M/s Yash & Associates, Kolkata V. ITO, Wd 1(2), Siliguri, Siliguri

ITA 1529/KOL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7882 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 19-10-2012
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: VIVEK JAISWAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HON BLE SRI MAHAVIR SINGH, JM& HON BLE SRI SHAMIM YAHYA , A M ] ITA NO.152 9 /KOL/2012 ASSESSMENT YEAR : 2008 - 09 ( A PPELLANT ) (RESPONDENT) BHAGWAN D AS GOEL . , . - VS - I.T.O., WARD - 1 (2), KOLKATA SILIGURI (PAN: ADBPG 4679 H) FOR THE APPELLAN T SHRI VIVEK JAISWAL, FCA FOR THE RESPONDENT SHRI RAJENDRA PRASAD JCIT, DATE OF HEARING : 01.12 .2014 DATE OF PRONOUNCEMENT : 04.12.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF L D. C.I.T.(A) - SILIGURI DT. 23.08 .2012 AND PERTAIN S TO ASSESSMENT YEAR 2008 - 09 . 2. THE GROUNDS OF APPEAL READ AS UNDER : - 1. THAT THE HON BLE CIT(A) WA S WRONG IN CONFIRMING THE ASSESSING OFFICER S ORDER REGARDING COST OF ACQUISITION, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE HON BLE CIT(A) HAS NOT ACTED IN ACCORDANCE WITH THE PROVISIONS OF LAW BY CONFIRMING THE AO S ORDER AND ACTION OF NOT REFERRING THE MATTER OF VALUATION TO THE D.V.O. 3. THAT THE APPELLATE ORDER, AS PASSED IS AGAINST FACTS AND BAD IN LAW. 3 . IN THIS CASE THE ASSESSEE HAS SOLD THE PROPERTY AND PURCHASED ANOTHER FLAT. THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN OF RS.15 ,52,671/ - AND HAD CLAIMED DEDUCTION U/S54F OF THE ACT FOR PURCHASE OF FLAT. THE VALUE OF SALE PRICE OF THE PROPERTY WAS SHOWN AS RS.25,00,000/ - . BY INVOKING THE PROVISION OF SECTION 50C OF THE ACT THE AO CONSIDERED THE SALE VALUE OF RS.38,06,800/ - AND THE RE AFTER MADE RECOMPUTATION AND ACCORDINGLY THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.23,22,877/ - . ITA.NO.152 9/K/2012 BHAGWAN DAS GOEL A.YR. 2008 - 09 2 4 . AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). THE LD. CIT(A) HELD THAT THE ACTION OF AO OF TAKING THE SALE VALUE OF THE PROPERT Y OF THE ASSESSEE AS PER THE PROVISION OF SECTION 50C OF THE ACT FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN WAS FULLY JUSTIFIED. HE OBSERVED THAT THERE WAS NO NEED TO REFER THE MATTER OF VALUATION OF THE PROPERTY SOLD BY THE ASSESSEE TO THE D ISTRICT VALUATION OFFICER AS THE ASSESSEE HAD NOT FILED ANY PETITION TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS CLAIMING THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY. THE LD. CIT(A) FURTH ER NOTED THAT THE ASSESSEE HAS HIMSELF MADE A NUMBER OF MISTAKES IN THE COMPUTATION OF LONG TERM CAPITAL GAIN. HENCE HE OBSERVED THAT IN SUCH SITUATION THE LD. CIT(A) WAS RIGHT IN TAKING THE INDEXED COST OF ACQUISITION AS DECLARED BY THE ASSESSEE IN THE R ETURN OF INCOME. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE HON BLE JURISDICTION AL HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT IN GA NO. 3686 OF 2013 ITAT NO. 221 OF 2013 ORDER DATED 13.03.2014, WHEREIN HON BLE CALCUTTA HIGH COURT HAS LAID DOWN CERTAIN PRINCIPLES IN REGARD TO VALUATION TO BE MADE BY DVO IN TERM OF SECTION 50C OF THE ACT, WHICH ARE AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ADVA NCED BY THE LEARNED ADVOCATES APPEARING FOR THE PARTIES. THE SUBMISSION OF MS. GHUTGHUTIA THAT THE REQUIREMENT OF CLAUSES A) AND (B) OF SUB - SECTION 2 OF SECTION 50C HAS NOT BEEN MET BY THE ASSESSEE, CAN HARDLY BE ACCEPTED. THE REQUIREMENT OF CLAUSE (B) OF SUB - SECTION 2 OF SECTION 50C WAS EVIDENTLY MET. THE ONLY QUESTION IS WHETHER THE REQUIREMENT OF CLAUSE (B) OF SUB - SECTION 2 OF SECTION 50C WAS EVIDENTLY MET. THE ONLY QUESTION IS WHETHER THE REQUIREMENT OF CLAUSE (A) OF SUB - SECTION 2 OF SECTION 50C WAS MET BY THE ASSESSEE. WE HAVE ALREADY SET OUT HEREINABOVE THE RECITAL APPEARING IN THE DEEDS OF CONVEYANCE UPON WHICH THE ASSESSEE WAS RELYING. PRESUMABLY, THE CASE OF THE ASSESSEE WAS THAT PRICE OFFERED BY THE BUYER WAS THE HIGHEST PREVAILING PRICE IN THE M ARKET. IF THIS IS HIS CASE THEN IT IS DIFFICULT TO ACCEPT THE PROPOSITION THAT THE ASSESSEE HAD ACCEPTED THAT THE PRICE FIXED BY THE DISTRICT SUB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. NO SUCH INFERENCE CAN BE MADE AS AGAINST THE ASSESSEE BEC AUSE HE HAD NOTHING TO DO IN THE MATTER. STAMP DUTY WAS PAYABLE BY THE PURCHASER. IT WAS FOR THE PURCHASER TO EITHER ACCEPT IT OR DISPUTE IT. THE ASSESSEE COULD NOT, ON THE BASIS OF THE PRICE FIXED BY THE SUB - REGISTRAR, HAVE ITA.NO.152 9/K/2012 BHAGWAN DAS GOEL A.YR. 2008 - 09 3 CLAIMED ANYTHING MORE THAN THE AGREED CONSIDERATION OF A SUM OF RS.10 LAKHS WHICH, ACCORDING TO THE ASSESSEE, WAS THE HIGHEST PREVAILING MARKET PRICE. IT WOULD FOLLOW AUTOMATICALLY THAT HIS CASE WAS THAT THE FAIR MARKET VALUE OF THE PROPERTY COULD NOT BE RS.35 LAKHS AS ASSESSED BY THE D ISTRICT SUB REGISTRAR. IN A CASE OF THIS NATURE THE ASSESSING OFFICER SHOULD, IN FAIRNESS, HAVE GIVEN AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C. AS A MATTER OF COURSE, IN ALL S UCH CASES THE ASSESSING OFFICER SHOULD GIVE AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER. FOR THE AFORESAID REASONS, WE ARE OF THE OPINION THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATE D UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLAT URE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH P RAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM A N OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. FROM THE ABOVE IT TRANSPIRES THAT AS PER LAW LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT WHEN SECTION 50C IS BEING RESORTED TO BY THE AO REFERENCE OF DVO IS NECESSARY. IN THIS CASE WE FIND THAT AO HAS NOT MAD E ANY SUCH REFERENCE. 5.1. WE FURTHER NOTE THAT THE LD.CIT(A) NOTED THAT ASSESSEE HIMSELF HAS MADE SEVERAL MISTAKES IN THE COMPUTATI ON OF LONG TERM CAPITAL GAIN. IN SUCH CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THE REVENUE SHOULD NOT TRY TO TAKE AD VANTAGE OF THE IGNORANCE AND THE MISTAKES COMMITTED BY THE ASSESSEE. HENCE WE DIRECT THAT THE LAWFUL CLAIM OF THE ASSESSEE SHOULD BE CONSIDERED BY THE AO. ACCORDINGLY THE ISSUES RAISED IN THIS APPEAL ARE REMITTED TO THE FILE OF THE AO TO CONSIDER THE ISSUE AFRESH. 6 . IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCE D IN THE COURT ON 0 4.12.2014. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 04.12.2014. R.G.(.P.S.) ITA.NO.152 9/K/2012 BHAGWAN DAS GOEL A.YR. 2008 - 09 4 COPY OF THE ORDER FORWARDED TO: 1 . BHAGWAN DAS GOEL, M/S. YASH & ASSOCIATES, 309, B.B.GANGULY STREET (EASTERN BLOCK), 1 ST FLOOR, ROOM NO.9, KOLKATA - 700012. 2 I.T.O., WARD - 1 (2), SILIGURI 3 . CIT(A) - SILIGURI 4. CIT KOLKATA 5 . CIT(DR), KOLKATA BENC HES, KOLKATA. TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES