Mr.Shivayogi Ambaraya Tengli, Gulbarga V. The Assistant Commissioner of Income Tax Circle-1, Gulbarga

ITA 1649/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7809 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 18-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUKESH PATIL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Set aside
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER IT A NO. 1649/ BANG / 2018 ASSESSMENT YEAR : 2014 - 15 SHRI SHIVAYOGI AMBARAYA TENGLI, C/O. PATIL KABBUR & ASSOCIATES, CHARTERED ACCOUNTANTS, NO.116/5/1, 3 RD FLOOR, 11 TH CROSS, MALLESHWARAM, BANGALORE 560003. PAN: DLYPS 7578 M VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, GULBARGA. APPELLANT RESPONDENT APPELLANT BY : S HRI SU KESH P ATIL, CA RESPONDENT BY : SHRI KANNAN NARAYANAN, JT.C IT(DR)(ITAT ), BENGALURU. DATE OF HEARING : 01. 0 9 .202 1 DATE OF PRONOUNCEMENT : 01 .0 9 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS), GULBARGA DATED 28.02.2018 FOR THE ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF HON'BLE CIT (A) IS BAD IN LAW AND WITHOUT CONSIDERING THE FACT OF THE CASE. ITA NO.1649/BANG/2018 PAGE 2 OF 4 2. THE HON'BLE CIT (A) ERRED IN NOT MAKING REFEREN CE TO DEPARTMENTAL VALUATION OFFICER IN TERMS OF SUB-SECT ION (2) OF THE SECTION 50C OF THE INCOME TAX ACT, 1961 AS PROMULGA TED BY HON'BLE CULCUTTA HIGH COURT IN THE CASE OF SUNIL KU MAR AGARWAL VS CIT, ITAT NO 221 OF 2013. 3. APPELLANT CRAVES LEAVES TO ADD, TO ALTER, TO A MEND AND TO DELETE ANY OTHER GROUNDS AT THE TIME OF HEARING. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AGRICULTURIST. DURING THE FINANCIAL YEAR 2013-14, THE ASSESSEE SOL D 7 PLOTS AND OFFERED IT FOR LONG TERM CAPITAL GAIN. DURING THE COURSE OF A SSESSMENT, THE AO OBSERVED THAT OUT OF 7 PLOTS, VALUE OF 4 PLOTS ADOP TED FOR REGISTRATION BY THE STATE GOVT. AUTHORITIES IS MORE THAN THAT OF ACTUAL SALE CONSIDERATION SPECIFIED IN THE SALE DEED. AS SUCH, THE AO APPLIE D THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT, 1961 [THE ACT] A ND MADE AN ADDITION OF RS.1,07,10,003. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 3. THE CIT(APPEALS) PLACING RELIANCE ON THE JUDGMEN T OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF GOULI MAHADEVAPPA V. ITO, 356 ITR 90 (KARN) WHEREIN IT WAS HELD AS FOLLOWS:- 6. IN THE INSTANT CASE, IT IS TO BE NOTICED THAT THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY TO QUESTION THE CORRECT NESS OF THE REGISTRATION VALUE FIXED BY THE STATE GOVERNMENT, I F HE HAD DONE SO, THEN THE ASSESSING AUTHORITY WOULD HAVE INVOKED THE POWER OF APPOINTING VALUATION OFFICER FOR ASSESSING THE F AIR MARKET VALUE. WHEN THE REGISTRATION VALUE IS NOT THE DISPU TED QUESTION, NOW, AT THIS STAGE, IT IS NOT PERMISSIBLE FOR THE A SSESSEE TO CONTEND THAT THE REGISTRATION VALUE IS EXCESSIVE AND DISPRO PORTIONATE TO THE MARKET VALUE OF THE PROPERTY. IN THE ABSENCE OF CON TRA MATERIAL, THE DEEMED FULL VALUE OF CONSIDERATION AS STATED IN SECTION 50C OF THE IT ACT WOULD COME INTO EFFECT. ITA NO.1649/BANG/2018 PAGE 3 OF 4 4. THUS, HE OBSERVED THAT THE ASSESSEE HAS NOT QUES TIONED THE CORRECTNESS OF THE VALUED ADOPTED BY THE SUB-REGIST RAR AT THE ASSESSMENT STAGE AND THE SAME CANNOT BE CHALLENGED AT THE APPE LLATE STAGE AND HE DISMISSED THE APPEAL OF ASSESSEE. AGAINST THIS, T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. AS SEEN FROM THE FACTS OF THE CASE, THE ASSESSEE IS AN AGRICULTURIST AND ILLITERATE AND HE BLINDLY RELIED UPON THE ADVOCATES TO WHOM THE WORK OF REGISTRATION WAS GIVEN. IT IS STATED THAT THE ASSE SSEE ENTERED INTO AGREEMENT WITH THE BUYER TWO YEARS PRIOR TO THE EXE CUTION OF SALE DEED AND RECEIVED THE CONSIDERATION THROUGH CHEQUES AND DD O N THE DATE OF AGREEMENT. THESE RECORDS COULD NOT BE PRODUCED BEF ORE THE AO DUE TO LACK OF TIME. FURTHER IT WAS RECORDED BY THE AO IN HIS ORDER THAT HE ASKED EXPLANATION FROM THE ASSESSEE AS TO WHY CAPITAL GAI N SHOULD NOT BE CALCULATED ADOPTING THE VALUE OF STATE GOVT. AS ON 1.12.2016, HOWEVER THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION BEFORE THE A O AND THE DATE OF HEARING OF THE CASE WAS FIXED ON 28.12.2016. THE AO PASSED THE ASSESSMENT ORDER ON 28.12.2016 ITSELF. THIS SHOWS THAT THE ASSESSEE IS NOT GIVEN FAIR OPPORTUNITY OF HEARING BEFORE THE AO AND BEING SO, THE ASSESSEE FAILED TO EXPLORE THE OPPORTUNITY OF REQUE STING THE AO TO REFER THE VALUATION OF THE PROPERTY TO THE DVO. IN SUCH CIRC UMSTANCES, IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO CONSIDER REFERENCE TO THE DVO FOR DETERMINING THE F AIR MARKET VALUE OF THE PROPERTIES AS ON THE DATE OF SALE. ACCORDINGLY THE ORDER OF THE CIT(APPEALS) IS SET ASIDE AND THE ISSUE IN DISPUTE IS REMITTED TO THE FILE OF ASSESSING OFFICER FOR FRESH CONSIDERATION, AFTER AF FORDING ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. WE ALSO DIR ECT THE ASSESSEE TO PRODUCE NECESSARY EVIDENCE TO SHOW THAT ASSESSEE EN TERED INTO SALE ITA NO.1649/BANG/2018 PAGE 4 OF 4 AGREEMENT TWO YEARS PRIOR TO THE EXECUTION OF SALE DEED AND RECEIVED THE ACTUAL SALE CONSIDERATION THROUGH CHEQUES/DD ON THE SAID DATE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF SEPTEMBER, 2021. SD/- SD/- ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 1 ST SEPTEMBER, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.