Sri Ajay Kumar, Hyderabad V. ACIT, Central Circle-5, Hyderabad

ITA 1937/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59274 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, A.M. AND SMT. ASHA VIJAYARAGHAVAN, J.M. ITA.NO.1937/HYD/2011 ASSESSMENT YEAR 2006-2007 MR. AJAY KUMAR HYDERABAD PAN AGIPK 9745L VS. THE ACIT, CENTRAL CIRCLE-5 HYDERABAD. (APPELLANT (RESPONDENT) FOR ASSESSEE : MR. MOHD. AFZAL FOR REVENUE : MR. B. YADAGIRI DATE OF HEARING : 25.03.2014 DATE OF PRONOUNCEMENT : 28.03.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY ASSESSEE IS AGAINST THE ORDER OF CIT(A)-V, HYDERABAD DATED 02.05.2011 FOR THE A.Y. 2 006-07. 2. THE ISSUE IN THE APPEAL IS REGARDING THE TWO ADDITIONS OF RS.5,70,250/- AND RS.55,500/- MADE UND ER SECTION 50C OF THE ACT. THE ASSESSEE SOLD VARIOUS S HOPS AND PLOTS ON WHICH HE HAD SHOWN CAPITAL GAINS. THERE AR E 12 TRANSACTIONS BY THE ASSESSEE AND A.O. ASKED FOR THE SUB REGISTRAR VALUATION WHICH WAS FURNISHED BY THE JOIN T SUB REGISTRAR, HYDERABAD BY LETTER DATED NIL TO THE A.O . THIS LETTER WAS FORWARDED TO THE ASSESSEE AND ASSESSEE FILED LE TTER DATED 27.12.2008 TO SUBMIT THAT OUT OF THE 12 TRANSACTION S, IN 10 2 ITA.NO.1937/HYD/2011 SRI AJAY KUMAR, HYDERABAD. TRANSACTIONS THE VALUE AS PER THE DOCUMENT IS MORE THAN THE SUB REGISTRAR VALUE. HOWEVER, WITH REFERENCE TO TWO TRANSACTIONS, THE VALUE WAS LESS AS THE ASSESSEE HA S SOLD BALCONY IN THE CASE OF ONE PROPERTY AND TERRACE RIG HTS IN THE CASE OF OTHER PROPERTY. IN VIEW OF THIS, ASSESSEE R EQUESTED THAT NO ADVERSE INFERENCE MAY BE DRAWN IN RESPECT OF VAR IATION OF THE VALUE RELATING TO TWO TRANSACTIONS. A.O. WITHOU T DISCUSSING THE NATURE OF THE PROPERTY INVOLVED NOR REFERRING T HE MATTER TO THE VALUATION AUTHORITIES UNDER SECTION 50C(2), MAD E THE ADDITION OF RS.6,25,750/- AND BROUGHT THE SAME TO T AX. 3. LD. CIT(A), HOWEVER, CONFIRMED THE SAME ON THE REASON THAT A.O. HAS NOT ASKED FOR VALUATION OF THE STRUCTURE BUT HAD ASKED THE SUB REGISTRAR FOR VALUATION AS PE R THE SALE DEEDS SUBMITTED BY THE ASSESSEE AND THE INFORMATION SENT BY THE SUB REGISTRAR WAS TAKEN AS VALUATION BY THE A.O . AND THERE IS NO AMBIGUITY IN THE ORDER PASSED BY THE A.O. HE WAS OF THE OPINION THAT A.O. HAS RIGHTLY TAKEN THE SHARE OF TH E ASSESSEE/APPELLANT IN THE PROPERTIES AND APPLIED TH E PROVISIONS OF SECTION 50C OF THE ACT. 4. LD. COUNSEL OBJECTING TO THE ORDER OF THE LD. C IT(A) SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 50C (2) & (3) A.O. IS BOUND TO REFER THE VALUATION TO THE VALUATI ON OFFICER AS PER THE STATUTE AND RELIED ON THE COORDINATE BENCH DECISION IN THE CASE OF B. RAMACHANDRA RAO, HYDERABAD VS. ITO I N ITA.NO. 970/HYD/2009 DATED 30.10.2009. HE ALSO RELIED ON TH E LUCKNOW BENCH DECISION IN THE CASE OF AKG CONSULTAN CY P. LTD. VS. ITO 17 SOT 592. 5. LEARNED D.R. HOWEVER SUBMITTED THAT ASSESSEE HA S NOT OBJECTED TO THE VALUATION AS REPORTED BY THE SU B REGISTRAR 3 ITA.NO.1937/HYD/2011 SRI AJAY KUMAR, HYDERABAD. AND THEREFORE, THERE IS NO NEED TO REFER TO THE VAL UATION AND A.O. ORDER IS CORRECTLY UPHELD BY THE LD. CIT(A). 6. WE HAVE CONSIDERED THE ISSUE. PRIMA FACIE, OUT OF 12 TRANSACTIONS DONE BY THE ASSESSEE, VALUE IN 10 T RANSACTIONS IS MORE THAN THE GUIDELINE VALUE REPORTED BY THE SU B REGISTRAR. A.O. FOUND THAT THE GUIDELINE VALUE IS MORE IN ONLY TWO TRANSACTIONS. IT WAS THE SUBMISSION THAT ASSESSEE H AS SOLD BALCONY IN ONE CASE AND TERRACE RIGHTS IN OTHER CASE. IN SPITE OF OBJECTION BY THE ASSESSEE AND INTIMATING THE FAC TS THAT THE PROPERTY SOLD ARE NOT STRUCTURES, BY LETTER DATED 2 7.12.2008 A.O. DID NOT CONSIDER NOR EVEN DISCUSSED THE NATURE OF THE PROPERTY INVOLVED AND MADE THE ADDITION VIDE ORDER DATED 29.12.2009. LD. CIT(A) WITHOUT ANALYZING THE PROVIS IONS OF SECTION 50C CAME TO A CONCLUSION THAT HE DID NOT FI ND ANY AMBIGUITY. WE ARE UNABLE TO ACCEPT THE CONTENTIONS OF THE A.O. AND CIT(A) IN MAKING THE ADDITION. WHEN THE VALUE A DOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PA YMENT OF STAMP DUTY EXCEEDS THE FAIR MARKET VALUE ADOPTED BY THE ASSESSEE, THE VALUE SO ADOPTED BY THE STAMP VALUATI ON AUTHORITY SHALL BE DEEMED TO BE FULL VALUE OF CONSI DERATION FOR TRANSFER OF THE PROPERTY, AS PER SEC 50(1). HOWEVER , WHEN THE ASSESSEE OBJECTS THAT THE VALUATION MADE BY THE STA MP VALUATION AUTHORITY WAS EXCEEDING THE FAIR MARKET V ALUE, THE MATTER NEEDS TO BE REFERRED TO THE VALUATION OFFICE R FOR THE PURPOSE OF FINDING OUT THE FAIR MARKET VALUE UNDER THE PROVISIONS OF SECTION 50C(2). THEREFORE, EVEN THOUG H THE LEGISLATURE HAS USED THE WORD MAY, IN THE INTERE ST OF JUSTICE, THE A.O. SHALL MAKE A REFERENCE TO THE VALUATION OF FICER WHENEVER ASSESSEE OBJECTS TO THE VALUATION BEING AD OPTED BY THE STAMP VALUATION AUTHORITY. EVEN IN THE CASE WHE RE ASSESSEE DID NOT OBJECT BEFORE THE STAMP VALUATION AUTHORITY 4 ITA.NO.1937/HYD/2011 SRI AJAY KUMAR, HYDERABAD. BUT OBJECTS TO THE A.O., A.O. IS BOUND TO REFER THE MATTER TO THE VALUATION OFFICER FOR DETERMINATION OF THE FAIR MAR KET VALUE. LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF AKG CONSULTANCY P. LTD. VS. ITO 17 SOT 592 HAS CLEARLY OPINED THAT WHEN THE MARKET VALUE OF THE PROPERTY IS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY THEN THE PROVISIONS OF SECTION 50C(2) AND 50C(3) WOULD BE AP PLICABLE. IT WAS FURTHER OBSERVED THAT IF THE A.O. FAILS TO DISC HARGE THIS STATUTORY OBLIGATION, THEN THE MATTER HAS TO BE SET ASIDE SO THAT A.O. CAN MAKE REFERENCE TO THE VALUATION OFFICER. I N VIEW OF THIS, WE ARE OF THE OPINION THAT THE ORDERS OF THE AUTHORITIES ARE TO BE SET ASIDE ON THE ISSUE OF ADOPTING FAIR MARKE T VALUE TO CONSIDER THE ASSESSEES OBJECTIONS ON THE ISSUE. TH EREORE WE SET ASIDE THE ORDERS AND REMIT THE ISSUE TO THE A.O . WHO SHALL MAKE A REFERENCE TO THE VALUATION OFFICER AND DECID E THE ISSUE AFRESH IN ACCORDANCE WITH LAW. A.O. ALSO SHOULD VER IFY THE NATURE OF THE PROPERTY, AS THE ASSESSEE STATES THAT THE PROPERTY IN QUESTION IS NOT A STRUCTURE BUT ONLY BALCONY AND TERRACE RIGHTS. THEREFORE, ANALYSIS OF THE DOCUMENT ALSO IS REQUIRED TO BE DONE. WITH THESE DIRECTIONS, THE ISSUE INVOLVED IN THIS APPEAL IS RESTORED TO THE FILE OF A.O. FOR FRESH CO NSIDERATION. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.03.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH MARCH, 2014 VBP/- 5 ITA.NO.1937/HYD/2011 SRI AJAY KUMAR, HYDERABAD. COPY TO 1. SRI AJAY KUMAR, C-1, MAYUR KUSHAL COMPLEX, GUNFO UNDRY, HYDERABAD. 2. THE ACIT, CENTRAL CIRCLE-5, HYDERABAD 3. CIT(A)-V, HYDERABAD 4. CIT-IV, HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.