Balwant Textile Mills Ltd., Sangli V. Income-tax Officer,

ITA 2213/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2790 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 144; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2213 /P U N/201 6 / ASSESSMENT YEAR : 20 1 2 - 13 BALWANT TEXTILE MILLS LTD., 2823, SHRI GOVINDRAOJI MARATHE ROAD, MIRAJ, DISTT. - SANGLI 416410 PAN : AABCB1538Q . / APPELLANT VS. THE INCOME TAX OFFICE R, WARD 2(4), SANGLI . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI PANKAJ GARG / DATE OF HEARING : 06.02. 201 9 / DAT E OF PRONOUNCEMENT: 27 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1, KOLHAPUR, DATED 01.07.2016 RELATING TO ASSESSMENT YEAR 20 1 2 - 13 AGAINST ORDER PASSED UNDER SECTI ON 14 4 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 2213 /P U N/20 1 6 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - 1. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS.86,50,736 ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF LAND CALCULATED BY THE LEARNED AO BY ESTIMATING THE VALUE OF PROPERTY (COST OF ACQUISITION). 2. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING ADDITION OF RS.86,50,736 OF LONG TERM CAPITAL GAIN DETERMINED ON THE BASIS OF PER SQUARE METER RATE OF ALLEGED NEARBY WHICH IS IN FACT MUCH DISTANT TO THE LOCATION OF THE SAID PROPERTY. 3. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE ASSESSEE COMPANY TO GET THE VALUATION DONE FROM A REGISTERED VALUER. 4. THE APPE LLANT CRAVES LEAV E TO ADD, ALTER, DELETE OR SUBSTITUTE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE COMPUTATION OF LONG TERM CAPITAL GAIN S ON SALE OF LAND. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE DURIN G THE YEAR UNDER CONSIDERATION HAD SOLD IMMOVABLE PROPERTY FOR RS.70,00,000/ - . THE ASSESSEE IN THE RETURN OF INCOME HAD NOT DECLARED ANY INCOME FROM CAPITAL GAINS. THE ASSESSEE WAS ASKED TO FILE THE DETAILS IN THIS REGARD. HOWEVER, THE ASSESSEE FAILED T O DO SO. THE ASSESSING OFFICER OBTAINED THE COPY OF THE SALE DEED FROM THE OFFICE OF SUB - REGISTRAR, SANGLI, AS PER WHICH THE SALE VALUE WAS TAKEN FOR STAMP DUTY PURPOSE AT RS.3,85,21,000/ - . THE ASSESSEE WAS SHOW CAUSE D AS TO WHY THE SALE VALUE BE NOT ADO PTED AS PER SECTION 50C OF THE ACT. HOWEVER, THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER. HENCE, THE ASSESSMENT WAS COMPLETED EX - PARTE THE ASSESSEE U/S. 144 OF THE ACT. FOR COMPUTING THE CAPITAL GAINS, DEEMED SALE CONSIDERATION WAS TAKEN AT RS. 3. 8 5 CRORES. THE COST OF ACQUISITION WAS TAKEN @ RS.500/ - PER SQ. MTR. FOR THE CALENDAR YEAR 1989. THE ASSESSING OFFICER COMPUTED LONG TERM CAPITAL GAIN S AFTER INDEXATION AT RS.86,50,736/ - . ITA NO. 2213 /P U N/20 1 6 3 5. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE AS SESSEE SUBMITTED THAT THE FAIR MARKET VALUE OF PROPERTY WAS MUCH HIGHER THAN THE COST OF ACQUISITION ADOPTED BY THE ASSESSING OFFICER. HENCE, REQUEST WAS MADE TO FILE THE VALUATION REPORT AS PER THE REGISTERED VALUER IN ORDER TO COMPUTE THE CORRECT FAIR M ARKET VALUE OF PROPERTY. THE COMMISSIONER OF INCOME TAX (APPEALS) HOWEVER REJECTED THE PLEA OF ASSESSEE AS NO SUCH REQUEST WAS MADE AT THE STAGE OF ASSESSMENT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 7. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT IN VIEW OF THE PROVISIONS OF SECTION 50C(2) OF THE ACT , IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO REFER THE MATTER TO DVO BEFORE ADOPTING THE DEEMED SALE CONSIDERATION. 8. THE LD. DR FOR THE REVENUE ON T HE OTHER HAND PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSMENT IN THE CASE WAS COMPLETE D EX - PARTE THE ASSESSEE, AS THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFIC ER ON APPOINTED DATE OF HEARING. THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING LOSS OF RS.20,30,945/ - . HOWEVER, AS PER THE AIR INFORMATION RECEIVED BY THE ASSESSING OFFICER, THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY FOR RS.70,00,000/ - DURING T HE YEAR. HOWEVER, NO INCOME FROM CAPITAL GAINS WAS SHOWN BY THE ASSESSEE. BECAUSE OF NON - COOPERATIVE ATTITUDE OF THE ASSESSEE, ITA NO. 2213 /P U N/20 1 6 4 THE ASSESSING OFFICER CALLED FOR THE INFORMATION FROM THE SUB - REGISTRAR , SANGLI. IT TRANSPIRED THAT AS PER THE STAMP VALUATION , THE DEEMED SALE CONSIDERATION WAS RS.3,58,21,000/ - . THE SAME WAS ADOPTED FOR COMPUTING THE INCOME FROM LONG TERM CAPITAL GAINS. FURTHER THE COST OF ACQUISITION WAS TAKEN AS ON 1989 SINCE THE COMPANY WAS INCORPORATED ON 09.12.1988. THE ASSESSING OFFICE R WAS OF THE VIEW THAT AS PER RATE SPECIFIED FOR THE PROPERTY SITUATED IN THE AREA, THE RATE TO BE ADOPTED @ RS.500/ - PER SQ. MTR. AS SUCH , LONG TERM CAPITAL GAINS OF RS.86,50,736/ - WAS COMPUTED. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , THE ASSESS EE RAISED PLEA OF MAKING REFERENCE TO THE DVO BEFORE ADOPTING THE VALUATION AS PER STAMP DUTY VALUATION AND ALSO RAISED THE PLEA VIS - - VIS THE MARKET VALUE AS ON DATE OF ACQUISITION. BOTH THESE REQUESTS OF THE ASSESSEE WERE NOT ACCEPTED BY THE COMMISSIONE R OF INCOME TAX (APPEALS), AS NO SUCH REQUEST WAS MADE BEFORE THE ASSESSING OFFICER. HOWEVER, WE NOTE THAT THE PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ARE IN CONTINUATION OF THE ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER AND I N CASE , THERE IS SOME REQUEST MADE BY THE ASSESSEE UNDER THE ACT , THEN THE SAME SHOULD BE ALLOWED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 10. SECTION 50C(2) OF THE ACT LAYS DOWN THAT WHERE THE ASSESSEE RAISES OBJECTIONS AGAINST STAMP DUTY VALUATION , THEN THE ASSESSING OFFICER ON THE REQUEST OF ASSESSEE MAY REFER THE MATTER FOR VALUATION OF THE SAID PROPERTY AS ON DATE OF THE SALE, TO THE DVO. AS AGAINST THE SALE CONSIDERATION OF RS.70,00,000/ - MENTIONED IN THE SALE DOCUMENT , THE DEEMED SALE VALUE W AS FOR STAMP DUTY WORKED OUT AT RS.3.85 CRORES. WE ARE OF THE VIEW THAT THIS IS A FIT CASE TO SEND BACK TO THE ASSESSING OFFICER WITH DIRECTIONS TO MAKE REFERENCE TO ITA NO. 2213 /P U N/20 1 6 5 THE DVO AND ORDER TO WORK OUT THE VALUE OF PROPERTY AS ON DATE OF SALE. FURTHER, THE ASS ESSEE IS DIRECTED TO COOPERATE AND APPEAR IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEE IS FURTHER DIRECTED TO FILE THE VALUATION REPORT VIS - A VIS THE COST OF ACQUISITION OF THE SAID PROPERTY IN ORDER TO COMPUTE THE INCOME FROM LONG TERM CAPITAL GAINS. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 27 TH DAY OF FEBRUARY, 2019 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 27 TH FEBRUARY, 201 9 . RK / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1, KOLHAPUR ; 4. / THE CIT - 1, KOLHAPUR ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE