SMT. ANITA SODHI, Jaipur V. ITO, Jaipur

ITA 169/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5317 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA J DHK
• Assessee Lawyers: VIJAY GOYALCA
• Keywords: Capital asset; Fair market value; Valuation report

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] Y S[KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 169/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SMT. ANITA SODHI C-160, BAHUBALI PATH, SHYAM NAGAR, SODALA, JAIPUR CUKE VS. THE ITO WARD- 1(3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ACTPS 9043 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY :SHRI VIJAY GOYAL,CA JKTLO DH VKSJ LS@ REVENUE BY : MS. ROSHANTA MEENA, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/05/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT: 13 /05/2016 VKNS'K@ ORDER PER KUL BHARAT, JM THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 20-01-2014 PERTAINING TO ASS ESSMENT YEAR 2010-11 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS O F APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 25,44,281/- BEING SHARE ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF PLOT BY TAKING THE SALE CONSIDERATI ON OF RS. 2,01,77,124/- ON THE BASIS OF VALE ADOPTED BY THE R EGISTRATION AUTHORITY AS AGAINST SALE CONSIDERATION OF RS. 1,00 ,00,000/- DECLARED IN THE SALE DEED. ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE AO AS WELL AS VALUATION OFFICER IN DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY SOLD BY THE ASSESSEE A LONGWITH THREE OTHER CO-OWNERS OF EQUAL SHARE AT RS. 2,01,77 ,124/- AGAINST ACTUAL SALE CONSIDERATION RECEIVED, ACCEPTE D BY THE SUB-REGISTRAR AT THE TIME OF REGISTRATION OF SALE D EED AT RS. 1,00,00,000/- FOR STAMP DUTY PURPOSES. IT IS CONTEN DED THAT THE FAIR MARKET VALUE OF THE PROPERTY DETERMINED B Y THE VALUATION OFFICER /AO IS SOLELY BASED ON THE DECISI ON OF DIG (STAMPS) WHO HAD MADE THE UPWARD REVISION OF THE ST AMP DUTY VALUATION OF THE PROPERTY TREATING THE SAME AS COMMERCIAL PROPERTY IN THE FORM OF VACANT PLOT OF L AND DECLARED BY THE ASSESSEE AND ACCEPTED BY THE SUB-RE GISTRAR WHILE REGISTERING THE SALE DEED. NO ANY OTHER MATER IAL WAS BROUGHT ON RECORD TO JUSTIFY THE MARKET VALUE OR NO INDEPENDENT ENQUIRES WERE CONDUCTED. 2.1 THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS WIT H REGARD TO ADOPTION OF SALE VALUE OF THE PROPERTY AS PER STAMP VALUATIO N MADE BY THE STAMP VALUATION AUTHORITY. 2.2 BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143( 3) OF THE INCOME TAX ACT, 1961 ((HEREINAFTER REFERRED TO ACT FOR SHO RT) WAS FRAMED BY THE AO VIDE HIS ORDER DATED 01-03-2014. WHILE FRAMING T HE ASSESSMENT, THE AO DECLINED TO ACCEPT THE VALUATION ADOPTED BY THE ASSESSEE. ON THE CONTRARY, THE AO REFERRED THE ISSUE OF VALUATION OF PROPERTY TO THE DVO AND ON THE BASIS OF THE REPORT SUBMITTED BY THE DVO , THE AO ADOPTED THE MARKET VALUE OF THE PROPERTY AT RS. 2,01,77,124/- A ND ACCORDINGLY CAPITAL ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 3 GAIN ON THE SHARE OF THE ASSESSEE WAS COMPUTED AT R S. 26,88,681/- AND ASSESSED INCOME AT RS. 35,06,230/- AGAINST THE INCO ME DECLARED AT RS. 8,17,550/-. 2.3 BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSE E PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL OF THE ASSESSEE. 2.4 NOW THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE SYNOPSIS OF THE ARGUMENTS SUBMITTED VIDE DATED 10-03-2016. THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE GRIEVANCE IN THIS APPEAL IS THAT THE DVO HAS FAILED TO CONDUCT THE ENQUIRY AND IN A MECHANICAL MANNER ASS ESSED THE VALUE OF THE PROPERTY WHICH IS CONTRARY TO THE SETTLED POSIT ION OF THE LAW. HE DREW OUR ATTENTION TO THE VALUATION REPORT AND ALSO THE DOCUMENTS PROVIDED IN THE FORM OF NOTINGS ETC. BY JAIPUR DEVELOPMENT AUTH ORITY (FOR SHORT JDA). TO BUTTRESS THE ARGUMENTS AS TO THE PROPERT Y IN QUESTION REMAINED RESIDENTIAL AND COMPUTING THE MARKET VALUE BY TREAT ING THE SAME AS COMMERCIAL LAND IS ERRONEOUS ON FACTS AS WELL AS ON LAW, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT EVEN OTHERWISE ALSO , THE DVOS REPORT CANNOT BE SOLE BASIS FOR ADOPTING THE FAIR MARKET V ALUE. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE OF IN THE CASE OF CIT VS. SMT. RAJ KUMARI ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 4 VIMLA DEVI AND ANR (2005) 279 ITR 360 (ALL.) AND IN THE CASE OF RAVI KANT VS. ITO (ITAT DELHI BENCH) (2007) 110 TTJ 297. 2.5 ON THE CONTRARY, MS.ROSHANTA MEENA, SR. DR ST RONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED T HAT THE ASSESSEE HAS NOT RAISED ANY OBJECTION AGAINST THE ADOPTION OF FAIR M ARKET VALUE AND THE ADOPTION OF VALUATION MADE BY STAMP VALUATION AUTHO RITY IN THE CASE OF THE ASSESSEE. THE AUTHORITIES BELOW WERE JUSTIFIED TO ADOPT THE FAIR MARKET VALUE AS ADOPTED BY THE STAMP VALUATION AUTHORITY. SHE FURTHER SUBMITTED THAT THE VALUATION OFFICER IS AN EXPERT PERSON. MOR EOVER, THE ASSESSEE HAS NOT GIVEN ANY CONTRARY VALUATION REPORT. THEREFORE, THE AO WAS JUSTIFIED IN ADOPTING THE DVOS REPORT. 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE TO BE ADJUDICATED IN THIS APPEAL IS WHETHER THE DVO AND STAMP VALUATION AUTHORITY WERE JUSTIFIE D IN TREATING THE PROPERTY IN QUESTION AS COMMERCIAL. IT IS OBSERVED THAT THE PROPERTY IN QUESTION WAS TRANSFERRED BY THE ASSESSEE BY WAY OF SALE DEED DATED 15-01- 2010 DULY REGISTERED WITH REGISTERING AUTHORITY. TH ERE IS NO REFERENCE IN THE SALE DEED THAT THE PROPERTY WAS COMMERCIAL. ON THE CONTRARY, IT IS STATED THAT THE PROPERTY IS RESIDENTIAL IN NATURE. FROM THE EVIDENCE IN THE FORM OF LETTER DATED 16-10-2007 OF THE AUTHORIZED O FFICER OF JDA, IT IS ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 5 STATED TO BE A RESIDENTIAL PROPERTY. IT IS NOTICED THAT THE METHOD APPLIED FOR ADOPTING VALUATION BY THE DVO IS DLC RATE FOR CORRESPONDING LAND. THE REASON FOR ADOPTION OF SUCH METHOD IS STATED TH AT THIS BEING THE TIME BARRING CASE, HENCE NO SALE INSTANCES WERE AVAILABL E. IT IS FURTHER OBSERVED BY THE DVO THAT THE LAND IS SITUATED ON ANCILLARY R OAD TO MAIN AMER ROAD, JUST BEFORE JORAWAR SINGH ROAD GATE. PRESENTL Y, A HOTEL IS RUNNING ON THE SAID PLOTS. BESIDES THESE PLOTS, SOME PLOTS ARE STILL IN RESIDENTIAL USE. IT IS NOTICED THAT THE DATE OF INSPECTION OF T HE PROPERTY IS STATED TO BE 17-12-2012. HOWEVER, THE DATE OF REGISTRATION OF SA LE DEED IS ON 15-01- 2010. FROM THE AFORESAID OBSERVATIONS OF THE VALUAT ION REPORT, IT CAN BE INFERRED THAT THE DVO HAS NOT GIVEN HIS FINDING WIT H REGARD TO THE NATURE OF LAND AS ON 15-01-2010 WHETHER THE LAND WAS BEING USED FOR COMMERCIAL PURPOSES. WE NOTICE THAT THERE ARE CLEAR CONTRADICTIONS IN THE EVIDENCES GIVEN BY THE JDA AND THE REASONINGS GIVEN BY THE DVO. IT IS INCUMBENT UPON THE DVO TO GIVE CLEAR FINDING ABOUT THE NATURE OF PROPERTY AS ON 15-01-2010 I.E. WHEN THE LAND WAS TR ANSFERRED BY THE ASSESSEE. WE FEEL THAT JDA IS A COMPETENT AUTHORIT Y TO COMMENT UPON THE NATURE OF PROPERTY. AFTER CONSIDERING THE MATERIALS PLACED ON RECORD IN THE FORM OF DVOS REPORT AND LETTERS OF THE JDA, WE ARE OF THE CONSIDERED VIEW THAT THE REPORT SUBMITTED BY THE DVO IS FAULTY AND DOES NOT INSPIRE ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 6 CONFIDENCE. HENCE, WE DEEM IT PROPER THAT THE ISSUE OF NATURE OF THE LAND IN QUESTION AS ON 15-01-2010 WHEN SALE DEED WAS EXE CUTED BY THE ASSESSEE REQUIRES VERIFICATION. THUS THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE ON THIS ISSUE AND THE ISSUE IN QUESTION I S RESTORED BACK TO THE FILE OF THE AO TO DECIDE IT AFRESH. THE AO WILL VERIFY T HE DETAILS FROM THE CONCERNED AUTHORITIES AND ALSO MAKE INDEPENDENT ENQ UIRY FOR ASCERTAINING THE NATURE OF THE LAND IN QUESTION AS ON 15-0-2010. THE AO WILL ALSO FIND OUT FROM THE STAMP VALUATION AUTHORITY THAT WHAT WA S THE REASON FOR TREATING THE LAND IN QUESTION AS COMMERCIAL LAND WH EN AS PER LETTERS OF THE JDA AND ALSO AS PER SALE DEED EXECUTED BY THE ASSES SEE , THE LAND IN QUESTION IS A RESIDENTIAL PROPERTY. IF UPON ENQUIRY , THE AO FINDS THAT THE CLAIM OF THE ASSESSEE IS CORRECT THAT THE CAPITAL A SSET WAS RESIDENTIAL NATURE, HE WOULD ACCORDINGLY APPLY THE DLC RATE PRE SCRIBED FOR THE RESIDENTIAL PROPERTIES FOR COMPUTING THE FAIR MARKE T VALUE OF THE CAPITAL ASSET. IN THE LIGHT OF THE ABOVE DELIBERATIONS, THE GROUNDS RAISED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. ACCORD INGLY, THE AO IS HEREBY DIRECTED TO MAKE ASSESSMENT DENOVO IN THE LIGHT OF THE DISCUSSIONS HEREINABOVE. ITA NO. 169/JP/2014 SMT. ANITA SODHI VS. ITO, WARD- 1(3) ,JAIPUR . 7 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /05/20 16. SD/- SD/- FOE FLAG ;KNO DQY HKKJR (VIKRAM SINGH YADAV) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 /5/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. ANITA SODHI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1 (3), JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.169/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR