Smt. Chandrika Vittel, CHENNAI V. ACIT, Coimbatore

ITA 1818/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2493 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-06-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 1818/MDS/2012 (ASSESSMENT YEAR : 2009-10) SMT. CHANDRIKA VITTEL, 33, DESABANDHU STREET, RAMNAGAR, COIMBATORE 641 009. PAN : ABRPV 2561 K (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, COIMBATORE. (RESPONDENT) APPELLANT BY : SHRI VIKRAM VIJAYARAGHAVAN, ADVOCA TE RESPONDENT BY : SHRI S. DASGUPTA, JCIT DATE OF HEARING : 04.06.2013 DATE OF PRONOUNCEMENT : 04.06.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS RE GARDING VALUE ADOPTED FOR COMPUTING CAPITAL GAINS IN RESPECT OF A PROPERTY SOLD BY HER. I.T.A. NO. 1818/MDS/12 2 2. LEARNED A.R. SUBMITTED THAT ASSESSEE HAD EFFECTE D SALE OF PROPERTY MEASURING 6.09 ACRES FOR A CONSIDERATION O F ` 1,38,61,912/-. AS PER LEARNED A.R., GUIDELINE VALUE FOR THE PURPOS E OF STAMP DUTY, WAS FIXED BY THE AUTHORITIES AT ` 1,88,52,204/-. WHEN THE ASSESSEE WAS PUT ON NOTICE, AS PER THE LEARNED A.R., SHE OBJ ECTED TO SUCH VALUATION AND REQUESTED FOR A REFERENCE TO DEPARTME NTAL VALUATION OFFICER. ACCORDINGLY, THE MATTER WAS REFERRED BY T HE A.O. TO DVO AND THE DVO FIXED THE VALUE OF THE PROPERTY AT ` 1,59,49,000/- LEARNED A.R. SUBMITTED THAT THE DVO DID NOT GIVE AN EFFECTI VE OPPORTUNITY TO THE ASSESSEE TO PROPERLY EXPLAIN ITS STANCE. FURTH ER, AS PER LEARNED A.R., THE DRAFT REPORT OF THE DVO WAS DATED 16.12.2 011 AND THE FINAL REPORT OF THE DVO WAS DATED 26.12.2011. EVEN BEFOR E RECEIPT OF THE FINAL REPORT, THE ASSESSING OFFICER HAD COMPLETED T HE ASSESSMENT ON 23.12.2011. LEARNED A.R. ARGUED THAT ONLY 20% DEDU CTION WAS GIVEN BY THE DVO FOR ROAD AND OTHER PUBLIC AMENITIES, WHE REAS, NORMS REQUIRED MINIMUM 30% OF THE TOTAL LAND AREA TO BE E ARMARKED FOR THESE PURPOSES. FURTHER, AS PER LEARNED A.R., THE DVO HAD CONSIDERED FOR COMPARISON, VARIOUS PLOTS MEASURING 1800 SQ. FT TO 4201 SQ. FT. THOUGH THE PROPERTY SOLD BY THE ASSESS EE MEASURED 6.09 ACRES, EQUIVALENT TO 2,65,829 SQ.FT. AGAIN, AS PER LEARNED A.R., THERE I.T.A. NO. 1818/MDS/12 3 WERE ONLY TWO CASES WHERE THE COMPARISON WAS WITH P ROPERTIES OF LARGER AREAS, VIZ. 10890 SQ.FT. AND 21825 SQ.FT. B UT, STILL THESE WERE ALL ONLY SMALL PLOTS AND NOT A LARGE AREA LIKE 6.09 ACR ES. THEREFORE, ACCORDING TO HIM, THE COMPARATIVE ANALYSIS SUFFERED FROM FUNDAMENTAL FLAWS. AS PER LEARNED A.R., IF AN OPPORTUNITY WAS GIVEN, ASSESSEE WOULD BE ABLE TO JUSTIFY WHY 33.33% HAD TO BE DEDUC TED FROM TOTAL AREA, FOR PUBLIC AMENITIES, BEFORE MAKING THE VALUA TION. 3. PER CONTRA, LEARNED D.R. SUBMITTED THAT ASSESSIN G OFFICER WAS BOUND TO FOLLOW THE VALUATION REPORT, ONCE A REFERE NCE WAS MADE BASED ON REQUEST OF THE ASSESSEE. RELYING ON SUB-S ECTION (2) OF SECTION 50C OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), LEARNED D.R. SUBMITTED THAT ASSESSING OFFICER HAD FOLLOWED THE P ROCEDURE PRESCRIBED UNDER THE SAID SECTION AND CIT(APPEALS) HAD RIGHTLY CONFIRMED SUCH ORDER OF THE ASSESSING OFFICER. 4. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THE AREA SOLD BY THE ASSES SEE WAS 6.09 ACRES. WHAT WE FIND IS THAT DVO HAD MADE COMPARISO N WITH SMALL HOUSE SITES, FOR ARRIVING AT THE VALUE OF THE PROPE RTY, EXCEPT FOR TWO ITEMS. EVEN IN THESE TWO CASES, THE EXTENT OF AREA WERE 10890 SQ.FT. I.T.A. NO. 1818/MDS/12 4 AND 21825 SQ.FT. OBVIOUSLY, THESE WERE ALL HOUSE S ITES AND A COMPARISON THEREOF WITH A LAND MASS MEASURING 6.09 ACRES MIGHT NOT GIVE CORRECT RESULTS. FURTHER, THE DVO HAD GIVEN O NLY 20% REDUCTION FOR ROADS AND OTHER PUBLIC AMENITIES. EXTRACT FROM RELATED RULES AND REGULATIONS PRODUCED BY THE ASSESSEE WOULD SHOW THA T ASSESSEE HERSELF HAD PROPOSED A DIVISION OF THE LAND INTO SI ZES WHEREIN MORE THAN 33% WAS EARMARKED FOR PUBLIC AMENITIES. IN AN Y CASE, THE DRAFT REPORT OF THE DVO WAS DATED 16.12.2011 AND FINAL RE PORT WAS DATED 26.12.2011. ASSESSING OFFICER HAD PASSED ASSESSMEN T ORDER ON 23.12.2011 EVEN BEFORE RECEIVING THE FINAL REPORT O F THE DEPARTMENTAL VALUATION OFFICER. SECTION 50C(2) OF THE ACT MANDA TES THAT THE VALUATION OFFICER SHALL ABIDE BY SUB-SECTIONS (2) T O (6) OF SECTION 16A OF WEALTH-TAX ACT, 1957, AND SUB-SECTION (4) THEREO F SAYS THAT AN OPPORTUNITY HAS TO BE GIVEN TO THE ASSESSEE FOR RAI SING HIS OBJECTIONS. SUCH AN OPPORTUNITY HAS TO BE AN EFFECTIVE ONE AND NOT ONE WHICH IS ILLUSORY. 5. WE ARE, THEREFORE, OF THE OPINION THAT THE MATTE R REQUIRES A REVISIT BY THE AUTHORITIES BELOW. WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND REMIT THE ISSUE BACK TO THE FILE OF THE A .O. FOR CONSIDERATION AFRESH. THE A.O. SHALL REQUEST FOR A FRESH REPORT FROM DVO AND DVO I.T.A. NO. 1818/MDS/12 5 SHALL CONSIDER THE OBJECTIONS OF THE ASSESSEE AND G IVE HIS FINAL REPORT. THEREAFTER THE A.O. SHALL PROCEED IN ACCORDANCE WIT H LAW. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, THE 4 TH OF JUNE, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 4 TH JUNE, 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-I, COIMBATORE (4) CIT-I, COIMBATORE (5) D.R. (6) GUARD FILE