KANTA AGARWAL, MUMBAI V. DCIT 24(3), MUMBAI

ITA 1781/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2294 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 04-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-03-2013
• Court: TRIBUNAL
• Assessee Lawyers: R C JAIN
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Cost of acquisition; Valuation report
• Section: 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACOUNTANT MEMBER) I.T.A. NO. 1781/MUM/2013 (ASSESSMENT YEAR: 2008-09) SMT. KANTA AGARWAL 07, RAJNIKETAN, S.V. ROAD GOREGAON (W), MUMBAI VS DY.CIT 24(3) MUMBAI PAN : AEIPA3617H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R.C. JAIN RESPONDENT BY SHRI G A NESH BARE DATE OF HEARING : 12-07-2016 DATE OF PRONOUNCEMENT : 27 -07-2016 O R D E R PER ASHWANI TANEJA, AM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS) [HEREINAFTER CALLED CIT(A)] D T 18-11-2010 FOR A.Y. 2008-09 ON THE FOLLOWING GROUNDS: 1. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE C ASE & IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS ) WAS NOT JUSTIFIED IN CONFIRMING THE INCREASE IN SALE CO NSIDERATION BY RS 70.27 LACS DONE BY AO BY APPLYING PROVISIONS OF SEC. 50C OF INCOME TAX ACT FOR CALCULATING LONG TERM CAP ITAL GAINS ON SALE OF PLOT OF LAND. 2 I.T.A. NO.178 /MUM/2013 2. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ID CIT(A) AND AO WERE NOT JUSTIFIED I N REJECTING THE VALUATION REPORT OF GOVERNMENT REGISTERED VALUER VALUING THE ENTIRE PROPERTY AT RS . 1.84 CRORE INSTEAD OF RS. 3.07 CRORE. 3. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ID CIT(A) AND AO WERE NOT JUSTIFIED IN NOT CONSIDERING THAT THE APPELLANT HAD SOLD AN UNFINISHED DILAPIDATED STRUCTURE WHEREAS TH E STAMP OFFICER HAD WRONGLY VALUED IT HIGHER AS A COM PLETE FINISHED BUILDING. 4. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ID CIT(A) AND AO WERE NOT JUSTIFIED I N NOT CONSIDERING THE BREAKUP OF THE VALUE OF LAND & BUILDING GIVEN BY THE STAMP OFFICER WITH THE ORIGIN AL AGREEMENT ITSELF. 5. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ID CIT(A) AND AO WERE NOT JUSTIFIED I N STATING THAT APPELLANT NEVER OBJECTED TO THE VALUE ADOPTED BY THE A.O. U/S 50 C(2) DURING ASSESSMENT PROCEEDING WHEN THE APPELLANT HAD ALREADY OBJECTED TO IT AND SAID FACT ALSO MENTIONED BY A.O. HIMSELF ON PAGE 2, PARA 3 OF HIS ORDER. 6. UNDER THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ID CIT(A) AND AO WERE NOT JUSTIFIED I N NOT GRANTING DEDUCTION U/S 54F OF THE I. TAX ACT FR OM LONG TERM CAPITAL GAINS FOR THE INVESTMENT IN RESID ENTIAL HOUSE. 2. GROUNDS 1 5 : THESE GROUNDS DEAL WITH GRIEVANCE OF THE ASSESSEE IN ESTIMATING THE SALE CONSIDERATION OF THE PLOT OF LA ND SOLD BY THE ASSESSEE AT RS.70.27 BY APPLYING PROVISIONS OF SECTION 50C OF T HE ACT, THAT TOO, WITHOUT CONSIDERING THE OBJECTION OF THE ASSESSEE AND REQUE ST OF THE ASSESSEE FOR REFERRING THE MATTER TO THE VALUATION OFFICER. 3 I.T.A. NO.178 /MUM/2013 2.1. IT WAS SUBMITTED DURING THE COURSE OF HEARING THAT IN THIS CASE, ASSESSEE HAD OBJECTED TO THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND, THEREFORE, AO WAS DUTY BOUND TO REFER THE MATTER TO THE VALUATION OFFICER. 2.2. L D. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BEL OW AND DID NOT REBUT THE FACTUAL SUBMISSION MADE BY THE ASSESSEE. 2.3. WITH THE ASSISTANCE OF THE PARTIES, IT IS NOTED FR OM THE PERUSAL OF THE ASSESSMENT ORDER THAT ASSESSEE HAD CLEARLY MENTIONE D IN ITS REPLY DT 8-11-2010 THAT ASSESSEE DID NOT ACCEPT THE MARKET VALUE ADOPT ED BY THE STAMP VALUATION OFFICER FOR STAMP DUTY PURPOSE. THE ASSESSEE ALSO MADE A REQUEST THAT IF THE SALE CONSIDERATION WAS TO BE ADOPTED AT MARKET VALU E IN LINE WITH THE STAMP DUTY VALUATION, THEN, FOR THE PURPOSE OF COST OF AC QUISITION ALSO, THE MARKET VALUE ADOPTED BY THE STAMP VALUATION DEPARTMENT SHO ULD BE CONSIDERED AS COST OF ACQUISITION OF THE ASSESSEE AND ACCORDINGLY , THE SAME SHOULD BE INDEXED, TO BE CONSIDERED FOR COMPUTING CAPITAL GAI NS. FURTHER, THE ASSESSEE ALSO SUBMITTED COPY OF LETTER OF STAMP DUTY DEPARTM ENT MENTIONING ABOUT COST OF ACQUISITION OF THE ASSESSEE, STAMP DUTY PAID BY THE ASSESSEE AT THAT TIME AND ALSO MARKET VALUE AS PER STAMP VALUATION AUTHOR ITY. THUS, ON THE BASIS OF ALL THESE SUBMISSIONS, IT CAN BE CLEARLY SAID THAT ASSESSEE HAD OBJECTED TO THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. LD . CIT(A) HAS WRONGLY STATED THAT THE ASSESSEE DID NOT OBJECT TO THE VALUE ADOPT ED BY THE STAMP VALUATION AUTHORITY. THUS, ORDER OF LD. CIT(A) IS BASED UPON INCORRECT FACTS AND FINDINGS. FURTHER, THE DEEMING PROVISIONS OF SECTION 50C CAN PROVE TO BE QUITE HARSH AT TIMES. THUS, IN THE INTEREST OF JUSTICE AND FAIRNE SS, IT IS EXPECTED FROM THE REVENUE AUTHORITIES TO OFFER FULL OPPORTUNITY TO TH E ASSESSEE TO REBUT ALL THE ALLEGATIONS TO AVOID ANY UNJUST OR HARSH ASSESSMENT . UNDER THESE CIRCUMSTANCES, THE PRINCIPLES OF NATURAL JUSTICE DE MAND THAT IN CASE THE ASSESSEE DOES NOT ACCEPT VALUATION OF THE STAMP VAL UATION AUTHORITY, THEN, THE 4 I.T.A. NO.178 /MUM/2013 MATTER SHOULD BE REFERRED TO THE DVO AND THEREAFTER VALUATION REPORT SHOULD BE CONFRONTED TO THE ASSESSEE TO SEEK REPLY OF THE ASSESSEE. THE ASSESSEE WOULD BE FREE TO SUBMIT EVIDENCES IN SUPPORT OF HIS REPLY, AND SHALL BE FREE TO RAISE ALL THE LEGAL AND FACTUAL ISSUES. THUS, WE R ESTORE THESE GROUNDS BACK TO THE FILE OF THE AO TO COMPLY WITH OUR DIRECTION AS STATED ABOVE. THE AO SHALL DECIDE THIS ISSUE AFRESH AFTER TAKING INTO ACCOUNT ALL DETAILS AND EVIDENCES ON OBJECTIVE BASIS AS MAY BE BROUGHT BY THE ASSESSEE B EFORE THE AO FOR WHICH ADEQUATE OPPORTUNITY SHALL BE GIVEN. THUS, WITH TH ESE DIRECTIONS, THESE GROUNDS ARE SENT BACK TO THE FILE OF THE AO AND MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 3. GROUND 6: IN THIS GROUND, THE ASSESSEE HAS CONTESTED THE ACTI ON OF THE LOWER AUTHORITIES IN NOT GRANTING BENEFIT OF DEDUCT ION U/S 54F AGAINST THE LONG TERM CAPITAL GAINS ON ACCOUNT OF THE INVESTMENT MAD E IN RESIDENTIAL HOUSE. 3.1. THE BRIEF FACTS ARE THAT THE ASSESSEE DID NOT MAKE CLAIM OF DEDUCTION U/S 54F IN THE ORIGINAL RETURN OF INCOME. SUBSEQUENTLY , BEFORE THE LD. CIT(A), ASSESSEE MADE THE CLAIM AND ALSO FILED ADDITIONAL E VIDENCES TO PROVE THE ACQUISITION OF NEW RESIDENTIAL PROPERTY. THESE WERE SENT BY THE LD. CIT(A) TO THE AO FOR EXAMINATION AND FURNISHING REMAND REPORT . THE AO EXAMINED THE EVIDENCES AND DID NOT FIND ANYTHING WRONG. LD. CIT (A) DENIED THE CLAIM ON THE GROUND THAT NO CLAIM WAS MADE IN THE ORIGINAL RETUR N OF INCOME, AND THEREFORE, THE SAME CANNOT BE GRANTED TO THE ASSESSEE IN VIEW OF JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD 284 I TR 323 (SC). 3.2. DURING THE COURSE OF HEARING BEFORE US, LD. COUNSEL SUBMITTED THAT IT IS A WORTH NOTING THAT THESE EVIDENCES HAVE ALREADY BEEN EXAMINED BY THE AO, AND THEREFORE, THE BENEFIT OF CLAIM SHOULD NOT BE DENIE D MERELY BECAUSE THE CLAIM WAS OMITTED TO BE MADE IN THE RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT IN ANY CASE, THE APPELLATE AUTHORITIES HAVE AMPLE P OWERS UNDER THE LAW TO 5 I.T.A. NO.178 /MUM/2013 DIRECT THE AO TO GRANT THIS CLAIM. RELIANCE HAS BE EN PLACED IN THIS REGARD ON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS PRITHVI BROKERS & SHARES PVT LTD (ORDER DT 21-6-2012 ITA NO .3908 OF 2010). PER CONTRA, THE LD. DR RELIED UPON THE ORDERS OF LOWER AUTHORIT IES. 3.3. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND ALSO GONE THROUGH THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS PRITHVI BROKERS & SHARES PVT LTD (SUPRA) WHEREIN IT HAS BEEN HELD THAT THERE WAS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENTERTAIN AN ADDITIONAL CLAIM AND THAT HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD (SUPRA) MADE IT CLEAR THAT THE SAID JUDGEMENT OF THE HONBL E SUPREME COURT DOES NOT IMPINGE UPON THE POWERS OF THE TRIBUNAL U/S 254. I T IS FURTHER NOTICED BY US THAT IN THE ASSESSMENT ORDER, THE AO ENHANCED THE INCOME OF THE ASSESSEE BY INCREASING THE SALE CONSIDERATION ON DEEMED BASIS B Y APPLYING THE PROVISIONS OF SECTION 50C. UNDER SUCH A SCENARIO SPECIFICALLY , THE ASSESSEE SHOULD ALSO HAVE ALL THE RIGHTS TO MAKE A LEGAL CLAIM UNDER THE LAW. IT IS WELL SETTLED POSITION OF LAW THAT TAX SHOULD NOT BE COLLECTED EX CEPT WITH THE AUTHORITY OF LAW. THE REVENUE AUTHORITIES ARE OBLIGED UNDER THE LAW TO MAKE A FAIR ASSESSMENT OF TAXABLE INCOME AND TAX PAYABLE THEREO N, AS PER THE PROVISIONS OF THE ACT. THEY ARE NOT EXPECTED TO TAKE UNDUE ADV ANTAGE OF IGNORANCE OF THE ASSESSEE. IN OUR OPINION THE DOORS OF JUSTICE SHOU LD NOT HAVE BEEN SHUT IN THIS MANNER. THEREFORE, WE SEND THIS ISSUE BACK TO THE FILE OF THE AO, WHO SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSE E TO FURNISH ALL REQUISITE EVIDENCE IN SUPPORT OF ITS CLAIM U/S 54F. WITH T HESE DIRECTIONS, THIS GROUND IS ALSO SENT BACK TO THE FILE OF THE AO. 6 I.T.A. NO.178 /MUM/2013 4. IN THE RESULT, APPEAL IS TREATED AS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON THIS _27 TH _ DAY OF JULY, 2016. SD/- SD/- (AMIT SHUKLA) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : JULY, 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , A-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES