Lalita Almal, Kolkata V. ITO, Ward - 30(1), Kolkata, Kolkata

ITA 2164/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2593 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2010
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 19-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 29-12-2009
• Court: TRIBUNAL
• Department Lawyers: NEERAJ SINGH
• Assessee Lawyers: SOUMITRA CHOW DHURY; S P CHOWDHURY
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Assessment record
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI C . D. RAO, AM] I.T.A. NO.2164/KOL/2009 ASSESSMENT YEAR: 2005-06 LALITA ALMAL -VS- INCOME-TAX OFFICER, WD-30(1) , KOLKATA (PA NO.ACQPA 7711 E) (APPELLANT) (RESPONDENT) & ITA NO. 430/KOL/2010 ASSESSMENT YEAR : 2005-06 INCOME-TAX OFFICER, WD-30(1), KOLKATA. -VS- SMT. LALITA ALMAL (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SRI S. P. CHOWDHURY & SOUMITRA CHO WDHURY DEPARTMENT BY : SRI NEERAJ SINGH O R D E R PER D. K. TYAGI, JM: BOTH THESE APPEALS PREFERRED BY THE ASSESSEE AND TH E REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 30.11.20 09 FOR ASSESSMENT YEAR 2005-06. SINCE BOTH THE APPEALS HAVE ARISEN OUT OF THE SAME ORDER OF THE LD. CIT(A), WE DISPOSE OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE ASSESSEES APPEAL THE ASSE SSEE HAS TAKEN THE FOLLOWING SOLE GROUND OF APPEAL : THAT THE VALUATION FOR LTCG MADE BY LD. CIT(A) AS PER PROVISION OF SECTION 50C, HE SHOULD HAVE ALSO DIRECTED THE LD. AO TO REFER THE V ALUATION OF THE CAPITAL ASSET TO VALUATION OFFICER IN VIEW OF SECTION 50C(2) PRAYED BY THE APPELLANT, AS ALLOWABLE UNDER LAW. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAS SOLD SOME PARTS OF THE PROPER TY OWNED BY HER AT 7, GARSTIN PLACE, KOLKATA. THE SALE PRICE OF THIS PREMISES LOCATED A T DIFFERENT FLOORS OF THE BUILDING AT 7, GARSTIN PLACE WERE NOT SHOWN BY THE ASSESSEE AS FOL LOWS : FLOOR AREAS (SQ. FT.) SALE PRICE RS. GROUND 160 1,60,000 GROUND 150 2,50,000 GROUND 340 5,10,000 FIRST 410 8,55,000 FIRST 476 2,38,000 1536 20,13,000 2 OUT OF THIS AMOUNT OF RS.20,13,000/- THE ASSESSEE C LAIMED THE FOLLOWING DEDUCTIONS : INDEXED COST OF ACQUISITION RS.28,47,621/- COST OF IMPROVEMENT RS. 9,48,956/- BROKERAGE RS. 2,40,000/- RS.40,46,577/- THUS AFTER DEDUCTING RS.40,36,577/- FROM THE SALE O F CONSIDERATION OF RS.20,13,000/- THE ASSESSEE COMPUTED LONG TERM CAPITAL LOSS OF RS.20,2 3,577/- AND CLAIMED IT TO BE CARRIED FORWARD. DURING THE ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO PRODUCE THE SALE DEED FOR THE PREMISES SOLD BY HER SO THAT THE VALUE OF THE PROPERTY ASSESSED BY THE STAMP VALUATION AUTHORITY OF THE STATE GOVERNMENT COULD B E DETERMINED FOR THE PURPOSE OF SEC. 50C OF THE I. T. ACT. THE ASSESSEE DID NOT PR ODUCE THE SALE DEEDS BEFORE THE AO. THEREFORE, THE AO DEPUTED HIS INSPECTOR TO PROCURE INFORMATION ABOUT THE VALUATION OF THE PROPERTY ADOPTED BY THE REGISTRAR OF ASSURANCE FOR THE RELEVANT ASSESSMENT YEAR. IN A LETTER THE REGISTRAR OF ASSURANCE INFORMED THE AO THAT THE FAIR MARKET VALUE IN GARSTIN PLACE FOR COMMERCIAL PURPOSE WAS TAKEN AT RS.8000 P ER SFT. DURING THE RELEVANT PERIOD. THE AO ADOPTED THIS VALUE AND APPLIED IT ON THE 153 6 SFT. OF OFFICE SPACE SOLD BY THE ASSESSEE. THUS, HE DETERMINED THE FAIR MARKET VALU E OF THE PROPERTY SOLD AT RS.1,22,88,000/- (RS.8000 X 1536). THE AO COMPUTED THE CAPITAL GAIN IN THE FOLLOWING MANNER.: COMPUTATION OF CAPITAL GAIN FAIR MARKET VALUE FOR FY 2004-05 RS.8000 X 1536 = 12288000 LESS : INDEXED COST PRICE BASED ON VALUATION 2847621 COST OF IMPROVEMENT 948956 BROKERAGE 24000 3820577 84,67,423 AGGRIEVED BY THIS ORDER THE ASSESSEE WENT BEFORE TH E FIRST APPELLATE AUTHORITY AND BEFORE HIM ONE OF THE GROUNDS TAKEN BY THE ASSE SSEE WAS THAT AS PER SECTION 50C(2) OF THE ACT THE ASSESSEE SHOULD HAVE BEEN GIVEN AN O PPORTUNITY TO CHALLENGE THE FAIR MARKET VALUE ASSESSED BY THE STAMP VALUATION AUTHOR ITY AND THE MATTER SHOULD BE REFERRED TO THE VALUATION OFFICER. THE LD. CIT(A) WAS OF THE VIEW THAT THE ASSESSEE WAS TO MAKE HER CLAIM FOR REFERRING THE VALUATION T O THE VALUATION OFFICER BEFORE THE AO AND SINCE THE SAME HAS NOT BEEN DONE BY THE ASSESSE E BEFORE THE AO, SHE HAS FORFEITED 3 HER OPPORTUNITY TO OBJECT TO THE VALUE ADOPTED BY T HE STAMP VALUATION AUTHORITY AND THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED . FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AND SUBMITTED THAT THE ASSESSEE COULD NOT CHALLENGE THE FAIR MARKET VALUE ASSESSED BY THE AO AS THE LETTER OF THE REGIS TRAR OF ASSURANCE RECEIVED BY THE AO WAS NEVER CONFRONTED TO THE ASSESSEE AND, THEREFORE , SHE HAD NO OCCASION TO CHALLENGE THE FAIR MARKET VALUE ASSESSED BY THE STAMP VALUATI ON AUTHORITY. TO ASCERTAIN THIS FACT, ASSESSMENT RECORDS WERE CALLED FOR AND IT WAS FOUND THAT THE CONTENTION OF THE ASSESSEE IS CORRECT. THE AO AFTER RECEIVING THE LETTER OF T HE REGISTRAR OF ASSURANCE DID NOT GIVE ANY OPPORTUNITY TO THE ASSESSEE. THEREFORE, SHE WA S PREVENTED FROM CHALLENGING THE PROPOSED FAIR MARKET VALUE ADOPTED BY THE AO. IN V IEW OF THIS, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER IS REQUIRED TO BE SENT BACK TO THE FILE OF THE AO TO GIVE AN OPPORTUNITY TO THE ASSESSEE FOR CHALLENGING OR ACCE PTING THE FAIR MARKET VALUE ASSESSED BY THE STAMP VALUATION AUTHORITY. WE ORDER ACCORDIN GLY. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLOWED FOR STATISTICAL PURPOSES. 4. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL : THE LD. CIT(A) ERRED IN DECIDING THE VALUE OF THE PORTION OF THE PROPERTY WHICH WAS SOLD TO SMT. DEEPA LAHIRI. THE MARKET VALUE WAS DET ERMINED BY THE REGISTRAR OF ASSURANCE AT RS. 18,70,000/- WHILE HE HAS ACCEPTED IT AT RS.13,60,000/- THE LD. CIT(A) HIMSELF WRITES SECTION 50C OF INCOME TAX ACT PROVIDES THAT IF THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE FOR TRANSFER OF ANY LAND AND BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTH ORITY OF STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THAN THE VALUE ADOPTED BY THE STATE GOVERNMENT AUTHORITY SHALL BE DEEMED TO B E THE FULL VALUE OF CONSIDERATION AS A RESULT OF SUCH TRANSFER. WHEREON, HE DIRECTS THAT THE VALUE FOR THE PROPERTY SOLD TO SMT. DEEPA LAHIRI OTHERS SHALL BE TAKEN AT THE LOWER AMOUNT OF RS.13,60,000/ - IN PLACE OF RS.18,70,000. IN THIS CASE THE SALE PRICE WAS HIGHER THAN THE MARKET VALU E ASSESSED BY THE CIT(A),KOLS. 5. IN VIEW OF OUR DECISION IN ASSESSEES APPEAL BEI NG ITA NO. 2164 OF 2009, THE APPEAL OF THE REVENUE IS ALSO RESTORED TO THE FILE OF THE AO TO ADJUDICATE AFRESH. THEREFORE, THE APPEAL OF THE REVENUE IS ALSO ALLOWE D FOR STATISTICAL PURPOSES. 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 14. 5.10 SD/- SD/- (C. D. RAO) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :14 TH MAY, 2010 4 COPY TO : 1. SMT. LALITA ALMAL, 101 & 102, 6A IRONSIDE ROAD, KOL KATA-19. 2. ITO, WARD-30(1), KOLKATA. 3. CIT(A), KOLKATA 4. CIT, KOLKATA. 5. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT., KOLKATA