NARENDRA KUMAR LUNIA, MUNGELI (C.G.) V. DY.. C.I.T. CIRCLE-2(1), BILASPUR(CG)

ITA 202/BIL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0211 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 26-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Keywords: Sale consideration of property below Jantri Value; Business income; Fair market value; Revised return
• Section: 50C

Judgement Text

ITA NO . 20 2 / RPR /201 4 ASSESSMEN T Y EAR: 20 1 0 - 11 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, SMC , RAIPUR [CORAM : PRAMOD KUMAR AM ] ITA NO . 20 2 / RPR /201 4 AS SESSMENT Y EAR : 20 1 0 - 11 NARENDRA KUMAR LUNIA .APPELLANT P / O. MANMAL SHANTILAL LUNIA, GANDHI WA R D, MUNGELI (CG) 495 3 34 . [P AN: A D DPB 5567 D ] VS. DY. COMMISSIONER OF INCOME TAX , CIRCLE 2(1), BILASPUR (C.G.) ...... . RESPONDENT APPEARANCES BY: S UNIL AGRAWAL , FOR THE A PPELLANT D.K. JAIN , F OR THE RE SPONDENT DATE OF CONCLUDING THE HE ARING : 2 3 .06.2016 DATE OF PRONOUNCING THE ORDER : 22 .09.2016 O R D E R BY WAY OF TH IS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 18 .0 3 .201 4 , PASSED BY THE LEARNED CIT (A), BILASPUR (C.G.), IN THE MATTER OF ASSESSMENT UNDER SECTION 14 3(3) OF THE INCOME TAX ACT, 1961 FOR ASSESSMENT YEAR 20 10 - 11 , ON THE FOLLOWING GROUND S : - 1. THAT THE HON BLE CIT (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER OF RS.27,25,071/ - AS DIFFERENCE O F LONG TERM CAPITAL GAIN WHICH COMES UNDER BUSINESS INCOME, WHICH IS MOST ARBITRARY AND UNJUSTIFIED. 2. THAT THE HON BLE CIT (A) HAS ERRED IN CONFIRMING PENALTY U/S. 271(1) (C) WHICH IS MOST ARBITRARY AND UNJUSTIFIED. 3. THAT THE HON BLE CIT ( A ) HAS ERRED I N NOT ADMITTING THE REVISED RETURN FILED BY APPELLANT AT THE TIME OF HEARING. ITA NO . 20 2 / RPR /201 4 ASSESSMEN T Y EAR: 20 1 0 - 11 PAGE 2 OF 4 2. TO ADJUDICATE ON THIS APPEAL ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A SSESSING OFFICER NOTED THAT THE STAMP DUTY V ALUATION OF THE PROPERTY, ON SALE OF WHICH LTCG WERE OFFERED TO TAX, WAS MUCH MORE THAN THE STATED CONSIDERATION ON SALE OF LAND. IT WAS IN THIS BACKDROP THAT THE A SSESSING OFFICER ADOPTED THE FULL VALUE OF CONSIDERATION A T STAMP DUTY VALUATION UNDER SECT ION 50C OF THE ACT AS AGAINST VALUE ON WHICH THE PROPERTY WAS ACTUALLY SOLD. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE ME . 3. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. I FIND THAT EVEN THOUGH THE ASSESSEE MAY NOT HAVE MADE A SPECIFIC REQUEST FOR REFERENCE TO THE DVO, IT WAS BOUNDEN DUTY OF THE A SSESSING OFFICER TO ACT FAIRLY AND SHOULD HAVE GIVEN THE ASSESSEE OPPORTUNITY OF REFERRING THE MATTER TO THE DVO FOR VERIFICATION, UNDER SECTION 50C(2). AS I SAY SO, I MAY ONLY REFER TO THE FOLLOWING OBSERVATION MADE BY A DIVISION BENCH OF THIS TRIBUNAL IN THE CASE OF RAJ KUMAR I AGARWAL VS. DCIT, 150 ITD 597 : 6. WE FIND THAT HERE IS A CASE IN WHICH THE ASSESSEE HAS SPECIFICALLY OBJECTED TO THE ADOPTION OF STAMP DUTY VALUATION RATE. THE MERE FACT THAT THE APPELLANT HAS NOT CHALLENGED THE STAMP DUTY VALUATION CANNOT BE PUT AGAINST THE ASSESSEE. THE AUTHORITY FOR THE THIS PROPOSITION IS CONTAINED IN, HON BLE JURISDICTIONAL HIGH COURT S JUDGMENT, IN THE CASE OF CIT VS CHANDRA NARAIN CHAUDHURI ([2013] 38 TAXMANN.COM 275 (ALLAHABAD) , WHEREIN THEIR LORDSHIPS HAVE OBSERVED THAT, THE QUESTION AS TO WHETHER THE ASSESSEE FILED ANY OBJECTIONS BEFORE THE STAMP VALUATION AUTHORITY TO DISPUTE THE VALUATION, OR FILED APPEAL OR REVISION OR MADE REFERENCE BEFORE ANY AUTHORITY, COURT OR THE HIGH COURT UNDER SUB SECTION (2) (B) OF SECTION 50 C OF THE ACT IS NOT OF ANY RELEVANCE IN THIS CASE, AS THE AO HIMSELF OBSERVED THAT THE ASSESSEE DID NOT DISPUTE THE STAMP VALUATION BEFORE THE STAMP VALUATION AUTHORITY. THERE MAY BE SEVERAL REASONS FOR THE PURCHASER NOT TO FILE SUCH OBJECTION. A PURCHASER MAY NOT GO INTO LITIGATION, AND PAY STAMP DUTY, AS FIXED BY THE STAMP VALUATION ITA NO . 20 2 / RPR /201 4 ASSESSMEN T Y EAR: 20 1 0 - 11 PAGE 3 OF 4 AUTHORITY, WHICH MAY BE OVER AND ABOVE THE FAIR MARKET VALUE OF THE PROPERTY, AS ON THE DATE OF TRA NSFER, THOUGH THE AMOUNT SO DETERMINED HAS NOT BEEN ACTUALLY RECEIVED BY OWNER OF THE PROPERTY . THE POSITION AS TO WHETHER REFERENCE SHOULD BE MADE TO THE DVO, EVEN WHEN THERE IS NO SPECIFIC PLEA TO THAT EFFECT BY THE ASSESSEE, IS NOW WELL SET OUT IN HON BLE CALCUTTA HIGH COURT S JUDGMENT IN THE CASE OF SUNIL KUMAR AGARWAL CIT (GA NO 3686/2013 IN ITAT NO 221/ 2013; JUDGMENT DATED 13 TH MARCH 2014) , WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS: - . WE ARE OF THE OPINION THAT THE VALUATION B Y THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGI STRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FA IRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW . 7. AS THERE IS NO BINDING JUDICIAL PRECEDENT CONTRARY TO WHAT HAS BEEN HELD BY HON BLE CALCUTTA HIGH COURT, AS ABOVE, THE ESTEEMED VIEWS OF THEIR LORDSHIPS, EVEN THOUGH FROM A NON JURISDICTIONAL HIGH COURT, BIND US AS WELL. 8. IN THE LIGHT OF THE ABOVE LEGAL POSITION, THE PLEA OF THE ASSESSEE, AS SET OUT IN THE GROUND OF APPEAL, IS INDEED WELL TAKEN. THE PREVAILING LEGAL POSITION IS NOW LIKE THIS. ONCE THE ASS ESSEE CLAIMS THAT THE ACTUAL MARKET VALUE OF THE LAND OR BUILDING IS LESS THAN STAMP DUTY VALUATION ADOPTED BY THE AUTHORITIES, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO REFER THE VALUATION OF SAID LAND OR BUILDING TO THE DEPARTMENTAL VALUATION OFFICER . IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT DONE SO. IN VIEW OF THIS FACTUAL POSITION, AND IN THE LIGHT OF THE DISCUSSIONS ABOVE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO AFTER MAK ING A REFERENCE TO THE DVO, AND COMPLETING THE ASSESSMENT ON THE BASIS OF THE VALUATION SO RECEIVED FROM THE DVO. WHILE SO DECIDING THE MATTER AFRESH, THE ASSESSING OFFICER WILL DECIDE THE MATTER IN ACCORDANCE WITH THE LAW, BY WAY OF A SPEAKING ORDER AND A FTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE DIRECT SO. 4. IN VIEW OF THE VIEW SO EXPRESSED BY THE DIVISION BENCH AS ALSO THE DECISION OF HON BLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL (SUPRA) , I DEEM IT FIT AND PR O PER TO REMIT THE MATTER TO THE FILE OF THE A SSESSING OFFICER WITH THE DIRECTION TO ITA NO . 20 2 / RPR /201 4 ASSESSMEN T Y EAR: 20 1 0 - 11 PAGE 4 OF 4 REFER THE VALUATION OF PROPERTY TO THE DVO UNDER SECTION 50C(2) OF THE ACT. THIS IS PRECISELY WHAT THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US HAS PRAYED FOR. 5. IN TH E RESULT, APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES 1963 TODAY ON 22 ND DAY OF SEPTEMBER, 2016 . SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DAT ED: THE 22 ND DAY OF SEPTEMBER , 2016 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR