Appeal Details
Counselvise Citation
[2014] 140 COUNSELVISE.COM (IT) 74277 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
11 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-02-2014
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
E
Next Hearing Date
10-02-2014
Assessment Year
2006-2007
Appeal Filed On
11-03-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1436/DEL/2013, 1437/DEL/2013 & 1438/DEL/2013 1436/DEL/2013, 1437/DEL/2013 & 1438/DEL/2013 1436/DEL/2013, 1437/DEL/2013 & 1438/DEL/2013 1436/DEL/2013, 1437/DEL/2013 & 1438/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2006 2006 2006 2006- -- -07, 2007 07, 2007 07, 2007 07, 2007- -- -08 & 2008 08 & 2008 08 & 2008 08 & 2008- -- -09 0909 09 DEPUTY DEPUTY DEPUTY DEPUTY COMMISSIONER OF COMMISSIONER OF COMMISSIONER OF COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, 8, 8, 8, ROOM NO.356, ARA CENTRE, ROOM NO.356, ARA CENTRE, ROOM NO.356, ARA CENTRE, ROOM NO.356, ARA CENTRE, E EE E- -- -2, JHANDEWALAN, 2, JHANDEWALAN, 2, JHANDEWALAN, 2, JHANDEWALAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, 14, RATAN MAHAL, 14, RATAN MAHAL, 14, RATAN MAHAL, 14, RATAN MAHAL, 15/197, CIVIL LINES, 15/197, CIVIL LINES, 15/197, CIVIL LINES, 15/197, CIVIL LINES, KANPUR. KANPUR. KANPUR. KANPUR. PAN : PAN : PAN : PAN : AAACD4969L. AAACD4969L. AAACD4969L. AAACD4969L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEYUR PATEL, SR.DR. RESPONDENT BY : SHRI O.P. SAPRA, ADVOCATE AND SHRI ASHUTOSH, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-II, KANPUR DATED 19 TH NOVEMBER, 2012 FOR THE AY 2006- 07, 2007-08 & 2008-09. 2. GROUND NOS.1 & 2 OF THE REVENUES APPEAL FOR AY 2 006-07, GROUND NO.1 OF THE REVENUES APPEAL FOR AY 2007-08 A ND GROUND NO.2 OF THE REVENUES APPEAL FOR AY 2008-09 ARE COMMON, I .E., WITH REGARD TO DELETION OF DISALLOWANCE OF INTEREST MADE BY THE A SSESSING OFFICER ON ACCOUNT OF INTEREST FREE ADVANCE GIVEN BY THE ASSES SEE. SINCE COMMON GROUNDS ARE RAISED IN ALL THE THREE YEARS, WE R EPRODUCE HEREIN BELOW THE GROUNDS RAISED IN AY 2006-07 ONLY. THE SAM E READ AS UNDER:- ITA-1436 TO 1438/D/2013 2 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING TH E ADDITION OF RS.4,79,773/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF INTEREST. 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING TH E ADDITION OF RS.5,83,673/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF INTEREST. 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DIRECTING TH E ASSESSING OFFICER NOT TO APPLY THE RULE 8D OF THE INCOM E TAX RULES, 1962 BUT TO WORK OUT THE DISALLOWANCE U/S 1 4A OF THE ACT, IF ANY, HAVING REGARD TO THE PROXIMITY OF EXPENSES TO EARN THE INCOME WHICH DOES NOT FORM PART O F TOTAL INCOME. 4. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING TH E COURSE OF THE HEARING OF THE APPEAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED THE RELEVANT MATERIAL PLACED BEFORE US. THE ASSESSING OFFIC ER MADE THE DISALLOWANCE OF INTEREST OF ` 4,79,773/- ON THE GROUND THAT ADVANCE OF ` 51,60,000/- TO ELEVEN PERSONS WAS CONTINUING SINCE LONG AND NO INTEREST WHATSOEVER WAS BEING CHARGED ON THESE LOANS. H E, THEREFORE, DISALLOWED THE INTEREST OF ` 4,79,773/- COMPUTING THE SAME AT 12% ON THE ADVANCE OF ` 51,60,000/-. HE FURTHER FOUND THAT THE ASSESSEE HAS GIVEN THE ADVANCE OF ` 1,31,69,046/- TO TEN PERSONS WITHOUT CHARGING INTEREST. WITH REGARD TO THESE ADVANCES, IT WAS CLAIME D BY THE ASSESSEE THAT THE ADVANCES WERE FOR PURCHASE OF PROPERTY/ SHARES IN THE OTHER COMPANY AND, THEREFORE, THESE ADVANCES WERE FOR THE PURPOSE OF BUSINESS AND NO INTEREST WAS CHARGEABLE ON THE SE ADVANCES. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEE S ITA-1436 TO 1438/D/2013 3 CONTENTION AND MADE THE DISALLOWANCE OF INTEREST AMOU NTING TO ` 5,83,673/-. LEARNED CIT(A) DELETED BOTH THE ADDITI ONS AND HIS FINDING WITH REGARD TO DELETION OF ADDITION OF ` 4,79,773/- IS AS UNDER:- I HAVE CONSIDERED THE ASSESSMENT ORDER, SUBMISSIONS OF THE LEARNED AR AND THE MATERIAL PLACED ON RECORD. IT IS OBSERVED THAT THE ADVANCES OF RS.51,60,000/- UNDER CONSIDERATION HAVE BEEN GIVEN IN EARLIER YEARS AND NO DISALLOWANCE WAS MADE FOR INTEREST IN RESPECT OF THESE ADVANCES IN EARLIER YEARS; THE ASSESSEE HAS EXPLAINED THE BUSINESS PURPOSE OF ADVANCES; THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE NEXUS OF MONEY BORROWED WITH THESE ADVANCES AND THE OWN FUNDS WITH THE ASSESSEE ARE RS.10.39 CRORES IN COMPARISON TO THESE ADVANCES OF RS.0.52 CRORE ONLY. IN VIEW OF THESE FACTS AND THE PRINCIPLES LAID DOWN IN THE CASE LAWS CITED BY THE LEA RNED AR, I.E. SA BUILDERS LTD. (SC) SUPRA, RELIANCE UTILIT IES LTD. (BOM) SUPRA AND HOTEL SAVERA LTD. (MAD), I AM OF THE OPINION THAT THE DISALLOWANCE OF INTEREST OF RS.4,79 ,773/- IS NOT JUSTIFIED. ACCORDINGLY, THE DISALLOWANCE IS DELET ED AND THIS GROUND OF APPEAL IS ALLOWED. 4. SIMILARLY, HE DELETED THE DISALLOWANCE OF ` 5,83,673/- WITH THE FOLLOWING OBSERVATIONS:- I HAVE CONSIDERED THE ASSESSMENT ORDER, SUBMISSIONS OF THE LEARNED AR AND THE MATERIAL PLACED ON RECORD. THE DETAILED CHART SHOWING THE NATURE AND PURPOSE OF ADVA NCES AND DEBTORS AS SUBMITTED BEFORE THE AO IS PLACED ON RECORD ALONG WITH THE COPIES OF AGREEMENTS, ALLOTMENT LETTERS ETC IN RESPECT OF MOST OF ADVANCES. I FIND THA T THE ADVANCES AND DEBTORS RELATE TO THE BUSINESS OF THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF FINANCE, REAL ESTATE, SHARE TRADING ETC. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE NEXUS OF MONEY BORROWED WITH THESE ADVANCES. THE OWN FUNDS WITH THE ASSESSEE ARE RS.10.39 CRORES IN COMPARISON TO THESE ADVANCES OF RS.1.29 CRORE ONLY. IN VIEW OF THESE FACTS AND THE PRINCIPLES LAID DOWN IN THE CASE LAWS CITED BY THE LEA RNED AR, I.E. SA BUILDERS LTD. (SC) SUPRA, RELIANCE UTILIT IES LTD. (BOM) SUPRA AND HOTEL SAVERA LTD (MAD) SUPRA, I AM OF THE ITA-1436 TO 1438/D/2013 4 OPINION THAT THE DISALLOWANCE OF INTEREST OF RS.5,83 ,673/- IS NOT JUSTIFIED. ACCORDINGLY, THE DISALLOWANCE IS DELET ED. 5. AFTER CONSIDERING THE FACTS OF THE CASE AND THE ARG UMENTS OF BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). WITH REGARD TO ADVANCE OF ` 1.31 CRORES, THE CIT(A) HAS RECORDED THE FINDING THAT THESE ADVANCES WERE FOR THE PURPOSE OF BU SINESS BECAUSE THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE, SHARE TRADIN G ETC. AND THESE ADVANCES WERE GIVEN FOR THE PURPOSE OF PURCHASE O F PROPERTY OR AS SHARE APPLICATION MONEY. HE ALSO OBSERVED THAT THE OWN FUNDS AVAILABLE WITH THE ASSESSEE ARE ` 10.39 CRORES WHILE SUCH ADVANCES ARE ONLY ` 1.31 CRORES. WITH REGARD TO THE ADVANCE OF ` 51,60,000/-, AGAIN, THE CIT(A) HAS RECORDED THE FINDING THAT THESE ADVANC ES WERE GIVEN IN THE EARLIER YEARS AND NO INTEREST WAS DISALLOWED IN THO SE YEARS. THERE IS NO NEXUS OF THE BORROWED MONEY WITH THESE ADVANCES A ND THE OWN FUNDS AVAILABLE WITH THE ASSESSEE ARE ` 10.39 CRORES. THE ABOVE FACTUAL FINDING RECORDED BY THE CIT(A) HAS NOT BEEN CONTROV ERTED BEFORE US. THAT THERE IS AN INTEREST FREE FUND AVAILABLE WITH TH E ASSESSEE OF MORE THAN ` 10 CRORES AND TOTAL ADVANCE GIVEN BY THE ASSESSEE IS LESS T HAN ` 2 CRORES AND THE SUBSTANTIAL PART OF WHICH IS FOR THE P URPOSE OF BUSINESS. NO NEXUS HAS BEEN POINTED OUT BY THE REVENUE BETWEEN THE BORROWING AND INTEREST FREE ADVANCE. MOREOVER, THE INTEREST FREE ADVANCE IS COMING FROM PRECEDING YEARS AND NO DISALLOW ANCE WAS MADE IN THE PRECEDING YEARS IN WHICH THE ADVANCE WAS GIVEN. CONSIDERING THE TOTALITY OF THESE FACTS, WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). ACCORDINGLY, HIS ORDER IS UPHELD AND GROUND NOS.1 & 2 OF THE REVENUES APPEAL FOR AY 2006- 07, GROUND NO.1 OF THE REVENUES APPEAL FOR AY 2007-08 AND GROUND NO .2 OF THE REVENUES APPEAL FOR AY 2008-09 ARE REJECTED. 6. GROUND NO.3 OF THE REVENUES APPEAL FOR AY 2006-0 7, GROUND NO.2 OF THE REVENUES APPEAL FOR AY 2007-08 AND GROU ND NO.1 OF THE ITA-1436 TO 1438/D/2013 5 REVENUES APPEAL FOR AY 2008-09 ARE WITH REGARD TO D ISALLOWANCE UNDER SECTION 14A OF THE ACT. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED THE MATERIAL PLACED BEFORE US. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE UNDER SECTION 14A AS PER RULE 8D FOR AY 2006-07, 2007-08 AND 2008-09. FOR AY 2006-0 7 AND 2007-08, THE CIT(A) HELD THAT RULE 8D IS NOT APPLICABLE. HO WEVER, HE DIRECTED THE ASSESSING OFFICER TO WORK OUT THE DISALLOWANCE UNDER SECTION 14A, IF ANY, HAVING REGARD TO PROXIMITY OF THE EXPENSES TO EARN THE INCOME WHICH DID NOT PART FORM OF THE TOTAL INCOME. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, W E FIND THAT THE DIRECTION OF THE CIT(A) IS IN CONFORMITY WITH THE DE CISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAXOPP INVEST MENT LTD. VS. CIT [2012] 347 ITR 272 (DELHI). RESPECTFULLY FOLLOWIN G THE SAME, WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF LEARNED CIT(A). THE SAME IS SUSTAINED AND GROUND NO.3 OF THE REVENUES APPEAL FOR AY 2006-07 AND GROUND NO.2 OF THE REVENUES APPEAL FOR AY 2007- 08 ARE REJECTED. 8. SO FAR AS AY 2008-09 IS CONCERNED, WE FIND THAT TH E CIT(A) IN PRINCIPLE HAS UPHELD THE DISALLOWANCE UNDER RULE 8D B UT HE DIRECTED THE ASSESSING OFFICER TO VERIFY THE EXPENDITURE INCURRE D FOR EARNING OF EXEMPT INCOME AND COMPUTE THE DISALLOWANCE UNDER RUL E 8D. PERHAPS HIS DIRECTION IS ONLY TO VERIFY THE WORKING OF DISALLO WANCE UNDER RULE 8D AND WHETHER THE DISALLOWANCE IS CORRECTLY WORKED OUT AS PER RULE 8D. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ABO VE DIRECTION OF THE CIT(A). THE SAME IS ALSO SUSTAINED AND GROUND NO.1 OF T HE REVENUES APPEAL FOR AY 2008-09 IS REJECTED. 9. THE ONLY GROUND NOW LEFT IS GROUND NO.3 OF THE RE VENUES APPEAL FOR AY 2008-09 WHICH READS AS UNDER:- ITA-1436 TO 1438/D/2013 6 THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS.2,32,930/- MADE BY THE ASSESSING OFFICER U/S 50C OF TH E INCOME TAX ACT, 1961. 10. THE FACTS OF THE CASE ARE THAT DURING THE ACCOUNT ING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, TH E ASSESSEE SOLD THE FOLLOWING ASSETS:- (I) THE FLAT SITUATED AT FIRST FLOOR OF RUPALI BUILDING, 17/1, MADAN MOHAN MALVIYA MARG, LUCKNOW SOLD AT RS.8,00,000 /- ON 22.01.2008. (II) ROOM NO.205, CHINTELS HOUSE, 16 STATION ROAD, LUCKNOW SOLD FOR RS.30,90,500/- ON 08.12.2008. 11. THAT THE STAMP DUTY VALUATION OF BOTH THE PROPER TIES WAS MORE THAN THE ACTUAL SALE CONSIDERATION. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITION UNDER SECTION 50C BEING THE DIFFE RENCE IN THE VALUE FOR THE STAMP DUTY AND THE ACTUAL SALE CONSIDERATION. THE FLAT-WISE DETAIL IS AS UNDER:- DETAIL OF PROPERTY ACTUAL SALE CONSIDERATION VALUE FOR STAMP DUTY DIFFERENCE IN VALUE FLAT AT 1 ST FLOOR RUPALI BUILDING 17/1 MM MARG LUCKNOW RS.8,00,000/- RS.24,53,220/- RS.16,53,220/- ROOM NO.205 CHINTELS HOUSE 16 STATION ROAD, LUCKNOW RS.30,90,500/- RS.33,23,430/- RS.2,32,930/- ITA-1436 TO 1438/D/2013 7 12. LEARNED CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE WITH THE FOLLOWING DIRECTION:- IT IS CLEAR THAT IN THIS CASE THE SALE CONSIDERATION IS LESS THAN THE VALUE ADOPTED FOR THE STAMP DUTY PURPOSE AND THE ASSESSEE COMPANY HAS DISPUTED THE STAMP DUTY VALUATION BEFORE THE AO. IN CASE OF THE PROPERTY AT MADAN MOH AN MALVIYA MARG, THE AO REFERRED THE MATTER TO DVO BUT HAS NOT CONSIDERED IT AS THE SAME WAS NOT RECEIVED TILL DATE OF LAST HEARING. HOWEVER, THE ASSESSEE COMPANY HAS PLACED ON RECORD THE DVOS REPORT DATED 30.12.2010. THE VALUATION AS PER DVO REPORT IS RS.11,15,000/- AS AGAINST THE VALUATION FOR STAMP DUTY AT RS.24,53,220/-. IN TERMS OF SECTION 50C, THE AO IS BOUND TO REFER THE MATTER TO DVO AND TO ADOPT THE VALUE AS PER DVO REPORT OR ADOPTED BY STAMP DUTY AUTHORITY, WHICHEVER IS LOWER. IT IS NOT J USTIFIED TO ADOPT THE STAMP DUTY VALUATION IN SUCH SITUATION. I, THEREFORE, DIRECT THE AO TO TAKE INTO CONSIDERATION THE DVO REPORT DATED 30.12.2010 AFTER HIS VERIFICATION AND C OMPUTE THE CAPITAL GAIN ACCORDINGLY. IN CASE OF ANOTHER PROPERTY AT CHINTELS HOUSE, THE ASSESSEE COMPANY DISPUTED THE STAMP DUTY VALUATION BUT THE AO HAS FAILED TO MAKE THE REFERENCE TO DVO. IN VIEW OF THE CASE LAWS CITED BY THE AR, I AM OF THE VIEW THAT THE AO HAS NO CHOICE BUT TO ACCEPT THE ACTUAL SALE CONSIDERAT ION AS MARKET VALUE OF PROPERTY. MOREOVER, THE DIFFEREN CE IS BELOW 15%. UNDER THIS CIRCUMSTANCES, THE ADDITION OF RS.2,32,930/- ON CONSIDERATION OF STAMP VALUE IS NOT JUSTIFIED. ACCORDINGLY, THE ADDITION OF RS.2,32,930/ - IS DELETED. 13. AGAINST THE ORDER OF LEARNED CIT(A), THE REVENU E IS IN APPEAL WHILE THE ASSESSEE IS NEITHER IN APPEAL NOR IN CROSS-OBJE CTION AGAINST THE ADDITION PARTLY SUSTAINED BY THE CIT(A). 14. FROM THE ABOVE FINDING OF THE CIT(A), IT IS EVID ENT NOW THAT THE ISSUE OF COMPUTATION OF CAPITAL GAIN IN RESPECT OF FIR ST FLAT AT MM MARG IS SETTLED BECAUSE, IN THIS CASE, THE MATTER WAS REFERRED TO THE DVO. THE CIT(A) DIRECTED THE ASSESSING OFFICER TO COMPUTE TH E CAPITAL GAIN ITA-1436 TO 1438/D/2013 8 AS PER DVOS REPORT AND THAT FINDING IS ACCEPTED BY BO TH THE PARTIES. HOWEVER, THE REVENUE IS AGGRIEVED WITH REGARD TO DEL ETION OF THE ADDITION OF ` 2,32,930/- WHICH WAS WITH REGARD TO SECOND FLAT, I.E. , FLAT AT CHINTELS HOUSE. FROM A PERUSAL OF THE ASSESSMENT ORDER, I T IS NOT CLEAR WHETHER THE ASSESSEE OBJECTED TO THE VALUATION MADE FOR STAMP DUTY PURPOSES OF BOTH THE FLATS OR ONE FLAT. IF ASSESSEE OBJEC TED TO THE VALUATION OF ONE FLAT ONLY, I.E., FLAT AT MM MARG, THEN THE ADDITION WITH REGARD TO COMPUTATION OF CAPITAL GAIN OF THE SECOND FLAT CANNOT BE DELETED ON THE GROUND THAT THE SAME WAS NOT REFERRED TO THE DVO. SUB-SECTION (2) OF SECTION 50C READS AS UNDER:- (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTIO N (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSF ER; (B) THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY TH E STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS N OT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFEREN CE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CA PITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERE NCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5 ) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB- SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECE SSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT A CT. [EXPLANATION 1].FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN ITA-1436 TO 1438/D/2013 9 CLAUSE (R) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 ( 27 OF 1957). [EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYT HING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRE D TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.]. 15. FROM THE ABOVE, IT IS EVIDENT THAT WHERE THE ASSESSE E OBJECTS TO THE VALUE ASSESSED FOR STAMP DUTY PURPOSES, THEN THE ASSESSING OFFICER IS TO REFER THE VALUATION OF CAPITAL ASSET TO THE VALU ATION OFFICER. NOW, ON THE FACTS AS RECORDED IN THE ASSESSMENT ORDER OR IN T HE ORDER OF THE CIT(A), IT IS NOT CLEAR THAT THE ASSESSEE OBJECTED TO TH E STAMP DUTY VALUATION OF BOTH THE FLATS OR ONE FLAT ONLY. IF HE OBJECTED TO THE VALUATION OF BOTH THE FLATS, THEN WHY THE MATTER WAS REFERRED TO THE DVO ONLY FOR ONE FLAT. IF THE MATTER WAS REFERRED T O THE DVO FOR BOTH THE FLATS, THEN WHAT ABOUT THE VALUATION OF THE SECON D FLAT. ALL THESE QUESTIONS ARISE BECAUSE IN THE ORDER OF THE ASSESSING OFFIC ER, THERE IS NO MENTION OF THE VALUATION REPORT OF EVEN FIRST FLA T. THE SAME WAS PRODUCED BY THE ASSESSEE BEFORE THE CIT(A). IN VIEW O F THE ABOVE, WE DEEM IT PROPER TO SET ASIDE THE ISSUE WITH REGARD TO AD DITION OF ` 2,32,930/- TO THE CAPITAL GAIN OF SECOND FLAT, I.E., FLAT AT CHINTELS HOUSE TO THE ASSESSING OFFICER AND WE DIRECT HIM TO VERIFY TH E RECORD AND IF THE ASSESSEE HAS OBJECTED TO THE VALUATION MADE, THEN TO REFER THE MATTER TO THE DVO, IF ALREADY NOT REFERRED, AND THE N WORK OUT THE CAPITAL GAIN AS PER SUB-SECTION (3) OF SECTION 50C I.E ., TAKING THE LOWER OF THE VALUE BETWEEN THE VALUE ASSESSED FOR STAMP DUTY VALUATION OR THE VALUE DETERMINED BY THE DVO. ACCORDINGLY, GROU ND NO.3 OF THE REVENUES APPEAL FOR AY 2008-09 IS DEEMED TO BE ALLOW ED FOR STATISTICAL PURPOSES. ITA-1436 TO 1438/D/2013 10 16. IN THE RESULT, THE REVENUES APPEALS IN ITA NOS.143 6/DEL/2013 & 1437/DEL/2013 ARE DISMISSED WHEREAS REVENUES APPEAL IN ITA NO.1438/DEL/2013 IS DEEMED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.02.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TAX , DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -8, ROOM NO.356, ARA CENTRE, 8, ROOM NO.356, ARA CENTRE, 8, ROOM NO.356, ARA CENTRE, 8, ROOM NO.356, ARA CENTRE, E EE E- -- -2, JHANDEWALAN, NEW DELHI. 2, JHANDEWALAN, NEW DELHI. 2, JHANDEWALAN, NEW DELHI. 2, JHANDEWALAN, NEW DELHI. 2. RESPONDENT : M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, M/S MANI CAPITAL LIMITED, 14, RATAN MAHAL, 1 14, RATAN MAHAL, 1 14, RATAN MAHAL, 1 14, RATAN MAHAL, 15/197, CIVIL LINES, 5/197, CIVIL LINES, 5/197, CIVIL LINES, 5/197, CIVIL LINES, KANPUR. KANPUR. KANPUR. KANPUR. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR
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