Sharmila K. Shah, Pune V. Income tax Officer,

ITA 225/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5189 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 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. 2 2 5 /P U N/201 7 / ASSESSMENT YEAR : 20 08 - 09 MRS. SHARMILA K. SHAH 23, BHAWANI PETH, PUNE 411042 . / APPELLANT P AN: AKIPS8375G VS. THE INCOME TAX OFFICER , WARD 4(5), PUNE . / RESPONDEN T / APPELLANT BY : SHRI NILESH KHANDELWAL / RESPONDENT BY : S HRI SUDHENDU DAS / DATE OF HEARING : 1 2 . 12 .201 8 / DATE OF PRONOUNCEMENT: 05 . 0 2 .201 9 / ORDER PER SUSH MA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 4 , PUNE , DATED 28 . 1 0 .201 6 RELATING TO ASSESSMENT YEAR 20 08 - 09 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUND S OF APPEAL: - 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND IN LAW, THE LD.CIT(A) SUSTAINED THE ADDITION OF RS.5,30,000/ - MADE BY THE AO IN TREATING THE SALE OF PLOT AS SALE OF CAPITAL ASSET AND WORKING OUT THE CAPITAL GAIN BY APPLYING THE PROVISION OF SEC 50C OF THE INCOME TAX ACT, ITA NO. 2 2 5 /P U N/20 1 7 MRS. SHARMILA K. SHAH 2 1961 UNDER THE HEAD 'CAPITAL GAIN'. THE ADDITION MADE BY THE AO AND THAT SUSTAINED BY THE 1ST APPELLATE AUTHORITY BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 2. ON F ACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, AO HAS ERRED IN INVOKING PROVISIONS OF SEC 50C OF THE ACT BY ASSESSING THE STAMP VALUATION OF THE OFFICE AS SALE CONSIDERATION WITHOUT REFERRING THE SAME TO THE VA LUATION OFFICER, WHICH IS IMPROPER, UNJUSTIFIED, AND CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE IT BE HELD THAT THE APPELLANT WAS NOT ISSUED SHOW CAUSE NOTICE AND GIVEN AN OPPORTUNITY TO BE HEARD BEFORE THE A.O WHICH WAS AN UNFAIR ACT ON THE PART OF THE A.O. WHICH IS IMPROPER, UNJUSTIFIED, AND CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT. THE ADDITION MADE DESERVES TO BE DELETED . THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT. 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL BUT THE ISSUE RAISED IS AGAINST APPLICATION OF PROVISIONS OF SECTION 50C OF THE ACT TO DETERMINE THE INCOME IN THE HANDS OF ASSESSEE UN DER THE HEAD INCOME FROM CAPITAL GAINS. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STATED THAT GROUND OF APPEAL NO.3 IS THE EFFECTIVE GROUND OF APPEAL WHICH NEEDS TO BE ADJUDICATED FIRST AND HENCE, WE PROCEED TO DECIDE THE SAME. 5. BRIEF LY, IN THE FACTS OF THE CASE, THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SHOWN SALE OF PLOT FOR 9 LAKHS ON 26.03.2008. THE SAID PLOT WAS PURCHASED ON 27.09.2007 FOR 8 LAKHS. THE ASSESSEE HAD DECLARED THE SAME AS INCOME FROM BUSINESS. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD PURCHASED ONLY ONE PLOT DURING THE YEAR WHICH WAS SOLD AND SHE HAD ANOTHER SHOP, WHICH WAS SHOWN IN THE CLOSING STOCK AND APART FROM THIS, THERE WAS NO PROPERTY DEALING AND SINCE THE ASSESSEE WAS DOING SHARE B USINESS AND NO PROPERTY DEALING, THEN THE INCOME WAS TO BE ASSESSED AS SHORT TERM CAPITAL GAINS IN THE HANDS OF ASSESSEE. THE ASSESSING OFFICER FURTHER NOTED THAT STAMP DUTY VALUATION FOR THE SAID PLOT SOLD WAS 15,30,000/ - ITA NO. 2 2 5 /P U N/20 1 7 MRS. SHARMILA K. SHAH 3 AS AGAINST SALE CONSIDERATION SHOWN BY THE ASSESSEE AT 9 LAKHS. THE ASSESSING OFFICER THUS, INVOKED PROVISIONS OF SECTION 50C OF THE ACT AND ADOPTED THE VALUE ASSESSED BY THE STATE AUTHORITIES AS DEEMED FULL VALUE OF CONSIDERATION AND WORK ED OUT THE CAPITAL GAINS IN THE HANDS OF ASSESSEE AT 6,30,000/ - . 6. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASS ESSING OFFICER HAD NOT GRANTED ANY OPPORTUNITY TO THE ASSESSEE AND HAD ASSESSED INCOME AS SHORT TERM CAPITAL GAINS AND HAD ALSO APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT. HOWEVER, BEFORE THE CIT(A), THE ASSESSEE HAD FILED THE REGISTERED VALUERS RE PORT AND IT WAS INCUMBENT UPON THE CIT(A) WHOSE PROCEEDINGS WERE IN CONTINUATION OF ASSESSMENT PROCEEDINGS, TO MAKE REFERENCE TO THE DVO OR DIRECT THE ASSESSING OFFICER TO MAKE SUCH REFERENCE AND IN THE ABSENCE OF THE SAME, ADDITION COULD NOT BE UPHELD IN THE HANDS OF ASSESSEE. 8. ON PERUSAL OF RECORD, IT IS APPARENT THAT THE ASSESSING OFFICER HAS FAILED TO GIVE OPPORTUNITY TO THE ASSESSEE BEFORE APPLYING AFORESAID PROVISIONS OF SECTION 50C OF THE ACT. BEFORE THE CIT(A), THE ASSESSEE HAD FURNISHED WRITTEN SUBMISSIONS DATED 08.08.2016 ALONG WITH REPORT OF THE GOVERNMENT APPROVED VALUER. IN SUCH CIRCUMSTANCES, IT WAS INCUMBENT UPON THE CIT(A) TO FOLLOW THE PROVISIONS OF SECTION 50C OF THE ACT. THE CIT(A) SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO REFER MATTER OF VALUATION OF SAID PROPERTY IN TERMS OF SECTION 50C(2) OF THE ACT. IN THE ABSENCE OF SAME, THE ORDER OF CIT(A) SUFFERS ITA NO. 2 2 5 /P U N/20 1 7 MRS. SHARMILA K. SHAH 4 FROM INFIRMITY. HOWEVER, IN VIEW OF PRINCIPLES OF NATURAL JUSTICE, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF ASS ESSING OFFICER WITH DIRECTIONS TO MAKE REFERENCE TO THE DVO TO DETERMINE THE VALUE OF PROPERTY AS ON THE DATE OF SALE IN LINE WITH PROVISIONS OF SECTION 50C(2) OF THE ACT. REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE SHALL BE PROVIDED BEFORE MAKING ASSESSMENT IN LINE WITH OUR DIRECTIONS. THE GROUND OF APPEAL NO.3 RAISED BY ASSESSEE IS THUS, ALLOWED FOR STATISTICAL PURPOSES. WE DO NOT ADJUDICATE THE OTHER GROUNDS OF APPEAL, IN VIEW OF OUR SENDING BACK THE ISSUE TO THE FILE OF ASSESSING OFFICER. 9 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED ON THIS 5 TH DAY OF FEBRUARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 5 TH FEBRUARY , 201 9 . GCVSR / COPY OF THE OR DER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 4 , PUNE ; 4. THE PR. CIT - 3 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FI LE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE