Shankar Lal Agarwala, Kolkata V. ITO, WD-36(2), KOLKATA, Kolkata

ITA 1749/KOL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1657 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 08-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMITAVA BHATTACHARJEE CIT RE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC, KOLKATA [BEFORE SHRI P.M. JAGTAP, AM] I.T.A. NO. 1749/KOL/2014 ASSESSMENT YEAR: 2010-11 SHANKAR LAL AGARWALA..........................................................................APPELLANT 405, SWAIKA CENTRE, A-4, POLLOCK STREET, KOLKATA 700 001 [PAN: ACQPA 9623 H] INCOME TAX OFFICER,...................RESPONDENT WARD NO. 36(2), KOLKATA, AAYAKAR BHAWAN, 110, SHANTI PALLI, PURVA, 8 TH FLOOR, KOLKATA 700 107 APPEARANCES BY: SHRI PRADEEP KUMAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI AMITAVA BHATTACHARJEE, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : JANUARY 11, 2018 DATE OF PRONOUNCING THE ORDER : FEBRUARY 09, 2018 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS) 20, KOLKATA DATED 10.06.2014 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE ADDITION MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL WHO DERIVES INCOME FROM INTEREST AND PROFIT FROM SHARE DEALING. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 03.08.2010 DECLARING A TOTAL INCOME OF RS. 37,015/-. THE ASSESSEE WAS ONE OF THE SEVEN JOINT OWNERS OF THE PROPERTY INHERITED FROM LT. SHRI P.D. BHIWANIWALA. THE SAID PROPERTY WAS SOLD DURING THE YEAR UNDER 2 I.T.A. NO. 1749/KOL/2014 ASSESSMENT YEAR: 2010-11 SHANKAR LAL AGARWALA CONSIDERATION FOR THE NET CONSIDERATION OF RS. 58,00,000/- OUT OF WHICH THE ASSESSEE GOT RS. 12,25,714/- BEING 22.86% OF THE TOTAL NET SALE CONSIDERATION AS HIS SHARES. IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, LONG TERM CAPITAL GAIN ARISEN FROM THE SALE OF THE SAID PROPERTY WAS NOT DECLARED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE, HOWEVER, FURNISHED THE COMPUTATION OF HIS LONG TERM CAPITAL GAIN OF RS. 9,58,994/- AND OFFERED THE SAME FOR TAXATION. IN THE SAID COMPUTATION, DEDUCTION ON ACCOUNT OF COST OF IMPROVEMENT WAS CLAIMED BY THE ASSESSEE BEING LABOUR CHARGES INCURRED FOR FILLING OF LAND. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE TO SUPPORT AND SUBSTANTIATE THIS CLAIM, THE A.O. DID NOT ALLOW THE DEDUCTION ON ACCOUNT OF COST OF IMPROVEMENT. THE A.O. ALSO FOUND THAT THE VALUE OF THE PROPERTY SOLD BY THE ASSESSEE AND OTHER JOINT OWNERS WAS ASSESSED BY STAMP VALUATION AUTHORITY AT RS. 1,45,53,702/-. TAKING INTO CONSIDERATION THE SAID VALUE AND ALLOWING DEDUCTION ON ACCOUNT OF INDEXED COST ACQUISITION, THE SHARE OF THE ASSESSEE IN THE LONG TERM CAPITAL GAIN ARISEN FROM THE SALE OF THE PROPERTY WAS COMPUTED BY THE A.O. AT RS. 32,73,693/- AND ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 27.12.2012. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND SINCE THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF HIS CASE WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(A), HE PROCEEDED TO CONFIRM THE ADDITION MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON 3 I.T.A. NO. 1749/KOL/2014 ASSESSMENT YEAR: 2010-11 SHANKAR LAL AGARWALA ACCOUNT OF LONG TERM CAPITAL GAIN FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO 3 OF HIS IMPUGNED ORDER: THERE IS ONLY ONE ISSUE INVOLVED IN ALL THE GROUNDS OF APPEAL WHICH RELATES TO ADDITION OF RS. 32,73,633/- MADE BY THE A.O. ON ACCOUNT OF HIS SHARE ON THE PROPERTY SOLD ON WHICH STAMP VALUATION AUTHORITY TAKEN THE VALUE AT RS. 1,45,53,702/-. THE FACT OF THE CASE IS THAT THE A.O. FOUND THAT THERE WAS PROPERTY PURCHASED BY LATE PURSHOTTAM DAS BHIWANIWALA ON 31.05.1982 AT RS. 40,200/-. THE SAID PROPERTY WAS INHERITED BY FOUR SONS AND THREE DAUGHTERS OF THE SAID KARTA OF HUF. THE PROPERTY WAS SOLD ON 09.11.2009 AT TOTAL CONSIDERATION OF RS. 60,00,000/- AS PER DEED OF CONVEYANCE DATED 09.11.2009 FOR WHICH RS. 2,00,000/- WAS PAID TO SHRI SOUMITRA DAS RAY AS BROKERAGE CHARGES BEING THE CONFIRMING PARTY. THE VALUE OF THE SAID PROPERTY WAS ASSESSED AT RS. 1,45,53,702/- UNDER RULE 43 OF W.B. REGISTRATION RULES, 1962. HOWEVER, THE APPELLANT DID NOT SHOW CAPITAL GAINS ON HIS SHARE RECEIVED FROM THE SALE OF THE AFORESAID PROPERTY. AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND THAT THE APPELLANT AS CO-OWNER OF THE PROPERTY. THE PROPERTY WAS SOLD DURING THE YEAR. THE VALUE OF THE PROPERTY WAS TAKEN BY THE STAMP VALUATION AUTHORITY AT RS. 1,45,53,702/-. THE APPELLANT DID NOT INCLUDE THE CAPITAL GAINS AROSE ON SALE OF THE PROPERTY TO THE EXTENT OF HIS SHARE IN THE PROPERTY. THEREFORE, THE A.O. HAD RIGHTLY CALCULATED LONG TERM CAPITAL GAIN ON THE SAME. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE A.O.S ORDER. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY CONTENTION RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE ASSESSEES CASE ON THE ISSUE OF ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN IS THAT THE VALUE OF THE PROPERTY ASSESSED BY THE STAMP VALUATION AUTHORITY WAS NOT THE CORRECT FAIR MARKET VALUE AS ON THE DATE OF SALE AND THE A.O. WAS NOT JUSTIFIED IN ADOPTING THE SAME AS SALE CONSIDERATION BY INVOKING SECTION 50C OF THE ACT WITHOUT REFERRING THE 4 I.T.A. NO. 1749/KOL/2014 ASSESSMENT YEAR: 2010-11 SHANKAR LAL AGARWALA ISSUE OF VALUATION TO THE DVO. THE LEARNED DR, ON THE OTHER HAND, HAS CONTENDED THAT THERE WAS NO OBJECTION RAISED BY THE ASSESSEE TO THE VALUATION OF THE PROPERTY AS DETERMINED BY THE STAMP VALUATION AUTHORITY DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE A.O. AND IN THE ABSENCE OF THE SAME, THE A.O. WAS NOT REQUIRED TO REFER THE MATTER TO THE DVO FOR DETERMINING THE VALUE OF THE PROPERTY. IN THIS REGARD, HE HAS REFERRED TO THE RELEVANT PORTION OF THE ASSESSMENT ORDER TO SHOW THAT A SPECIFIC OPPORTUNITY WAS GIVEN BY THE A.O. TO THE ASSESSEE TO OFFER HIS EXPLANATION IN THE MATTER, BUT THE ASSESSEE FAILED TO AVAIL THE SAME AND ALSO FAILED TO RAISE ANY SPECIFIC OBJECTION TO THE VALUE OF THE PROPERTY AS ASSESSED BY STAMP VALUATION AUTHORITY. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE CASE OF THE ASSESSEE WAS NOT REPRESENTED PROPERLY BEFORE THE ASSESSING OFFICER AND URGED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO FILE THE VALUATION REPORT OF THE APPROVED VALUER. I AM UNABLE TO ACCEPT THIS STAND OF THE LEARNED COUNSEL FOR THE ASSESSEE. AS SPECIFICALLY PROVIDED IN SUB-SECTION (2) OF SECTION 50C, THE ASSESSING OFFICER IS REQUIRED TO REFER THE VALUATION OF THE CAPITAL ASSET BEING LAND OR BUILDING OR BOTH TO A VALUATION OFFICER BEFORE INVOKING THE PROVISIONS OF SECTION 50C ONLY WHERE THE ASSESSEE CLAIMS SPECIFICALLY BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY IN SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF THE TRANSFER. IN THE PRESENT CASE, THERE IS NOTHING TO SHOW THAT SUCH CLAIM WAS SPECIFICALLY MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND EVEN THE LEARNED COUNSEL FOR THE ASSESSEE IS UNABLE TO DISPUTE THIS POSITION. I, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) CONFIRMING THE ADDITION MADE BY THE A.O. TO THE TOTAL INCOME OF THE 5 I.T.A. NO. 1749/KOL/2014 ASSESSMENT YEAR: 2010-11 SHANKAR LAL AGARWALA ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN BY INVOKING THE PROVISIONS OF SECTION 50C AND UPHOLDING THE SAME, I DISMISS THIS APPEAL FILED BY THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 09, 2018. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED: 09/02/2018 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. SHANKAR LAL AGARWALA, 405, SWAIKA CENTRE, 4-A, POLLOCK STREET, KOLKATA 700 001. 2. ITO, WARD 36(2), AAYAKAR BHAWAN, 110, SHANTIPALLY, PURVA, 8 TH FLOOR, KOLKATA 700 107. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, KOLKATA