Shri Gambhirmal Jain, Indore V. The ACIT, Indore

ITA 179/IND/2012

• Counselvise Citation: 17922714 RSA 2012
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: T N UNNI; PAVITRAN NAMBIAR
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Valuation report
• Section: 50C; 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 179/IND/2012 A.Y.2007-08 GAMBHIRMAL JAIN INDORE PAN ABBPJ 7470R :: APPELLANT VS ACIT 2(1) INDORE :: RESPONDENT APPELLANTS BY SHRI T.N. UNNI AND SHRI PAVITRAN NAMBIAR RESPONDENT BY SHRI R.A. VERMA ITA NO. 187/IND/2012 A.Y.2007-08 MANGILAL JAIN INDORE PAN ABEPJ 8047R :: APPELLANT VS ACIT 2(1) INDORE :: RESPONDENT 2 APPELLANTS BY SHRI H.P. VERMA, SAKSHI VERMA AND SHRI MANISH JOSHI RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 26.11.2012 DATE OF PRONOUNCEMENT 26.11.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER BOTH THESE APPEALS ARE BY DIFFERENT ASSESSEES FOR THE A.Y. 2007-08 CHALLENGING THE RESPECTIVE ORDERS BOTH DATED 20.1.2012 PASSED BY THE LEARNED FIRST APPELLA TE AUTHORITY ON THE ADOPTION OF MARKET VALUE OF THE PR OPERTY SOLD BY THESE ASSESSEES AND APPLICABILITY OF SECTIO N 50C OF THE ACT. REOPENING OF ASSESSMENT U/S 147 IN THE CASE OF SHRI GAMBHIRMAL JAIN HAS ALSO BEEN TAKEN, HOWEVE R, THIS GROUND WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, THIS GROUND IS DISMISSED A S SUCH. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD S HRI H.P. VERMA ALONG WITH MISS SAKSHI VERMA AND MANISH 3 JOSHI IN THE CASE OF SHRI MANGILAL JAIN WHEREAS SHR I T.N. UNNI ALONG WITH P. NAMBIAR, LEARNED COUNSEL FOR TH E ASSESSEE IN THE CASE OF SHRI GAMBHIRMAL JAIN. SHRI R.A. VERMA, LEARNED SENIOR DR WAS ALSO HEARD FOR THE REVENUE. DURING HEARING, THE LEARNED REPRESENTATIVE S FROM BOTH THE SIDES CONTENDED THAT SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS IDENTICAL, ARISING OUT OF THE SAME PROPERTY, THEREFORE, THESE APPEALS CAN BE HEARD TOGETHER. THE LEARNED SENIOR DR DID NOT OPPOSE THE ASSERTION OF THE LEARNED COUNSELS. 3. THE CRUX OF ARGUMENTS ON BEHALF OF THESE ASSESSE ES IS THAT THE BUILDING IN ISSUE WAS CONSTRUCTED IN TH E YEAR 1972-73 ON A PLOT AND WAS RENTED TO STATE BANK OF I NDIA. THE CONDITION OF THE BUILDING WAS CLAIMED TO BE VER Y BAD, HOWEVER, IN SPITE OF REPEATED REQUESTS, THE BANK WA S NOT READY TO VACATE THE BUILDING, THEREFORE, KEEPING IN VIEW THE NECESSITY AND THE CIRCUMSTANCES, ALL THE SHARE HOLDERS DECIDED TO SELL THE BUILDING. UNDER THE 4 CIRCUMSTANCES, THE SALE VALUE WAS CONSIDERABLY LOW. IT WAS ALSO CONTENDED THAT THE BUILDING WAS FETCHING R ENT OF RS. 28,750/- PER MONTH FROM THE BANK. IT WAS FURTHE R CONTENDED THAT THE SALE VALUE OF RS.1,80,00,000/- W AS WRONGLY ADOPTED AT RS.2,88,56,000/- BY THE OFFICE O F THE REGISTRAR FOR STAMP DUTY PURPOSES. IT WAS POINTED O UT THAT ULTIMATELY THE M.P. BOARD OF REVENUE, GWALIOR, QUASHED THE ORDER OF THE DIVISIONAL COMMISSIONER DA TED 18.10.2011/COLLECTOR OF STAMPS DATED 10.10.2006, THEREFORE, AS ON DATE THE VALUE ADOPTED BY THE M.P. BOARD OF REVENUE STANDS. HOWEVER, MR. VERMA, THE LEARNED SENIOR DR DEFENDED THE VALUATION OF PROPERTY AT RS. 2,88,56,000/-. 4. WE HAVE CONSIDERED THE ASSERTION MADE BY THE LEARNED RESPECTIVE COUNSEL AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE THE IDENTICAL ISSUE IS I NVOLVED IN BOTH THESE APPEALS, ARISING OUT THE SAME PROPERT Y, THEREFORE, BOTH THE APPEALS CAN BE DISPOSED OF BY T HIS 5 CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FAC TS, IN BRIEF, ARE THAT THE ASSESSEE CONSTRUCTED A BUILDING IN THE YEAR 1972-73 AND RENTED OUT THE SAME TO STATE BANK OF INDIA. THE MARKET VALUE OF THE PROPERTY WAS CLAIMED TO BE ABNORMALLY LOW ON THE GROUNDS THAT FIRSTLY THERE WE RE SIX CO-OWNERS, IT WAS IN A BAD CONDITION AS THE BANK WA S NOT GETTING THE SAME REPAIRED AND WAS MERELY PAYING RS. 28,750/- PER MONTH AS RENT. FINALLY, ALL THE CO-SHA RERS OF THE PROPERTY SOLD THE SAME AT RS.1,80,00,000/-. SHR I MANGILAL JAIN AND SHRI GAMBHIRMAL JAIN ARE OWNERS O F 1/3 RD SHARE EACH WHEREAS SMT. SUSHILABAI JAIN,SHRI NARENDRAKUMAR JAIN, SHRI TEJKUMAR JAIN AND SHRI DEVKUMAR JAIN ARE OWNERS OF 1/12 TH SHARES EACH. THE ASSESSING OFFICER APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT RESULTING INTO ADDITIONS IN THE RESPECTIVE HANDS. THE OFFICE OF THE REGISTRAR STAMPS VALUED THE PROPE RTY AT RS.2,88,56,000/-.THE STAMP DUTY WAS PAID IN PROTEST . AFTER LOSING THE CASE BEFORE THE COLLECTOR AND DIVI SIONAL COMMISSIONER, THE ASSESSEE FILED APPEAL BEFORE THE M.P. 6 BOARD OF REVENUE WHO VIDE ORDER DATED 4.9.2012 (APP EAL NO. 2152 PBR/2011) QUASHED THE ORDERS OF BOTH THE LOWER AUTHORITIES BY ACCEPTING THE FAIR MARKET VALU E AT RS.1,80,000/-(COPY OF THE ORDER IS AVAILABLE ON REC ORD). NO CONTRARY DECISION WAS BROUGHT ON RECORD BY EITHE R SIDE AND MORE SPECIFICALLY THE REVENUE. IF THE TOTA LITY OF FACTS AVAILABLE ON RECORD AND THE ASSERTION MADE BY THE LEARNED RESPECTIVE COUNSEL ARE KEPT IN JUXTAPOSITIO N, WE ARE OF THE CONSIDERED OPINION THAT THE SALE VALUE F INALLY ADOPTED BY THE M.P. BOARD OF REVENUE WILL PREVAIL A S NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE. THE M .P. REVENUE BOARD WHICH IS THE CHIEF CONTROLLING REVENU E AUTHORITY FOR THE STATE OF M.P. CONSIDERED THE TOTA LITY OF FACTS BY OBSERVING THAT THE COLLECTOR OF STAMPS NEI THER MADE ANY INQUIRY NOR PASSED A REASONED ORDER AND MERELY ACCEPTED THE PROPOSED VALUE OF SUB-REGISTRAR . THE STAMP FEE WAS ALSO DEPOSITED UNDER PROTEST MEANING THEREBY THAT THE ASSESSEE NEVER AGREED TO THE PROPO SED VALUATION. THE VALUATION REPORT PREPARED BY THE APP ROVED 7 VALUER WAS DULY CONSIDERED ALONG WITH THE LETTER FR OM STATE BANK OF INDIA ESTABLISHING THAT THE BUILDING WAS IN WORSE CONDITION. EVEN THE SUB-REGISTRAR WAS HELD TO HAVE REACHED TO A CONCLUSION WITHOUT CONSIDERING TH E DILAPIDATED CONDITION OF THE BUILDING. ULTIMATELY VIDE ORDER DATED 4.9.2012 THE REVENUE BOARD DECIDED IN FAVOUR OF THE ASSESSEE. SINCE THE CHIEF CONTROLLING REVENUE AUTHORITY FOR THE STATE OF M.P. HAS AFFIRME D THE VALUATION OF THE PROPERTY AS TAKEN BY THE ASSESSEE, SECTION 50C, WHICH IS A DEEMING PROVISION, DOES NOT COME INTO PLAY. IN VIEW OF THESE UNCONTROVERTED FA CTS, BOTH THE APPEALS OF THE ASSESSEE DESERVE TO BE ALLO WED. THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE VALU E AS DECIDED BY THE BOARD OF REVENUE AND WORK OUT THE CAPITAL GAINS, AS PER RESPECTIVE SHARES OF EACH OF THESE ASSESSEES, AS PER LAW. FINALLY, THE APPEAL IN ITA NO. 187/IND/2012 IS ALLOWED WHEREAS APPEAL IN ITA NO. 179/IND/2012 IS 8 PARTLY ALLOWED AS THE ISSUE OF REOPENING OF ASSESSM ENT U/S 147 WAS NOT PRESSED BEFORE THE TRIBUNAL. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 26.11.2012. SD SD (R.C.SHARMA) (JOGINDER S INGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26 TH NOVEMBER, 2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/-2626