Shri Bhalchandra Pandurang Tupe, through L/h. Milind P. Tupe, Pune V. Income-tax Officer,

ITA 1763/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1036 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Cost of acquisition; Fair market value; Valuation report; Validity of assessment; Reason to believe
• Section: 143(3); 50C; 147; 148; 6; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1759/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2005-06 SMT. INDUMATI JAISING TUPE, M/S. MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO. : 84, WELLESLEY ROAD, NEAR RTO, PUNE-411001 PAN : ADYPT2890C ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT / ITA NO. 1760/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2005-06 SMT. VIMAL RAMCHANDRA TUPE, M/S. MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO. : 84, WELLESLEY ROAD, NEAR RTO, PUNE-411001 PAN : AEEPT1508J ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT 2 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 / ITA NO. 1762/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2005-06 SMT. REKHA VIJAY SHIRKE, M/S. MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO. : 84, WELLESLEY ROAD, NEAR RTO, PUNE-411001 PAN : BAXPS6041K ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT / ITA NO. 1763/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2005-06 SHRI BHALCHANDRA PANDURANG TUPE, M/S. MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO. : 84, WELLESLEY ROAD, NEAR RTO, PUNE-411001 PAN : AEEPT1587R ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT ASSESSEE BY : SHRI NEELESH KHANDELWAL REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 08-09-2016 / DATE OF PRONOUNCEMENT : 09-09-2016 3 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 * / ORDER PER VIKAS AWASTHY, JM : THESE FOUR APPEALS BY THE FOUR ASSESSEES ARE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE FOR THE ASSES SMENT YEAR 2005-06 IN THEIR RESPECTIVE CASES. THE IMPUGNED ORDERS IN ITA NOS. 1759 & 1763/PN/2014 ARE DATED 01-07-2014 AND ITA NO S. 1760 & 1762/PN/2014 ARE DATED 30-06-2014. SINCE, THE APPEALS ARE ARISING FROM SAME SET OF FACTS, THESE APPEALS ARE TAKEN UP TOGET HER FOR ADJUDICATION AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. FOR THE SAKE OF CONVENIENCE WE ARE TAKING FACTS FROM ITA NO. 1759/PN/2014. THE ASSESSEE ALONG WITH HER FAMILY MEMBE RS HAD TRANSFERRED LAND SITUATED AT S. NO. 201, SADESATRA NALI, HAD APSAR, PUNE ADMEASURING 7740 R TO M/S. R.R. TUPE BUILDERS PVT. LTD. VID E DEVELOPMENT AGREEMENT DATED 31-04-2004 FOR ` 57,46,500/-. THUS, THE LAND WAS SOLD AT ` 975/- PER SQ. MTRS. THE LAND TRANSFERRED BY THE ASSESSEES WAS AN ANCESTRAL PROPERTY AND THE FAIR MARKE T VALUE OF THE LAND AS ON 01-04-1981 WAS TAKEN AT ` 205/- PER SQ. MTRS. THE ASSESSEE WAS HAVING 1/7 TH SHARE IN THE LAND. THE LAND TRANSACTION WAS SHOWN BY THE ASSESSEE IN ITS INDIVIDUAL CAPACITY. A SEARCH AND S EIZURE ACTION WAS CARRIED OUT IN THE CASE OF SHRI RAHUL ROHIDAS TUPE AN D OTHERS ON 02-12-2006. AFTER EXAMINATION OF DOCUMENTS PRODUCED BE FORE THE ADIT(INV) IT TRANSPIRED THAT THE VALUE OF THE LAND FOR STA MP DUTY PURPOSE WAS CONSIDERED AT ` 54,16,150/-. SINCE, THE PROPERTY UNDER REFERENCE WAS AN ANCESTRAL PROPERTY, THE RESULTANT CAPIT AL GAIN ACCORDING TO THE DEPARTMENT SHOULD HAVE BEEN TAXED IN THE HANDS OF 4 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 THE HUF AND NOT IN THE HANDS OF THE INDIVIDUAL IN THE ASSE SSMENT YEAR 2005-06. NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06. ON PERUSAL OF COMPUTATION OF L ONG TERM CAPITAL GAIN FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOM E THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS ADOPTE D THE FAIR MARKET VALUE OF THE LAND AS ON 01-04-1981 AT ` 205 PER SQ. MTRS. THUS, THE VALUE OF LAND SOLD WAS WORKED AT ` 15,86,700/-. AFTER APPLYING THE INDEXED COST OF ACQUISITION, THE VALUE OF LAND SOLD DURING TH E FINANCIAL YEAR 2004-05 WAS ARRIVED AT ` 76,16,160/-. THE NET PROFIT/LOSS ON SALE OF LAND WAS ARRIVED AT (-) ` 69,660/-. THE ASSESSING OFFICER REFERRED THE MATTER TO GOVERNMENT VALUATION OFFICER FOR THE VALUATION OF LAND U/S. 55A/50C(2) OF THE ACT TO ARRIVE AT THE VALUATION AS ON 01 -04-1981 AND FAIR MARKET VALUE ON 31-04-2004. ON THE BASIS OF VALUATION REPORT THE ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN OF ` 37,92,900/-. THE SHARE OF THE ASSESSEE BEING 1/7 TH IN THE LAND WAS COMPUTED AT ` 5,41,843/-. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFER RED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSES SEE CHALLENGED THE ASSESSMENT ORDER ON MERITS AS WELL AS THE VALIDITY OF ASSESSMENT FRAMED U/S. 143(3) R.W.S. 147 INSTEAD OF SECTION 153C OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSE D THE APPEAL OF THE ASSESSEES UPHOLDING THE VALIDITY OF ASSESSMEN T ORDER, AS WELL AS ADDITION. NOW, THE ASSESSEES ARE IN SECOND APPEA L BEFORE THE TRIBUNAL. 3. THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL ARE AS UNDER : 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RES ORTING TO THE 5 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 PROVISIONS OF SEC. 148/147 INSTEAD OF PROVISIONS OF SEC. 153C BY THE AO FOR REOPENING THE ASSESSMENT IS IMPROPER, ERRONE OUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE C ASE. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FR AMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S. 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. WITHOUT PREJUDICE TO GROUND NO.1, IT BE HELD THAT O N FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PRO VISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVIS IONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDIC TION IN TERMS OF PROVISIONS OF SEC. 147. IT FURTHER BE HELD THAT TH E 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CON FIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S. 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE T HAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RES ORTING TO THE PROVISIONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT ON THE BASIS OF DEPARTMENT VALUATION OFFICER IN CAS E OF ANOTHER ASSESSEE IS IMPROPER, WITHOUT SATISFYING THE CONDIT IONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC. 147 . IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S. 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER REL IEF IN THIS RESPECT. 4. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE T HAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, IT BE HELD THAT, LONG TERM CAPITAL GAIN WORKED OUT BY THE AO IN PLACE OF THAT WORKED OUT BY THE APPELLANT IS IMPROPER, ERRONEOUS, CONTRARY T O THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE LONG TERM S CAPITAL LOSS AS WORKED OUT BY THE APPELLANT OF RS.9,951/- SHOULD HA VE BEEN ADMITTED AND ALLOWED IN PLACE OF LONG TERMS CAPITAL GAIN WORKED OUT BY THE AO AT RS.5,41,843/-. IT MAY FURTHER BE HELD THAT REJECTING THE VALUATION REPORT ISSUED BY A GOVERNMENT APPROVE D VALUER AND FRESH REFERENCE TO DEPARTMENT VALUATION OFFICER AS PER PROVISIONS OF 6 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 SEC. 55A IS IMPROPER, ERRONEOUS, CONTRARY TO THE PR OVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT MAY FURTHER BE HEL D THAT THE VALUATION REPORT ISSUED BY A GOVERNMENT APPROVED VALUER WHICH HAS BEEN ADOPTED BY THE APPELLANT FOR COMPUTATION OF LONG TE RM CAPITAL GAIN IS AS PER THE PROVISIONS OF LAW AND FACTS PREVAILING I N THE CASE. THE REFERENCE MADE TO DEPARTMENT VALUATION OFFICER U/S. 55A AND COMPUTATION OF LONG TERM GAIN MADE ON THIS BASIS BY THE AO & THAT CONFIRMED BY THE T' APPELLATE AUTHORITY BE SET ASID E. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 5. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE T HAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE FIRST APPELLATE AUTHORITY HAS NOT ADJUDICATED THE GROUND 4 RAISED B EFORE THE FIRST APPELLATE AUTHORITY. IT FURTHER BE HELD AND THE FIR ST APPELLATE AUTHORITY SHOULD BE DIRECTED TO ADJUDICATE THE GROUND NO.4 RA ISED BY THE APPELLATE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 6. WITHOUT PREJUDICE TO THE GROUND NO. 6, IT BE HELD T HAT ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PE R PROVISIONS & SCHEME OF THE ACT, RESORTING TO THE PROVISIONS OF S EC. 142A TREATING THE SALE OF ASSETS AS UNEXPLAINED ASSETS U/S. 69, 69A A ND 69B IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RES ORTING TO THE PROVISIONS OF SEC. 142A. IT FURTHER BE HELD THAT TH E 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN NOT ADJUDICATING THE GROUND NO.4 RAISED BY THE APPELLATE. THE COMPUTATION OF LONG TERM CAPITAL GAIN MADE BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BY ADOPTING VALUATION AS PER PROVISIONS OF SEC. 142A BE SET ASI DE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 7. THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MO DIFY, RECTIFY, DELETE, RAISE ANY GROUNDS OF APPEAL AT THE TIME OF H EARING. IDENTICAL GROUNDS HAVE BEEN RAISED BY ALL THE ASSESSEES IN THEIR RESPECTIVE CASES. 4. SHRI NEELESH KHANDELWAL APPEARING ON BEHALF OF THE ASSE SSEE SUBMITTED AT THE OUTSET THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN 7 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 THE CASE OF SMT. SANGEETA SANJAY GHULE VS. THE INCOME TAX OFFICER IN ITA NO. 1764/PN/2014 FOR THE ASSESSMENT YEAR 2005-06 DECIDED ON 30-06-2016 IN AN APPEAL BY SIMILARLY SITUATED ASSESSEE W HO WAS ONE OF THE CO-OWNERS OF LAND WHICH IS MATTER OF DISPUTE HAS ADJU DICATED THIS ISSUE. THE LD. AR OF THE ASSESSEE PLACED ON RECORD A COP Y OF THE ORDER OF TRIBUNAL IN ITA NO. 1764/PN/2014 (SUPRA). THE LD. AR POIN TED THAT THE CASE OF THE PRESENT ASSESSEES ARE IDENTICAL. THE LD . AR FURTHER FURNISHED THE COPY OF ORDER DATED 30-12-2009 PASSED U/ S. 147 OF THE ACT IN THE CASE OF LATE NAMDEO PANDURANG TUPE (HUF), WH EREIN REASSESSMENT PROCEEDING INITIATED FOR SIMILAR REASONS WERE DROPP ED. 5. ON THE OTHER HAND SHRI P.L. KUREEL REPRESENTING THE D EPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS). HOWEVER, THE LD. DR ADMITTED THAT THE TRIBUNAL IN THE CASE OF SIMILARLY SITUATED CO-OWNERS HAD ADJUDICATED THE IDENT ICAL ISSUES AS RAISED BY THE ASSESSEES/APPELLANTS IN THE PRESENT SET OF APPEALS. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. AS HAS BEEN POINTED OUT EARLIER THE PRESENT SET OF APPEALS ARE ARISING FROM THE SAME SET OF FACTS. THEREFORE, THE FINDINGS GIVEN BY US ON THE BASIS OF FACTS EXTRACTED FROM ITA NO. 1759/PN/2014 WOULD MUTATIS MUTANDIS APPLY TO THE OTHER APPEALS I.E. ITA NOS. 1760, 1762 & 1763/PN/2014. 7. THE LD. AR OF THE ASSESSEE HAS PLACED ON RECORD A CO PY OF THE ORDER OF TRIBUNAL IN THE CASE OF SMT. SANGEETA SANJAY GH ULE VS. THE INCOME TAX OFFICER (SUPRA) CONTENDING THAT THE FACTS IN THE PRESENT SET OF APPEALS AND THE AFORESAID APPEAL ARE IDENTICAL. A PERUSA L OF THE 8 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 ORDER OF TRIBUNAL SHOWS THAT THE GROUNDS OF APPEAL RAISED IN THE CASE OF SMT. SANGEETA SANJAY GHULE VS. THE INCOME TAX OFFICER (SUP RA) AND THE PRESENT SET OF APPEALS ARE IDENTICAL AND THE FACTS N ARRATED IN THE ORDER ARE SIMILAR. THE TRIBUNAL AFTER DELIBERATING ON THIS ISSUE RAISED IN THE APPEAL HAS HELD AS UNDER : 16. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN R ELATION TO TWO FACETS I.E. (I) SALE CONSIDERATION TO BE ADOPTED AND (II) FAIR MARKET VALUE AS ON 01.04.1981. THE CONTENTION OF THE LEARNED AUTHORIZ ED REPRESENTATIVE FOR THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT WHERE THE INCOME HAD BEEN CORRECTLY DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME, THEN IN THE ABSENCE OF ANY REASONS TO BELIEVE OF ESCAPEMENT OF INCOME, THERE WAS NO REASON TO INITIATE THE RE-ASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE. THE FIRST OBJECTION WAS AGAINST THE REFERENCE TO DV O UNDER SECTION 55A OF THE ACT TO DETERMINE THE FAIR MARKET VALUE AS ON 01 .04.1981. UNDER THE PRE-AMENDED PROVISIONS OF SECTION 55A OF THE ACT WI TH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF A CAPITAL ASSET, THE ASSES SING OFFICER IS EMPOWERED TO REFER THE VALUATION OF CAPITAL ASSET T O A VALUATION OFFICER UNDER CLAUSE (A) IN CASE WHERE THE VALUE OF AN ASSE T AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH ESTIMATE MADE BY THE REGISTERED VALUER AND WHERE THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS MARKET VALUE. CLAUSE (B) REFERS TO CASES WHICH WERE OTHER THAN CLAUSE (A) I.E. WHERE THE VALUE OF AN ASSET DECLARED BY THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE REPORT OF A REGISTERED VALUER. IN THE FACTS OF PRESENT CASE, THE ASSESSEE HAD DECLARED THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE BASIS OF REGIS TERED VALUER REPORT AND THE SAME IS UNDISPUTED, HENCE, IN THE PRESENT C ASE, PROVISIONS OF CLAUSE (A) TO SECTION 55A OF THE ACT ARE ATTRACTED. THE PRE-AMENDED PROVISIONS OF SAID CLAUSE VERY CLEARLY PROVIDED THA T A REFERENCE COULD BE MADE TO THE VALUATION OFFICER ONLY IN CASES WHERE T HE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED BY THE ASSESSEE WAS LESS THAN ITS FAIR MARKET VALUE. IN THE INSTANT CASE, T HE REGISTERED VALUER HAD WORKED OUT THE VALUE OF PROPERTY AT RS.205/- PER SQ .MTR., WHEREAS THE DVO HAS WORKED OUT THE VALUE OF PROPERTY AT RS.101/ - PER SQ.MTR. CONSEQUENTLY, WHERE THE VALUE AS DETERMINED BY THE DVO WAS LESSER THAN THE VALUE AS DECLARED BY THE ASSESSEE AS ON 01 .04.1981, THEN THE REFERENCE TO THE DVO UNDER SECTION 55A OF THE ACT I S NOT WARRANTED. IN THIS REGARD, I FIND SUPPORT FROM THE RATIO LAID DOW N BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS (SUPRA), W HEREIN IT HAS BEEN 9 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 HELD THAT WHERE THE ASSESSING OFFICER REFERRED THE ISSUE OF VALUATION TO THE DVO ONLY BECAUSE IN HIS VIEW, THE VALUATION OF THE PROPERTY AS ON 01.04.1981 AS MADE BY THE RESPONDENT-ASSESSEE WAS H IGHER THAN THE FAIR MARKET VALUE, THUS, IN SUCH CASES, INVOCATION OF SECTION 55A OF THE ACT WAS NOT JUSTIFIED. THE HONBLE HIGH COURT FURT HER HELD THAT THE AMENDMENT TO SECTION 55A OF THE ACT IN 2012 WAS MAD E EFFECTIVE FROM 01.07.2012 AND HENCE, WAS TO BE APPLIED PROSPECTIVE LY. IT WAS FURTHER HELD THAT WHERE THE ISSUE WAS COVERED BY SECTION 55 A [CLAUSE (A)] OF THE ACT, RESORT COULD NOT BE MADE TO THE RESIDUARY CLAU SE PROVIDED IN SECTION 55A(B)(II) OF THE ACT. THE CBDT CIRCULAR DATED 25. 11.1972 WAS HELD TO BE NOT APPLICABLE. FOLLOWING THE ABOVE SAID PROPOSITI ON AS LAID DOWN BY THE JURISDICTIONAL HIGH COURT AND APPLYING THE SAME TO THE FACTS OF THE PRESENT CASE, IN THE INSTANT CASE ALSO, REFERENCE W AS MADE TO THE VALUATION OFFICER IN ORDER TO DETERMINE THE FAIR MA RKET VALUE AS ON 01.04.1981 ON THE PRETEXT THAT THE FAIR MARKET VALU E AS DECLARED BY THE ASSESSEE WHICH WAS BACKED BY REGISTERED VALUER REPO RT, WAS HIGHER, WHICH IS NOT CORRECT. 17. ANOTHER ASPECT TO BE KEPT IN MIND IS THAT THE V ALUATION BY THE DVO WAS IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND THE SAME WAS APPLIED TO THE CASE OF THE ASSESSEE. THE HONBLE S UPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (SUPRA) HAS LAID DOWN THAT THE OPINION OF DVO PERSE IS NOT INFORMATION FOR THE PURPOSE OF REO PENING ASSESSMENT UNDER SECTION 147 OF THE ACT. THE HONBLE SUPREME COURT FURTHER HELD THAT THE ASSESSING OFFICER HAS TO APPLY HIS MIND TO THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELIEF THEREON. 18. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HO NBLE HIGH COURT OF GUJARAT IN AAVKAR INFRASTRUCTURE COMPANY VS. DCI T (SUPRA), WHERE THE ASSESSING OFFICER HAD REFERRED TO THE DVO FOR DETER MINING COST OF CONSTRUCTION OF PROJECT OF ASSESSEE AND BASED UPON REPORT OF DVO, REOPENED THE ASSESSMENT FOR THE YEAR UNDER CONSIDER ATION ON THE GROUND THAT THE ASSESSEE HAD UNDER-REPORTED THE COST OF IN VESTMENT. WHERE THE ASSESSING OFFICER HAD NOT INDEPENDENTLY APPLIED HIS MIND TO RECORD THE CASE AS TO COST OF IMPROVEMENT AS DECLARED BY THE A SSESSEE WAS IN FACT UNDER-REPORTED AND THE REOPENING OF ASSESSMENT MERE LY ON THE BASIS OF REPORT OF DVO WAS HELD TO BE WITHOUT ANY AUTHORITY OF LAW AND COULD NOT BE SUSTAINED. 19. APPLYING THE ABOVE SAID PROPOSITION TO THE FACT S OF THE PRESENT APPEAL, IT IS CLEAR THAT THE ASSESSMENT IN THE CASE WAS REOPENED IN ORDER 10 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 TO RE-COMPUTE THE INCOME FROM LONG TERM CAPITAL GAI NS IN THE HANDS OF ASSESSEE ON ACCOUNT OF COST OF ACQUISITION DECLARED BY THE ASSESSEE AT RS.205/- PER SQ.MTR. THE REOPENING OF ASSESSMENT W AS ALSO ON ACCOUNT OF REFERENCE MADE TO THE DVO UNDER SECTION 50C OF T HE ACT, THE SAME WILL BE REFERRED IN THE PARAS HEREINAFTER. 20. NOW, COMING TO THE REASONS RECORDED FOR REOPENI NG THE ASSESSMENT I.E. ON THE BASIS OF REPORT OF DVO, WHER EIN THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION SO COLLECTED AND HAD BASED HIS VIEW ON THE DVO REPORT OBTAINED IN THE CA SE OF SUNIL RAMACHANDRA TUPE (HUF) AND HAD RECORDED THE REASONS FOR REOPENING THE ASSESSMENT ON THE BASIS THAT THERE WAS ESCAPEME NT OF INCOME, WHERE THE ASSESSEE HAD CLAIMED THE COST OF ACQUISIT ION AS ON 01.04.1981 ON HIGHER VALUE OF RS.205/- PER SQ.MTR. AS AGAINST THE DVO REPORT OF RS.101/- PER SQ.MTR. FIRST OF ALL, THE ACTION OF A SSESSING OFFICER IN RECORDING THE REASONS FOR REOPENING THE ASSESSMENT DO NOT STAND IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (SUPRA). SECONDLY, IN ANY CASE, N O REFERENCE COULD BE MADE UNDER SECTION 55A OF THE ACT TO THE DVO TO OBT AIN FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 ON THE PRETEXT THAT TH E VALUATION OF PROPERTY DECLARED BY THE ASSESSEE WAS HIGHER THAN THE FAIR M ARKET VALUE AS ON THAT DATE. WHERE NO SUCH REFERENCE COULD BE MADE T O THE DVO UNDER SECTION 55A OF THE ACT AND IN THE ABSENCE OF VALUER REPORT, NO REASONS COULD BE RECORDED FOR ESCAPEMENT OF INCOME AND ON T HIS GROUND ALSO, THERE IS NO MERIT IN THE REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT. 21. ANOTHER ASPECT OF THE ISSUE IS THAT THE PERUSAL OF DVO REPORT, WHICH IS REPRODUCED BY THE CIT(A) AT PAGES 16 AND 1 7 OF THE APPELLATE ORDER REFLECTS THAT IN THE VICINITY OF THE AREA, TH ERE WERE SALES INSTANCE AVAILABLE ON SALE OF PLOT OF LAND AT RS.298/- PER S Q.MTR. ON 18.08.1984. THERE IS ANOTHER SALE INSTANCE OF FLAT BEING SOLD O N 03.09.1981, WHERE THE LAND RATE WAS TAKEN AT RS.253/- PER SQ.MTR. BOT H THESE INSTANCES WERE IGNORED AND THE DVO ADOPTED DEVELOPMENT METHOD TO WORK OUT THE VALUE OF THE LAND AT RS.101/- PER SQ.MTR., WHICH IS NOT JUSTIFIED. 22. NOW, COMING TO THE SECOND REFERENCE MADE BY THE ASSESSING OFFICER UNDER SECTION 50C OF THE ACT, WHEREIN THE S ALE VALUE OF THE SAID PROPERTY AS ON 04.08.2004 HAS BEEN WORKED OUT AT RS .56,45,250/- AND THE ASSESSEE HAD DECLARED THE SALE CONSIDERATION OF RS.56,45,250/- ONLY. FIRST OF ALL, THERE IS NO DIFFERENCE IN THE SALE VA LUE DECLARED BY THE ASSESSEE AND AS COMPUTED BY THE DVO AS ON 04.08.200 4. SECONDLY AND 11 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 MOST IMPORTANTLY, NO REFERENCE COULD BE MADE TO THE DVO UNDER THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH ARE TO BE INVOKED IN SPECIAL CIRCUMSTANCES, WHEREIN THE CONSIDERATION RECEIVED O R ACCRUING AS A RESULT OF TRANSFER BY THE ASSESSEE OF A CAPITAL ASSET BEIN G LAND OR BUILDING OR BOTH IS OTHER THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF STATE GOVERNMENT, FOR THE PURPOSE OF PAYMENT OF STA MP DUTY IN RESPECT OF SUCH TRANSFER. IN CASE, THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE SO ADOPTED OR ASSESSED BY STAMP VALU ATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON DATE OF TRANSFER AND WHERE THE VALUE SO ADOPTED OR ASSESSED HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY AUTHORITIES, COURTS OR HIGH COURT, THEN THE ASSESSING OFFICER MA Y REFER THE VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER. THE PRE SENT CASE IS NOT A CASE, WHEREIN THE STAMP VALUATION OFFICER HAS ASSESSED TH E VALUE OF CAPITAL ASSET SOLD BY THE ASSESSEE AND THE CO-OWNER AT A HI GHER RATE. IN THE ABSENCE OF THE SAME, NO REFERENCE COULD BE MADE UND ER THE GARB OF SECTION 50C OF THE ACT. WHERE NO SUCH REFERENCE CO ULD BE MADE, THERE COULD NOT BE ANY REASON TO BELIEVE THAT THERE IS ES CAPEMENT OF INCOME ON ACCOUNT OF SUCH REPORT OF THE DVO AS ON DATE OF SAL E I.E. 04.08.2004. IN THE ABSENCE OF ANY REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME, NO ACTION CAN BE INITIATED UNDER SECTION 148/147 OF THE ACT. THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROK ERS (P) LTD. (SUPRA) HAS ELABORATED ON THE SCOPE AND EFFECT OF SECTION 1 47 OF THE ACT AND WHERE THE SAME CAN BE INVOKED. HOWEVER, THE BASIC CONDITION FOR THE ASSESSING OFFICER TO COME TO A FINDING THAT THERE I S A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN ORDER TO CONF ER JURISDICTION ON HIM TO REOPEN THE ASSESSMENT STANDS. THE SAID COND ITIONS HAVING NOT BEEN FULFILLED IN THE PRESENT APPEAL, THERE IS NO M ERIT IN RECORDING OF REASONS FOR REOPENING THE ASSESSMENT IN THE CASE OF ASSESSEE AND CONSEQUENTLY, THE EXERCISE OF RECORDING OF REASONS UNDER SECTION 147 OF THE ACT MERITS TO BE SET-ASIDE. THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT IS INVALID AND THE ASSESSMENT PROCEEDINGS COMPL ETED THEREIN ARE ALSO THUS, INVALID. REVERSING THE ORDER OF CIT(A), THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME OF ASSESSEE AS DECLA RED BY HER IN THE RETURN OF INCOME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 23. THE FACTS AND ISSUE IN ITA NO.1761/PN/2014 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.1764/PN/2014 AND THE DECI SION IN ITA NO.1764/PN/2014 SHALL APPLY MUTATIS AND MUTANDIS TO ITA NO.1761/PN/2014. 12 ITA NOS. 1759, 1760, 1762 & 1763/PN/2014 24. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 8. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FINDING S OF CO- ORDINATE BENCH OF THE TRIBUNAL AND HAS FAIRLY ADMITTED THA T THE FACTS ARE SIMILAR. IN SUCH CIRCUMSTANCES WE FIND NO REASON TO T AKE A CONTRARY VIEW. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL IN THE CASE OF SMT. SANGEETA SANJAY GHULE VS. THE INCOME TAX O FFICER (SUPRA), THE PRESENT SET OF APPEALS ARE PARTLY ALLOWED IN THE SAME TERMS. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 09 TH DAY OF SEPTEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 09 TH SEPTEMBER, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE