Madan Lal, Bareilly V. Income Tax Officer, Bareilly

ITA 184/LKW/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4385 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice
• Section: 50C; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.184/LKW/2016 ASSESSMENT YEAR 2005-06 INCOME TAX OFFICER, WARD 1(2), BAREILLY VS MADAN LAL, S/O SHRI CHHADDAMI LAL, HARUNAGLA, BAREILLY (U.P.) PAN A ITPL 7506 K (RESPONDENT) (APPELLANT) SHRI YOGESH AGARWAL, ADVOCATE APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 12/07/2016 DATE OF HEARING 15/07/2016 DATE OF PRONOUNCEMENT O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A) INTER ALIA ON FOLLOWING GROUNDS: I. THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS), BAREILLY [HERE-IN-AFTER REFERRED TO AS THE LD. CIT (A)S] GR OSSLY ERRED ON FACTS AND IN LAW IN CONFORMING THE ADDITION OF RS.6 ,98,480/- MADE AS LONG TERM CAPITAL GAINS BY FIRSTLY ADOPTING THE VALUATION AS PER SECTION 50C AT RS.49,20,000/-INSTE AD OF ACTUAL SALE CONSIDERATION OF RS.8,75,000/- AND SECO NDLY NOT ALLOWING THE AMOUNT OF RS.5,00,000/- CLAIMED AS TRA NSFER CHARGES BEING STAMP DUTY AND REGISTRATION FEE FROM THE TOTAL COST OF THE PROPERTY SOLD AND THUS THE ORDER BEING BAD-IN-LAW AND VOID-AB-INITIO MAY KINDLY BE ORDERED TO BE SET ASIDE AND THE ADDITION BE DELETED. II. IN CONFORMING THE ADDITION OF RS.6,98,480/- THE LD. CIT (A)'S GROSSLY ERRED ON FACTS AND IN LAW IN ADOPTING THE S ALE VALUE AS PER SECTION 50C AND IN NOT APPRECIATING THAT IT IS INCUMBENT 2 UPON THE ASSESSING OFFICER TO REFER THE MATTER TO T HE DVO IN EASE THE APPELLANT HAS ADOPTED THE ACTUAL SALE CONS IDERATION RECEIVED BEING THE VALUATION AS PER SALE DEED IN TH E INTERESTS OF NATURAL JUSTICE AND FAIR PLAY AND ALSO AS HELD B Y A NUMBER OF JUDICIAL DECISIONS UPON THIS ISSUE AND THUS TO H OLD THAT AS THE ASSESSEE HAS NOT CHALLENGED THE CIRCLE RATES IS WHOLLY UNTRUE AND AGAINST ALL SETTLED PRINCIPLES OF LAW AN D THUS THE ORDER OF THE LD. CIT (A)'S BEING VITIATED MAY KINDL Y BE ORDERED TO BE SET ASIDE THE RELIEF GRANTED ACCORDINGLY. III. ON THE FACTS AND PECULIAR CIRCUMSTANCES OF THE PRESENT CASE THE LD. CIT (A)'S GROSSLY ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE TRANSFER EXPENSES OF RS.5,00,000/- ON THE ENTIRE PROPERTY BEING RS.4,92,000/- STAMP DUTY AND RS.8,00 0/- REGISTRATION FEE WHICH WERE DULY MENTIONED IN THE S ALE DEED ITSELF AS HAVING BEING INCURRED BY THE SELLERS AND THUS IN CONFORMING THE ADDITION AND NOT ALLOWING THIS BENEF IT IS WHOLLY IRRATIONAL, PREJUDICED AND FACTS ON RECORD. IV. THE LD. CIT (A)'S FURTHER GROSSLY ERRED ON F ACTS AND IN LAW IN CONFORMING THE ADDITION OF RS.50,000/- MADE TOWARDS ALLEGED LOW HOUSE HOLD WITHDRAWALS WITHOUT ANY COGENT MATER IAL ON RECORD AND THUS AS THE ADDITION AND ITS CONFIRMATIO N IS BASED ON WHIMS AND FANCIES THE SAME MAY KINDLY BE ORDERED TO BE DELETED. V. THAT THE LD, CFT (A)'S DID NOT AFFORD THE AP PELLANT ANY PROPER OR SUFFICIENT OPPORTUNITY TO HAVE HER SAY OR MAKE N ECESSARY COMPLIANCE OF THE REASONS RELIED UPON BY HIM IN CON FORMING THE ADDITIONS AND THUS THE ORDER SO PASSED WITHOUT AFFORDING ADEQUATE OPPORTUNITY MAY KINDLY BE ORDERED TO BE QU ASHED. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE A SSESSEE HAS INVITED MY ATTENTION THAT THE ASSESSING OFFICER HAS PASSED THE EX-PARTE ORDER U/S 144 OF THE ACT. THERE IS A DISPUTE WITH RESPECT TO THE VAL UATION ADOPTED BY THE ASSESSING OFFICER AND DVO IN ORDER TO COMPUTE THE L ONG TERM CAPITAL GAIN, BUT THE CIT(A), WITHOUT LOOKING TO THE OBJECTION AND IN STEAD OF REFERRING THE MATTER TO THE DVO, HAS APPROVED THE ORDER OF THE ASSESSING OFFICER. LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED MY ATTENTION TO THE PROVIS IONS OF SECTION 50C OF THE ACT 3 WITH THE SUBMISSION THAT WHENEVER THE VALUATION ADO PTED BY THE ASSESSING OFFICER IS DISPUTED, IT IS TO BE REFERRED TO THE DV O BEING A TECHNICAL EXPERT TO DETERMINE THE VALUATION OF THE CAPITAL ASSETS SOLD BY THE ASSESSEE. 3. LD. DR OF THE REVENUE ON THE OTHER HAND HAS SUBMITT ED THAT BEFORE THE ASSESSING OFFICER NONE APPEARED ON BEHALF OF THE AS SESSEE, THEREFORE, THE VALUATION ADOPTED BY THE ASSESSING OFFICER WAS NOT DISPUTED AND IN THAT EVENTUALITY THERE IS NO OCCASION WITH THE ASSESSING OFFICER TO MAKE A REFERENCE TO DVO. THIS DISPUTE WAS RAISED FIRST TIME BEFORE T HE CIT(A) AND CIT(A) HAS NO JURISDICTION TO MAKE A REFERENCE TO DVO FOR DETERMI NE OF THE VALUATION OF THE CAPITAL ASSETS SOLD. 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AU THORITIES IN THE LIGHT OF JUDGMENT OF THE CALCUTTA HIGH COURT REFERRED BY THE ASSESSEE IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT REPORTED IN 372 ITR 83 AND THE PROVISIONS OF SECTION 50C OF THE ACT, I FIND THAT WHILE COMPUTING THE CAPITAL GAIN AS PER PROVISIONS OF SECTION 50C OF THE ACT, PROPER AND FA IR OPPORTUNITY SHOULD HAVE BEEN GRANTED TO THE ASSESSEE BUT IN THE INSTANT CAS E ASSESSMENT ORDER PASSED U/S 144 OF THE ACT AS SUCH NO OPPORTUNITY WAS AFFOR DED TO THE ASSESSEE TO RAISE A DISPUTE WITH REGARD TO THE VALUATION OF THE CAPIT AL ASSETS SOLD DURING THE YEAR. THE DISPUTE WAS RAISED FIRST TIME BEFORE THE CIT(A) . THROUGH THE JUDGMENT IN THE CASE OF SUNIL KUMAR AGARWAL (SUPRA), THE HONBL E CALCUTTA HIGH COURT HAS EXPRESSED HIS VIEWS THAT THE ASSESSING OFFICER SHOU LD, IN FAIRNESS, GIVE OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPA RTMENTAL VALUATION OFFICER CONTEMPLATED U/S 50C OF THE ACT. 5. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE A SSESSEE HAS CONTENDED ON MERIT THAT EVEN THE CALCULATION OF CAPITAL GAIN IS ALSO NOT PROPER AS THE ASSESSEE HAS INCURRED THE EXPENSES IN REGISTRATION OF SALE DEED. THOUGH THIS FACTS WERE BROUGHT TO THE NOTICE OF THE CIT(A) BUT IT WAS NOT TAKEN INTO ACCOUNT. 4 LD. COUNSEL FURTHER CONTENDED THAT WHEN THE ASSESSE E HAS RAISED A DISPUTE WITH REGARD TO VALUATION TO BE ADOPTED BY THE ASSESSING OFFICER, THE CIT(A) SHOULD HAVE MADE THE REFERENCE TO THE DVO OR RESTORE THE M ATTER TO THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAIN IN THE LIGHT OF CONTENTIONS OF THE ASSESSEE. BUT THE CIT(A) DID NOT AFFORD OPPORTUNITY TO THE AS SESSEE AND CONFIRM THE ORDER OF THE ASSESSING OFFICER. 6. IN THE LIGHT OF PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE ASSESSEE HAS NO OCCASION TO DISPUTE VALUATION, THE CIT(A) SHOULD HAVE AFFORDED OPPORTUNITY TO THE ASSESSEE TO RAISE A DISPUTE BY M AKING A REFERENCE TO DVO OR RESTORE THE MATTER TO ASSESSING OFFICER TO READJUDI CATE THE ISSUE AFTER OBTAINING THE REPORT FROM THE DVO, I THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER WITH DIRECTION TO RE- COMPUTE THE CAPITAL GAIN ON SALE OF LONG TERM CAPIT AL ASSETS AFTER MAKING A PROPER REFERENCE TO DVO. ACCORDINGLY, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- (S.K. YAD AV ) JUDICIAL MEMBER DATED: 15/07/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGIS TRAR