P.Mariappan, Karur V. ITO, Karur

ITA 1894/CHNY/2014

• Counselvise Citation: 189421714 RSA 2014
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 05-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2014
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1894/MDS/2014 / ASSESSMENT YEAR : 2008-09 SHRI P. MARIAPPAN NO.70, RAMAKRISHNAPURAM WEST 50 FEET ROAD KARUR VS. THE INCOME TAX OFFICER WARD I(2) KARUR [PAN AGPPM 2363 M ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE /RESPONDENT BY : SHRI N. MADHAVAN, JCIT / DATE OF HEARING : 05-05-2015 ! / DATE OF PRONOUNCEMENT : 19-06-2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIRA PALLI, DATED 14.3.2014 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2. SHRI N. QUADIR HOSEYN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY TO THE EXTENT OF 24,720 SQ FT SITUATED AT SURVEY NO.555/3B IN ANDANKOVIL, EAST VILLAGE, KARUR, FOR A SALE CONSIDERATION OF ` 49,53,800/-. THE ITA NO. 1894/14 :- 2 -: ASSESSING OFFICER ESTIMATED THE MARKET VALUE AT ` 200/- PER SQ FT ON THE BASIS OF THE GUIDELINE VALUE. ACCORDING TO THE LD. COUNSEL, WHEN THE ASSESSEE OBJECTS TO THE VALUATION MADE BY THE ASSESSING OFFICER, HE OUGHT TO HAVE REFERRED THE MATTER TO THE DEPARTM ENTAL VALUATION OFFICER IN VIEW OF SECTION 50C(2) OF THE ACT. HOWE VER, THE ASSESSING OFFICER, WITHOUT REFERRING TO THE DVO, ESTIMATED TH E COST OF LAND AS ON 18.2.2005 AT ` 4,10,000/-. THE LD. COUNSEL PLACED HIS RELIANCE O N THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CA SE OF APPADURAI VIJAYARAGHAVAN VS JCIT, [2014] 369 ITR 486, AND SUB MITTED THAT WHEN THE ASSESSEE MADE A CLAIM WITH REGARD TO THE SALE CONSIDERATION, THE MATTER OUGHT TO HAVE REFERRED TO THE DVO IN VIEW OF SECTION 50C(2) OF THE ACT. THE LD. COUNSEL HAS ALSO PLACED HIS RELIA NCE ON THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF S.M UTHURAJA VS CIT, [2014] 369 ITR 483. 3. ON THE CONTRARY, SHRI N. MADHAVAN, LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY TO THE EXTENT OF 24,720 SQ FT IN ANDANKOIL, EAST VILLAGE, KARUR. HOWEVER, THE CAPITAL GAIN ARISING OUT OF SUCH TRANSFER WAS NOT DECLARED TO THE DEPARTMENT. THE ASSESSEE HAS SHOWN THE SALE CONSIDERATION IN THE SALE DEED AT ` 49,53,800/-. ACCORDING TO THE LD. DR, THE LAND WAS SITUATED WITHIN THE MUNICIPAL LIMITS OF KARUR. THE ASSESSING OFFICER, AFTER OBTAINING THE FAIR MARKET VALUE FROM THE SUB- ITA NO. 1894/14 :- 3 -: REGISTRAR, ESTIMATED THE COST OF THE LAND AS ON 18. 2.2005 AT ` 4,10,000/-. THE CIT(A), ACCORDING TO THE LD. DR, H AS RIGHTLY CONFIRMED THE ESTIMATION MADE BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 50C(2) OF THE ACT . WHEN THE ASSESSEE CLAIMS THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) OF SECTION 50C EXCE EDS THE FAIR MARKET VALUE OF THE PROPERTY, THE MATTER OUGHT TO HAVE BEE N REFERRED TO THE DVO. THE CIT(A) FOUND THAT THE ASSESSEE HAS NOT F ILED ANY LETTER BEFORE THE ASSESSING OFFICER REQUESTING FOR REFEREN CE TO THE VALUATION OFFICER. WE HAVE CAREFULLY GONE THROUGH THE JUDGME NT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF S. MUTHURAJA (SUPR A). THE MADRAS HIGH COURT FOUND THAT WHEN THE ASSESSEE MADE A SPE CIFIC OBJECTION AS TO THE VALUE ADOPTED, THE ASSESSING OFFICER OUGHT T O HAVE REFERRED THE MATTER TO THE VALUATION OFFICER. IN THE CASE OF AP PADURAI VIJAYARAGHAVAN (SUPRA), THE MADRAS HIGH COURT FOUND THAT AN ASSERTION BY THE ASSESSEE WOULD AMOUNT TO MAKING A CLAIM. W HEN THE ASSESSEE CLAIMS THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE, THEN THE M ATTER OUGHT TO HAVE REFERRED TO THE VALUATION OFFICER U/S 50C(2) OF TH E ACT. IN THIS CASE, ADMITTEDLY, THE MATTER WAS NOT REFERRED TO THE VALU ATION OFFICER FOR DETERMINING THE FAIR MARKET VALUE. IT IS APPARENT FROM THE RECORD THAT ITA NO. 1894/14 :- 4 -: THE ASSESSEE ASSERTS THAT THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE O F THE PROPERTY AS ON THE DATE OF TRANSFER. THEREFORE, AS HELD BY THE HO N'BLE MADRAS HIGH COURT, THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE MATTER TO THE VALUATION OFFICER. IN VIEW OF THE ABOVE, THE ORDER S OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ENTIRE ISSUE OF C OMPUTATION OF CAPITAL GAINS IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REFER THE MATTER TO THE VAL UATION OFFICER AS REQUIRED U/S 50C(2) OF THE ACT AND THEREAFTER COMP UTE THE CAPITAL GAINS IN ACCORDANCE WITH LAW AFTER ALLOWING A REASO NABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 19 TH JUNE, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF