Nandkumar Namdeo Tupe, L/h. of Late NP Tupe, Pune V. Income-tax Officer,

ITA 1889/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1169 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Search and seizure; Cost of acquisition; Fair market value; Valuation report; Reason to believe
• Section: 143(3); 50C; 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1 889 /PN/201 4 / ASSESSM ENT YEAR : 20 05 - 06 SHRI NANDKUMAR NAMDEO TUPE L/H OF LATE NAMDEO PANDURANG TUPE, M/S. MZSK & ASSOCIATES CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE 411001 . / APPELLANT PAN: A EEPT157 8C VS. THE INCOME TAX OFFICER , WARD 1 ( 3 ), PUNE . / RESPONDENT WARD 1 ( 3 ), PUNE . / RESPONDENT / APPELLANT BY : SHRI NILESH KHANDELWAL / RESPONDENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 16 . 0 8 .201 6 / DATE OF PRONOUNCEMENT: 16 . 0 8 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1 , PUNE , DATED 3 0 . 0 6 .20 1 4 RELATING TO ASSESSMENT YEAR 20 05 - 06 AGAINST ORDER PASSED UNDER SECTION 1 43(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 2 1. THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED CONDONED THE DELAY IN FILING THE APPEAL. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 INSTEAD OF PROVISIONS OF SEC. 153C BY THE AO FOR REOPENING THE ASSES SMENT IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THA T CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3 . WITHOUT PREJUDICE TO GROUND NO. 2 , IT BE HELD THAT ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC.147. IT FURTHE R BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S.143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 4 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISIONS OF SEC. 148/147 BY THE AO FOR REOPENING THE ASSESSMENT ON THE BASIS OF DE PARTMENT VALUATION OFFICER IN CASE OF ANOTHER ASSESSEE IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC. 147. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORITY IS NOT JUSTIFIED IN CONFIRMING THE A CTION OF THE AO IN THIS RESPECT. THE ASSESSMENT FRAMED BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 143(3) R.W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 5 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, IT BE HELD THAT, LONG TERM CAPITAL GAIN WORKED OUT BY THE AO IN PLACE OF THAT WORKED OUT BY THE APPELLANT IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAI LING IN THE CASE. THE LONG TERMS CAPITAL LOSS AS WORKED OUT BY THE APPELLANT OF RS. 4 8, 900 / - SHOULD HAVE BEEN ADMITTED AND ALLOWED IN PLACE OF LONG TERMS CAPITAL GAIN WORKED OUT BY THE AO AT RS. 27 , 92 , 700 / - . IT MAY FURTHER BE HELD THAT REJECTING THE VALUATIO N REPORT ISSUED BY A GOVERNMENT APPROVED VALUER AND FRESH REFERENCE TO DEPARTMENT VALUATION OFFICER AS PER PROVISIONS OF SEC.55A IS IMPROPER, ERRONEOUS, CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT MAY FURTHER BE HELD THAT THE VA LUATION REPORT ISSUED BY A GOVERNMENT APPROVED VALUER WHICH HAS BEEN ADOPTED BY THE APPELLANT FOR COMPUTATION OF LONG TERM CAPITAL GAIN IS AS PER THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. THE REFERENCE MADE TO DEPARTMENT VALUATION OFFICER U/ S.55A AND COMPUTATION OF LONG TERM GAIN MADE ON THIS BASIS BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 3 6 . ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE FIRST APPELLATE AUTHORITY HAS NOT ADJUDICATED THE GROUND 5 RAISED BEFORE THE FIRST APPELLATE AUTHORITY. IT FURTHER BE HELD AND THE FIRST APPELLATE AUTHORITY SHOULD BE DIRECTED TO ADJUDICATE TH E GROUND NO. 5 RAISED BY THE APPELLATE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 7 . WITHOUT PREJUDICE TO THE GROUND NO.6, IT BE HELD THAT ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE THAT AND AS PER PROVISIONS & SCHEME OF THE A CT, RESORTING TO THE PROVISIONS OF SEC.142A TREATING THE SALE OF ASSETS AS UNEXPLAINED ASSETS U/S.69, 69A AND 69B IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESORTING TO THE PROVISIONS OF SEC.142A. IT FURTHER BE HELD THAT THE 1 ST APPELLATE AUTHORIT Y IS NOT JUSTIFIED IN NOT ADJUDICATING THE GROUND NO.4 RAISED BY THE APPELLATE. THE COMPUTATION OF LONG TERM CAPITAL GAIN MADE BY THE AO & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY BY ADOPTING VALUATION AS PER PROVISIONS OF SEC.142A BE SET ASIDE. THE A PPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3 . THE PRESENT APPEAL IS FILED AFTER DELAY OF 22 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT IN THIS REGARD POINTING OUT THE REASONS FOR DE LAY IN FILING THE APPEAL LATE BEFORE THE TRIBUNAL. IN T HE TOTALITY OF THE FACTS AND CIRCUMSTANCES AS MENTIONED IN THE AFFIDAVIT, THERE IS MERIT IN THE PLEA OF ASSESSEE AND HENCE, THE DELAY OF 22 DAYS IS CONDONED AND APPEAL IS HEARD ON MERITS. DELAY OF 22 DAYS IS CONDONED AND APPEAL IS HEARD ON MERITS. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OU TSET POINTED OUT THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN RELATED CASES. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE DID NOT CONTROVERT THE SUBMISSIONS OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD. 6. ON PERUSAL OF RECORD, THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST INVOKING OF PROVISIONS OF SECTION 147/148 OF THE ACT FOR REOPENING THE ASSESSMENT. ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 4 7. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD ALONG WITH OTHER CO - OWNERS SOLD THE PLOT OF LAND SITUATED AT HADAPSAR, PUNE ON 03.07.2004. AN IDENTICAL ISSUE AROSE BEFORE THE TRIBUNAL IN THE CASE OF SMT. SANGEETA SANJAY GHULE VS. ITO IN ITA NO.1764/PN/2014 AND ALSO IN SMT. MINAKSHI D. GHULE VS. ITO IN ITA NO .1761/PN/2014, RELATING TO ASSESSMENT YEAR 2005 - 06 AND VIDE CONSOLIDATED ORDER DATED 30.06.2016 , THE FACTUAL ASPECTS OF THE CASE WERE NOTED BY THE TRIBUNAL WHICH READ AS UNDER: - 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD SOLD THE LAND SITUATED AT SR.NO.201, SADESATRA NALI, HADAPSAR ON 03.07.2004. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD DISCLOSED INCOME FROM LONG TERM CAPITAL GAINS ON SALE OF THE SAID LAND. FOR COMPUTING THE COST OF ACQUISITION, THE ASSESSEE HAD ADOPTED THE FAIR MARK ET VALUE AS ON 01.04.1981, AS PER THE REPORT OF GOVERNMENT APPROVED VALUER. THE ASSESSING OFFICER RECEIVED INFORMATION FROM DCIT, CENTRAL CIRCLE 2(3), PUNE ON 02.03.2009 IN THE CASE OF SUNIL RAMACHANDA TUPE (HUF). THE ASSESSING OFFICER FOUND THAT SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF SHRI RAHUL ROHIDAS TUPE AND OTHERS ON 02.12.2006. DURING THE COURSE OF POST SEARCH ENQUIRIES, THE ADIT (INV), UNIT 1(1), PUNE IN THE APPRAISAL REPORT DATED 29.01.2007 HAD OBSERVED THAT SHRI SUNIL RAMCHANDR A TUPE AND HIS 10 FAMILY MEMBERS TRANSFERRED THE LAND AT HADAPSAR ADMEASURING 5790 SQ.MTRS. TO M/S. R.R. TUPE BUILDERS PVT. LTD. VIDE DEVELOPMENT AGREEMENT DATED 04.08.2004 FOR CONSIDERATION OF RS.46,45,250/ - PLUS TWO PLOTS OF RS.10 LAKHS AS CONSIDERATION IN KIND. THE SALE RS.46,45,250/ - PLUS TWO PLOTS OF RS.10 LAKHS AS CONSIDERATION IN KIND. THE SALE RATE PER SQUARE METER WORKED TO RS.975/ - . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD TAKEN THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AT RS.205/ - PER SQUARE METER, AS SUCH, THE VALUE OF THE LAND SOLD AT 5790 SQ.MTRS. WORK ED OUT TO RS.11,86,950/ - AND AFTER INDEXING, THE INDEXED COST OF ACQUISITION WORKED OUT TO RS.56,97,360/ - THE ADIT(INV) ON GOING THROUGH THE DOCUMENTS HAD OBSERVED THAT THE VALUE OF ABOVE PROPERTY FOR STAMP DUTY PURPOSE WAS TO BE CONSIDERED AT RS.41,02,27 5/ - AND SINCE THE PROPERTY UNDER REFERENCE WAS AN ANCESTRAL PROPERTY, THE RESULTANT CAPITAL GAINS HAD TO BE TAXED IN ASSESSMENT YEAR 2005 - 06 IN THE HANDS OF HUF AND NOT IN THE HANDS OF INDIVIDUAL. ON THE BASIS OF SAID INFORMATION, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) FOR ASSESSMENT YEAR 2005 - 06. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FILED A LETTER DATED 18.12.2009 ALONG WITH COPY OF 7/12 EXTR ACT OF THE SAID LAND AND ALSO PHER - PHAR EXTRACT OF THE LAND. HE EXPLAINED THAT THE ASSESSEE AND HIS FIVE OTHER FAMILY MEMBERS HAD 1/6 TH SHARE IN THE SAID PROPERTY IN THE INDIVIDUAL CAPACITY AND THE SAID TRANSACTION HAD BEEN SHOWN BY THE ASSESSEE IN THE INDIVIDUAL RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2005 - 06 ON 10.08.2005 WITH ITO, WARD 1(3), PUNE DECLARING TOTAL LOSS OF RS.8,685/ - . THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT IN THE PRESENT CASE PERUSED THE RETURN OF INCOME FILED BY THE A SSESSEE AND NOTED THAT HE HAD ADOPTED THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AT RS.205/ - PER SQ.MTR. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF), THE MATTER WAS REFERRED TO THE GOVERNMENT VALUATI ON OFFICER, IT DEPARTMENT, SOLAPUR FOR VALUATION PURPOSES OF THE SAID LAND UNDER SECTION 55A/50C(2) OF THE ACT TO ARRIVE AT THE VALUATION AS ON 01.04.1981 AND FAIR MARKET VALUE ON 04.08.2004. ON THE BASIS OF VALUATION REPORT IN RESPECT OF SAID LAND, THE L ONG TERM CAPITAL GAINS WAS RE - COMPUTED IN THE HANDS OF ASSESSEE BY ADOPTING THE SALE CONSIDERATION AT RS.56,45,280/ - AND BY ADOPTING ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 5 THE COST OF ACQUISITION AT RS.5,85,000/ - AND INDEXED COST OF ACQUISITION AT RS.28,08,000/ - . THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.28,37,250/ - , IN WHICH THE ASSESSEES SHARE WAS PROPOSED TO BE RS.4,72,875/ - . THE ASSESSEE WAS SHOW CAUSED IN THIS REGARD, WHO IN TURN, SUBMITTED ITS REPLY WHICH IS INCORPORATED IN THE ASSESSMENT ORDER ITSELF. THE ASSESSEE SUBMITTED THAT T HE RETURN OF INCOME FILED ON 10.08.2005 BE TREATED AS IN COMPLIANCE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE NEXT OBJECTION RAISED BY THE ASSESSEE WAS AGAINST THE REFERENCE TO THE VALUATION OFFICER UNDER SECTION 55A OF THE ACT, WHERE THE VAL UE TAKEN BY THE ASSESSEE AS COST OF ACQUISITION UNDER SECTION 48 OF THE ACT WAS BASED UPON THE VALUATION CERTIFICATE FURNISHED BY THE GOVERNMENT APPROVED VALUER. THE PLEA OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT WHERE THE COST OF ACQUISITION IS BACKED BY GOVERNMENT APPROVED VALUER, THEN NO REFERENCE CAN BE MADE TO THE DISTRICT VALUATION OFFICER IN ORDER TO COMPUTE THE COST OF ACQUISITION, WHICH IS LOWER. THE ASSESSING OFFICER REJECTED THE PLEA OF THE ASSESSEE IN THIS REGARD AND POINTED OUT TH AT THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WAS TAKEN ON HIGHER SIDE BY THE ASSESSEE AT RS.205/ - PER SQ.MTR. IN ORDER TO DETERMINE THE CORRECT VALUE OF THE PROPERTY, REFERENCE WAS MADE UNDER SECTION 55A/50C(2) OF THE ACT IN THE CASE OF SUNIL RAM CHANDRA TUPE (HUF) TO ARRIVE AT THE VALUE AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON 04.08.2004. COST OF ACQUISITION ADOPTED BY THE GOVERNMENT VALUATION OFFICER, SOLAPUR WAS RS.101.01 PER SQ.MTR. AND ON THIS BASIS, THE LONG TERM CAPITAL GAINS WORKED OUT TO RS.28,37,250/ - AND ASSESSEES SHARE COMES TO RS.4,72,875/ - AS AGAINST THE LOSS SHOWN BY THE ASSESSEE AT RS.8,685/ - . 8. THE CIT(A) CONSIDERED THE PLEA OF ASSESSEE IN RESPECT OF REOPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE ACT AND VARIOUS FACET S OF REOPENING AND ALSO REFERENCE MADE TO THE VALUATION OFFICER UNDER SECTION 55A/50C OF THE ACT AND DECIDED THE SAME AGAINST THE ASSESSEE . 9. THE TRIBUNAL ADJUDICATED THE ISSUE VIDE PARA 15 ONWARDS OBSERVING AS UNDER: - 15. ON PERUSAL OF RECORD AND THE PAPER BOOK FILED BY THE ASSESSEE AND ALSO THE LEGAL RELIANCES, THE ISSUE TO BE ADJUDICATED IN THE PRESENT APPEAL IS AGAINST INVOKING OF JURISDICTION UNDER SECTION 147/148 OF THE ACT IN THE HANDS OF ASSESSEE. THERE WAS SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF SHRI RAHUL ROHIDAS TUPE AND OTHERS ON 02.12.2006. IN THE CASE OF SUNIL RAMCHANDRA TUPE (HUF) INFORMATION WAS RECEIVED FROM THE DCIT, CENTRAL CIRCLE 2(3), PUNE ON 02.03.2009. IN THE APPRAISAL REPORT, THE ADIT HAD OBSERVED THAT SHRI SUN IL RAMACHANDRA TUPE AND HIS 10 FAMILY MEMBERS HAD TRANSFERRED THE LAND AT HADAPSAR ADMEASURING 5790 SQ.MTRS. TO M/S. R.R. TUPE BUILDERS PVT. LTD. VIDE DEVELOPMENT AGREEMENT DATED 04.08.2004 FOR CONSIDERATION OF RS.46,45,250/ - PLUS TWO PLOTS OF RS.10 LAKHS AS CONSIDERATION IN KIND. THE SALE RATE PER SQUARE METER WORKED OUT TO RS.975/ - . SHRI SUNIL RAMACHANDRA TUPE IN HIS INDIVIDUAL CAPACITY HAD SHOWN CAPITAL LOSS OF RS.8,685/ - UNDER THE HEAD LONG TERM CAPITAL GAINS FOR THE ASSESSMENT YEAR 2005 - 06 WHILE WORK ING OUT COST OF ACQUISITION. THE LAND WAS ADMITTED TO BE AN ANCESTRAL LAND AND FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 WAS TAKEN AT RS.205/ - PER SQ.MTR. THE INDEXED COST OF ACQUISITION WORKED OUT TO ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 6 RS.56,97,360/ - AND THE NET LOSS WORKED OUT TO RS .52,110/ - , IN WHICH THE ASSESSEE CLAIMS TO HAVE 1/6 TH SHARE TO THE EXTENT OF RS.8,685/ - . ON THE BASIS OF INFORMATION, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO SUNIL RAMACHANDRA TUPE (HUF), WHEREIN HE CLAIMED THAT THE SAID PROPERTY WAS OWNED BY HI M IN HIS INDIVIDUAL CAPACITY. HOWEVER, THE ASSESSING OFFICER IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) REFERRED THE MATTER TO THE GOVERNMENT VALUATION OFFICER FOR VALUATION PURPOSES OF THE SAID LAND UNDER SECTION 55A/50C(2) OF THE ACT TO ARRIVE AT THE V ALUATION AS ON 01.04.1981 AND FAIR MARKET VALUE AS ON 04.08.2004. ON THE BASIS OF SAID VALUATION, THE LONG TERM CAPITAL GAINS IN THE CASE OF FAMILY WAS RE - COMPUTED AND THE ASSESSEES SHARE WORKED OUT TO RS.4,72,875/ - . THE ASSESSING OFFICER THUS, HELD THA T THERE WERE REASONS TO BELIEVE THAT THE INCOME OF ASSESSEE FOR ASSESSMENT YEAR 2005 - 06 HAD ESCAPED THE ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT, WHEREIN THE TAXABLE LONG TERM CAPITAL GAINS COMES TO RS.4,72,875/ - AS AGAINST LOSS OF RS.8,685/ - . THUS, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IS AGGRIEVED BY THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND CONSEQUENT ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSE E IS ALSO AGGRIEVED BY THE COMPUTATION OF LONG TERM CAPITAL GAINS IN HER HANDS AND HENCE, THE PRESENT APPEAL. 16. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION TO TWO FACETS I.E. (I) SALE CONSIDERATION TO BE ADOPTED AND (II) FAIR MARKET VALUE AS O N 01.04.1981. THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT WHERE THE INCOME HAD BEEN CORRECTLY DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME, THEN IN THE ABSENCE OF ANY REASONS TO BELIEVE OF ESCA PEMENT OF INCOME, THERE WAS NO REASON TO INITIATE THE RE - ASSESSMENT PROCEEDINGS IN THE CASE OF ASSESSEE. THE FIRST OBJECTION WAS AGAINST THE REFERENCE TO DVO UNDER SECTION 55A OF THE ACT TO DETERMINE THE FAIR MARKET VALUE AS ON 01.04.1981. UNDER THE PRE - AMENDED PROVISIONS OF SECTION MARKET VALUE AS ON 01.04.1981. UNDER THE PRE - AMENDED PROVISIONS OF SECTION 55A OF THE ACT WITH A VIEW TO ASCERTAIN THE FAIR MARKET VALUE OF A CAPITAL ASSET, THE ASSESSING OFFICER IS EMPOWERED TO REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER UNDER CLAUSE (A) IN CASE WHERE THE VALUE OF AN ASSET AS CLAIMED BY THE ASSESSEE IS IN ACCORDANCE WITH ESTIMATE MADE BY THE REGISTERED VALUER AND WHERE THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS MARKET VALUE. CLAUSE (B) REFERS TO CASES WHICH WERE OTHER THAN CLA USE (A) I.E. WHERE THE VALUE OF AN ASSET DECLARED BY THE ASSESSEE WAS NOT IN ACCORDANCE WITH THE REPORT OF A REGISTERED VALUER. IN THE FACTS OF PRESENT CASE, THE ASSESSEE HAD DECLARED THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE BASIS OF REGISTERED VALUE R REPORT AND THE SAME IS UNDISPUTED, HENCE, IN THE PRESENT CASE, PROVISIONS OF CLAUSE (A) TO SECTION 55A OF THE ACT ARE ATTRACTED. THE PRE - AMENDED PROVISIONS OF SAID CLAUSE VERY CLEARLY PROVIDED THAT A REFERENCE COULD BE MADE TO THE VALUATION OFFICER ONLY IN CASES WHERE THE ASSESSING OFFICER WAS OF THE OPINION THAT THE VALUE SO CLAIMED BY THE ASSESSEE WAS LESS THAN ITS FAIR MARKET VALUE. IN THE INSTANT CASE, THE REGISTERED VALUER HAD WORKED OUT THE VALUE OF PROPERTY AT RS.205/ - PER SQ.MTR., WHEREAS THE DV O HAS WORKED OUT THE VALUE OF PROPERTY AT RS.101/ - PER SQ.MTR. CONSEQUENTLY, WHERE THE VALUE AS DETERMINED BY THE DVO WAS LESSER THAN THE VALUE AS DECLARED BY THE ASSESSEE AS ON 01.04.1981, THEN THE REFERENCE TO THE DVO UNDER SECTION 55A OF THE ACT IS NOT WARRANTED. IN THIS REGARD, I FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. PUJA PRINTS (SUPRA), WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSING OFFICER REFERRED THE ISSUE OF VALUATION TO THE DVO ONLY BECAUSE IN HIS V IEW, THE VALUATION OF THE PROPERTY AS ON 01.04.1981 AS MADE BY THE RESPONDENT - ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE, THUS, IN SUCH CASES, INVOCATION OF SECTION 55A OF THE ACT WAS NOT JUSTIFIED. THE HONBLE HIGH COURT FURTHER HELD THAT THE AMENDME NT TO SECTION 55A OF THE ACT IN 2012 WAS MADE EFFECTIVE FROM 01.07.2012 AND HENCE, WAS TO BE APPLIED PROSPECTIVELY. IT WAS FURTHER HELD THAT ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 7 WHERE THE ISSUE WAS COVERED BY SECTION 55A [CLAUSE (A)] OF THE ACT, RESORT COULD NOT BE MADE TO THE RESIDUARY CLAU SE PROVIDED IN SECTION 55A(B)(II) OF THE ACT. THE CBDT CIRCULAR DATED 25.11.1972 WAS HELD TO BE NOT APPLICABLE. FOLLOWING THE ABOVE SAID PROPOSITION AS LAID DOWN BY THE JURISDICTIONAL HIGH COURT AND APPLYING THE SAME TO THE FACTS OF THE PRESENT CASE, IN THE INSTANT CASE ALSO, REFERENCE WAS MADE TO THE VALUATION OFFICER IN ORDER TO DETERMINE THE FAIR MARKET VALUE AS ON 01.04.1981 ON THE PRETEXT THAT THE FAIR MARKET VALUE AS DECLARED BY THE ASSESSEE WHICH WAS BACKED BY REGISTERED VALUER REPORT, WAS HIGHER, WHICH IS NOT CORRECT. 17. ANOTHER ASPECT TO BE KEPT IN MIND IS THAT THE VALUATION BY THE DVO WAS IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND THE SAME WAS APPLIED TO THE CASE OF THE ASSESSEE. THE HONBLE SUPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (SUPRA) HAS LAID DOWN THAT THE OPINION OF DVO PERSE IS NOT INFORMATION FOR THE PURPOSE OF REOPENING ASSESSMENT UNDER SECTION 147 OF THE ACT. THE HONBLE SUPREME COURT FURTHER HELD THAT THE ASSESSING OFFICER HAS TO APPLY HIS MIND TO THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELIEF THEREON. 18. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN AAVKAR INFRASTRUCTURE COMPANY VS. DCIT (SUPRA), WHERE THE ASSESSING OFFICER HAD REFERRED TO THE DVO FOR DETERMINING COST O F CONSTRUCTION OF PROJECT OF ASSESSEE AND BASED UPON REPORT OF DVO, REOPENED THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION ON THE GROUND THAT THE ASSESSEE HAD UNDER - REPORTED THE COST OF INVESTMENT. WHERE THE ASSESSING OFFICER HAD NOT INDEPENDENTLY APPLI ED HIS MIND TO RECORD THE CASE AS TO COST OF IMPROVEMENT AS DECLARED BY THE ASSESSEE WAS IN FACT UNDER - REPORTED AND THE REOPENING OF ASSESSMENT MERELY ON THE BASIS OF REPORT OF DVO WAS HELD TO BE WITHOUT ANY AUTHORITY OF LAW AND COULD NOT BE SUSTAINED. 19 . APPLYING THE ABOVE SAID PROPOSITION TO THE FACTS OF THE PRESENT APPEAL, IT IS CLEAR THAT THE ASSESSMENT IN THE CASE WAS REOPENED IN ORDER TO RE - COMPUTE THE INCOME FROM LONG TERM CAPITAL GAINS IN THE HANDS OF ASSESSEE ON ACCOUNT OF COST OF ACQUISITION DEC LARED BY THE ASSESSEE AT RS.205/ - PER SQ.MTR. THE REOPENING OF ASSESSMENT WAS ALSO ON ACCOUNT OF REFERENCE MADE TO THE DVO UNDER SECTION 50C OF THE ACT, THE SAME WILL BE REFERRED IN THE PARAS HEREINAFTER. 20. NOW, COMING TO THE REASONS RECORDED FOR REOPE NING THE ASSESSMENT I.E. ON THE BASIS OF REPORT OF DVO, WHEREIN THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION SO COLLECTED AND HAD BASED HIS VIEW ON THE DVO REPORT OBTAINED IN THE CASE OF SUNIL RAMACHANDRA TUPE (HUF) AND HAD RECORDED TH E REASONS FOR REOPENING THE ASSESSMENT ON THE BASIS THAT THERE WAS ESCAPEMENT OF INCOME, WHERE THE ASSESSEE HAD CLAIMED THE COST OF ACQUISITION AS ON 01.04.1981 ON HIGHER VALUE OF RS.205/ - PER SQ.MTR. AS AGAINST THE DVO REPORT OF RS.101/ - PER SQ.MTR. FIRS T OF ALL, THE ACTION OF ASSESSING OFFICER IN RECORDING THE REASONS FOR REOPENING THE ASSESSMENT DO NOT STAND IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN ACIT VS. DHARIYA CONSTRUCTION CO. (SUPRA). SECONDLY, IN ANY CASE, NO REFERENCE COUL D BE MADE UNDER SECTION 55A OF THE ACT TO THE DVO TO OBTAIN FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 ON THE PRETEXT THAT THE VALUATION OF PROPERTY DECLARED BY THE ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE AS ON THAT DATE. WHERE NO SUCH REFERENC E COULD BE MADE TO THE DVO UNDER SECTION 55A OF THE ACT AND IN THE ABSENCE OF VALUER REPORT, NO REASONS COULD BE RECORDED FOR ESCAPEMENT OF INCOME AND ON THIS GROUND ALSO, THERE IS NO MERIT IN THE REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER UNDER SECT ION 147 OF THE ACT. 21. ANOTHER ASPECT OF THE ISSUE IS THAT THE PERUSAL OF DVO REPORT, WHICH IS REPRODUCED BY THE CIT(A) AT PAGES 16 AND 17 OF THE APPELLATE ORDER REFLECTS ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 8 THAT IN THE VICINITY OF THE AREA, THERE WERE SALES INSTANCE AVAILABLE ON SALE OF PL OT OF LAND AT RS.298/ - PER SQ.MTR. ON 18.08.1984. THERE IS ANOTHER SALE INSTANCE OF FLAT BEING SOLD ON 03.09.1981, WHERE THE LAND RATE WAS TAKEN AT RS.253/ - PER SQ.MTR. BOTH THESE INSTANCES WERE IGNORED AND THE DVO ADOPTED DEVELOPMENT METHOD TO WORK OUT THE VALUE OF THE LAND AT RS.101/ - PER SQ.MTR., WHICH IS NOT JUSTIFIED. 22. NOW, COMING TO THE SECOND REFERENCE MADE BY THE ASSESSING OFFICER UNDER SECTION 50C OF THE ACT, WHEREIN THE SALE VALUE OF THE SAID PROPERTY AS ON 04.08.2004 HAS BEEN WORKED OUT AT RS.56,45,250/ - AND THE ASSESSEE HAD DECLARED THE SALE CONSIDERATION OF RS.56,45,250/ - ONLY. FIRST OF ALL, THERE IS NO DIFFERENCE IN THE SALE VALUE DECLARED BY THE ASSESSEE AND AS COMPUTED BY THE DVO AS ON 04.08.2004. SECONDLY AND MOST IMPORTANTLY, NO REF ERENCE COULD BE MADE TO THE DVO UNDER THE PROVISIONS OF SECTION 50C OF THE ACT, WHICH ARE TO BE INVOKED IN SPECIAL CIRCUMSTANCES, WHEREIN THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY THE ASSESSEE OF A CAPITAL ASSET BEING LAND OR BUILDI NG OR BOTH IS OTHER THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF STATE GOVERNMENT, FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. IN CASE, THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE SO ADOPTED OR ASSES SED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON DATE OF TRANSFER AND WHERE THE VALUE SO ADOPTED OR ASSESSED HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY AUTHORITIES, COURTS OR HIGH COURT, THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO THE VALUATION OFFICER. THE PRESENT CASE IS NOT A CASE, WHEREIN THE STAMP VALUATION OFFICER HAS ASSESSED THE VALUE OF CAPITAL ASSET SOLD BY THE ASSESSEE AND THE CO - OWNER AT A HIGHER RATE. IN THE ABSENCE OF THE SAME, NO REFERENCE COULD BE MADE UNDER THE GARB OF SECTION 50C OF THE ACT. WHERE NO SUCH REFERENCE COULD BE MADE, THERE COULD NOT BE ANY REASON TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME ON ACCOUNT OF SUCH REPORT OF THE DVO AS ON DATE OF SALE I.E. INCOME ON ACCOUNT OF SUCH REPORT OF THE DVO AS ON DATE OF SALE I.E. 04.08.2004. IN THE ABSENCE OF ANY REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME, NO ACTION CAN BE INITIATED UNDER SECTION 148/147 OF THE ACT. THE HONBLE SUPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS (P ) LTD. (SUPRA) HAS ELABORATED ON THE SCOPE AND EFFECT OF SECTION 147 OF THE ACT AND WHERE THE SAME CAN BE INVOKED. HOWEVER, THE BASIC CONDITION FOR THE ASSESSING OFFICER TO COME TO A FINDING THAT THERE IS A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESS MENT IN ORDER TO CONFER JURISDICTION ON HIM TO REOPEN THE ASSESSMENT STANDS. THE SAID CONDITIONS HAVING NOT BEEN FULFILLED IN THE PRESENT APPEAL, THERE IS NO MERIT IN RECORDING OF REASONS FOR REOPENING THE ASSESSMENT IN THE CASE OF ASSESSEE AND CONSEQUENT LY, THE EXERCISE OF RECORDING OF REASONS UNDER SECTION 147 OF THE ACT MERITS TO BE SET - ASIDE. THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT IS INVALID AND THE ASSESSMENT PROCEEDINGS COMPLETED THEREIN ARE ALSO THUS, INVALID. REVERSING THE ORDER OF CIT(A) , THE ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME OF ASSESSEE AS DECLARED BY HER IN THE RETURN OF INCOME. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 10 . THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSU E BEFORE THE TRIBUNAL IN RELATED CASES AND FOLLOWING THE SAME PARITY OF REASONING, IT IS HELD THAT REOPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE ACT IS INVALID AND THE ASSESSMENT PROCEEDINGS COMPLETED THEREON ARE ALSO INVALID. THE ASSESSING OFFICER IS THUS, DIRECTED TO COMPUTE THE INCOME OF ASSESSEE AS ITA NO. 1 889 /PN/20 1 4 SHRI NANDKUMAR NAMDEO TUPE 9 DECLARED BY H IM IN THE RETURN OF INCOME AND BOTH THE PROVISIONS OF SECTION 55A AND 50C OF THE ACT ARE NOT ATTRACTED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 1 1 . IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF AUGUST , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 16 TH AUGUST , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - 1 , PUNE ; 4. / THE CIT - 1 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE