Dr.B.Hari, Villupuram V. DCIT Villupuram Circle, Villupuram

ITA 1671/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1932 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 15-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R ANITHA IRS
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Set aside
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO.1671/CHNY/2018 ! / ASSESSMENT YEAR : 2014-2015. DR. B. HARI, NO.13, TRICHY TRUNK ROAD, VILLUPURAM 605 602. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, VILLUPURAM CIRCLE, VILLUPURAM. [PAN AAAPH 2978N] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE &' '# $ % /RESPONDENT BY : MS. R. ANITHA, IRS, JCIT ( ) $ * /DATE OF HEARING : 03-09-2019 +,! $ * /DATE OF PRONOUNCEMENT : 04-09-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-P UDUCHERRY (CIT(A) FOR SHORT) DATED 14.03.2018 FOR THE ASSE SSMENT YEAR (AY) 2014-2015. ITA NO.1671/2018 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE CIT(A) HAS ERRED IN LAW AND IN FACT IN NOT CONSIDERING THAT THE MARKET VALUE MENTIONED IN THE SALE DEED IS TO ARRIV E AT THE STAMP DUTY PURPOSES AND THE SAME CANNOT BE CONSIDERED AS THE S ALE VALUE OF THE PROPERTY AS TRANSACTION VALUE IS DIFFERENT. 2. THE ASSESSING OFFICER IS WRONG IN DEMANDING RS. 4,03,780 WITHOUT CONSIDERING THE FACT THAT VARIOUS HIGH COURTS HAVE DECIDED THE CASES IN FAVOUR OF THE ASSESSEE WITH REGARD TO THE PROVISION S OF SECTION 50C ON THE SAME SET OF FACTS. 3. THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE CASE TO VALUATION OFFICER BEFORE CONFIRMING ADDITION. IF THE REFERENC E IS NOT MADE, THEN THE ASSESSMENT IS NULL AND VOID AS THE ASSESSMENT W AS COMPLETED ON 26.12.2016. WHEREAS THE REFERENCE TO THE VALUATION OFFICER IS MADE ON 01.06.2017. THE HONBLE ITAT OF DELHI IN THE CASE O F INCOME TAX OFFICER VS. M/S ADITYA NARAIN VERMA (HUF) HAS HELD THAT WHEN THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY UNDER SUB SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY ADOPTED BY ASSESSEE AS ON THE DATE OF TRANSFER, THE ASSESSING OFFICER SHOULD HAVE REFERRE D THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER INSTEAD OF ADO PTING THE VALUE TAKEN BY THE STATE AUTHORITY FOR THE PURPOSE OF STAMP DUT Y. THE VERY PURPOSE OF THE LEGISLATURE BEHIND THE PROVISIONS LAID DOWN UNDER SUB SECTION (2) TO SECTION 50C OF THE ACT IS THAT A VALUATION OFFIC ER IS AN EXPERT ON THE SUBJECT FOR SUCH VALUATION AND IS IN A BETTER POSIT ION THAN THE ASSESSING OFFICER TO DETERMINE THE VALUATION. THUS, NON-COMPL IANCE OF THE PROVISIONS LAID DOWN UNDER SUB SECTION (2) BY THE A SSESSING OFFICER CANNOT BE HELD VALID AND JUSTIFIED. ALSO, THE HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CHANDNIBHUCHAR (2010 ) 229 CTR (P&H) 190 HAS HELD THAT IN THE ABSENCE OF ANY ADMI SSIBLE EVIDENCE, VALUATION DONE BY THE STAMP DUTY AUTHORITIES COULD NOT BE TAKEN AS ACTUAL SALE CONSIDERATION AND THE VALUE SHOWN IN TH E SALE DEED TO BE ACCEPTED. ON THE ABOVE GROUNDS AND OTHER GROUNDS THAT MAY BE ADDUCED AT OR BEFORE THE TIME OF HEARING THE ORDER OF THE CIT (A) BE SET ASIDE AND THE VALUE OF THE ASSESSEE BE ACCEPTED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL DERIVING INCOME FR OM RUNNING HOSPITAL. THE RETURN OF INCOME FOR THE AY 2014-15 WAS FILED ON ITA NO.1671/2018 :- 3 -: 18.09.2014 DISCLOSING TOTAL INCOME OF H 77,91,570 /-, WHICH INCLUDES LONG TERM CAPITAL GAINS ARISING ON SALE OF LAND OF H54,54,896/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPL ETED BY THE DEPUTY COMMISSIONER OF INCOME TAX, VILLUPURAM CIRCL E, VILLUPURAM VIDE ORDER DATED 26.12.2016 PASSED U/S. 143(3) O F THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AFTER MAKING ADDITI ON OF H10,58,000/-. WHILE COMPUTING CAPITAL GAINS ARISING ON SALE OF LA ND INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS WHEN ASSESSING OFFICER HAD PROPOSED TO ADOPT THE GUIDELINE VALUE FOR STAMP DUTY PURPOSE AS SALES CO NSIDERATION, ASSESSEE HAD CLAIMED THAT FAIR MARKET VALUE IS LESS THAN THE GUIDELINE VALUE ADOPTED FOR STAMP DUTY PURPOSE AND THEREFORE THE MATTER BE REFERRED TO THE DVO, BUT THE ASSESSING OFFICER WI THOUT REFERRING TO THE DVO HAD PROCEEDED WITH FRAMING THE ASSESSMEN T ORDER. 4. BEING AGGRIEVED BY THE ABOVE ADDITION, AN APPEAL WA S PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R CONFIRMED THE ADDITION. 5. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE AP PELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE PROVISIONS OF SECTION 50C OF THE ACT M ANDATES THAT WHEN ITA NO.1671/2018 :- 4 -: ASSESSEE OBJECTS TO ADOPTION OF GUIDELINE VALUE FOR STAMP DUTY PURPOSE, THE ASSESSING OFFICER IS DUTY BOUND TO REF ER THE MATTER TO THE DVO. IN THE PRESENT CASE, UNDISPUTEDLY, THE ASSESS ING OFFICER HAD DECLINED TO REFER THE MATTER TO THE DVO. THEREFORE WE REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR DENOV O ASSESSMENT IN ACCORDANCE WITH LAW. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 4TH DAY OF SEPTEMBER, 2019, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED: 4TH SEPTEMBER, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF