Shri Mohankumar Industries, CHENNAI V. ITO Non Corporate Ward 2(2), CHENNAI

ITA 1543/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6012 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 16-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR SHRI B SAGADE
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Valuation report
• Section: 50C; 144

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC A BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.1543/MDS/2017 ( / ASSESSMENT YEAR: 2007-08) M/S. SHRI MOHANKUMAR INDUSTRIES, REPRESENTATIVE. BY R. DAMODARASAMY (PARTNER), D.NO.4/5, BUDHAR STREET, RAMAKRISHNAPURAM, COIMBATORE 641 006. VS THE INCOME TAX OFFICER, NON CORPORATE WARD 2 (2), COIMBATORE. PAN: ATYPD5545Q ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI B. SAGADEVAN, JCIT /DATE OF HEARING : 06.09.2017 ! /DATE OF PRONOUNCEMENT : 09.10.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-2, COIMBATORE DATED 31.03.2017 IN ITA NO.93/15-16 FOR THE ASSESSMENT YEAR 2007-08 PASSED U/S.250(6) R.W.S.144 & 147 OF THE ACT. 2 ITA NO.1543/MDS/2017 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL AND THEY ARE REPRODUCED HEREIN BELOW FOR REFERENCE: - 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) 2, COIMBATORE DATED 31.03.2017 IN I,T.A.NO.93/2015-16 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN CONFIRMING THE VALIDI TY OF THE RE- ASSESSMENT COMPLETED IN TERMS OF SECTION 144 READ W ITH SECTION 147 OF THE ACT ON 30.03.2015 WITHOUT ASSIGNING PROP ER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ORDER OF RE- ASSESSMENT UNDER, CONSIDERATION WAS PASSED OUT OF T IME, INVALID, PASSED WITHOUT JURISDICTION AND NOT SUSTAI NABLE BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE NON SERVICE OF NOTICE ON THE PARTNERSHIP FIRM/APPELLANT WOULD V ITIATE THE CONSEQUENTIAL RE-ASSESSMENT ORDER AND OUGHT TO HAVE APPRECIATED THAT THE MISCONSTRUCTION OF THE PROVISI ONS OF SECTION 292 BB OF THE ACT WOULD FURTHER VITIATE THE FINDINGS ON SUSTAINING THE VALIDITY OF THE RE-ASSESSMENT FROM P ARA 4.0 OF THE IMPUGNED ORDER. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT IN A NY EVENT HAVING NOT PASSED THE RE-ASSESSMENT ORDER IN THE PA N OF THE PARTNERSHIP FIRM (THE RE-ASSESSMENT WAS PASSED IN T HE PAN OF THE PARTNER), THE CONSEQUENTIAL RE-ASSESSMENT WAS B AD IN LAW. 6. CIT (APPEALS) FAILED TO APPRECIATE THAT THE OBJE CTIONS FILED VIDE DATED 9.3.2015 AND 17.2.2015 WERE NOT DISPOSED OF ESPECIALLY OVERLOOKING THE PRINCIPLES LAID DOWN BY THE SUPREME COURT IN THE CASE REPORTED IN 259 ITR 19. 3 ITA NO.1543/MDS/2017 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT ON M ERITS, THE DISTRESS SALE WOULD VITIATE THE MECHANICAL APPLICAT ION OF THE STAMP DUTY VALUE AS SALE CONSIDERATION U/S 50C OF T HE ACT IN THE COMPUTATION OF LONG TERM CAPITAL GAINS AND OUGH T TO HAVE APPRECIATED THAT THE PROVISIONS OF SECTION 50C (2) OF THE ACT WERE COMPLETELY OVERLOOKED AND BRUSHED ASIDE. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPU GNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRIN CIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 9. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A FIRM WHICH WAS DISSOLVED SUBSEQUENT TO THE RELEVANT ASSE SSMENT YEAR. IT WAS FOUND BY THE REVENUE THAT THE ASSESSEE FIRM HAD SOLD ITS IMMOVABLE PROPERTY CONSISTING OF 17 CENTS OF LAND AND WORKSHOP BUILDING FOR RS.12,17,900/- ON 21.02.2007 VIDE DOCUMENT NO.200700931 IN SRO GANAPATHY. IT WAS FUR THER REVEALED THAT THE GUIDELINE VALUE OF THE PROPERTY W AS RS.27 LAKHS, THEREBY ATTRACTING PROVISIONS OF SECTION 50C OF THE ACT. THEREAFTER NOTICE U/S.148 WAS ISSUED TO THE ASSESSE E ON 31.03.2014 AND THE ASSESSMENT WAS FRAMED U/S.144 R. W.S.147 OF THE ACT, ON 30.03.2015, WHEREIN THE LD.AO ASSESSED THE LONG 4 ITA NO.1543/MDS/2017 TERM CAPITAL GAIN OF THE ASSESSEE AT RS.26,47,062/- . ON APPEAL, THE LD.CIT(A) ALSO CONFIRMED THE ORDER OF THE LD.AO . 4. AT THE OUTSET, THE LD.AR ARGUED BEFORE US BY STA TING THAT THE ASSESSEE WAS NOT GIVEN OPPORTUNITY U/S.50C(2) O F THE ACT, WHEREIN THE LD.AO OUGHT TO HAVE REFERRED THE MATTER TO THE VALUATION OFFICER FOR ASCERTAINING THE VALUE OF THE IMMOVABLE PROPERTY SOLD BY THE ASSESSEE. IT WAS THEREFORE PL EADED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO TO CONSIDER THE ISSUE AFRESH AFTER OBTAINING THE VALUATION REPORT F ROM THE VALUATION OFFICER. THE LD.DR STRONGLY OPPOSED TO TH E SUBMISSION OF THE LD.AR AND PLEADED FOR SUSTAINING THE ORDER O F THE LD.REVENUE AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE IT IS APPARENT THAT THE LD.REVENUE AUTHORITIES HAD NOT RE FERRED THE MATTER TO THE VALUATION OFFICER FOR VALUING THE PRO PERTY THOUGH THE ASSESSEE HAS CHALLENGED THE VALUATION BEFORE THE LD .CIT(A). THE ASSESSEE WAS ALSO IRRESPONSIBLE BY NOT CO-OPERATING BEFORE THE LD.AO. HOWEVER, IN THE INTEREST OF JUSTICE, I REMIT BACK THE MATTER 5 ITA NO.1543/MDS/2017 TO THE FILE OF LD.AO TO CONSIDER THE ISSUE AFRESH A FTER OBTAINING VALUATION REPORT OF THE PROPERTY SOLD BY THE ASSESS EE FROM THE VALUATION OFFICER. I ALSO CAUTION THE ASSESSEE TO P ROMPTLY CO- OPERATE WITH THE LD. REVENUE AUTHORITIES IN THEIR P ROCEEDINGS IN ORDER TO EXPEDITE THEIR RESPECTIVE ORDERS FAILING W HICH THEY ARE AT LIBERTY TO PASS APPROPRIATE ORDERS IN ACCORDANCE WI TH LAW AND MERITS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON 09 TH OCTOBER, 2017 AT CHENNAI. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 09 TH OCTOBER, 2017 RSR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF