Kumari Ahana Garadi , Bangalore V. The Income Tax Officer Ward-5(2)(1), Bangalore

ITA 1611/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2195 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Sale consideration of property below Jantri Value; Condonation of delay
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A, BANGALORE BEFORE SHRI GEORGE GEORGE K, JM & SHRI B.R.BASKARAN,AM ITA NO.1611/BANG/2018 : ASST.YEAR 2013-2014 KUMARI AHANA GARADI C/O.M/S.S.VENKATESAN & CO, CAS 31-33, II FLOOR, SNS PLAZA KUMARAKRUPA ROAD BENGALURU 560 001. PAN : BBXPA4798L. V. THE INCOME TAX OFFICER WARD 5(2)(1) BENGALURU. (APPELLANT) (RESPONDENT) ITA NO.2128/BANG/2018 : ASST.YEAR 2013-2014 THE DY.COMMISSIONER OF INCOME - TAX, CIRCLE 5(2)(1) BENGALURU. V. KUMARI AHANA GARADI C/O.M/S.S.VENKATESAN & CO, CHARTERED ACCOUNTANTS 31-33, II FLOOR, SNS PLAZA KUMARAKRUPA ROAD BENGALURU 560 001. (APPELLANT) (RESPONDENT) REVENUE BY : SRI.SANJAY KUMAR, CIT-DR ASSESSEE BY : SRI.V.SRINIVASAN, ADVOCATE DATE OF HEARING : 01.12.2020 DATE OF PRONOUNCEMENT : 02.12.2020 O R D E R PER GEORGE GEORGE K, JM THESE CROSS APPEALS ARE DIRECTED AGAINST THE CIT(A)S ORDER DATED 31.03.2018. THE RELEVANT ASSESSMENT YEAR IS 2013-2014. WE SHALL FIRST ADJUDICATE THE REVENUES APPEAL. ITA NO.2128/BANG/2018 : REVENUES APPEAL 2. THERE IS A DELAY OF 28 DAYS IN FILING THIS APPEAL. THE DEPARTMENT HAS FILED A PETITION FOR CONDONATION OF DELAY AND ALSO AN AFFIDAVIT OF THE DY.COMMISSIONER OF INCOME-TAX, STATING THEREIN THE REASON FOR THE DELAYED FILING OF THIS APPEAL. WE HAVE ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 2 PERUSED THE REASONS STATED IN THE AFFIDAVIT OF THE DCIT. WE ARE OF THE VIEW THAT THERE IS SUFFICIENT CAUSE FOR THE BELATED FILING OF THIS APPEAL AND NO LATCHES CAN BE ATTRIBUTED ON THE PART OF THE DEPARTMENT. THEREFORE, WE CONDONE THE DELAY OF 28 DAYS IN FILING THIS APPEAL AND PROCEEDED TO DISPOSE OF THE SAME ON MERIT. 3. THE REVENUE HAS RAISED THE SOLITARY EFFECTIVE GROUND, WHICH READS AS FOLLOW:- 2. THE LD.CIT(A) ERRED IN LAW AND IN FACT BY ADJUDICATING THE VALUATION OF THE IMMOVABLE PROPERTY FOR THE PURPOSE OF SECTION 50C OF THE INCOME TAX ACT, 1961, HIMSELF AND WITHOUT REFERRING THE VALUATION TO THE DVO, AS IS MANDATE BY THIS SECTION. 4. BRIEF FACTS IN RELATION TO THE ABOVE GROUND ARE AS FOLLOW: THE ASSESSEE HAD SOLD 7,500 SQ.FT. OF PROPERTY FOR A SUM OF RS.7,50,00,000 (RS.10,000 PER SQ.FT.). THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T.ACT, PROPOSED TO TAKE GROSS SALE CONSIDERATION AT RS.10,92,00,000 (RS.14,560 PER SQ.FT.). THE ASSESSEE HAD STATED BEFORE THE A.O. THAT THERE WERE TWO ENTRIES OF SUBEDHAR CHATRAM ROAD IN THE GUIDELINE VALUE NOTIFICATION ISSUED BY THE GOVERNMENT OF KARNATAKA, WHICH ARE AS UNDER:- (A) SUBEDAR CHATRAM ROAD [KEMPE GOWDA ROAD TO ANANDA RAO CIRCLE] RATE PER SFT. FOR RESIDENTIAL VALUES RS.10,400/- FOR APARTMENTS AND FLATS RS.7,330/- FOR MOSAIC / CERAMIC FLOORING AND RS.7,370/- FOR MARBLE / GRANITE FLOORING. ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 3 (B) SUBEDAR CHATRAM ROAD [UPTO ANANDA RAO CIRCLE] PROPOSED RATE PER SFT. FOR RESIDENTIAL VALUES IS RS.5,250/- FOR APARTMENTS AND FLATS RS.4,390/- FOR MOSAIC / CERAMIC FLOORING AND RS.4,520/- FOR MARBLE / GRANITE FLOORING. 5. THE ASSESSEE CONTENDED THAT A SUM OF RS.10.92 CRORE, DETERMINED BY THE DEPARTMENT AS GUIDELINE VALUE BY THE SUB REGISTRAR, KACHARKANAHALLI, WAS BASED ON WRONG PREMISE THAT THE IMPUGNED PROPERTY, I.E., KINO THEATER WAS SITUATED ON THE STRETCH OF SUBEDAR CHATRAM ROAD LYING BETWEEN KEMPE GOWDA ROAD AND ANANDA RAO CIRCLE. IT WAS STATED THAT FACTUALLY THIS IS NOT TRUE INASMUCH AS THE ASSESSEES PROPERTY IS LYING ON THE STRETCH OF SUBEDAR CHATRAM ROAD (UPTO ANANDA RAO CIRCLE) IN SESHADRIPURAM AREA. CONSEQUENTLY, THE GUIDELINE VALUE OF THE IMPUGNED PROPERTY AS PER THE ABOVE NOTIFICATION WOULD BE RS.7,280 PER SQ.FT. AFTER CONSIDERING MARK-UP OF 40% ON THE GUIDELINE VALUE OF RS.5,200 PER SQ.FT. NOTIFIED FOR RESIDENTIAL PROPERTIES (40% MARK-UP FOR COMMERCIAL PROPERTY). THEREFORE, IT WAS STATED THAT THE PROVISIONS OF SECTION 50C OF THE I.T.ACT WOULD NOT COME INTO PLAY INASMUCH AS THE ASSESSEE HAD SOLD THE PROPERTY AT A RATE OF RS.10,000 PER SQ.FT., WHICH IS MUCH MORE THAN THE GUIDELINE VALUE OF RS.7,280 PER SQ.FT. WITHOUT PREJUDICE TO THE ABOVE CONTENTION, THE ASSESSEE HAD ALSO REQUESTED THE A.O. TO REFER TO THE VALUATION OFFICER IN TERMS OF SECTION 50C(2) OF THE I.T.ACT. THE ASSESSING OFFICER, HOWEVER, REJECTED THE CONTENTIONS RAISED BY THE ASSESSEE WITH REGARD TO THE LOCATION OF THE PROPERTY BY STATING THAT THE PURCHASER WHO ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 4 WAS AN MNC WOULD NOT PAY A SINGLE PENNY MORE TOWARDS THE STAMP DUTY. 6. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECTION 50C OF THE I.T.ACT AND TAKING THE SALE CONSIDERATION AT RS.10.92 CRORE, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER DEPUTED AN INSPECTOR, WHO HAD VISITED THE IMPUGNED PROPERTY AND AFTER PHYSICAL VERIFICATION, IT WAS FOUND THAT THE IMPUGNED PROPERTY, VIZ., KINO THEATRE WAS SITUATED ON THE STRETCH OF SUBEDAR CHATRAM ROAD LYING BETWEEN ANAND RAO CIRCLE AND SESHADRIPURAM. THEREAFTER, THE CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOW:- I HAVE PERUSED THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER ALSO THE GOOGLE MAP AND IT IS SEEN THAT THE IMPUGNED PROPERTY IS SITUATED ON THE STRETCH OF SUBEDAR CHATRAM ROAD LYING BETWEEN ANAND RAO CIRCLE AND SESHADRIPURAM AREA AND CONSEQUENTLY, THE GUIDELINE VALUE WAS TO BE DETERMINED WITH REFERENCE TO THE NOTIFICATION AND THE GUIDELINE VALUE OF THE PROPERTY WOULD BE RS.5,200/- NOTIFIED FOR RESIDENTIAL PROPERTIES AND AFTER CONSIDERING A MARK-UP OF 40% ON THE GUIDELINE VALUE WOULD BE RS.7,280/- PER SFT. THEREFORE, EVEN AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, THE VALUE TO BE ADOPTED IS RS.7,280/- PER SFT. WHICH IS MUCH LESSER THAN THAT OF THE PROPERTY SOLD AT THE RATE OF RS.10,000/- PER SFT. THEREFORE, THE CONTENTION OF THE APPELLANT THAT THE INVOCATION OF THE PROVISIONS OF SEC.50C OF THE ACT, IS ERRONEOUS AND THE SALE CONSIDERATION OF RS.7,50,00,000/- REPORTED BY THE APPELLANT BE ADOPTED INSTEAD OF RS.10,92,00,000/- IS HEREBY ACCEPTED. THE GROUNDS TAKEN ON THIS ISSUE ARE HEREBY ALLOWED. 7. AGGRIEVED BY THE DECISION OF THE CIT(A) IN ACCEPTING THE SALE CONSIDERATION AT RS.7.50 CRORE INSTEAD OF RS.10.92 CRORE ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 5 ADOPTED BY THE A.O., THE DEPARTMENT HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE COURSE OF HEARING OF THIS APPEAL, BOTH THE LEARNED AR AND LEARNED DR WERE DIRECTED TO OBTAIN AND PLACE ON RECORD AN ENDORSEMENT FROM THE SUB REGISTRAR, GANDHINAGAR, PRESCRIBING THE ACTUAL VALUE OF THE IMPUGNED PROPERTY, VIZ., KINO THEATRE, SITUATED AT NO.215/1, SUBEDAR CHATRAM ROAD, NEHRUNAGAR, BENGALURU AS ON 30.06.2012. IN THIS CONTEXT, THE LEARNED AR HAD PLACED ON RECORD THE FOLLOWING DOCUMENTS, VIZ., - (I) COPY OF LETTER OF ASSESSEES ADVOCATE DATED 27.10.2020 ADDRESSED TO THE DISTRICT REGISTRAR, GANDHINAGAR, VYALIKAVAL, BENGALURU, REQUESTING FOR FURNISHING OF CERTIFIED COPY OF THE GUIDELINE VALUE OF THE PROPERTY KNOWN AS KINO THEATRE, SUBEDAR CHATRAM ROAD, BENGALURU AS ON 30.06.2012. (II) COPY OF THE LETTER OF THE DISTRICT REGISTRAR DATED 29.10.2020 ADDRESSED TO THE ASSESSEES ADVOCATE ALONG WITH THE CERTIFIED COPIES OF THE RELEVANT PAGES OF REVISED GUIDELINE VALUE OF THE ABOVE PROPERTY WHEREIN THE RELEVANT ENTRY HAS BEEN HIGHLIGHTED. (III) FREE ENGLISH TRANSACTION OF THE AFORESAID LETTER OF THE DISTRICT REGISTRAR DATED 29.10.2020. ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 6 (IV) FREE ENGLISH TRANSLATION OF THE SHEET [5] OF THE GUIDELINE VALUE ATTACHED ALONG WITH THE AFORESAID LETTER OF THE DISTRICT REGISTRAR DATED 29.10.2020. 8.1 THE DCIT HAS ALSO WRITTEN TO THE DISTRICT REGISTRAR REQUESTING FOR INFORMATION IN THE CASE OF THE ASSESSEE. IN RESPONSE TO THE LETTER OF THE DCIT, THE DISTRICT REGISTRAR HAD PROVIDED THE CERTIFIED COPY OF THE GUIDELINE VALUE FIXED BY THE GOVERNMENT OF KARNATAKA, COVERING THE AREA (IN VERNACULAR). ADMITTEDLY, THE IMPUGNED PROPERTY IS SITUATED ON SUBADAR CHATRAM ROAD BETWEEN ANAND RAO CIRCLE AND SESHADRIPURAM. THIS FACT IS ALSO CONFIRMED BY THE ASSESSING OFFICER IN THE REMAND REPORT DATED 30.03.2018 SUBMITTED TO THE FIRST APPELLATE AUTHORITY. ON PERUSAL OF THE LETTER OF DISTRICT REGISTRAR DATED 29.10.2020, ALONG WITH THE RELEVANT PAGES OF GUIDELINE VALUE ATTACHED ALONG WITH THE LETTER OF DISTRICT REGISTRAR, IT IS CLEAR THAT THE IMPUGNED PROPERTY WHICH IS LOCATED AT SUBEDAR CHATRAM (SC) ROAD BETWEEN SESHADRIPURAM AND ANAND RAO CIRCLE IS GOVERNED BY ENTRY NO.157, WHERE THE GUIDELINE VALUE FIXED AS ON 30.06.2012 WAS MUCH LESS THAN RS.10,000 PER SQ.FT. ADOPTED BY THE ASSESSEE IN THE SALE DEED. THEREFORE, THE CIT(A)S ORDER ACCEPTING THE SALE CONSIDERATION OF RS.7.50 CRORE DISCLOSED BY THE ASSESSEE IN HER SALE DEED IS UPHELD AS CORRECT AND IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. ITA NO.1611/BANG/2018 : ASSESSEES APPEAL 9. IN THE COURSE OF HEARING, THE LEARNED AR SUBMITTED THAT THE ASSESSEE IS SEEKING TO AVAIL VIVAD SE VISHWAS SCHEME AND ITA NO.1611 & 2128/BANG/2018 KUMARI AHANA GARADI. 7 THE APPEAL FILED BY THE ASSESSEE MAY BE TREATED AS DISMISSED AS WITHDRAWN. RECORDING TO THE LEARNED ARS SUBMISSION, THE APPEAL OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 02 ND DAY OF DECEMBER, 2020 . SD/- SD/- ( B.R.BASKARAN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE; DATED : 02 ND DECEMBER, 2020. DEVADAS G* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A)-5, BANGALORE 4. THE PR.CIT-5, BANGALORE. 5. THE DR, ITAT, BENGALURU. 6. GUARD FILE. ASST.REGISTRAR/ITAT, BANGALORE