Nandkumar Janardhan Jadhav, Kolhapur V. Income-tax Officer, Ward - 1(2), Kolhapur

ITA 193/PUN/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1453 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Capital asset; Fair market value

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO.169/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 SNEHAL RAMCHANDRA JADHAV, 3040, A- WARD, TARABAI ROAD, KOLHAPUR-416 012 PAN : AHWPJ1867B ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR. / RESPONDENT . / ITA NO.191/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 ARUN DATTAJIRAO GAWADE, 1190, B-WARD, MANGALWAR PETH, OPP. MARATHA BANK, KOLHAPUR-416 012 PAN : AEXPG4261L ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(4), KOLHAPUR. / RESPONDENT . / ITA NO.192/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 KALPANA ANIL JADHAV A-WARD, 3123, JADHAV GALLI, NARAYAN NIWAS, KAPILTHIRTH MARKET, 2 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 TARABAI ROAD, KOLHAPUR-416012 PAN : ANGPJ2417B ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR. / RESPONDENT . / ITA NO.193/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 NANDKUMAR JANARDHAN JADHAV, 3062, A-WARD, JADHAV GALLI, TARABAI ROAD, KOLHAPUR-416 012 PAN : ALBPJ1773D ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR. / RESPONDENT . / ITA NO.194/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 PRATIBHA RAMCHANDRA JADHAV, 3040, A- WARD, OPP. SHRI MAHALAXMI DHARMA, TARABAI ROAD, KOLHAPUR-416012 PAN : AMIPJ6657N ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR. / RESPONDENT 3 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 . / ITA NO.195/PUN/2018 ! '! / ASSESSMENT YEAR : 2010-11 ABHIJIT JANARDHAN JADHAV, A-WARD, 3062, RAJOPADHYA LANE, KOLHAPUR-416 012 PAN : AIKPJ4619E ....... / APPELLANT # / V/S. THE INCOME TAX OFFICER, WARD 1(2), KOLHAPUR. / RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY : SHRI M.K. VERMA / DATE OF HEARING : 22.11.2018 / DATE OF PRONOUNCEMENT : 26.11.2018 $ / ORDER PER VIKAS AWASTHY, JM THESE BUNCH OF SIX APPEALS HAVE BEEN FILED BY SIX DIFFEREN T ASSESSEES. THE APPEALS ARE DIRECTED AGAINST THE ORDER OF COMMISSIONE R OF INCOME TAX (APPEAL)-1, KOLHAPUR FOR ASSESSMENT YEAR 2010-11 IN THE C ASE OF RESPECTIVE ASSESSEES/APPELLANTS. ALL THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 12.12.2017. 4 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 2. SINCE, THE GROUNDS RAISED IN ALL THE SIX APPEALS ARE IDE NTICAL AND ARE ARISING FROM SAME TRANSACTION OF SALE OF LAND, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE BEING DISPOSED OF VIDE THIS COMMON O RDER. 3. SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEES N ARRATING THE FACTS COMMON FOR ALL THE APPEALS SUBMITTED THAT ALL THE ASSESSEES ARE RELATED TO EACH OTHER AND HAVE INHERITED SHARE IN AGRICULTURAL LAN D COMPRISING IN SURVEY NO.79/3, E-WARD, NEW PALACE, KOLHAPUR ADMEASURING 36700 SQ. MTRS. THE AFORESAID LAND WAS JOINTLY SOLD BY ALL THE OWNER S INCLUDING ASSESSEES TO M/S.SANGHVI ESTATE DEVELOPERS VIDE SALE DE ED DATED 29.03.2010 FOR A TOTAL CONSIDERATION OF RS.3,60,00,000/-. THE M ARKET VALUE OF LAND FOR STAMP DUTY AND REGISTRATION PURPOSE AT THE T IME OF EXECUTION OF SALE DEED WAS RS.5,06,97,000/-. THE ASSESSEE ADOPTED STA MP DUTY VALUE FOR COMPUTING CAPITAL GAIN. THE ONLY DISPUTE IN THE PRESENT SE T OF APPEALS IS VALUE OF ACQUISITION OF LAND AS ON 01.04.1981. THE ASSESSEE HAD SOUGHT VALUATION OF LAND FROM GOVERNMENT APPROVED VALUER. THE GOV ERNMENT APPROVED VALUER DETERMINED THE MARKET VALUE OF PROPERTY AS ON 01.04.1981 AT RS.60,55,500/-. THE ASSESSEE ON THE BASIS OF GOVERNMEN T APPROVED VALUERS REPORT COMPUTED LONG TERM CAPITAL GAIN. IN SCRUT INY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REJECTED THE VALUATION O F GOVERNMENT APPROVED VALUER AS ON 01.04.1981 AND REFERRED THE MATTE R TO DISTRICT VALUATION OFFICER (DVO). THE DVO DETERMINED THE FAIR MARKET VA LUE OF LAND AS ON 01.04.1981 AT RS.23,81,800/-. THE ASSESSING OFFICER ON THE BASIS OF VALUE DETERMINED BY THE DVO COMPUTED LONG TERM CAPITAL G AIN AND MADE ADDITION IN THE HANDS OF RESPECTIVE ASSESSEES/CO-OWNERS IN PROPORTION TO THEIR SHARE IN LAND. 5 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 4. AGGRIEVED BY THE ASSESSMENT ORDER IN THEIR RESPECTIV E CASES, ASSESSEES FILED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL). OUT OF TOTAL 8 CO-OWNERS, SIX APPEALS WERE FILED BEFORE THE COMMISSIONER O F INCOME TAX (APPEAL)-1, KOLHAPUR AND IN THE CASE OF OTHER TWO CO-OWNE RS, APPEALS WERE ADJUDICATED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLHAPUR. THE COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLHAPUR DELETED THE ADDITION BY FOLLOWING THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. PUJA PRINTS, REPORTED AS 360 ITR 697. THE LD. COUNSEL FUR NISHED COPY OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLHAPUR, DATED 06.03.2018 IN THE CASE OF UMA ARUN GAVADE FOR THE ASSESS MENT YEAR 2010- 11. HOWEVER, IN THE SIX APPEALS DECIDED BY COMMISSIONER O F INCOME TAX (APPEAL)-1, KOLHAPUR, THE ADDITION MADE BY ASSESSING OFFICER O N ACCOUNT OF LONG TERM CAPITAL GAIN WERE CONFIRMED. 4.1 THE LD. COUNSELS FOR THE ASSESSEES SUBMITTED THAT T HE PROVISIONS OF SECTION 55A(A) WERE AMENDED BY FINANCE ACT, 2012 W.E.F. 01.0 7.2012. THUS, THE AMENDMENT WOULD NOT BE APPLICABLE ON THE TRANSACTIO NS CARRIED OUT BY ASSESSEES IN ASSESSMENT YEAR UNDER APPEAL I.E. ASSESSMEN T YEAR 2010-11. TO SUPPORT HIS SUBMISSIONS, THE LD. COUNSELS DRAWS SUPPORT FROM THE RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CI T VS. PUJA PRINTS (SUPRA.). 5. ON THE OTHER HAND, SHRI M.K. VERMA REPRESENTING THE D EPARTMENT VEHEMENTLY DEFENDED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL) AND PRAYED FOR DISMISSING THE APPEALS OF THE ASSESSEES. 6 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 6. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERU SED. I HAVE ALSO CONSIDERED THE DECISIONS ON WHICH LD. COUNSEL FOR THE ASSES SEES HAVE PLACED RELIANCE. THE SOLITARY ISSUE RAISED IN ALL THE APPEALS IS AGAI NST VALUATION OF LAND AS ON 01.04.1981 ADOPTED BY ASSESSING OFFICER FOR DETE RMINING LONG TERM CAPITAL GAIN IN THE CASE OF EACH ASSESSEE/APPELLANT. I T IS AN UNDISPUTED FACT THAT ALL THE ASSESSEES ARE CO-OWNERS OF THE LAND CO MPRISING IN SURVEY NO. 79/3, E-WARD, NEW PALACE, KOLHAPUR. THERE WERE IN TOTAL EIGHT CO- OWNERS, OUT OF WHICH SIX ARE IN APPEAL BEFORE THE TRIBUNA L. IN THE CASES OF OTHER TWO CO-OWNERS, THOUGH SIMILAR ADDITIONS WERE MADE, B UT THEY GOT RELIEF FROM COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLHAPUR. THE AS SESSING OFFICER DID NOT ACCEPT VALUATION OF AFORESAID LAND AS ON 01.0 4.1981 AS THE VALUE OF LAND ADOPTED BY THE ASSESSEES WAS MORE THAN T HE FAIR MARKET VALUE DETERMINED BY DVO. ON REFERENCE MADE BY ASSESSING OFFICER U/S.55A, THE DVO DETERMINED VALUE OF LAND AS ON 01.04.1981 AT RS.23,81 ,800/- VIS-A-VIS VALUATION OF GOVERNMENT APPROVED VALUER AT RS.60,55,500/- ADOPTED BY THE ASSESSEE. 7. AS PER THE PROVISIONS OF SECTION 55A(A) [ AS IT WAS APP LICABLE IN THE ASSESSMENT YEAR UNDER APPEAL] THE ASSESSING OFFICER WITH A VIEW TO ASCERTAIN FAIR MARKET VALUE OF CAPITAL ASSET MAY MAKE REFER ENCE TO THE VALUATION OFFICER WHEREIN HIS OPINION THE VALUE OF THE ASSET A S CLAIMED BY THE ASSESSEE IS LESS THAN ITS FAIR MARKET VALUE . THE PROVISIONS OF SECTION 55A(A) WERE AMENDED BY THE FINANCE ACT, 2012 W.E.F. 01.07.20 12. BY VIRTUE OF AMENDMENT, THE WORD IS LESS THAN ITS FAIR MARKET VALUE WERE SUBSTITUTED BY THE WORDS IS AT VARIANCE WITH A FAIR MARKET VALUE. T HE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PRINTS (SUPRA.) HELD THE AMENDMENT 7 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 TO BE PROSPECTIVE IN NATURE. THE RELEVANT EXTRACT OF T HE JUDGMENT OF THE HON'BLE HIGH COURT READS AS UNDER: 7. WE FIND THAT SECTION 55A(A) OF THE ACT VERY CLEA RLY AT THE RELEVANT TIME PROVIDED THAT A REFERENCE COULD BE MADE TO THE DEPARTMENTAL VALUATION OFFICER ONLY WHEN THE VALUE ADOPTED BY TH E ASSESSEE WAS LESS THAN THE FAIR MARKET VALUE. IN THE PRESENT CASE, IT IS AN UNDISPUTED POSITION THAT THE VALUE ADOPTED BY THE RESPONDENT A SSESSEE OF THE PROPERTY AT RS.35.99 LAKHS WAS MUCH MORE THAN THE F AIR MARKET VALUE OF RS.6.68 LAKHS EVEN AS DETERMINED BY THE DEPARTMENTA L VALUATION OFFICER. IN FACT, THE ASSESSING OFFICER REFERRED TH E ISSUE OF VALUATION TO THE DEPARTMENTAL VALUATION OFFICER ONLY BECAUSE IN HIS VIEW THE VALUATION OF THE PROPERTY AS ON 1981 AS MADE BY THE RESPONDENT ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE. IN THE AFORESAID CIRCUMSTANCES, THE INVOCATION OF SECTION 55A (A) OF THE ACT IS NOT JUSTIFIED. 8. THE CONTENTION OF THE REVENUE THAT IN VIEW OF TH E AMENDMENT TO SECTION 55A(A) OF THE ACT IN 2012 BY WHICH THE WORDS 'IS LE SS THAN THE FAIR MARKET VALUE' IS SUBSTITUTED BY THE WORDS ' 'IS AT VARIANC E WITH ITS FAIR MARKET VALUE' IS CLARIFACTORY AND SHOULD BE GIVEN RETROSPECTIVE E FFECT. THIS SUBMISSION IS IN FACE OF THE FACT THAT THE 2012 AMENDMENT WAS MADE E FFECTIVE ONLY FROM 1 JULY 2012. THE PARLIAMENT HAS NOT GIVEN RETROSPECTIVE EF FECT TO THE AMENDMENT. THEREFORE, THE LAW TO BE APPLIED IN THE PRESENT CAS E IS SECTION 55A(A) OF THE ACT AS EXISTING DURING THE PERIOD RELEVANT TO THE ASSES SMENT YEAR 200607. AT THE RELEVANT TIME, VERY CLEARLY REFERENCE COULD BE MADE TO DEPARTMENTAL VALUATION OFFICER ONLY IF THE VALUE DECLARED BY THE ASSESSEE IS IN THE OPINION OF ASSESSING OFFICER LESS THAN ITS FAIR MARKET VALUE. THUS, THE AMENDED PROVISIONS OF CLAUSE (A) TO SECTION 55A WOULD OPERATE PROSPECTIVELY AND WOULD NOT ALTER THE POSITION IN ASSESSMENT YEARS PRIOR TO THE AMENDMENT. 8. THE LD. COUNSEL HAS PLACED ON RECORD COPY OF THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLHAPUR (SUPRA.) IN THE CASES OF UMA AURN GAVADE. A PERUSAL OF THE SAID ORDER SHOWS THA T SHE WAS ONE OF THE CO-OWNERS OF THE LAND COMPRISING IN SURVEY NO. 79/3, E-WARD, NEW PALACE, KOLHAPUR AND IN IDENTICAL SET OF FACTS, COMMISSIONER OF INCOME TAX (APPEAL) PLACING RELIANCE ON THE DECISION OF PUJA PRINTS (SUPR A.) DELETED THE ADDITION. 8 ITA NOS.169 & 191 TO 195/PUN/2018 A.Y.2010-11 9. THUS, IN VIEW OF THE FACTS EMANATING FROM RECORDS AND T HE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PR INTS (SUPRA.), THE REFERENCE MADE BY ASSESSING OFFICER TO DVO FOR ASCERTAINING THE FAIR MARKET VALUE OF LAND WHERE THE VALUE OF LAND DECLARED BY ASSESSEE S AS ON 01.04.1981 WAS MUCH HIGHER THAN THE FAIR MARKET VALUE, WA S UNWARRANTED. I FIND MERIT IN THE PRESENT SET OF APPEALS. ACCORDINGLY, TH E IMPUGNED ORDERS ARE SET ASIDE AND THE APPEALS FILED BY RESPECTIVE ASSESSEES ARE A LLOWED. 10. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED ON MONDAY THE 26 TH DAY OF NOVEMBER, 2018. SD/- ( /VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; !' / DATED : 26 TH NOVEMBER, 2018. SB $%&'()'' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL)-1, KOLHAPUR. 4. THE PR. CIT-1, KOLHAPUR. 5. %&' () , * () , - +,- , / DR, ITAT, SMC BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // * 2 / BY ORDER, 3 (- /PRIVATE SECRETARY * () , / ITAT, PUNE.