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE AO BE RESTORED. 3. GROUND NOS. 2 & 3 ARE GENERAL IN NATURE AND HENC E, NEED NO SEPARATE ADJUDICATION. ACCORDINGLY, SUCH G ROUNDS OF APPEAL ARE DISMISSED. 4. IN GROUND NO.1, THE REVENUE CONTENDED THAT CIT(A ) WAS NOT JUSTIFIED IN ISSUING DIRECTIONS TO THE AO T O MAKE A REFERENCE TO THE VALUATION OFFICER IN TERMS OF SECT ION 50C(2) OF THE ACT AND ASSESS THE CAPITAL GAIN EARNE D BY THE ASSESSEE FROM THE SALE OF PROPERTY IN QUESTION IN V IEW OF THE REPORT OF THE V.O. AND PROVISION OF SECTION 50C (3) OF THE ACT. THE REVENUE, FURTHER, CONTENDS THAT THE A SSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN SECTI ON 50C OF THE ACT AND THERE WAS HARDLY ANY CASE FOR INVOKING THE PROVISION OF SECTION 50C(2) OF THE ACT. 5. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'DR' SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. 'AR' PLACED RELIANCE ON THE ORDER PASSED BY THE CIT (A). HE ALSO REFERRED TO PARA 5.14 OF THE ORDER PASSED BY T HE CIT(A). 6. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORDS. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR 3 THE ASSESSMENT YEAR UNDER REFERENCE, DECLARING AN I NCOME OF RS.6,47,720/-. THE AO FRAMED ASSESSMENT U/S 143 (3) OF THE ACT AND AN INCOME OF RS.1,79,57,050/- BY MAK ING AN ADDITION OF RS.1,80,58,334/- BY INVOKING THE PRO VISION OF SECTION 50C OF THE ACT. THE AO HAD ADOPTED THE DEEMED CONSIDERATION OF THE PROPERTIES SOLD BY THE ASSESSE E IN THE LIGHT OF PROVISION OF SECTION 50C OF THE ACT. THE AO IGNORED THE OBJECTION RAISED BY THE ASSESSEE IN THE COURSE OF PRESENT ASSESSMENT PROCEEDINGS THAT THE STAMP DU TY VALUATION IS HIGHER VIS--VIS THE MARKET VALUE OF T HE PROPERTY, SCF NO. 72A AND 73A. THE ASSESSEE HAD ADVANCED REASONS TO SUPPORT HIS CONTENTION THAT THE PROPERTIES WERE OCCUPIED BY THE BANK FOR A LONG TIM E AND THERE WERE NO READY BUYERS FOR SUCH PROPERTIES. IT WAS CONTENDED BEFORE THE AO THAT THESE CIRCLE RATED ADO PT UNIFORM RATE OF LAND FOR THE ENTIRE LOCALITY, WHICH IS INHERENTLY A COMPLETE DISREGARD TO THE PECULIAR FEA TURES OF THE PROPERTIES IN QUESTION. THE CONTENTIONS MADE B Y THE ASSESSEE ARE RECORDED IN THE SALE DEED THAT THE PRO PERTIES WERE OCCUPIED BY THE BANK. HOWEVER, THE AO IGNORIN G SUCH OBJECTIONS, RAISED BY THE ASSESSEE, INVOKED TH E PROVISIONS OF SECTION 50C OF THE ACT AND FRAMED THE ASSESSMENT ACCORDINGLY. THE LD. CIT(A), AFTER A DE TAILED DISCUSSION AND PROPER APPRECIATION OF THE FACT SITU ATION OF THE CASE, INCLUDING THE PROVISIONS OF SECTION 50C(2 ) OF THE ACT DIRECTED THE AO TO REFER THE PROPERTY TO THE VA LUATION OFFICER U/S 50C(2) OF THE ACT AND ASSESS THE CAPITA L GAINS EARNED BY THE APPELLANT FROM THE SALE OF THE PROPER TIES IN QUESTION, IN THE LIGHT OF THE REPORT OF THE VALUATI ON OFFICER 4 AND ACCORDING TO THE PROVISIONS OF SECTION 50C(3) O F THE ACT. THE REVENUE IS IN APPEAL AGAINST SUCH DIRECTI ONS OF THE CIT(A). 7. THE CIT(A), ON CONSIDERATION OF VARIOUS JUDICIAL VERDICTS IN THE MATTER, GAVE SUCH DIRECTION. THESE CASES INCLUDE, NAMELY, AJMAL FRAGRANCES & FASHIONS (P) LT D. V ACIT 34 SOT 57, MUMBAI BENCH, KALPATARU INDUSTRIES V ITO IN ITA NO. 5540/MUM/2007 DATED 24.08.2009, MUMBAI BENCH, MEGHRAJ BAID V ITO 114 TTJ 84, JODHPU R BENCH, BMJ REAL ESTATE PVT. LTD. LUDHIANA V DCIT, I TA NO. 1010/CHD/2009, CHANDIGARH BENCH, AND NUMBER OF OTHER DECISIONS. THE PROVISIONS OF SECTION 50C(2) A RE CLEAR IN TEXT AND CONNOTATION. ONCE THE OBJECTION HAS BE EN RAISED BY THE ASSESSEE, THE AO SHOULD CONSIDER IT I N THE LIGHT OF SUCH PROVISIONS AND MAKE A REFERENCE TO TH E VALUATION OFFICER, WITH A VIEW TO GIVE FULL EFFECT TO THE LEGISLATIVE INTENT, CONTAINED IN SUCH PROVISIONS. THE CIT(A) ISSUED SUCH DIRECTIONS TO THE AO, AS THE AO FAILED TO DISCHARGE HIS STATUTORY OBLIGATION. THE FINDING S OF THE CIT(A) CANNOT BE FAULTED ON ANY GROUND. HOWEVER, FI NDINGS OF THE CIT(A), AS CONTAINED IN PARA 5.14, ARE REPRO DUCED HEREUNDER : 5.14 IN THE CASE UNDER CONSIDERATION, IT IS THUS, CLEAR THAT THE APPELLANT HAS FULFILLED BOTH T HE CONDITIONS LAID IN SECTION 50C(A) & (B) AND THE AO HAS NOT BROUGHT ON RECORD ANY VALID REASON OF REJECTING THE CLAIM OF THE APPELLANT THAT THE FAIR MARKET VALUE WAS LESS THAN THE VALUE ADOPTED BY SVA. THUS, IN VIEW OF THE FACTS OF THE CASE AND ALSO THE VARIOUS JUDICIAL PRONOUNCEMENTS, IT IS HEL D 5 THAT THE AO WAS STATUTORILY REQUIRED TO MAKE A REFERENCE TO VO WITH REGARD TO THE VALUATION OF THE PROPERTIES SOLD BY THE APPELLANT. THE AO IS, THEREFORE, DIRECTED TO MAKE A REFERENCE TO THE VO IN TERMS OF SECTION 50C(2) AND ASSESS THE CAPITAL GAINS EARNED BY THE APPELLANT FROM THE SALE OF THE PROPERTIES IN QUESTION IN VIEW OF THE REPORT OF THE VO AND THE PROVISIONS OF SECTION 50C(3) OF THE ACT. THESE GROUNDS OF APPEAL ARE THUS ALLOWED. 8. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSIO NS, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL,2012. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 10 TH APRIL,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH