Asad Cassim, CHENNAI V. ACIT, CHENNAI

ITA 1822/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86356 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 26-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: ANIL NAIR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! . . ' , # $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO.1822/MDS/2014 # % !&% / ASSESSMENT YEAR : 2006-07 SHRI ASAD CASSIM, P-21/B, 3 RD MAIN ROAD, ANNA NAGAR, CHENNAI - 600 040. PAN : ADKPA 2015 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE III, CHENNAI - 600 034. (()/ APPELLANT) (+,()/ RESPONDENT) () - . / APPELLANT BY : SHRI ANIL NAIR, CA +,() - . / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT / ! - 0 / DATE OF HEARING : 26.02.2015 1& - 0 / DATE OF PRONOUNCEMENT : 11.03.2015 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER: THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-0 7 ARISES FROM ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- III, CHENNAI, DATED 13.11.2013 PASSED IN ITA NO.441 /2013-14, ASSESSING VALUE OF THE CAPITAL ASSET SOLD AT ` 98,23,000/- AGAINST - - I.T.A. NO. 1822/MDS/2014 2 ` 65,00,000/- DECLARED, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE CASE FILE REVEALS THAT THE PRESENT APPEAL IS TIME BARRED BY DELAY OF 85 DAYS IN FILING. THE ASSESSEE FILED AN AFFIDAVIT DATED 25.06.2014 PRAYING FOR CONDONATION. IT IS STATED THEREIN THAT HE HAS CHANGED HIS AUTHORIZED REPRESEN TATIVE CAUSING DELAY IN COLLECTION OF NECESSARY DOCUMENTS. THE REVENUE FAILS TO CONTROVERT THESE SOLEMN AFFIRMATIO NS. THEREFORE, WE ACCEPT THE ASSESSEES AFFIDAVIT AND C ONDONE DELAY OF 85 DAYS IN FILING. THE CASE IS TAKEN UP ON MERI TS FOR DISPOSAL. 3. THE ASSESSEE CO-OWNED A PROPERTY CONSISTING OF L AND AND BUILDING MEASURING 2200 SQ.FT. AT OS NO.34, RS NO.2 91, BLOCK NO.8, TRIPLICANE-MYLAPORE DIVISION, CHENNAI (HEREIN AFTER THE CAPITAL ASSET). ALL OF THE CO-OWNERS SOLD THIS AS SET ON 20.03.2006 FOR ` 65,00,000/-. THE ASSESSEE WOULD ADMIT AN INCOME OF ` 15,16,793/- INCLUDING LONG TERM CAPITAL GAINS OF ` 9,63,875/- AS PER THE ACTUAL SALE PRICE. THE SAME WAS SUMMARILY PROCESSED. THEREAFTER, THE ASSESSING O FFICER FRAMED A REGULAR ASSESSMENT ON 30.12.2008, INVOKED SECTION 50C, - - I.T.A. NO. 1822/MDS/2014 3 ADOPTED GUIDELINE VALUE OF ` 95.20 LAKHS AS MARKET VALUE OF THE ASSET SOLD AND COMPUTED LONG TERM CAPITAL GAINS OF ` 15,17,707/-. 4. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(APPEA LS) REFERRED THE CASE FOR VALUATION. THE DVO SUBMITTED A REPORT. THE CIT(APPEALS) CONFRONTED CONTENTS THEREOF TO THE ASSESSEE AND DISMISSED HIS APPEAL AS UNDER:- 6.4 IN RESPONSE TO THE SAME, MR. ASAD CASSIM ALONG WITH MR. MANI MOHAN APPEARED AND FILED THEIR OBJECT IONS TO THE VALUATION OFFICERS REPORT VIDE LETTER 30.10.20 13. FURTHER, HE FILED A COPY OF THE SALE DEED DATED 20. 03.2006. AS ADMITTED BY MR. ASAD CASSIM IN HIS LETTER DATED 30.10.2013 AT PARA 1 . THE PROPERTY WAS SOLD ON 20.03.2006 AND YET THE VALUATION OFFICER HAS ARBITR ARILY ADOPTED A VALUE OF ` 4000/- PER SQ.FT. INSTEAD OF ` 1843 PER SQ.FT. (THIS POINT ESCAPED MY ATTENTION WHILE REPL Y TO THE VALUATION OFFICER). FIRST, THE ASSESSEE CONTENTS TH AT THE A.O. ADOPTED WRONG VALUE AND REQUESTS FOR REFERRING TO VALUATION OFFICER AND THEN HE STATES THAT THE POINT ESCAPED HIS ATTENTION. EVEN IN THE STATEMENT OF FACTS FILE D ALONG WITH THE APPEAL, IT IS NOTICED THAT THE APPELLANT S HOWED A LONG TERM CAPITAL GAIN OF ` 963875/- WHICH WAS SUBSEQUENTLY REVISED TO ` 1517707/-. IN FACT, THE OBJECTIONS OF THE APPELLANT ABOUT THE LACK OF ORIGI NAL DOCUMENTS HAS BEEN CONSIDERED BY THE VALUATION OFFI CER IN HIS REPORT AND HAS COMMENTED AT PAGE 3 OF THE SAID VALUATION REPORT, IN REPLY TO OBJECTION NO.4: NO DOCUMENTARY EVIDENCE HAVE BEEN FURNISHED. HENCE, T HE SAID ASPECT CANNOT BE CONSIDERED. FURTHER, AS NOT ICE FROM THE TRUE COPY OF THE SALE DEED GIVEN BY THE AP PELLANT AT PAGE 17 OF THE SAID COPY MENTIONED AS ANNEXURE 1 A, THE FOLLOWING DETAILS ARE MENTIONED: STAMP DUTY PAID ON: LAND VALUE : 78,72,120/- BUILDING VALUE : 16,48,780/- TOTAL : 95,20,000/- - - I.T.A. NO. 1822/MDS/2014 4 HENCE, THE A.O. WAS JUSTIFIED IN ARRIVING AT THE VA LUE OF ` 95.20 LAKHS FOR THE SAID PROPERTY AS AGAINST THE RE ALIZED SALE VALUE. IT WAS ON THE APPELLANT REQUEST THE MA TTER WAS REFERRED TO VALUATION OFFICER BEING A TECHNICAL EXP ORT AND THE VALUE ARRIVED AT BY SUCH AUTHORITY HAS TO BE TA KEN. HENCE, THE VALUE OF THE SAID PROPERTY IS TAKEN AS ` 98.23 LAKHS. THE A.O. IS DIRECTED TO REWORK THE CAPITAL GAIN ACCORDINGLY. APPEAL DISMISSED. THIS LEAVES THE ASSESSEE AGGRIEVED. 5. WE HAVE HEARD BOTH SIDES AND RECORDS PERUSED. T HE QUESTION THAT ARISES FROM THE DIVERGENT ARGUMENTS O F THE PARTIES IS THAT OF VALUATION OF THE CAPITAL ASSET SOLD ON 2 0 TH MARCH, 2006. THE ASSESSEE JUSTIFIES ITS PRICE TO BE ` 65,00,000/- AS PER SALE DEED. THE REVENUES STAND IS IN SUPPORT OF THE CIT (APPEALS)S ORDER RELYING ON DVOS REPORT QUOTING ITS VALUE AS ` 98.23 LAKHS @ ` 4000/- PER SQ.FT. THE ASSESSING OFFICER ADOPTED G UIDELINE VALUE U/S 50C OF THE ACT TO DETERMINE THE ASSETS V ALUE AT ` 95.20 LAKHS. THE CASE RECORD REVEALS THAT THE GUIDELINE VALUE OF THE PROPERTY SOLD WAS ` 1843/- PER SQ.FT. UPTO 31.07.2007. THEREAFTER, IT STOOD REVISED TO ` 5430/- PER SQ.FT. WE REITERATE THAT THE IMPUGNED SALE DEED IS DATED 20.03.2006. IT IS EVIDENT THAT VARIOUS SALE DEEDS EXECUTED BETWEEN 20.07.2005 TO 2 0.03.2006 PER SQUARE FEET RATES OF SURVEY NOS.289, 267, 292, 293 AND 294 - - I.T.A. NO. 1822/MDS/2014 5 IN THE VERY AREA ARE BETWEEN ` 597 TO ` 783/-. THE ASSESSEES SURVEY NUMBER IS 291. HOWEVER, HE FAILS TO PRODUCE SITE PLAN DEMONSTRATING PROXIMITY OF THE ABOVE SURVEY NUMBERS . THE FACT ALSO REMAINS THAT SINCE THESE NUMBERS ARE IN THE SA ME SERIES, A REASONABLE INFERENCE CAN BE DRAWN THAT THEY ARE SIT UATED NEAR TO EACH OTHER. WE DEEM IT APPROPRIATE TO OBSERVE THAT A CRUCIAL ASPECT ASCERTAINING FAIR MARKET VALUE AT AN EXORBIT ANT RATE OF ` 4000/- PER SQ.FT. CANT ALSO BE ALTOGETHER IGNORED. IN THESE PECULIAR CIRCUMSTANCES, WE APPLY THUMB RULE AND FEE L THAT LARGER INTEREST OF JUSTICE WOULD BE MET IN CASE THE IMPUGN ED VALUE OF THE CAPITAL ASSET IS FIXED SOMEWHERE BETWEEN ` 65 LAKHS (STATED IN THE SALE DEED) AND ` 98.23 LAKHS (DVOS RATE) IS TO ` 80 LAKHS. IT IS MADE CLEAR THAT SUCH VALUATION ISSUE IS ALWAY S A SUBJECTIVE DISPUTE NOT INVOLVING ANY RIGID PARAMETER. THUS, T HE ASSESSING OFFICER IS DIRECTED TO PASS A CONSEQUENTIAL ORDER T REATING THE FAIR MARKET VALUE OF THE ASSESSEES ASSET SOLD AS ` 80 LAKHS AS ON 20.03.2006 AND COMPUTE LONG TERM CAPITAL GAINS IN Q UESTION ACCORDINGLY. 6. THE ASSESSEES APPEAL IS PARTLY ALLOWED. - - I.T.A. NO. 1822/MDS/2014 6 ORDER PRONOUNCED ON WEDNESDAY, THE 11 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (S.S. GODARA) ( . ) ( . . ') / ACCOUNTANT MEMBER # /JUDICIAL MEMBER /CHENNAI, 3 /DATED, THE 11 TH MARCH, 2015. KRI. 4 - +#056 76&0 /COPY TO: 1. () /APPELLANT 2. +,() /RESPONDENT 3. / 80 () /CIT(A)-III, CHENNAI-34 4. / 80 /CIT, CHENNAI-III, CHENNAI-34 5. 6!9' +#0# /DR 6. ':% ; /GF.