ITO, CHENNAI V. R.Suresh Kumar, CHENNAI

ITA 1920/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95908 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: D ANAND
• 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 , B B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO . 1920/MDS/2014 ( / ASSESSMENT YEAR: 2010-11) INCOME TAX OFFICER, BUSINESS WARD-V(3), CHENNAI-34. VS. MR. R.SURESH KUMAR, 9, KAMARAJ NAGAR, 1 ST STREET SATHYA GARDEN, SALIGRAMAM, CHENNAI-93. PAN: AAWPS0119A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. N.MADHAVAN, JCIT /RESPONDENT BY : MR.D.ANAND, ADVOCATE /DATE OF HEARING : 23 RD JUNE, 2015 /DATE OF PRONOUNCEMENT : 19 TH AUGUST, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS-V), CHEN NAI DATED 03.03.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER TO RECALCULATE T HE LONG-TERM CAPITAL GAIN IN THE CASE OF THE ASSESSEE BY ADOPTING ` 400/- PER SQ.FT AS THE FULL VALUE OF CONSIDERATION. 2 ITA NO.1920/MDS/2014 2. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSEE HAS NEITHER DISPUTED THE VALUE ADOPTED BY THE STAMP VALUE AUTHORITIES IN ANY APPEAL NOR REQUESTED THE ASSESSING OFFICER TO REFER THE VALUATION OF CAPITAL ASSET TO VALUATION OFFICER. 3. HAVING REGARD TO JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF AMBATTUR CLOTHING CO. LTD. VS. ACIT (326 ITR 245) COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER. 3. BRIEF FACTS ARE THAT ASSESSEE FILED RETURN OF IN COME FOR THE ASSESSMENT YEAR 2010-11 ON 31.07.2010 DECLARING TOTAL INCOME OF ` 90,84,206/- INCLUDING CAPITAL GAINS. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 05.02.2013 DETERMINING THE TOTAL INCOME AT ` 81,724/- AND LONG TERM CAPITAL GAINS AT ` 1,20,02,482/-. THE ASSESSING OFFICER WHILE COMPUTING LONG TERM CAPITAL GAINS CONSIDERED SALE V ALUE OF THE PROPERTY AT ` 2,60,00,000/- AS PER THE VALUE ADOPTED FOR STAMP DUTY PURPOSES AS AGAINST ` 2,30,00,000/- RECEIVED BY THE ASSESSEE. IN THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE BY LETTER DATED 21.01.2013 SUBMITTED WHY T HE PROPERTY WAS SOLD ONLY FOR ` 2,30,00,000/- AND THEREFORE REQUESTED TO CONSIDER THE SUBMISSIONS AND ADOPT THE SALE 3 ITA NO.1920/MDS/2014 CONSIDERATION AS PER SALE DEED FOR CAPITAL GAINS CO MPUTATION. HOWEVER, THE ASSESSING OFFICER ADOPTED THE SALE CONSIDERATION AT ` 2,60,00,000 AS AGAINST ` 2,30,00,000/- AND COMPUTED THE CAPITAL GAINS BY MAKING ADDITION O F DIFFERENCE AMOUNT OF ` 30,00,000/- AND COMPUTED THE CAPITAL GAINS ACCORDINGLY. ON APPEAL, THE COMMISSIONER OF I NCOME TAX (APPEALS) ACCEPTED THE SUBMISSIONS OF THE ASSES SEE AND DIRECTED THE ASSESSING OFFICER TO CALCULATE THE LON G TERMS CAPITAL GAINS ADOPTING ` 400/- PER SQ.FT AS PER THE GUIDELINE VALUE GIVEN IN TAMIL NADU STATE GOVT. WEBSITE AS G UIDELINE VALUE, AS AGAINST THIS ORDER, REVENUE CAME UP IN AP PEAL. 4. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER IN ADOPTING THE SAL E CONSIDERATION AT ` 2,60,00,000/- AS AGAINST ` 2,30,00,000/- IN COMPUTING THE LONG TERM CAPITAL GAINS. 5. COUNSEL FOR THE ASSESSEE STRONGLY PLACES RELIANC E ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S). 4 ITA NO.1920/MDS/2014 6. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE ISSUE IN APPEAL HAS BEEN ELABORATELY CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS) WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE CONTENTIONS OF THE ASSESSING OFFICER AND BY TAKING NOTE OF THE GUIDELI NE VALUE FIXED BY THE TAMIL NADU STATE GOVT. WEBSITE FOR THE SURROUNDING PROPERTIES OF THE ASSESSEES AGRICULTUR AL LANDS DIRECTED THE ASSESSING OFFICER TO ADOPT ` 400/- PER SQ.FT AS GUIDELINE VALUE AND RECALCULATE THE LONG TERM CAPIT AL GAINS OBSERVING AS UNDER:- 7. THE AR OF THE APPELLANT IN HIS SUBMISSIONS STA TED THAT IT IS INCUMBENT AND MANDATORY FOR THE ASSESSIN G AUTHORITY TO REFER TO THE VALUATION TO DVO UNDER TH E PROVISIONS OF SUB SECTION 2 OF SECTION 50C. FURTHER SUBMITTED THE SECTION 50C ALONE CANNOT BE APPLIED IN ISOLATION AND ENTIRE PROVISIONS OF SECTION 50C M UST BE FOLLOWED WHILE TAXING THE LONG TERM CAPITAL (2013) 021 ITR (TRIB.) 0627 WHEREIN IT WAS HELD THAT ONCE THE ASSESSEE OBJECTS FOR ADOPTION OF GUIDELINE VALUE FOR COMPUTING CAPITAL GAINS AND REQUESTS THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE VALUATION OFFICER, THE MANDATORY IN THE PART OF THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE. DISTR ICT VALUATION OFFICER (DVO). SINCE THE ASSESSING OFFICE R HAS NOT REFERRED THE MATTER TO VALUATION OFFICER AS REQUESTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE IS NOT JUSTIFIED IN ADOPTING THE VALUE OF THE PROPERTY SOLD AT RS.2,60,OO,OOOI- AS PER THE GUIDELINE VALUE FOR CALCULATION OF STAMP DUTY IN THE PLACE OF RS.2,30,OO,OOOI- ADOPTED BY THE ASSESSING OFFICER. AFTER CONSIDERING THE VARIOUS SUBMISSIONS AS WELL A S THE CASE LAWS REFERRED TO ABOVE, ONCE THE APPELLANT OBJECTED FOR ADOPTION OF VALUE AS PER STAMP DUTY 5 ITA NO.1920/MDS/2014 PURPOSE THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE DVO AND ACCORDINGLY CALCULATED TH E LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER HAS NOT MADE ANY REFERENCE TO DVO AS REQUIRED U/S. 50C(2) WHICH PRESCRIBES THAT THE VALUE ADOPTED BY THE STAMP DUTY VALUATION AUTHORITY U/S.50C(1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. ONCE THE APPELLANT OBJECTS TO THE VALUE OF STAMP DUTY AUTHORITY ADOPTED BY THE ASSESSING OFFICER, THEN THE ASSESSING OFFICER HAS T O REFER AND DUTY BOUND TO REFER THE MATTER TO THE DEPARTMENT VALUATION OFFICER. RELYING ON THE RATIOS HELD IN AJMAL FRAGRANCES FASHIONS PVT. LTD., V. ACI T 34 SOT 57 (MUM), KALPATARU INDUSTRIES V. ITO WHERE THE MATTER HAS BEEN REFERRED TO VALUATION OFFICER, ONCE THE MATTER HAS BEEN REFERRED TO VALUATION OFFICER, THE ASSESSING OFFICER CANNOT PASS THE ORDE R ADOPTING STAMP DUTY VALUE. THE ASSESSING OFFICER HAS TO WAIT TILL THE VALUATION OFFICER'S REPORT BEF ORE FINALIZING THE ASSESSMENT ORDER. THIS VIEW HAS BEEN HELD BY THE JURISDICTIONAL ITAT IN THE CASE OF N. MEENAKSHI IN 226 CTR 624 (MAD.). THUS THE APPELLANT OBJECTED TO THE VALUE ADOPTED BY THE ASSESSING OFFICER FOR THE PROPERTY SOLD AS PER THE DEEMING FICTION OF SEC.50C WHICH HAS UNFAIRLY PRECISED THE APPELLANT INTEREST. OVER AND ABOVE THE APPELLANT HIMSELF HAS MENTIONED THE RATE OF ` 400/- PER SQ.FT AS PER GUIDELINE VALUE IN TAMIL NADU GOVERNMENT SITE FOR VALUATION OF THE PROPERTY SURROUNDING THE APPELLANT'S AGRICULTURAL LAND. KEEP ING IN VIEW OF THE APPELLANT'S OWN ADMISSION THE ASSESSING OFFICER MAY ADOPT THE ` 4OO/- PER SQ.FT AND ACCORDINGLY CALCULATE THE LONG TERM CAPITAL GAI NS IN THE CASE OF THE APPELLANT. THIS VIEW IS CONSIDER ED RELYING ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CWT VS. SHARBA DEVI JHALANI (1994) 207 ITR 1 (SC) WHEREIN IT WAS HELD THAT EVEN MATTER REFERRED BY THE ASSESSING OFFICER TO THE DVO , IF THE DVO VALUATION IS MORE THAN THE VALUE REPORTE D BY THE APPELLANT, THE DVO'S VALUATION REPORT IS NO T BINDING ON THE APPELLANT AUTHORITIES. KEEPING IN SU CH EVENTUALITY THE ASSESSING OFFICER IS DIRECTED TO RECALCULATE THE LONG TERM CAPITAL GAIN IN THE CASE OF THE APPELLANT BY ADOPTING ` 400/- PER SQ.FT AS PER GUIDELINE VALUE GIVEN IN TAMIL NADU GOVERNMENT WEBSITE FOR GUIDELINE VALUE. THUS THE APPEAL FILED BY THE APPELLANT IS ALLOWED PARTLY. 6 ITA NO.1920/MDS/2014 7. ON GOING THROUGH THE ABOVE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE DO NOT FIN D ANY INFIRMITY IN THE ORDER PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS) IN GIVING SUCH DIRECTIONS TO THE ASSE SSING OFFICER. THUS, WE SUSTAIN THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) AND REJECT THE GROUNDS RAISED BY THE REVENUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAGENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 19 TH AUGUST, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .