DCIT, CHENNAI V. Manjula Ekambaram, CHENNAI

ITA 1510/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81293 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: N VIJAY KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NO. 1510/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-V(3), 4 TH FLOOR, MAIN BUILDING, 121, N.H.ROAD, CHENNAI-34. VS SMT. MANJULA EKAMBARAM 9, ARCOT STREET, T.NAGAR, CHENNAI-600 017. PAN: AEOPM0168F ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.S.DAS GUPTA, JCIT /RESPONDENT BY : MR. N.VIJAY KUMAR, C.A / DATE OF HEARING : 1 ST DECEMBER, 2014 /DATE OF PRONOUNCEMENT : 5 TH DECEMBER, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-V, CHEN NAI DATED 28.01.24 FOR THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 2. THE CIT(A) ERRED IN DELETING THE SHORT TERM CAPITAL GAINS WORKED OUT ` 95,98,050/- BY THE ASSESSING OFFICER. 2 ITA NO.1510/MDS/2014 2.1 THE CIT(A) HAS FILED TO REFER THE CASE TO DVO DURING THE APPELLATE PROCEEDINGS, THOUGH THE CASE WAS NOT REFERRED TO THE DVO DURING THE ASSESSMENT PROCEEDINGS. 2.2 THE CIT(A) OUGHT TO HAVE FOLLOWED THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CWT VS. PRASAD PRODUCTIONS (P) LTD., (250 ITR 88) WHEREIN IT WAS DECIDED THAT CWT(A) CAN DIRECT THE ASSESSING OFFICER TO MAKE REVALUATION TO VALUATION OFFICER IF ASSESSING OFFICER HAS MADE VALUATION WITHOUT ANY SUCH REFERENCE. 2.3 THE CIT(A) ERRED IN NOT FOLLOWING THE DECISION OF HONBLE HIGH COURT IN THE CASE OF K.R.PALANISAMY (306 ITR 61) IN WHICH THE HIGH COURT HAS UPHELD THE CONSTITUTIONAL VALIDITY OF SECTION 50C. 3. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT P ROPOSED TO COMPUTE THE SHORT TERM CAPITAL GAINS BY TAXING T HE VALUE OF SALE CONSIDERATION AS PER THE STAMP VALUATION AU THORITY AS AGAINST THE SALE CONSIDERATION REPORTED BY THE A SSESSEE IN THE SALE DEED. DEPARTMENTAL REPRESENTATIVE SUBM ITS THAT THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO REFER THE MATTER TO VALUATION OFFICER SINCE THE VALUE OF THE VALUATION AUTHORITY FOR STAMP DUTY PURPOSES IS MORE THAN THE VALUE OF THE MARKET VALUE OF THE PROPERTY SOLD. 3 ITA NO.1510/MDS/2014 DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSING OFFICER COMPLETED THE ASSESSMENT BY TAKING VALUE A S PER STAMP VALUATION AUTHORITY AS SALE CONSIDERATION AND COMPUTED THE CAPITAL GAINS IGNORING THE REQUEST MAD E BY THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEA LS) DELETED SHORT TERM CAPITAL GAINS WORKED OUT BY THE ASSESSING OFFICER OBSERVING THAT THERE IS NO EVIDE NCE TO SHOW THAT THE ASSESSEE HAS RECEIVED EXTRA AMOUNT O VER AND ABOVE THE SALE CONSIDERATION RECEIVED BY THE A SSESSEE AND THE AMOUNT OF SALE CONSIDERATION WORKED OUT BY THE STAMP DUTY AUTHORITY FOR COLLECTION OF STAMP DUTY F OR THE STATE GOVT. ADOPTING THE VALUE OF PROPERTY AS PER SECTION 50C IS ONE SIDED AND NOT JUSTIFIED. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE REFERRED THE MATTER TO THE V ALUATION OFFICER WITHOUT DELETING THE CAPITAL GAINS COMPUTED BY THE ASSESSING OFFICER . 4. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE MATT ER MAY BE REFERRED TO VALUATION OFFICER AS REQUESTED B Y THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS TO ASCERTAI N THE 4 ITA NO.1510/MDS/2014 FAIR MARKET VALUE OF THE PROPERTY FOR THE PURPOSE O F SECTION 50C OF THE ACT. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. IN THE COURSE OF ASSESSMENT PROCEEDINGS BY LETTER D ATED 03.10.2011 THE ASSESSEE EXPLAINED THE REASONS AS T O HOW THE GUIDELINE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY IS MORE AND THE SALE VALUE OF THE PROPERT Y WILL NOT FETCH THAT MUCH AMOUNT AND REQUESTED THE ASSESSING OFFICER TO REFER THE VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER. THE REQUEST OF THE ASSESSEE W AS IGNORED BY THE ASSESSING OFFICER AND COMPUTED SHOR T TERM CAPITAL GAINS. THE COMMISSIONER OF INCOME TAX (APP EALS) DELETED THE SHORT TERM CAPITAL GAINS ASSESSED BY THE ASSESSING OFFICER, THOUGH HE OBSERVED THAT UNDER SECTION 50C(2) WHENEVER THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT HE HAS CHALLENGED THE STAMP DUTY VALUATION ON SALE CONSIDERATION WHICH IS D IFFERENT BECAUSE OF VALID REASONS AND REQUESTED TO REFER THE MATTER TO THE DVO, THEN THE ASSESSING OFFICER IS REQUIRED TO REFER THE MATTER TO THE VALUATION OFFICER. HAV ING OBSERVED THAT THE ASSESSING OFFICER IS REQUIRED TO REFER THE 5 ITA NO.1510/MDS/2014 MATTER TO THE VALUATION OFFICER UNDER SECTION 50C(2 ), THE COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO DELETE THE CAPITAL GAINS WITHOUT REFERRING THE MATT ER TO THE VALUATION OFFICER. TAKING THE TOTALITY OF THE FACT S AND CIRCUMSTANCES OF THE CASE INTO CONSIDERATION, WE SE T ASIDE THE ORDERS OF LOWER AUTHORITIES AND RESTORE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REFER VALUATION OF PROPERTY TO THE VALUATION OFFICER AS P ER PROVISIONS OF SECTION 50C(2) OF THE ACT FOR THE PUR POSE OF COMPUTING CAPITAL GAINS. 6. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, TH E 5 TH DAY OF DECEMBER, 2014 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED, 5 TH DECEMBER, 2014 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .