C.V.Ramkumar, CHENNAI V. ITO, CHENNAI

ITA 1816/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7647 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 09-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S SRIDHAR
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1816/MDS./2016 / ASSESSMENT YEAR :2006-07 MR.C.V.RAMKUMAR, 1 ST CROSS STREET, TTK ROAD, CHENNAI. VS. THE ITO, BUSINESS WARD II(3), CHENNAI-34. [PAN AEKPR 9394 A] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR,ADVOCATE /RESPONDENT BY : MR.SHIVA SRINIVAS, JCIT, DR / DATE OF HEARING : 09 - 0 2 - 201 7 / DATE OF PRONOUNCEMENT : 22 - 02 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2,CHENNAI DATE D 15.02.2016 PERTAINING TO ASSESSMENT YEAR 2006-07. SINCE ISSUE S INVOLVED IN THIS REVENUES APPEAL & CROSS OBJECTIONS ARE COMMON IN N ATURE, THESE ARE ITA NO.1816/16 :- 2 -: CLUBBED TOGETHER, HEARD TOGETHER, DISPOSED OFF BY T HIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. FIRST WE TAKE UP ITA NO.1817MDS//16 (A.Y.2006-07) 2. THE COMMON GROUNDS NO.2 & 3 IN BOTH THE APPEALS OF ASSESSEE IS REGARDING REOPENING OF ASSESSMENT , WHICH IS NOT PRESSED BEFORE US BY THE LD.A.R AND MADE AN ENDORSEMENT TO THAT EFFE CT. ACCORDINGLY, THIS ISSUE IS DISMISSED AS NOT PRESSED. 3. THE NEXT ISSUE RAISED IN GROUND NOS.4 TO 6 IN I TA NO.1871/16 IS WITH REGARD TO COMPUTATION OF LONG TERM CAPITAL GAI NS AND TRANSFER OF CAPITAL ASSETS WITHOUT FOLLOWING THE GUIDE LINE VAL UE (GLV) OF SALE IN TERMS OF SEC.50C(1) WITHOUT REFERRING THE MATTER TO THE DVO INSPITE OF THE REQUEST OF ASSESSEE TO REFER THE MATTER TO DVO TO ASCERTAIN THE FAIR MARKET VALUE (FMV) OF THE PROPERTY AS ON THE D ATE OF SALE. IN THIS CASE, THE ASSESSMENT WAS RE-OPENED BY ISSUANC E OF NOTICE U/S.148 OF THE ACT ON 21.09.2012 TO BRING IT TO TAX CAPITAL GAINS RESULTED ON TRANSFER OF PROPERTY. WHILE FRAMING RE -ASSESSMENT, THE LD. ASSESSING OFFICER CONSIDERED THE GLV ADOPTED FOR RE GISTRATION PURPOSE AS SALE CONSIDERATION. THE ASSESSEE OBJECTED THIS AND REQUESTED THE AO TO REFER THE MATTER TO THE DVO IN TERMS OF SEC.5 0C(2) OF THE ACT SO AS TO ARRIVE AT FMV OF THE PROPERTY AS ON THE DATE OF TRANSFER. ITA NO.1816/16 :- 3 -: 4. NOW, THE CONTENTION OF THE LD.A.R IS THAT SEC.5 0C(2) OF THE ACT IS A BENEFICIAL PROVISION AND WHENEVER THE ASSESSEE IS OBJECTED THE GLV MENTIONED IN THE SALE DEED FOR THE PURPOSE OF ADOPT ING THE SALE CONSIDERATION, IT IS REQUIRED TO REFER THE MATTER T O THE DVO TO ASCERTAIN THE FMV AS ON THE DATE OF TRANSFER, WHICH WAS NOT C ONSIDERED BY THE AO AND REQUESTED THAT THE ISSUE MAY BE REMITTED BAC K TO THE FILE OF AO WITH A DIRECTION TO REFER THE MATTER TO DVO. TO THIS EFFECT, HE RELIED ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN TH E CASE OF APPADURAI VIJAYARAGHAVAN REPORTED IN [2014] 369 ITR 486 (MAD) WHEREIN HELD THAT ANY OBJECTION MADE BY THE ASSESSE E TO AO IS WITH REGARD TO ADOPTION OF GLV OF PROPERTY U/S.50C(1) OF THE ACT, THE AO OUGHT TO HAVE REFERRED THE VALUATION OF CAPITAL ASS ET TO VALUATION CELL AND MERE ASSERTION BY THE ASSESSEE IN THIS RESPECT WILL SUFFICE. IN VIEW OF THE JURISDICTIONAL JUDGMENT CITED SUPRA , WE ARE INCLINED TO REMIT THE MATTER IN DISPUTE TO THE FILE OF AO TO REFER THE MA TTER TO THE VALUATION CELL TO ASCERTAIN THE FMV AS ON THE DATE OF TRANSFE R. THIS GROUND OF ASSESSEE IS ALLOWED. 5. THE ASSESSEE ALSO RAISED OTHER GROUNDS NO.7 TO 10 IS WITH REGARD TO ADOPTION OF FMC OF THE PROPERTY AS O 01.04.1981 BEING THE COST OF ACQUISITION IN THE COMPUTATION OF LONG TERM CAPITAL GAINS. AT THIS STAGE, WE REFRAIN FROM GOING INTO THIS ISSUE RAISED IN THESE GROUNDS ITA NO.1816/16 :- 4 -: AND THESE GROUNDS ARE KEPT IN OPEN AND THE ASSESSEE IS AT LIBERTY TO PLACE NECESSARY EVIDENCE BEFORE THE AO IN SUPPORT O F THE CLAIM. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22 ND FEBRUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 22 ND FEBRUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF