DCIT 7(3), MUMBAI V. SHIVKRISHNA H. DAMANI, MUMBAI

ITA 1938/MUM/2010

• Counselvise Citation: 193819914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VADANA SAGAR
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1938/MUM/2010 (ASSESSMENT YEAR: 2006-07) DCIT - 7(3) SHRI SHIVKRISHNA H. DAMANI ROOM NO. 615, 6TH FLOOR 5, DHIRAJ CHAMBERS AAYAKAR BHAVAN, M.K. ROAD VS. 9, HAZARIMAL SOMANI MARG MUMBAI 400020 MUMBAI 400001 PAN - AABPD 2300 F APPELLANT RESPONDENT APPELLANT BY: SMT. VADANA SAGAR RESPONDENT BY: SHRI M. SUBRAMANIAN O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE IS AGAINST THE ORDER OF THE CIT(A) XII, MUMBAI DATED 05.11.2009 IN WHICH REVENUE HAS AGGRIEVED ABO UT THE DIRECTIONS OF THE CIT(A) REFERRING THE MATTER TO DVO FOR DETERMIN ING THE FAIR MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF CAPITAL GAIN UND ER SECTION 50C. REVENUE HAS RAISED THE FOLLOWING TWO GROUNDS: - 1. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS CORRECT IN LAW IN TAKING INTO ACCOUNT TH E ARGUMENTS OF THE ASSESSEE THAT THE FAIR MARKET VALUE OF THE PROP ERTY SHOULD BE ACCEPTED AT RS.1,05,55,5000/- AT THE POINT OF TR ANSFER TO RE- DETERMINE THE VALUE WHEN NO SUCH EVIDENCE TO THAT E FFECT WAS FILED BEFORE THE ASSESSING OFFICER? 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS CORED IN LAW IN ASKING THE A.O. TO REFER THE MATTER TO THE DVO FOR DETERMINING THE FAIR VALUE OF THE PROPE RTY ON THE DATE OF TRANSFER FOR THE PURPOSE OF CAPITAL GAIN U/ S 50C AS THIS AMOUNT TO VIRTUALLY SETTING ASIDE THE ORDER BACK TO THE ASSESSING OFFICER FOR WHICH CIT(A) IS NOW NOT AUTHORIZE UNDER THE I.T. ACT? 2. BRIEFLY STATED, ASSESSEE HAS SHOWN LONG TERM CAPITA L GAINS OF ` 23,26,320/- IN RESPECT OF SHARE IN OFFICE PREMISES IN MITTAL CHAMBERS. ASSESSEES SHARE OF 55% IN THE PROPERTY WAS TAKEN A T ` 58,05,535/- AFTER CONSIDERING THE SALE CONSIDERATION OF THE PROPERTY AT ` 1,05,55,500/-. THE A.O. ITA NO. 1938/MUM/2010 SHRI SHIVKRISHNA H. DAMANI 2 ASKED FOR DETAILS OF REGISTRATION AND THE ASSESSEE VIDE LETTER DATED 26.12.2008 INTIMATED THAT THE QUOTED PRICE IN MITTAL CHAMBERS WAS AT ` 8,000/-PER SQ.FT WHEREAS THE ASSESSEE SETTLED AT ` 7,750/- PER SQ.FT. DUE TO CERTAIN PROBLEMS BEING A CO-SHARER PROPERTY AND NON-AVAILABILITY OF BUYERS. AS ASSESSEE COULD NOT FURNISH THE REGISTRATION DOCUMENT, THE A.O. EST IMATED THE PROPERTY VALUE AT ` 14,500/- PER SQ.MT. AND TOOK THE VALUE AT ` 1,97,44,000/- AS AGAINST THE ESTIMATED SALE PRICE OF ` 1,05,55,500/-. THE PORTION WHICH COMES TO THE ASSESSEES SHARE WAS ADDED TO THE COMPUTATION OF IN COME. 3. THE MATTER WAS CONTESTED BEFORE THE CIT(A) WHO AFTE R CONSIDERING ASSESSEES SUBMISSIONS DIRECTED THE A.O. TO REFER T HE MATTER TO THE DVO FOR DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY F OR THE PURPOSE OF CAPITAL GAIN UNDER SECTION 50C. THE REVENUE IS AGGRIEVED ON THE SAID DIRECTION. 4. THE LEARNED D.R. SUBMITTED THAT THE ASSESSEE HAS FA ILED TO FURNISH THE SALE DEED AND ACCORDINGLY THE A.O. HAS NO OTHER OPT ION THAN TO ESTIMATE THE FAIR MARKET VALUE AND SUCH ACTION OF THE A.O. SHOUL D HAVE BEEN AFFIRMED BY THE CIT(A) BUT WHO TOOK THE SALE RATE ON RECORD WHICH W AS NOT FURNISHED BEFORE THE A.O. AND DIRECTED THE A.O. TO REFER THE MATTER TO D VO. IT WAS HER OBJECTION THAT THE ASSESSEE INSPITE OF GIVING ENOUGH OPPORTUNITY H AD NOT FURNISHED THE SALE DEED DATED 14.12.2005, THEREFORE THE SAME SHOULD NO T HAVE BEEN ENTERTAINED BY THE CIT(A) AND, MOREOVER, WITHOUT GIVING OPPORTU NITY TO THE A.O. THE CIT(A) WAS NOT CORRECT IN DIRECTING TO REFER THE MATTER TO DVO AS HE HAS NO POWERS TO SET ASIDE OR RESTORE THE MATTER TO THE A.O. 5. THE LEARNED A.R., HOWEVER, SUBMITTED THAT THE ASSES SEE HAS NOT GIVEN ENOUGH OPPORTUNITY AND WITHOUT GIVING PROPER OPPORT UNITY THE A.O. ESTIMATED THE VALUE AT ` 14,500/- PER SQ.MT. WHEN THE ASSESSEE VIDE HIS LETTER DATED 26.12.2008 SUBMITTED THAT THE MARKET V ALUE WAS AT ` 8,000/- ONLY. HE FURTHER REFERRED TO THE DATE OF ASSESSMENT ORDER BEING 30 TH DECEMBER 2008 AND HIS SUBMISSION WAS THAT ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO CONTEST THE INVOCATION OF PROVISIONS OF SECTION 50C OR OBJECTION TO THE VALUATION AS PER THE SAID SECTION. HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE A.O. AGAIN. 6. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE RECOR D. THERE IS NO DOUBT THAT ASSESSEE HAS NOT FURNISHED COPY OF THE S ALE DEED BEFORE THE A.O. ITA NO. 1938/MUM/2010 SHRI SHIVKRISHNA H. DAMANI 3 THE CIT(A), AFTER CONSIDERING THE SUBMISSION, DIREC TED THE A.O. TO REFER THE MATTER TO THE DVO FOR THE PURPOSE OF DETERMINING TH E CAPITAL GAINS UNDER SECTION 50C. EVENTHOUGH HIS DIRECTION IS ACCORDING TO THE PROVISIONS OF SECTION 50C, THE CIT(A) COULD NOT HAVE RESTORED THE MATTER TO THE FILE OF THE A.O. AS POWER TO SET ASIDE WAS NOT AVAILABLE TO HI M. IN VIEW OF THIS, WITHOUT GOING INTO THE MERITS OF THE ISSUE AND OBJECTIONS R AISED BY THE REVENUE, SINCE THE A.O. HAS NOT GIVEN PROPER OPPORTUNITY TO THE ASSESSEE AT THE TIME OF ASSESSMENT AND HAD NOT CONSIDERED PROVISIONS OF SECTION 50C IN THE CORRECT PERSPECTIVE, WE ARE OF THE OPINION THAT THE ISSUE OF CAPITAL GAIN IS TO BE RE-EXAMINED BY THE A.O. AFTER GIVING DUE OPPORTU NITY TO THE A.O. THEREFORE MODIFYING THE ORDER OF THE CIT(A), WE SET ASIDE THE ORDER TO THAT EXTENT AND RESTORE THE ISSUE OF DETERMINING CAPITA L GAINS TO THE FILE OF THE A.O. TO CONSIDER IT AFRESH AFTER GIVING PROPER OPPO RTUNITY TO THE ASSESSEE. ASSESSEE IS DIRECTED TO FURNISH NECESSARY DETAILS I N SUPPORT OF HIS CONTENTIONS AND OBJECTIONS IF ANY. GROUNDS ARE CONS IDERED ALLOWED. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 29 TH APRIL 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIII, MUMBAI 4. THE CIT VII, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.