K.MANJULA, CHENNAI V. ITO,CORPORATE WARD-4(3), CHENNAI

ITA 1454/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9503 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 09-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A SASI KUMAR
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Valuation report; Capital Gains
• Section: 143(3); 50C; 131

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER & SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO. 1454/CHNY/2019 / ASSESSMENT YEAR :2013-14 SMT. K. MANJULA, C/O SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO. 196), LLOYDS ROAD, CHENNAI 600 086. [PAN:AAHPM8682K] VS. THE INCOME TAX OFFICER, CORPORATE WARD 4(3), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE / RESPONDENT BY : SHRI A. SASIKUMAR, JCIT / DATE OF HEARING : 30.07.2019 /DATE OF PRONOUNCEMENT : 24.09.2019 / 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) 8, CHENNAI, DATED 21.02.2019 RELEVANT TO THE ASSESSMENT YEAR 2013-14. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ASSESSMENT OF QUANTUM OF LONG TERM CAPITAL GAINS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 29.01.2014 DECLARING TOTAL INCOME OF .5,14,020/-. AFTER CONSIDERING THE SUBMISSIONS AND VERIFICATION OF DETAILS I.T.A. NO. 1454/CHNY/19 2 SUBMITTED BY THE ASSESSEE, THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] WAS COMPLETED BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT .2,62,12,767/- AFTER COMPUTING TAXABLE INCOME FROM LONG TERM CAPITAL GAINS AT .2,56,12,767/-. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE FACTS OF THE CASE, THE LD. CIT(A) CONFIRMED THE ASSESSMENT. 6. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING VARIOUS DETAILS IN THE FORM OF PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS DISMISSED THE APPEAL OF THE ASSESSEE SUMMARILY OBSERVING THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE GROUNDS OF APPEAL BY PROVIDING REQUIRED EVIDENCE AND JUSTIFICATION, THEREBY UPHOLDING THE QUANTUM OF LONG TERM CAPITAL GAINS AS ASSESSED BY THE ASSESSING OFFICER. IT WAS FURTHER SUBMISSION THAT NEITHER THE LETTERS DATED 25.02.2016 AND 09.03.2016 OF THE SUB-REGISTRAR TO THE INCOME TAX OFFICER NOR THE DETAILS OF INSPECTION OF THE PROPERTY WERE FURNISHED TO THE ASSESSEE, WHICH THE ITO OUGHT TO HAVE BEEN DONE IN FAIRNESS AND IN LAW AND PRAYED THAT THE ENTIRE ISSUE MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH AFTER CONSIDERING THE SUBMISSIONS ON THE INSPECTION REPORT, ETC. I.T.A. NO. 1454/CHNY/19 3 7. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). 8. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW INCLUDING PAPER BOOK FILED BY THE ASSESSEE. THE ASSESSEE SOLD AN IMMOVABLE PROPERTY [VACANT LAND TOGETHER WITH BUILDING]. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAS CONSIDERED .1,50,00,000/-, I.E., THE VALUE AS PER SALE DEED IN RESPECT OF THE SAID PROPERTY AS SALE CONSIDERATION FOR CALCULATING LONG TERM CAPITAL GAINS, WHEREAS, THE ASSESSEE HAS NOT ADOPTED THE GUIDELINE VALUE OF THE PROPERTY FOR CALCULATING THE CAPITAL GAINS INCOME. IN RESPONSE TO THE SUMMON UNDER SECTION 131 OF THE ACT, THE SUB-REGISTRAR VIDE HIS LETTER DATED 25.02.2016 AND 09.03.2016 FURNISHED THE DETAILS LIKE LAND VALUE, BUILDING VALUE AFTER INSPECTION OF THE SAID PROPERTY, STAMP DUTY, ETC., WHICH COMES TO .3,54,30,685/-. IN VIEW OF THE PROVISIONS OF SECTION 50C OF THE ACT, THE SALE CONSIDERATION WAS TO BE CONSIDERED AS .3,54,30,685/- FOR CALCULATING LONG TERM CAPITAL GAINS. HOWEVER, IN VIEW OF THE OBJECTION AND SPECIFIC REQUEST BY THE ASSESSEE, REFERENCE TO THE DISTRICT VALUATION OFFICER FOR VALUING THE SAID PROPERTY WAS MADE AND ACCORDINGLY, THE DVO ESTIMATED THE FAIR MARKET VALUE AT .3,96,53,000/-. ACCORDINGLY, IN VIEW OF THE PROVISIONS OF SECTION 50C(3) OF THE ACT, THE ASSESSING OFFICER DETERMINED THE LONG TERM CAPITAL GAINS AND BROUGHT TO TAX, WHICH WAS CONFIRMED BY THE LD. CIT(A). I.T.A. NO. 1454/CHNY/19 4 8.1 THE CASE LAW FILED IN THE CASE OF MANI SINGH AVTAR SINGH V. INSPECTING ASST. CIT [1985] 151 ITR 233 (P&H) HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE BECAUSE, DETERMINATION OF LTCG WAS NOT BASED ON THE DVOS FAIR MARKET VALUE AND IT WAS BASED ON THE 50C(3) VALUE. 8.2 ON PERUSAL OF THE ASSESSMENT ORDERS, WE FIND THAT THE FAIR MARKET VALUE FURNISHED BY THE SUB-REGISTRAR WAS TAKEN AS 50C VALUE OF THE SALE CONSIDERATION. EVEN THOUGH THE ASSESSING OFFICER PROPOSED THE ASSESSEE FOR TAKING 50C VALUE OF THE SALE CONSIDERATION, WHICH WAS FURNISHED BY THE SUB- REGISTRAR UNDER SECTION 131 OF THE ACT, BUT, THERE WAS NO MENTION THAT THE VALUATION OF THE BUILDING AFTER INSPECTION OF THE SAID PROPERTY BY THE SUB- REGISTRAR WAS PROVIDED TO THE ASSESSEE OR NOT. THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED BEFORE THE BENCH THAT THE ASSESSEE WAS NOT PROVIDED THE DETAILED VALUATION REPORT OF THE SUB-REGISTRAR AND MOREOVER, HE ALSO CONTENDED THAT THE ASSESSEE WAS NOT GIVEN SUITABLE DISCOUNT TO THE VACANT LAND I.E., UNBUILT AREA OF THE TOTAL LAND AREA SOLD ALONG WITH THE BUILDING SINCE THE VACANT LAND IS ENCUMBERED WITH THE BUILDING WHILE ARRIVING THE FAIR MARKET VALUE. ACCORDINGLY, WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO GIVE AN OPPORTUNITY TO THE ASSESSEE FILE REPLY AGAINST THE INSPECTION /VALUATION REPORT OF THE SUB-REGISTRAR AND CONSIDER THE OBJECTIONS OF THE ASSESSEE, IF ANY, AND ALSO TO CONSIDER ANY DISCOUNT ON THE UNBUILT I.T.A. NO. 1454/CHNY/19 5 VACANT LAND, IF PERMITS UNDER THE ACT AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER ALLOWING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 24 TH SEPTEMBER, 2019 IN CHENNAI. SD/- SD/- (S. JAYARAMAN) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 24.09.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.