The Income-tax Officer, Jammu V. Sh Prem Parkash Kapoor, New Delhi

ITA 205/ASR/2011

• Counselvise Citation: 20520914 RSA 2011
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K K MEHRA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report; Revised return
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.82(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN :AIAPK8093K SH. PREM PRAKASH KAPOOR, VS. THE INCOME TAX OFFICER , SRINAGAR. WARD-2, SRINAGAR. (APPELLANT) (RESPONDENT) I.T.A. NO.205(ASR)/2011 ASSESSMENT YEAR:2007-08 PAN :AIAPK8093K THE INCOME TAX OFFICER, VS. SH. PREM PARKASH KAPOO R WARD III(2), SRINAGAR. C/O M/S. ROY MALHOTRA & CO ., SRINAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY:SH. K.K. MEHRA, CA DEPARTMENT BY:SH. TARSEM LAL, DR DATE OF HEARING: 23/07/2012 DATE OF PRONOUNCEMENT:06/08/2012 ORDER PER BENCH : THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENU E ARISE FROM THE ORDER OF THE CIT(A), JAMMU, DATED 07.02.2011 FOR TH E ASSESSMENT YEAR 2007- 08. 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE IMPUGNED ORDER IS ERRONEOUS IN LAW, PR EJUDICIAL, ARBITRARY AD NOT IN KEEPING WITH THE FACTS ON RECOR DS OF THE CASE. 2. (A) THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN FAC TS & CIRCUMSTANCES OF THE CASE TO UPHOLD ADDITION TO THE EXTENT OF RS.36,79,078/- ON ACCOUNT OF ALLEGED LONG TERM CAPI TAL GAIN ON SALE OF 1/6 TH SHARE OF PROPERTY (KNOWN AS WHITE HOUSE) AGAINST NOMINAL LOSS RETURNED BY THE APPELLANT. (B) THAT THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 HAS BEEN GROSSLY UNDER ESTIMATED IN AS MUCH AS VALU E OF LAND IN PRIME HUB OF COMMERCIAL AREA AT RS.100 PER SQ METER BY THE VALUATION OFFICER. (C) THAT THE FAIR MARKET VALUE DETERMINED BY THE V ALUATION OFFICER U/S 50C ON THE DATE OF SALE COMPLETELY IGNO RES THE FACT THAT PROPERTY WAS TENANTED AT A MEAGER RENT OF RS.1 600/- PER YEAR ALTHOUGH THE THIS FACT WAS BROUGHT TO HIS NOTI CE IN ADVANCE. (D) THAT THE VALUATION OFFICER HAS NOT RESPONDED T O THE OBJECTIONS RAISED BY THE APPELLANT AGAINST HIS VALU ATION REPORTS DURING THE ASSESSMENT PROCEEDINGS TILL DATE. (E) THAT THE VALUATION REPORTS OF THE APPROVED VAL UERS ON 01/04/1981 AND AS ON DATE OF SALE SUBMITTED DURING THE COURSE OF ASSESSMENT HAVE BEEN REJECTED WITHOUT ADVANCING VALID REASONS. (F) THAT THE LD. CIT(A) HAS NOT ADJUDICATED UPON T HE OBJECTIONS RAISED BY THE APPELLANT ON VALUATION MAD E BY THE VALUATION OFFICER ADOPTED BY THE ASSESSING AUTHORIT Y. 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND CIRCUMSTANCES THE LD. CIT(A) H AS ERRED IN REDUCING THE LONG TERM CAPITAL GAIN CHARGEABLE TO T AX AT RS.36,79,078/- INSTEAD OF RS.62,53,176/- AS COMPUTE D BY THE ASSESSING OFFICER. 3 2. ON THE FACTS AND CIRCUMSTANCES THE LD. CIT(A) HA S ERRED IN TAKING INTO ACCOUNT THE FAIR MARKET VALUE ON THE DA TE OF SALE INSTEAD OF THE FULL VALUE OF CONSIDERATION DECLARED BY THE ASSESSEE AND TAKEN BY THE ASSESSING OFFICER WHILE C OMPUTING THE LONG TERM CAPITAL GAIN. 3. THAT THE APPELLANT CRAVES TO AMEND OR ADD ANY ON E MORE GROUNDS OF APPEAL. 4. THE BRIEF FACTS IN THE PRESENT APPEALS ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 24.07.2007 SHOWING TAXABLE INC OME AT RS.1,33,794/-. IN THE COMPUTATION OF INCOME A LONG TERM CAPITAL LOSS WAS SHOWN ON SALE OF HIS 1/6 TH SHARE IN A PROPERTY NAMED WHITE HOUSE AT DEHRADU N. THE ACTUAL SALE PRICE WAS SHOWN AT RS.29.70 LACS YET THE ASSESSEE HAS WORKED OUT CAPITAL GAINS TAKING THE VALUE FOR STAMP DUTY PURPOSES, AS PER SECTION 50C OF THE ACT AT RS.69,86,284/-. THE INDEXED COST OF ACQUISITION ON PROPERTY WAS ADOPTED AT RS.70,92,996/- ON THE BASIS OF A VALUATION REPOR T ISSUED BY AN APPROVED VALUER OF DEHRADUN. 4.1. THE AO NOTED THAT THE VALUATION REPORT FOR THE COST AS ON 01.04.1981 WAS ON THE HIGHER SIDE. IN VIEW OF THIS HE WROTE TO THE APPROVED VALUER WHO REPLIED THAT THE COST ADOPTED @ 55000/- SQ. METER W AS MISTAKENLY TAKEN AND A REVISED REPORT ADOPTING THE RATE @ 20000 SQ. MET ERS WAS PREPARED. THE AO THEN REFERRED THE MATTER TO DEPARTMENTAL VALUATI ON OFFICER. HE ALSO WROTE TO SUB-REGISTRAR, DEHRADUN TO PROVIDE HIM INS TANCES OF SALE DEEDS MADE IN RESPECT OF THE SAME LOCALITY. THE AO DID NO T GET THE REGISTRIES YET ON 4 INQUIRY HE FOUND THE CIRCLE RATE IN THE CONCERNED AREA WHICH WAS RS.2,50,000/- PER ACRE. AS PER THE REPORT OF VALUER THE VALUE OF PROPERTY WAS TAKEN AT RS.4,23,741/- AS ON 01.04.1981 AND IN TERM S OF SECTION 50C(2) OF I.T.ACT WAS AT RS.1,32,40,625/-. THE ASSESSEE OBJEC TED TO SUCH VALUATION AND THE AO ACCEPTED TO REFER THE OBJECTIONS TO VALUATI ON OFFICER VIDE LETTER DATED 10.10.2009. THE COMMENTS OF VALUATION OFFICER WERE NOT RECEIVED BY AO TILL THE DATE OF PASSING OF THE ORDER. THE ASSES SEE HAD ALSO FILED ANOTHER VALUATION REPORT BY SOME OTHER APPROVED VALUER WHIC H ALSO AS PER AO AS DISCUSSED IN ASSESSMENT, WAS NOT RELIABLE. THE AO A T FIRST HAD FORWARDED THE OBJECTIONS OF ASSESSEE AS PER SECTION 50C(2) OF THE INCOME TAX ACT TO THE DEPARTMENTAL VALUER BUT WHEN SUCH COMMENTS OF THE DEPARTMENT VALUER WAS NOT RECEIVED AT THE TIME OF PASSING THE ORDER HE TO OK A U TURN AND QUESTIONED THE RIGHT OF ASSESSEE TO RAISE A CONTENTION BY FILI NG A LETTER. AS PER THE AO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M /S.GOETZE (INDIA) LTD. 284 ITR 323, SUCH CONTENTION COULD BE RAISED ONLY B Y WAY OF FILING A REVISED RETURN. IN THE END, THE AO ADOPTED THE FULL VALUE O F CONSIDERATION OF RS.69,86,248/- (TAKEN FOR THE PURPOSE OF STAMP DUTY ) AND COST OF ACQUISITION BY GOVT. VALUER AT RS.7,33,072/-. 5. THE LD. CIT(A) AFTER CONSIDERING THE FACTS OF TH E CASE CONSIDERED THE FAIR MARKET VALUE AS ON THE DATE OF SALE AT RS.44,1 2,150/- INSTEAD OF RS.69,86,284/-. THE COST AS ON 01.04.1981 REMAINED UNALTERED WHICH IS 5 ALREADY AS PER THE VALUATION REPORT OF THE D.V.O. AT RS.7,33,072/- AND ACCORDINGLY HE WORKED OUT THE LONG TERM CAPITAL GAI NS CHARGEABLE TO TAX AMOUNTING TO RS.36,79,078 IN PLACE OF RS.62,53,176/ - TAKEN BY THE A.O. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE DURING ASSESSMENT PROCEEDINGS HAD WRIT TEN TO THE VALUATION OFFICER ON 21.10.2009, WHICH IS REPRODUCED IN PARA 4(B) OF CIT(A)S ORDER. ON 06.11.2009 THE ASSESSEE SENT A VALUATION REPORT PREPARED BY ANOTHER VALUER, WHO HAD VALUED ASSESSEES SHARE AS ON THE D ATE OF SALE AT RS.21,84,835/-. THE ASSESSEE AGAIN WROTE TO THE VAL UATION OFFICER OF THE DEPARTMENT ON 16.11.2009, WHICH IS REPRODUCED IN PA RA 4(C) OF CIT(A)S ORDER. AFTER RECEIPT OF THE VALUATION REPORT BY THE DEPARTMENTAL VALUER AND BEFORE PASSING THE ORDER, THE ASSESSEE SENT HIS FI NAL OBJECTIONS TO THE A.O. ON 18.12.2009, WHICH ARE REPRODUCED IN PARA 4(B) OF CI T(A)S ORDER. THE VALUATION OFFICERS OBJECTIONS AS ON 10.05.2006 ARE ALSO AVAILABLE IN THE ORDER OF THE LD. CIT(A). THE OBJECTIONS OF THE ASSE SSEE AFTER CONSIDERING THEM IN THE ASSESSMENT ORDER WERE REJECTED BY THE A OAND HE ADOPTED THE VALUE TAKEN FOR THE PURPOSE OF STAMP DUTY RS.69,86, 285/- AS FULL VALUE OF CONSIDERATION AND THE COST ON 01.04.1981 AS PER DEP ARTMENTAL VALAUER AT RS.7,33,072/-. 6.1. THE LD. CIT(A), IN FACT, HAS ALSO DIRECTED TO ADOPT THE FAIR MARKET VALUE ON THE DATE OF SALE AT RS.44,12,150/- IN PLAC E OF RS.69,86,284/- AS THE 6 ASSESSEE HIMSELF DECLARED IN THE RETURN OF INCOME. THE LD. CIT(A)S DIRECTION IS BASED ON THE REASON THAT THE CO-OWNER RITU KAPOO R AND CHILDREN ADOPTED THE VALUE AT RS.44,12,150/- WHICH PROPERTY WAS SOLD ABOUT SIX MONTHS BACK AND THE LD. CIT(A) WAS OF THE VIEW THAT THE SALE VA LUE SHOULD BE ADOPTED IN ASSESSEES OWN CASE WHO SOLD THE PROPERTY AFTER SIX MONTHS. THE LD. CIT(A) HAS MIXED THE FACTS WITH CO-OWNER RITU KAPOOR & CH ILDREN WHO HAD SOLD THE PROPERTY ON 29.10.2005 AND THE DATE OF SALE IN THE CASE OF THE ASSESSE IS 09.05.2006. THE LD. CIT(A) HAS NOT APPRECIATED THAT THE PROPERTY BY THE OTHER CO-OWNERS WAS SOLD DURING THE FINANCIAL YEAR 2005-06 AND THE ASSESSEE DURING THE FINANCIAL YEAR 2006-07 WHERE THERE WERE ESCALATION OF THE STAMP DUTY DURING THE IMPUGNED YEAR AS COMPARED TO THE FI NANCIAL YEAR 2005-06 WHEN CO-OWNER SOLD THE PROPERTY. THE LD. CIT(A) HAD NO POWER TO REDUCE SUCH VALUE AS ADOPTED FOR THE PURPOSE OF STAMP DUTY AS PER SECTION 50C OF THE ACT. THE ASSESSEE ALSO VIDE LETTER DATED 05.10 .2009 HAD DESIRED THAT THE ACTUAL PRICE OF RS.29.70 LAC AS AGAINST DEEMED SALE OF RS.69,86,284/- BE ADOPTED. WHEREAS THE VALUE OF THE LAND IN THE SALE DEED ON 29.10.2005 WAS ADOPTED AT CIRCLE RATE OF RS.4,500/- PER SQ. METER IN THE CASE OF SH. KASHMIRI LAL KAPOORS PROPERTY WHICH WAS 50 METERS FROM SUBA SH ROAD, DEHRADUN AND THE VALUE OF LAND IN THE SALE DEED DATED 29.10. 2005 IN RESPECT OF SMT. RITU KAPOOR WAS ADOPTED AT CIRCLE RATE OF RS.6000/- PER SQ. METER. AS THE SALE OF THE PROPERTY OF THE ASSESSEE TOOK PLACE IN THE SUBSEQUENT YEAR WHEN 7 THE CIRCLE RATE WAS ADOPTED AT RS.7500/- PER SQ. ME TER AND THEREFORE, THE LD. CIT(A) HAS ERRED IN FOLLOWING THE VALUATION AS PE R SALE DEED OF SMT. RITU KAPOOR AT RS.44,12,150/- AT CIRCLE RATE OF RS.6000/ - PER SQ. METER. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE FAI R MARKET VALUE OF THE PROPERTY IS TO BE TAKEN AS DECLARED BY THE ASSESSE E AT RS.68,86,284/- AND NOT AT RS.44,12,150/- AS DIRECTED BY THE LD. CIT(A). WE ORDER ACCORDINGLY TO ADOPT THE VALUE OF THE SALE AT RS.69,86,284/- AND C OSTS AT RS.7,33,072/- AS ADOPTED BY THE A.O. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ALL THE GROUNDS OF THE REVENUE ARE ALLOWED AND THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 205(ASR)/2011 IS ALLOWED AND THE APPEAL OF THE ASSESSEE IN ITA NO.82 (ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH AUGUST, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6TH AUGUST, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. PREM PARKASH KAPOOR, SRINAGAR. 2. THE ITO WARD III(2), 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER