Dr. Yaspal Agarwal, Haridwar V. ITO, Roorkee

ITA 1541/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5574 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 09-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 17-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANNA
• Assessee Lawyers: S K MONGA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

ITA NO. 1541/DEL/2009 A.Y. 2005-06 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH I: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1541/DEL/2009 A.Y. : 2005-06 DR. YASHPAL AGARWAL, VS. INCOME TAX OFFICER, C/O S.K. MONGA, ADVOCATE, WARD-2, BIRLA ROAD, P.BOX. 41, AAYAKAR BHAVAN, HARIDWAR (U.K.) CIVIL LINES, [PAN : ABNPA 6106 D] ROORKEE (U.K.) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.K. MONGA, ADV. DEPARTMENT BY : MS. ANUSHA KHURANNA, DR O R D E R PER SHAMIM YAHYA : AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A) DATED 16.01.2009 PERTAINING TO ASSES SMENT YEAR 2005-06. 2. THE FIRST GROUND RAISED READS AS UNDER:- THAT THE LONG TERM CAPITAL AS HAS BEEN WORKED OUT BY THE AO AT RS. 6,22,803/- AS AGAINST DECLARED CAPITAL GAIN RS. 1,41,678/-. THE NATURAL JUSTICE REQUIRES THAT IF TH E SALE CONSIDERATION IS ADOPTED AS PER STAMP DUTY REGISTRA TION (CIRCLE RATE), THE CAPITAL GAIN OUGHT TO BE WORKED OUT STAMP DUTY REGISTRATION (CIRCLE RATE). ITA NO. 1541/DEL/2009 A.Y. 2005-06 2 2.1 IN THE INSTANT CASE, THE ASSESSEE SOLD AN IMMO VABLE PROPERTY DURING THE YEAR AND TOOK THE COST OF ACQUISITION TH EREOF AT RS. 7,52,000/- AND NOT AT RS. 3,25,000 FOR WHICH TH E IMMOVABLE PROPERTY HAD BEEN BOUGHT. THE ASSESSEES PLEA WA S THAT THE COST OF THE ACQUISITION OF RS. 7,52,000/- WAS THE ONE WH ICH WAS THE VALUED ADOPTED/ ASSED BY THE STAMP DUTY AUTHORITY FOR REGISTRATION PURPOSES. THIS PLEA WAS NOT ACCEPTED BY THE AO. AO DISCUSSED THE PROVISION OF SECTION 50C OF THE ACT A ND CONCLUDED THAT THE STAMP DUTY VALUATION ADLOPTED BY THE ASSES SEE IN RESPECT OF EVEN COST OF ACQUISITION WAS NOT TENABLE IN LAW. 2.2 UPON ASSESSEES APPEAL LD. CIT(A) CONFIRMED THE AOS ACTION. 2.3 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED TH E RECORDS. WE FIND THAT INCOME TAX ACT MANDATES FOR THE PURPOS E OF COMPUTATION OF CAPITAL GAIN, DEDUCTION OF COST OF A CQUISITION INCURRED BY THE ASSESSEE FROM THE SALE CONSIDERATI ON. ADMITTEDLY IN THE CASE THE COST OF ACQUISITION IS RS. 3,25,000 /- PAID BY THE ASSESSEE AND NOT RS. 7,52,000/-. ASSESSEES RELIANC E UPON SECTION 50C OF THE IT ACT HAS RIGHTLY BEEN REJECTED BY THE AUTHORITIES BELOW TO BE MISPLACED. SECTION 50C IS APPLICABLE ONLY FO R THE SALE CONSIDERATION WHICH IS SHOWN BY THE ASSESSEE WHICH IS LOWER THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY . HENCE THIS ASPECT OF THE ISSUE RAISED BY THE ASSESSEE THAT SEC TION 50C BE APPLIED TO SUBSTITUTE HIS COST OF ACQUISITION IS RE JECTED. 3. THE NEXT GROUND RAISED READS AS UNDER:- ITA NO. 1541/DEL/2009 A.Y. 2005-06 3 THAT AS PER THE CLAIM OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW BY ADOPTING THE PROCEDURE OF SECTION 50C I F THE BASIS OF DECLARATION OF CAPITAL GAIN BY THE ASSESSEE IS N OT ACCEPTED, BUT THE PROCEDURE HAS NOT BEEN ADOPTED BY THE AUTH ORITIES BELOW. 3.1 ON THIS ISSUE THE ASSESSEES CLAIM IS THAT ASSE SSEE HAS OBTAINED ACTUAL CONSIDERATION WHICH IS MUCH LOWER T HAN THE RS.9.89 LACS VALUE ADOPTED BY THE STAMP DUTY AUTHO RITY. ASSESSEE HAS CONTENDED BEFORE THE LD. CIT(A) THAT A O SHOULD HAVE REFERRED THE IMMOVABLE PROPERTY FOR VALUATION BY T HE VALUATION OFFICER. HOWEVER, LD. CIT(A) FELT THAT AO HAD NO OC CASION TO MAKE ANY REFERENCE AS ASSESSEE HAS HIMSELF SHOWN SALE CO NSIDERATION AS ASSESSED BY STAMP DUTY AUTHORITY. 3.2 AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 3.3 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE FIND THAT ASSESSEE HAS AGITATED THAT SALE CONSID ERATION ADOPTED AS PER THE STAMP VALUATION AUTHORITY OF RS. 9.89 L ACS IS NOT CORRECT AND THE SAME IS EXCESS OF THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. WE FIND THAT SECTION 5 0C(2)DOES ENVISAGE THAT IF THE ASSESSEE CLAIMED BEFORE ANY AO THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY, THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET TO VALUATION OFFICER. IN THIS REGA RD, WE FIND THAT ASSESSEE HAS NOT MADE ANY SUCH CLAIM BEFORE THE AO. HOWEVER, UPON CAREFUL CONSIDERATION IN THE INTEREST OF JUSTI CE, WE REMIT THIS ASPECT TO THE FILES OF THE AO. THE AO SHALL CONSI DER THE ASSESSEES ITA NO. 1541/DEL/2009 A.Y. 2005-06 4 PLEA THAT THE FAIR MARKET VALUE OF THE PROPERTY IS LOWER THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. TH E ASSESSEE SHALL ALSO SUBMIT THE NECESSARY DOCUMENTS SUPPORTIN G THE CLAIM. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9/03/2010 SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 9/03/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES