M/s B.M.J. Real Estate (P) Ltd., Ludhiana V. DCIT, Ludhiana

ITA 179/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6132 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 13-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S C JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.179/CHD/2013 ASSESSMENT YEAR : 2006-07 B.M.J.REAL ESTATE(P)LTD., VS. THE D.C.I.T., 65-I,SARABHA NAGAR, CIRCLE-VII, LUDHIANA. LUDHIANA. PAN: AABCB7823L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.C.JAIN RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 12.03.2014 DATE OF PRONOUNCEMENT : 28.04.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA IN APPEAL NO.436/IT/CIT(A)-I/LDH/2011-12 RELATING TO ASSESSME NT YEAR 2006-07 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF IN COME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THAT THE SALE PROCEEDS OF THE LAND WERE CONSIDERED AT RS 7360000/- AND AFTER INDEXATION THE LONG TERM CAPITAL GAINS ARRIVED AT RS 2532644/- AND AFTER ADJUSTING LOSS OF RS 5760/- THE RETURN INCOME WAS RS 2526884/-. (A) THAT THE SALE CONSIDERATION U/S 50C OF THE INCOME T AX ACT WAS CONSIDERED BY THE A.O IN THE ORIGINAL ASSESSMENT AT RS. 12532000/- ON THE BASIS OF STAMP DUTY ALTHOUGH THE PROCEEDS OF SALES WAS RECEIVED AT RS 7 360000/-. THE A.O ASSESSED THE INCOME ACCORDINGLY. 2 (B) THAT THE MATTER WAS REFERRED TO VALUATION OFFICER A FTER SET ASIDE BY THE ITAT AND THE VALUATION OFFICER ASSESSED THE VALUATION OF PRO PERTY AT RS 29798550/- AND IN THE APPEAL BEFORE THE CIT(A)-I HAS RESTRICTED THE S AME TO RS.12532000/- CONSIDERING THE VALUE CONSIDERED FOR THE PURPOSES U /S 50C OF THE INCOME TAX ACT 1961. THAT THE ID CIT(A)-I HAS NOT CONSIDERED THE IMPORTA NT ISSUES INVOLVED FOR THE PURPOSES OF VALUATION. THE WRITTEN ARGUMENTS WERE GIVEN AT T HE TIME OF HEARING AND THE SAME HAS NOT BEEN DISCUSSED IN THE APPEAL ORDER, HENCE APPEA L ORDER SHOULD BE SET ASIDE FOR FURTHER CONSIDERATION TO THE RESTRICTED AMOUNT OF R S.12532000/- FOR THE PURPOSE OF LONG TERM CAPITAL GAINS U/S 50C OF THE INCOME TAX A CT 1961. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, AM END OR ALTER ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE ADOPTION OF SALE CONSIDERATION OF RS.1,25,32,000/- ON THE BA SIS OF THE STAMP DUTY VALUATION UNDER SECTION 50C OF THE ACT AS AGAINST T HE SALE PRICE RECEIVED BY THE ASSESSEE AT RS.73,60,0000/-. THE SECOND PAR T OF THE ISSUE RAISED BY THE ASSESSEE IS THAT THE VALUATION OFFICER HAD A SSESSED THE VALUATION OF THE PROPERTY AT RS.2,97,98,550/- AND THE CIT (AP PEALS) HAD RESTRICTED THE SAME TO RS.1,25,32,000/-. 4. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CI T (APPEALS) IN NOT CONSIDERING THE ISSUE INVOLVED FOR THE PURPOSES OF VALUATION AND RESTRICTING THE AMOUNT TO RS.1.25 CRORES FOR THE PU RPOSE OF LONG TERM CAPITAL GAINS UNDER SECTION 50C OF THE ACT. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE MATTER WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER TO RE FER THE VALUATION OF THE PROPERTY TO THE VALUATION OFFICER IN ORDER TO COMPU TE FAIR MARKET OF THE PROPERTY AS ON THE DATE OF TRANSFER. THE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDINGS HAD MADE A REFERENCE TO THE VA LUATION OFFICER, WHO IN TURN HAD VALUED THE PROPERTY AT RS.2.97 CRORES A ND AFTER MEETING WITH THE OBJECTIONS RAISED BY THE ASSESSEE AND FORWARDED THE SAME TO THE VALUATION OFFICER AND CONSIDERING HIS COMMENTS, THE ASSESSING OFFICER HAD ADOPTED THE SALE VALUE OF THE PROPERTY AT RS.2. 97 CRORES I.E. THE 3 VALUE ASSESSED BY THE VALUATION OFFICER. THE CIT ( APPEALS), ON THE OTHER HAND, HAD ADOPTED THE MARKET VALUE OF CONSIDE RATION AT RS.1.25 CRORES I.E. THE VALUE ASSESSED BY THE STAMP VALUATI ON AUTHORITY IN VIEW OF THE PROVISIONS OF SECTION 50C(3) OF THE ACT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF THE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE IS AG GRIEVED BY THE VALUATION REPORT PREPARED BY THE VALUATION OFFICER AS THE CIRCLE RATES OF COMMERCIAL AREA HAD BEEN ADOPTED TO COMPUTE THE VAL UE OF PROPERTY IN THE HANDS OF THE ASSESSEE AND FURTHER NO CREDIT HAS BEEN ALLOWED OF VARIOUS FACTORS WHICH HAD AFFECTED THE MARKET VALUE OF THE PROPERTY. THE LEARNED A.R. FOR THE ASSESSEE CLEARLY CONCEDED THAT WHEREAS THE PROPERTY OF THE ASSESSEE WAS RESIDENTIAL, IT WAS SITUATED IN AN AREA WHERE COMMERCIAL ACTIVITY WAS BEING CARRIED OUT. THE LEA RNED A.R. FOR THE ASSESSEE ALSO ACCEPTED THAT THE DVO HAD GIVEN CONCE SSION ON ACCOUNT OF THE DEPTH AND ON ACCOUNT OF PROXIMITY TO CREMATION GROUND. 7. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THE ASSESSING OFFICER AND VALUATION OFFICER HAD MET WITH ALL THE OBJECTIONS RAISED BY THE ASSESSEE AND HAD VALUED THE PROPERTY AFTER CONS IDERING THE SAME. RELIANCE WAS PLACED ON THE ORDERS OF THE AUTHORITIE S BELOW BY THE LEARNED D.R. FOR THE REVENUE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE, ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT VIDE ORDER DATED 15.12.2 008 UNDER WHICH ADDITION OF RS.51,72,000/- WAS MADE UNDER SECTION 5 0C OF THE ACT. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DE CLARED INCOME FROM CAPITAL GAINS ON SALE OF LAND WHICH WAS SOLD FOR RS .73,60,000/-. THE ASSESSING OFFICER IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS NOTED THAT 4 THE SALE CONSIDERATION ADOPTED FOR THE STAMP DUTY P URPOSE WAS RS.1,25,32,000/- AND ADDITION OF RS.51,72,000/- WAS MADE TO THE RETURNED INCOME UNDER SECTION 50C OF THE ACT. THE CIT (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 9. THE TRIBUNAL IN ITA NO.1010/CHD/2009 VIDE ORDER DATED 30.4.2010 REMITTED THE ISSUE BACK TO THE FILE OF THE ASSESSIN G OFFICER AS NO REFERENCE WAS MADE TO THE DVO FOR THE VALUATION OF THE PROPERTY. THE ASSESSING OFFICER WAS DIRECTED TO DECIDE THE ISSUE AFRESH AFTER MAKING REFERENCE TO THE DVO TO ASCERTAIN THE FAIR MARKET V ALUE OF THE ASSET ON THE DATE OF TRANSFER AND IN ACCORDANCE WITH LAW. T HE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDINGS REFERRED THE MAT TER TO THE VALUATION OFFICER, LUDHIANA VIDE LETTER DATED 27.9.2011 AND T HE REPORT OF THE VALUATION OFFICER WAS RECEIVED, AS PER WHICH THE VA LUE OF THE PROPERTY WAS ASSESSED TO RS.2,97,98,550/- AS ON 24.1.2006 I. E. THE DATE OF SALE. THE VALUATION REPORT IS REPRODUCED UNDER PARA 4.1 A T PAGES 3 TO 7 OF THE ASSESSMENT ORDER. THE SAID REPORT WAS SHOW CAUSED TO THE ASSESSEE, WHO IN TURN FURNISHED VARIOUS REPLIES POINTING OUT THE DEFECTS IN THE VALUATION REPORT. THE MAIN OBJECTION OF THE ASSESS EE TO THE VALUATION REPORT WAS THAT THE RATES OF COMMERCIAL PROPERTIES HAD BEEN APPLIED TO VALUE THE PROPERTY OF THE ASSESSEE WHICH WAS RESIDE NTIAL IN NATURE. FURTHER THERE WERE DEFECTS IN THE PROPERTY I.E. ITS PROXIMITY TO RAILWAY TRACK AND BEING NEAR TO CREMATION GROUND AND BEING IRREGULAR IN SHAPE, WHICH WAS NOT CONSIDERED BY THE VALUATION OFFICER. THE SAID COMMUNICATIONS ARE REFERRED TO AND REPRODUCED BY TH E ASSESSING OFFICER AT PAGES 8 TO 16 OF THE ASSESSMENT ORDER. THEREAFT ER THE COMMENTS OF THE VALUATION OFFICER WERE RECEIVED AGAINST VARIOUS OBJ ECTIONS RAISED BY THE ASSESSEE AND IT WAS OBSERVED THAT EVEN AFTER CONSID ERING THE OBJECTIONS RAISED BY THE ASSESSEE, VALUATION MADE WAS IN ORDER , AS THE CIRCLE RATES 5 APPLIED WERE OF PARTICULAR AREA AS NOTIFIED BY THE REVENUE AUTHORITIES. IT WAS POINTED OUT THAT FOR THE RESIDENTIAL RATES FOR G.T. ROAD TO CHOWK DHOLEWAL ROAD WAS RS.7300/- PER SQ YD. AS PER SEGM ENT 0008, ITEM NO.0250, THE AREA IN QUESTION WAS NOT RESIDENTIAL A ND WAS FULLY COMMERCIAL. WITHOUT PREJUDICE TO THE VALUATION ALR EADY MADE, THE VALUATION OFFICER NOTED THAT EVEN IF VARIOUS RATES AND VALUES ARE CONSIDERED, AS POINTED OUT BY THE ASSESSEE VIDE LET TER DATED 28.12.2011 THE VALUE OF A PLOT IN GANDHI NAGAR (RESIDENTIAL AR EA) @RS.3600/- PER SQ.YD. WOULD WORK OUT TO RS.1.24 CRORES AND AT G.T. ROAD TO CHOWK DHOLEWAL (RESIDENTIAL CIRCLE ROAD) @ RS.7300/- WAS WORKED OUT TO RS.2.52 CRORES AND AS PER G.T. ROAD TO CHOWK DHOLEW AL (COMMERCIAL AREA) @ RS.11,000/- WOULD WORK OUT TO RS.3.80 CRORE S. THE VALUATION OFFICER FURTHER REPORTED THAT PARTICULAR LOCATION W AS ACTUALLY VISITED ALONGWITH REPRESENTATIVE OF THE ASSESSEE AND THE AR EA WAS FOUND TO BE FULLY COMMERCIAL HAVING COMMERCIAL ACTIVITIES. THE RAILWAY LINE HAD NO BAD IMPACT ON THE COMMERCIAL ACTIVITIES AS IT HAD A FFECT ON THE RESIDENTIAL AREAS. THE VALUATION ALREADY MADE AT R S.2.97 CRORES WAS HELD TO BE CORRECT BY THE VALUATION OFFICER. THE REPLY OF THE ASSESSEE TO THE SAID COMMENTS OF THE VALUATION OFFICER ARE REPRODUC ED AT PAGES 22 AND 23 OF THE ASSESSMENT ORDER IN WHICH HE HAD RE-AGITA TED THE ISSUE. THE MAIN GRIEVANCE OF THE ASSESSEE WAS THAT THE LAND WA S PURELY RESIDENTIAL IN NATURE AND WAS EVEN IN THE REVENUE RECORDS DECLA RED AS RESIDENTIAL AND THERE WAS NO MERIT IN VALUING THE LAND OTHER TH AN ANY OTHER RATE EXCEPT THE RESIDENTIAL RATES. THE ASSESSING OFFICE R NOTED THAT THE VALUATION WAS CONDUCTED BY THE VALUATION OFFICER AS PER THE PRESCRIBED PROCEDURE AFTER GIVING DUE OPPORTUNITY TO THE ASSES SEE AND WHILE COMPLETING THE VALUATION, DEDUCTION WAS ALLOWED ON ACCOUNT OF DEPRECIATION DUE TO NEARNESS TO THE CREMATION GROUN D AT 10% AND ALSO FOR EARTH FILLING LOW LINE AREA. IN VIEW THEREOF, THE VALUATION OFFICER 6 HAVING VALUED THE SALE CONSIDERATION OF THE ASSET A T RS.2.97 CRORES AS AGAINST RS.73,60,000/- CLAIMED BY THE ASSESSEE, THE ASSESSING OFFICER ADOPTED THE VALUE AT RS.2.97 CRORES IN ORDER TO WOR K OUT THE INCOME OF THE ASSESSEE. 10. BEFORE THE CIT (APPEALS) THE PLEA OF THE ASSESS EE WAS THAT THE ASSESSING OFFICER HAD IGNORED THE DEFINITION OF SEC TION 50C OF THE ACT WHICH CLEARLY INDICATED THAT THE ASSESSING OFFICER WAS BOUND TO ADOPT THE SAME VALUE ASSESSED FOR STAMP DUTY PURPOSE BY S TAMP VALUATION OFFICER AND IGNORE THE VALUE ADOPTED OR ASSESSED BY THE VALUATION OFFICER WHERE SUCH VALUE HAS BEEN ASSESSED AT HIGHE R FIGURE. THE CIT (APPEALS) NOTED THAT REFERENCE WAS MADE TO THE VALU ATION OFFICER BY THE ASSESSING OFFICER IN VIEW OF THE SPECIFIC DIRECTION S OF THE TRIBUNAL ON ACCOUNT OF THE PROVISIONS OF SECTION 50C (2)(A) OF THE ACT. HOWEVER, UNDER SECTION 50C(3) IT IS SPECIFICALLY PROVIDED TH AT WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) OF SECTION 50C OF THE ACT EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY AUTHORI TIES, THEN THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE T AKEN AS FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER AND WHERE THE VALUATION WORKED OUT BY THE VALUATION OFFICER EXCEE DS THE VALUE AS ASSESSED BY THE STAMP DUTY AUTHORITY, THEN THE VALU E ASSESSED BY THE STAMP DUTY AUTHORITY SHOULD BE TAKEN AS FULL VALUE OF CONSIDERATION. IN VIEW THEREOF, THE CIT (APPEALS) DIRECTED THE ASSESS ING OFFICER TO ADOPT THE SALE VALUE AT RS.1.25 CRORES. 11. THE GRIEVANCE OF THE ASSESSEE BEFORE US IS TWO FOLD; THAT THE VALUATION OFFICER WHILE VALUING THE PROPERTY AS ON THE DATE OF SALE, IT ERRED IN ADOPTING THE COMMERCIAL CIRCLE RATES FOR V ALUING THE SAID ASSET, WHEREAS THE PROPERTY IN QUESTION WAS RESIDENTIAL. THE LEARNED A.R. FOR THE ASSESSEE FAIRLY ADMITTED THAT THE SAID PROPERTY WAS RESIDENTIAL THOUGH 7 SITUATED IN AN AREA WHERE COMMERCIAL ACTIVITY WAS B EING CARRIED ON. THE NEXT OBJECTION OF THE LEARNED A.R. FOR THE ASSESSEE WHILE ARGUING THE MATTER WAS THAT CERTAIN FACTORS WHICH WERE AFFECTIN G THE VALUE OF THE PROPERTY WERE NOT CONSIDERED BY THE DVO THOUGH HE H AD GIVEN CONCESSION ON ACCOUNT OF THE LOW DEPTH OF THE PROPE RTY AND ALSO ON ACCOUNT OF PROXIMITY TO THE CREMATION GROUND. THE ASSESSEE AFTER THE CONCLUSION OF THE ARGUMENTS HAD FILED WRITTEN SUBMI SSIONS AND THE GRIEVANCE OF THE LEARNED A.R. FOR THE ASSESSEE WAS THAT THE VALUATION OFFICER HAD NOT CONSIDERED VARIOUS OBJECTIONS AND D OCUMENTS FILED BEFORE VALUING THE PROPERTY AT RS.2.97 CRORES. THE OBJECTIONS FILED BY THE ASSESSEE BEFORE THE VALUATION OFFICER WERE AS U NDER: 1. THE SUB-REGISTRAR AT THE TIME OF REGISTRATION HAS CONSIDERED THE PROPERTY IN QUESTION AS RESIDENTIAL AND HAS TAKEN THE STAMP DUTY RATE @ RS. 3600/- PER SQ. YDS., SINCE THE PROPERTY IS AT GANDHINAGAR, LUDHIANA, WHICH IS RESIDENTIAL AREA AS MENTIONED IN THE REGISTRATION DEED. THE RATE LIST AS PER STAMP DUTY ACT IS PLACED IN FIRST PAPER BOOK AT PAGE NO. 21 & 22 AND THE CORRECT RESIDENTIAL RATE MENTIONED IS ON PAPER BOOK PAGE 22 . 2. THE FARD OF THE PROPERTY CLEARLY MENTIONS RESIDENTI AL AREA AND THE REGISTRATION DEED CLEARLY MENTIONS GANDHI NAGAR RESIDENTIAL AREA. THE FARD IS PLACED IN SECOND PAPER BOOK AT PAGE 94 IN ENGLISH VERSION AND PAGE 95 IN PUNJABI VERSIO N. 3. THE AGREEMENT TO SELL WAS GIVEN TO THE VALUATION OF FICER WHICH HAS NOT BEEN CONSIDERED AT THE TIME OF VALUATION OF THE PROPERTY. THE AGREEMENT TO SELL CONTAINS PAYMENTS THROUGH CHEQUES WHICH ARE DATED 06.11.2004. IN THE AGREEMENT TO SEL L IT IS CLEARLY MENTIONED THAT RS. 250000/- DATED 06.11.2004 VIDE CHEQUE NO. 439607 HAS BEEN RE CEIVED AND AMOUNT OF RS. 250000/- DATED 06.11.2004 THROUGH CHEQUE NO. 261632 HAS BEEN RECEI VED. THE DOCUMENT IS ATTACHED IN THE SECOND PAPER BOOK AT PAGE NO. 1 & 2 IN ENGLISH VERS ION. THE VO HAS NOT CONSIDERED THIS FACT WHILE PREPARING THE VALUATION REPORT AND THIS FACT IS MENTIONED IN THE ASSESSMENT ORDER AT PAGE 15 UNDER THE PARA 4.6 AT POINT 1. 4. THE SAID PROPERTY IN QUESTION WAS IN OCCUPATION WIT H THE TENANT AND IN THE AGREEMENT TO SELL IT IS CLEARLY MENTIONED THAT RESIDENTIAL PORTION WA S IN POSSESSION OF THE TENANT. THE ENGLISH VERSION OF AGREEMENT TO SELL IS PLACED IN SECOND PAPER BOOK AT PAGE NO. 1 & 2. 5. THE PLOT IS UNEVEN AND HAS SIX SIDES SHOWING WEST P ORTION 96.60 FT, SOUTH SIDE 196.60 FT, EAST PORTION IS 202.80 FT AND NORTH SIDE IS 94.10 FT. TH E MAP IS PLACED IN THE FIRST PAPER BOOK AT PAGE NO. 20. 6. ON THE BACK OF LAND MAIN RAILWAY LINE FROM AMRITSAR TO DELHI IS GOING ON WHICH IS A GREAT NUISANCE DUE TO RAILWAY TRACK AND ALMOST AFTE R TEN MINUTES TRAINS PASSES/CROSSES O THIS RAILWAY LINE WHICH ALWAYS GIVE EARTH SHAKING, SMOKE AND NUISANCE VALUE. THIS FACT HAS BEEN ADMITTED IN THE AO'S ORDER ON PAGE 15 AT POINT NO. 3 FOR WHICH THE VO HAS NOT CONSIDERED THIS POINT. 8 7. THE AREA PLOT IS NEAR THE CREMATION GROUND AND THE SAME IS ADMITTED BY THE VALUATION OFFICER. THE AO HAS GIVEN THE VALUATION REPORT IN THE ASSESSMENT ORDER PAGE 24 AND 10% REBATE HAS BEEN ALLOWED BY THE VO FROM THE TOTAL CONSIDERA TION, WHICH IS RS. 3310950/-. 8. THE PORTION OF THE PLOT IS VERY DEEP AS COMPARED TO ROAD LEVEL. THIS REQUIRES EARTH FILLING IN THE LOW LYING MIDDLE PORTION. THIS FACT HAS BEEN AD MITTED BY THE VO IN HIS VALUATION REPORT AND THE AO HAS GIVEN DETAILS IN THE ASSESSMENT ORDER PA GE 24 AND REBATE OF RS. 732000/- HAS BEEN GIVEN ON THIS ACCOUNT. 12. THE GRIEVANCE OF THE LEARNED A.R. FOR THE ASSES SEE WAS THAT THE VALUATION OFFICER HAD NOT CONSIDERED THE ABOVE FACT S AND MADE THE VALUATION OF THE SAID PROPERTY AS UNDER: A) THE PROPERTY IN QUESTION HAS BEEN CONSIDERED AS COM MERCIAL PROPERTY WITHOUT LOOKING TO THE REGISTRATION DEEDS AND FARD ISSUED B Y THE PATWARI ON WHICH THE PROPERTY IN QUESTION HAS BEEN EAR MARKED AS RESIDENTIAL. THE MA IN DIFFERENCE IN RATES IS ON THE PART OF THIS ISSUE. THIS FACT IS VERY RELEVANT AND THE COMP LETE DETAILS HAVE BEEN GIVEN AT POINT NO. 1 & 2ABOVE.THECIT (A) HAS NOT CONSIDERED THESE ISSUES . THESE POINTS ARE VERY IMPORTANT AND REQUIRE RECONSIDERATION, SPECIALLY TH E POINT OF AGREEMENT TO SELL, SINCE THIS ISSUE WAS TAKEN UP WITH THE VALUATION OFFICER. THE COMPLETE DETAILS ARE GIVEN BY THE AO IN HIS ASSESSMENT ORDER AT PAGE NO. 8 TO 13 AND THESE POINTS ARE VERY IMPORTANT AND THE SAME MAY PLEASE BE REFERRED. IT IS ALSO IMPORTANT TO MENTION HERE THAT THE SUB-REGISTRAR IS JUST EQUAL TO SDM AND THE RATES ADOPTED BY THE SUB- REGISTRAR CANNOT BE CHANGED BY THE VALUATION OFFICER. EVEN THE COMMENTS OF THE ASS ESSEE ARE MENTIONED IN THE ASSESSMENT ORDER AT PAGE20&21FROMPOINT NO. 1 TO 6 A ND THE SAME MAY PLEASE BE REFERRED. B) AT THE TIME OF VALUATION OF THE SAID PLOT THE VALUA TION OFFICER HAS GIVEN 25% REBATE ON THE REAR PORTION OF 1550 SQ. YDS. THE RATE OF TH IS PORTION IS TAKEN AT RS. 8200/- PER SQ. YDS AND THE FRONT PORTION HAS BEEN CONSIDERED AT RS . 11000/- PER SQ. YDS INSPITE OF THE FACT THAT PROPERTY IN QUESTION. THE WHOLE PROPERTY IS IN QUESTION UNEVEN AND THE SIZE OF PLOT IS VERY BIG. THIS ISSUE HAS NOT BEEN CONSIDERE D BY THE CIT (A) DURING THE PROCEEDINGS. THE VALUATION OFFICER HAS NOT CONSIDERED THE UNEVEN SIDES OF EAST, WEST, NORTH AND SOUTH SIDES AS PER MAP AND THE PROPERTY CANNOT FETCH THE SAME VALUE AS PER NORMAL EQUAL SIDES OF PLOT. THIS ISSUE ALSO HAS NOT BEEN CONSIDERED BY THE CIT (A) AND THE COMPLETE DETAILS GIVEN ON PAGE14&15AT POINT NO. 2 OF THE AO'S ORDER. C) THE PROPERTY IN QUESTION AS PER AGREEMENT TO SELL WAS IN POSSESSION OF SOME OTHER PERSON AND THIS ISSUE HAS NOT BEEN CONSIDERED BY THE CIT (A) DURING THE PROCEEDIN GS. IT IS CLEARLY MENTIONED IN THE AGREEMENT TO SELL THAT PRO PERTY IN QUESTION WILL BE GOT VACATED BY THE PURCHASER AND THERE WAS ELECTRIC AND WATER CONNECTION OF THE RESIDENCE. THIS ISSUE ALSO HAS NOT BEEN CONSIDERED BY THE CIT (A). THE DETAILS ARE GIVEN IN ASSESSMENT ORDER AT PAGE NO.15UNDER THE PARA 4.6 IN POINT NO. 1. D) THE PROPERTY IN QUESTION IS ADJACENT TO MAIN RAILWA Y LINE FROM AMRITSAR TO DELHI AND ALMOST AFTER EVERY 10 MINUTES THE TRAIN PASSES WHIC H CAUSES NUISANCE AND SHAKING OF EARTH. THIS ISSUE HAS NOT BEEN CONSIDERED BY THE C IT (A) AS WELL AS BY THE VALUATION OFFICER AND THIS REQUIRES RECONSIDERATION. THIS POI NT HAS BEEN GIVEN IN THE ASSESSMENT ORDERONPAGE15POINT NO. 3 AND THIS POINT IS ALSO GIV EN IN THE ASSESSMENT ORDER AT PAGE 23. 9 E) THE AREA PLOT IS NEAR THE CREMATION GROUND AND THE SAME IS ADMITTED BY THE VALUATION OFFICER. THE AO HAS GIVEN THE VALUATION R EPORT IN THE ASSESSMENT ORDER PAGE 24 AND 10% REBATE HAS BEEN ALLOWED BY THE VO FROM T HE TOTAL CONSIDERATION, WHICH IS RS. 3310950/-. THIS POINT HAS NOT BEEN CONSIDERED B Y THE CIT (A) DURING THE PROCEEDINGS. F) THE PORTION OF THE PLOT IS VERY DEEP AS COMPARED TO ROAD LEVEL. THIS REQUIRES EARTH FILLING IN THE LOW LYING MIDDLE PORTION. THIS FACT HAS BEEN ADMITTED BY THE VO IN HIS VALUATION REPORT AND THE AO HAS GIVEN DETAILS IN TH E ASSESSMENT ORDER PAGE 24 AND REBATE OF RS.732000/-HASBEEN GIVEN ON THIS ACCOUNT. THIS ISSU E HAS NOT BEEN CONSIDERED BY THE CIT (A). 13. THE ASSESSEE IS AGGRIEVED BY THE VALUATION REPO RT OF THE VALUATION OFFICER IN NOT CONSIDERING VARIOUS POINTS I.E. THE LAND BEING RESIDENTIAL IN AREA. ACCORDING TO THE LEARNED A.R. FOR THE ASS ESSEE THE MAIN REASON FOR HIGH VALUATION OF THE SAID PROPERTY WAS ON ACCO UNT OF THE RATES OF LAND ADOPTED BY THE VALUATION OFFICER WHEREIN THE R ATE FOR THE BACK PORTION WAS TAKEN AT RS.8200/- PER SQ.YD. AND FRONT PORTION WAS CONSIDERED AT RS.11,000/- PER SQ.YD. IN SPITE OF TH E FACT THAT THE PROPERTY WAS RESIDENTIAL IN NATURE. THE OTHER GRIEVANCE OF THE ASSESSEE WAS THAT THE WHOLE PROPERTY IN QUESTION WAS UNEVEN AND THE S IZE OF THE PLOT WAS VERY BIG AND IT WAS NOT POSSIBLE TO VALUE THE PROPE RTY. ANOTHER ASPECT WHILE VALUING THE PROPERTY WAS THAT THE SAID PROPER TY WAS IN POSSESSION OF ANOTHER PERSON I.E. THE TENANT AND THAT FACT WAS MENTIONED IN THE AGREEMENT TO SALE. OTHER ASPECT AFFECTING THE VALU E OF THE PROPERTY WAS ITS PROXIMITY TO THE RAILWAY LINE AND ALSO CREMATIO N GROUND AND ALSO LOW LINE MIDDLE PORTION. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) IN NOT CONSIDERING THE ABOVE SAID POINTS AND HAD MADE A PRAYER THAT THE ISSUE SHOULD BE SET ASIDE TO THE FILE OF T HE CIT (APPEALS) TO DECIDE THE ISSUE AFRESH. 14. IN THE FACTS OF THE PRESENT CASE THE ASSESSING OFFICER IN THE FIRST ROUND OF ASSESSMENT PROCEEDINGS HAD ADOPTED THE SAL E VALUE AS DETERMINED BY STAMP VALUATION AUTHORITIES AS THE FA IR MARKET VALUE OF THE PROPERTY AND MADE ADDITION IN THE HANDS OF THE ASSESSEE. THE PLEA 10 OF THE ASSESSEE BEFORE THE TRIBUNAL IN THE FIRST RO UND OF PROCEEDINGS WAS THAT THERE WERE SEVERAL FACTORS WHICH AFFECTED THE VALUE OF THE PROPERTY WHICH HAVE NOT BEEN CONSIDERED BY THE ASSESSING OFF ICER AND NO REFERENCE WAS MADE BY THE ASSESSING OFFICER TO THE VALUATION OFFICER AND HENCE THE SAID VALUE CANNOT BE ADOPTED FOR DETE RMINING THE INCOME IN THE HANDS OF THE ASSESSEE. THE TRIBUNAL IN VIEW THEREOF, HAD REMITTED THE MATTER BACK TO THE ASSESSING OFFICER TO MAKE RE FERENCE TO THE VALUATION OFFICER AND TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE. THE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDINGS HAD MADE REFERENCE TO THE VALUATION OFF ICER, WHO IN TURN HAD CONDUCTED THE PROCEEDINGS AFTER AFFORDING OPPOR TUNITIES OF HEARING TO THE ASSESSEE. THEREAFTER THE VALUATION REPORT W AS ALSO CONFRONTED TO THE ASSESSEE, WHO IN TURN FILED THE OBJECTIONS AND OBJECTIONS WERE MET WITH BY THE ASSESSING OFFICER AND IN THE FINAL ANAL YSIS THE PROPERTY AS ON DATE OF SALE WAS VALUED AT RS.2.97 CRORES BY THE VA LUATION OFFICER AS AGAINST THE VALUE OF RS.1.25 CRORES ASSESSED BY THE STAMP VALUATION AUTHORITIES. 15. UNDER THE PROVISIONS OF SECTION 50C(1) OF THE A CT, IT IS CLEARLY PROVIDED THAT WHERE THE CONSIDERATION RECEIVED OR A CCRUED AS A RESULT OF TRANSFER OF CAPITAL ASSET, BEING THE LAND OR BUILDI NG OR BOTH, IS LESS THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATIO N AUTHORITIES THEN THE VALUE SO ADOPTED OR ASSESSED FOR THE PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, SHALL BE DEEMED TO BE FUL L VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER AND SHOULD BE ADOPTED FOR THE PURPOSES OF SECTION 48 OF THE AC T. SUB-SECTION (2) TO SECTION 50C OF THE ACT PROVIDES THAT WHERE THE ASSE SSEE CLAIMED BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASS ESSED BY THE STAMP VALUATION AUTHORITIES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON 11 THE DATE OF TRANSFER AND THE SAID VALUE HAD NOT BEE N DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAD BEEN MADE BE FORE ANY AUTHORITY, THE COURT OF HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO VALUATION OFFICER, WHO IN T URN SHALL VALUE THE PROPERTY. SUB-SECTION (3) TO SECTION 50C OF THE AC T PROVIDES THAT WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION(2) TO SECTI ON 50C OF THE ACT EXCEEDS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITIES THEN THE VALUE SO ADOPTED OR ASSESSED B Y SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION REC EIVED OR ACCRUING AS A RESULT OF THE TRANSFER. 16. IN VIEW OF THE PROVISIONS OF THE ACT, IT IS CLE ARLY PROVIDED THAT WHERE THE VALUE ADOPTED OR ASSESSED BY THE STAMP VA LUATION AUTHORITIES IS HIGHER THAN THE SALE VALUE SHOWN BY THE PERSON, THEN THE VALUE SO ASSESSED BY THE STAMP VALUATION AUTHORITIES WOULD B E ADOPTED AS FULL VALUE OF CONSIDERATION ON THE TRANSFER OF THE ASSET UNDER SECTION 48 OF THE ACT. HOWEVER, WHERE THE ASSESSEE HAD NOT DISPU TED THE VALUATION SO ADOPTED BY THE STAMP VALUATION AUTHORITIES AND IS N OT IN APPEAL AGAINST THE SAME, A RECOURSE IS AVAILABLE TO REFER THE VALU ATION TO THE VALUATION OFFICER ON THE OBJECTIONS RAISED BY THE ASSESSEE AN D THE ASSESSING OFFICER THEN TO CONSIDER THE VALUATION REPORT SUBMI TTED BY THE VALUATION OFFICER. HOWEVER, UNDER SECTION 50C(3) OF THE ACT, IT IS PROVIDED THAT IN CASES WHERE VALUE OF THE PROPERTY AS DETERMINED BY THE VALUATION OFFICER IS HIGHER THAN THE VALUE ASSESSED BY THE STAMP VALU ATION AUTHORITIES, THEN THE VALUE ASSESSED BY THE STAMP VALUATION AUTH ORITIES IS TO BE TAKEN AS FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF THE TRANSFER. 17. IN THE FACTS OF THE PRESENT CASE THE REQUIREMEN TS OF SECTION 50C OF THE ACT HAVE BEEN MET WITH BY THE ASSESSING OFFICER BY MAKING 12 REFERENCE TO THE VALUATION OFFICER AND IN TURN RECE IVED VALUATION REPORT OF THE PROPERTY DETERMINING THE VALUE OF PROPERTY A S ON THE DATE OF SALE. THE LEARNED A.R. FOR THE ASSESSEE HAS VEHEMENTLY PO INTED OUT VARIOUS DEFECTS IN THE VALUATION REPORT MADE BY THE VALUATI ON OFFICER AND THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE VALUATIO N OFFICER HAS ADOPTED HIGHER RATES I.E. THE COMMERCIAL AS AGAINST THE RES IDENTIAL RATES WHICH RESULTED IN HIGHER VALUATION OF THE PROPERTY. HOWE VER, IF WE LOOK AT THE CASE IN ENTIRETY AND CONSIDERING THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAD SOLD TH E SAID ASSET FOR AN AMOUNT OF RS.73,60,000/- AND THE STAMP DUTY HAD BEE N PAID @ RS.1.25 CRORES, WHERE AS AGAINST THE SAID STAMP DUTY VALUAT ION, THE VALUATION OFFICER HAD VALUED THE PROPERTY AT RS.2.97 CRORES. THE CIT (APPEALS) HAD APPLIED THE VALUE DETERMINED BY THE STAMP VALUA TION AUTHORITIES AS TO BE FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFER, AGAINST WHICH REVENUE IS NOT APPEAL. HENCE, THE VALUE ASSE SSED IN THE HANDS OF THE ASSESSEE IS RS.1.25 CRORES AS AGAINST THE VALUE ASSESSED BY THE DVO AT RS.2.97 CRORES. THE PERUSAL OF THE GRIEVANCES R AISED BY THE ASSESSEE REFLECTS THAT ALL THE GRIEVANCES WERE AGAINST THE V ALUATION FRAMED BY THE VALUATION OFFICER AND EVEN IF THE VALUE IS REDUCED AS PER THE SAID GRIEVANCES, THERE IS NO SUBSTANCE IN THE GRIEVANCE OF THE ASSESSEE WHERE REDUCED VALUE HAS BEEN ADOPTED BY THE CIT (APPEALS) AS FAIR MARKET VALUE OF THE PROPERTY. IN THE ENTIRETY OF THE FACT S AND CIRCUMSTANCES, WE FIND NO MERIT IN THE STAND OF THE ASSESSEE AND THE OBJECTIONS RAISED AGAINST THE VALUATION REPORT HAVE NO MEANING INCLUD ING THE STAND OF DVO TO HAVE ADOPTED COMMERCIAL RATES FOR VALUING TH E SAID PROPERTY AS THE ASSESSMENT IN THE HANDS OF THE ASSESSEE HAS NOT BEEN MADE ON SUCH VALUATION REPORT BUT ON A MUCH LESSER VALUE OF RS.1 .25 CRORES AND EVEN IF CREDIT IS GIVEN ON ACCOUNT OF ALL THE OBJECTIONS RAISED BY THE ASSESSEE, THE VALUE OF PROPERTY ADOPTED IN THE HANDS OF THE A SSESSEE IS MUCH LOWER 13 THAN THE VALUE DETERMINED BY THE DVO. HENCE, WE U PHOLD THE ORDER OF THE CIT (APPEALS) IN ADOPTING THE VALUE ASSESSED BY THE STAMP VALUATION AUTHORITIES AS THE FAIR MARKET VALUE OF THE PROPERT Y ON THE DATE OF TRANSFER IN COMPUTING THE INCOME OF THE ASSESSEE. WE MAY MENTION THAT THE LEARNED COUNSEL FOR THE ASSESSEE INITIALLY RAIS ED ANOTHER CONTENTION THAT THE ASSESSEE IN THIS CASE HAD ENTERED IN TO AN AGREEMENT TO SALE WITH THE PARTY IN DELHI AT A LOWER CONSIDERATION, AGAIN ST WHICH ADVANCE WAS ALSO RECEIVED. THEREFORE, WE CALLED FOR THE FILE O F EARLIER ROUND OF LITIGATION AND FOUND THAT NO SUCH CONTENTION WAS TA KEN IN THE FIRST ROUND OF LITIGATION BEFORE THE TRIBUNAL. WHEN THIS FACT WAS POINTED OUT TO LEARNED A.R. FOR THE ASSESSEE, HE FAIRLY WITHDREW T HIS CONTENTION. 18. IN VIEW THEREOF, WE CONFIRM THE ORDER OF THE CI T (APPEALS) AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSE E. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF APRIL, 2014. (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH APRIL, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 14