Smt. Reeta Varshney, Budaun V. ITO, Budaun

ITA 2274/DEL/2010

• Counselvise Citation: 227420114 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SHUMANA SEN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Fair market value
• Section: 50C; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.2274/DEL/2010 2274/DEL/2010 2274/DEL/2010 2274/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2005 2005 2005 2005- -- -06 0606 06 SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, D/O SHRI SHIV NARAIN D/O SHRI SHIV NARAIN D/O SHRI SHIV NARAIN D/O SHRI SHIV NARAIN VARSHNEY, VARSHNEY, VARSHNEY, VARSHNEY, MOH. SH MOH. SH MOH. SH MOH. SHRI NARAINGANJ, RI NARAINGANJ, RI NARAINGANJ, RI NARAINGANJ, UJHANI, UJHANI, UJHANI, UJHANI, DISTT. BUDAUN. DISTT. BUDAUN. DISTT. BUDAUN. DISTT. BUDAUN. PAN : ABLPB5131L. PAN : ABLPB5131L. PAN : ABLPB5131L. PAN : ABLPB5131L. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, BUDAUN (UP). BUDAUN (UP). BUDAUN (UP). BUDAUN (UP). (APPELLANT) (RESPONDENT) APPELLANT BY : NONE. RESPONDENT BY : MRS.SHUMANA SEN, DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A), BAREILLY DATED 7 TH JANUARY, 2010 FOR THE AY 2005-06. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING. NOTICE OF HEARING HAS DULY BEEN SENT TO THE ASSESSE E. THEREFORE, WE PROCEED TO DECIDE THE APPEAL OF THE ASSESSEE EX-PAR TE QUA THE APPELLANT ON MERITS AFTER HEARING THE ARGUMENTS OF LEARNED DR AND PERUSING THE MATERIAL PLACED BEFORE US. 3. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER :- ITA-2274/DEL/2010 2 1. THE LEARNED ASSESSING OFFICER ENHANCED THE CAPI TAL GAIN ON SALES OF PLOT BY RS.108000/- BY APPLYING SE CTION 50C OF THE INCOME TAX ACT. THE ASSESSEE DURING THE PROCESS OF ASSESSMENT DISPUTED THE VALUATION AS PER STAMP DUTY. HOWEVER THE ASSESSING OFFICER HIMSELF TOOK T HE VALUE OF PROPERTY AT STAMP DUTY VALUE WITHOUT REFERRING M ATTER TO THE VALUATION OFFICER WHICH IS TOTALLY AGAINST THE PROVISIONS OF SECTION 50C AND NATURAL JUSTICE THUS ADDITION OF RS.108000/- UNDER THE HEAD CAPITAL GAIN DESERVES TO BE DELETED. 2. THE ASSESSING OFFICER ARBITRARILY ADDED RS.6000/ - AS HOUSE HOLD EXPENSES WHICH IS ALSO UNJUSTIFIED AND D ESERVES TO BE DELETED. 4. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE ACTION OF AUTHORITIES BELOW IN CONFIRMING THE ADDIT ION ON ACCOUNT OF CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY. THE AS SESSEE HAS ALSO CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN A RBITRARILY TAKING THE VALUE OF PROPERTY AT STAMP DUTY VALUE WITHOUT REFER RING THE MATTER TO THE VALUATION OFFICER. 5. SECTION 50C OF THE INCOME-TAX ACT, 1961 READS AS UNDER:- [SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES. CASES. CASES. CASES. 50C. 50C. 50C. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUI NG AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VA LUE ADOPTED OR ASSESSED 11 [OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE ITA-2274/DEL/2010 3 VALUE SO ADOPTED OR ASSESSED 11 [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESU LT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE ( A ) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED 11 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS T HE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRAN SFER; ( B ) THE VALUE SO ADOPTED OR ASSESSED 11 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFER ENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REF ERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), ( 4), (5) AND (6) OF SECTION 16A, CLAUSE ( I ) OF SUB-SECTION (1) AND SUB- SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5 ) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECE SSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THA T ACT. 12 [ EXPLANATION 1 ]. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE ( R ) OF SECTION 2 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957). 13 [ EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE S TAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANY THING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REF ERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF S TAMP DUTY.] (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) E XCEEDS THE VALUE ADOPTED OR ASSESSED 13 [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB-SECTIO N (1), THE ITA-2274/DEL/2010 4 VALUE SO ADOPTED OR ASSESSED 13 [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER.]. 6. FROM THE ABOVE, IT IS EVIDENT THAT AS PER SUB-SE CTION (1) OF SECTION 50C, FOR THE PURPOSE OF DETERMINING THE CAP ITAL GAIN, THE ASSESSING OFFICER MAY ADOPT THE VALUE ASSESSED OR A SSESSABLE FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER. HOWEVER, AS PER SUB-SECTION (2) OF SECTION 50C, IF THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET V ALUE OF THE PROPERTY, THE ASSESSING OFFICER MAY REFER THE VALUA TION OF THE CAPITAL ASSET TO THE VALUATION OFFICER. FROM A PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT BEFORE THE ASSESSING OFFICER, THE ASSE SSEE OBJECTED TO THE VALUE DETERMINED BY THE STAMP DUTY AUTHORITY BECAUS E AT PAGE 1 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT ED IN HER REPLY, THE ASSESSEE HAS SAID THAT THE VALUATION AS PER STA MP DUTY ACT IS NOT A MARKET VALUE.. THUS, THE ASSESSEE DISPUTED THE VA LUATION DETERMINED BY THE STAMP VALUATION AUTHORITIES AND, THEREFORE, AS PER SUB-SECTION (2) OF SECTION 50C, THE ASSESSING OFFICER WAS SUPPO SED TO REFER THE MATTER TO THE VALUATION OFFICER. WE, THEREFORE, SE T ASIDE THE ORDERS OF AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE MAT TER TO THE ASSESSING OFFICER WITH THE DIRECTION THAT HE WILL REFER THE M ATTER TO THE VALUATION OFFICER AS PER SUB-SECTION (1) OF SECTION 50C OF TH E ACT. 7. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ACTION OF LEARNED CIT(A) IN CONFIRMING THE ADDITION OF ` 6,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HOUSEHOLD EXPENSES. AFTER HEARING THE LEARNED DR AND CONSIDERING THE MATERIAL AVAILABLE O N RECORD, WE ARE OF THE VIEW THAT THE HOUSEHOLD EXPENDITURE ESTIMATED B Y THE ASSESSING OFFICER AT ` 24,000/- IS QUITE REASONABLE AND JUSTIFIED. NO EVI DENCE WAS PRODUCED BY THE ASSESSEE EITHER BEFORE THE AUTHORIT IES BELOW OR BEFORE ITA-2274/DEL/2010 5 US TO CONTROVERT THE SAID ESTIMATION OF HOUSEHOLD E XPENSES. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT(A) ON TH IS ISSUE AND DISMISS GROUND NO.2 OF THE ASSESSEES APPEAL. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 24 TH AUGUST, 2012. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 24.08.2012 VK. COPY FORWARDED TO: - 1. APPELLANT : SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, SMT.REETA VARSHNEY, D/O SHRI SHIV NARAIN VARSHNEY, D/O SHRI SHIV NARAIN VARSHNEY, D/O SHRI SHIV NARAIN VARSHNEY, D/O SHRI SHIV NARAIN VARSHNEY, MOH. SHRI NARAINGANJ, MOH. SHRI NARAINGANJ, MOH. SHRI NARAINGANJ, MOH. SHRI NARAINGANJ, UJHANI, DISTT. BUDAUN. UJHANI, DISTT. BUDAUN. UJHANI, DISTT. BUDAUN. UJHANI, DISTT. BUDAUN. 2. RESPONDENT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, BUDAUN (UP). BUDAUN (UP). BUDAUN (UP). BUDAUN (UP). 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR