K.Ramaswamy, CHENNAI V. ITO, CHENNAI

ITA 2277/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8495 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 11-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 16-12-2015
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: M P SENTHIL KUMAR
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I T.A. NO. 2277 /MDS/201 5 / ASSESSMENT YEAR :20 11 - 1 2 SHRI K. RAMASWAMY CHETTY, 51/70, ACHARAPPAN STREET, GEORGE TOWN, CHENNAI 600 001. [PAN:A A BP C 1766C ] VS. THE INCOME TAX OFFICER , BUSINESS WARD IX(2 ), CHENNAI 600 006. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI M.P. SENTHIL KUMAR , ADVOCATE / RESPONDENT BY : SHRI S UPRIYO PAL, JCIT / DATE OF HEARING : 1 1 . 0 7 .201 6 / DATE OF P RONOUNCEMENT : 16 . 0 9 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 1 3 , CHENNAI , DATED 19 . 1 0 .20 1 5 RELEVANT TO THE ASSESSMENT YEAR 20 11 - 1 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. APPLICATION OF S ECTION 50C : I.T.A. NO . 2277 /M/ 15 2 2.1. THE COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN UPHOLDING THE COMPUTATION OF CAPITAL GAINS BY ASSESSING OFFICER IN RESPECT OF PROPERTY AT 23 TO 25, FOURTH LANE BEACH ROAD, MUTHIALPET, GEORGE TOWN, CHENNAI. 2.2. THE COMMISS IONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN NOT CONSIDERING THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY PURSUANT TO THE APPEAL FILED U/S. 47A OF INDIAN STAMP ACT, 1899. 2.3. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED TH AT THE FINAL VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY PURSUANT TO THE DECISION IN APPEAL FILED U/S. 47A AT RS.30,000/ - PER SQ.MTR. SHOULD ONLY BE DEEMED AS FULL VALUE OF CONSIDERATION RECEIVED AS PER SECTION 50C FOR THE PURPOSE OF COMPUTATION OF CAPI TAL GAINS. 2.4. THE COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN OBSERVING THAT THE ASSESSING OFFICER HAS ADOPTED THE VALUE AS DETERMINED U/S. 47A OF INDIAN STAMP ACT, 1899. 2.5. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECI ATED THAT THE ASSESSING OFFICER HAS NOT ADOPTED THE VALUE DETERMINED U/S. 47A OF INDIAN STAMP ACT, 1899. 3. FAIR MARKET VALUE AS ON 01.04.1981 : 3.1. THE COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN UPHOLDING THE COST OF ACQUISITION ADOPTED BY THE ASSESSING OFFICER AT RS.2.5 LAKHS. 3.2. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE HIGHER VALUE OF RS.6 LAKHS AS PROVIDED BY THE SUB REGISTRAR, CHENNAI NORTH FOR THE PROPERTY VIDE LETTER DATED 03.02.2014 SHOULD HA VE BEEN ADOPTED AS COST OF ACQUISITION AS ON 01.04.1981. 4. THE APPELLANT CONTESTS ALL THE FINDINGS OF FACT AND LAW MADE BY THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST THE APPELLANT. 5. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS OF AP PEAL AT OR BEFORE THE TIME OF HEARING. I.T.A. NO . 2277 /M/ 15 3 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING OF PULSES. HE FILED HIS RETURN OF INCOME ON 30.09.2011 ADMITTING TOTAL INCOME OF .3,65,060/ - . THE RETURN FIL ED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] ON 27.12.2011. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 03.08.2012. IN RESPONSE THERETO, T HE ASSESSEE FILED DETAILS FOR SALE OF IMMOVABLE PROPERTY AND OTHER DOCUMENTS AS CALLED FOR. THE ASSESSING OFFICER HAS NOTICED THAT AS PER THE AIR INFORMATION , THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY TO THE TUNE OF .51,00,000/ - . ON PERUSAL OF THE REGISTERED SALE DEED FURNISHED BY THE SUB - REGISTERED OFFICE, CHENNAI, THE GUIDELINE VALUE OF THE PROPERTY WAS RE - FIXED BY THE SUB REGISTRAR UNDER SECTION 47(A) OF THE REGISTRATION ACT. HENCE, S ECTION 50C OF THE INCOME TAX A CT IS ATTRACTED IN THE PROPERTIES SOLD DURING THE F.Y. 2010 - 11 AND ACCORDINGLY THE VALUE ADOPTED AS PER 47(A) OF THE REGISTRATION ACT AND T HE DETAILS OF THE IMMOVABLE PROPERTIES ARE AS UNDER: - 1. UNIT - I: OLD MUNICIPAL DOOR NO.10, PART OF MUNICIPAL DOOR NO.9/11, NEW NO.23, FOURTH LANE BEACH ROAD, MUTHIALPET, GEORGE TOWN CHENNAI , MEASURING 1100 SQ. FEET. UNIT - II : OLD MUNICIPAL DOOR. NO.1 /11 AND NOW NEW MUNICIPAL DOOR NO. 9 / 11, NEW NO.24, FOURTH LANE BEACH ROAD, MUTHIALPET, GEORGE TOWN, CHENNAI, MEASUR ING 684 SQ. FEET I.T.A. NO . 2277 /M/ 15 4 U NIT ILL: OLD MUNICIPAL DOOR NO.2 / 11, NEW MUNICIPAL DOOR NO. 9/11, NEW NO.25, FOURTH LANE BEACH ROAD, MEASURING 11 4 2 SQ. FEET. THUS, THE ASSESSEE'S SHARE IN THE ABOVE MENTIONED UNIT WA S 1 / 3 RD OF 2926 SQ.FT. COMES TO .72,36,166/ - 2. IN THE SURVEY NO.RS.3748/1 AT DORR NO.35,FOURTH LANE, MUTHIAL P ET GEORGE TOWN, CHENNAI - 600 001.THE TOTAL COMES TO 784 SQ. FT. 3. IN THE SURVEY NO. RS. 3866 AT NEW DOOR NO. 11, FOURTH LANE, MUTHIAL P ET GEORGE TOWN, C HENNAI - 600 001.THE TOTAL COMES TO 79 1SQ. FT. FOR THE ABOVE SAID PROPERTIES VIDE SL.NO.2 & 3 THE ASSESSEE IS HAVING 100% SHARE IN THE SALE CONSIDERATION MADE DURING THE F. Y. 20010 - 11 . 3. IN THE ABOVE UNIT - I, UNIT - I I , AND UNIT - I I L, THE FULL VALUE OF THE SALE CONSIDERATION WAS TAKEN AT . 2,17,08,500/ - (51,00,000+1,65,78,500+30000) IN 3 UNITS SINCE THE ABOVE ASSESSEE IS HAVING 1 / 3 RD SHARE OF .2,17,08500/ - VIDE SERIAL NO.1 AS .72,36,166/ - (SERIAL NO.2 AS .23,21,080/ - AND SERIAL NO.3 AS .18,15,103/ - . CONSIDERING THE ABOVE FACTS, THE TO TAL LONG TERM CAPITAL GAINS WAS WORKED OUT AT .1,06,51,033/ - AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT .1,10,16,091/ - . 4 . THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) BY CHALLENGING THE APPLICATION OF SECTION 50C OF THE ACT A ND VALUATION OF FAIR MARKET VALUE AS ON 01.04.1981. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5 . ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING COPY OF SAL E DEED AND COPY OF LETTER FROM THE SUB - REGISTRAR, CHENNAI, I.T.A. NO . 2277 /M/ 15 5 T HE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY IN PURSUANT TO THE APPEAL FILED UNDER SECTION 47A OF INDIAN STAMP ACT, 1899 WAS SIMPLY IGNORED AND PRAYED THAT THE FINAL VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY UNDER SECTION 47A OF INDIAN STAMP ACT SHOULD BE THE FULL VALUE OF CONSIDERATION RECEIVED AS PER SECTION 50C OF THE ACT FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. WITH REGARD TO DETERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981 , THOUGH THE JOINT SUB - REGISTRAR, CHENNAI HAS FURNISHED THE VALUE OF THE PROPERTY AS ON 01.04.1981 AT .2,50,000/ - AS WELL AS .6,00,000/ - , THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT WHEN THE PROPERTY ON THE SAME ROAD WAS SOLD AT .6,00,000/ - , THE ASSESSING OFFICER SHOULD HAVE ADOPTED THE COST OF ACQUISITION AS ON 01.04.1981 AT .6,00,000/ - . 6 . ON THE OTHER HAND, THE LD. DR HAS SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 7 . WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE SALE CONSIDERATION OF THE PROPERTY SOLD BY THE ASSESS EE WAS .51,00,000/ - . THE VALUE ADOPTED BY THE JOINT SUB - REGISTRAR WAS .1,65,78,500/ - . ON APPEAL AGAINST THE ABOVE VALUATION UNDER SECTION 47A OF THE INDIAN STAMP ACT, 1899, THE DISTRICT REVENUE OFFICER HAS FIXED THE VALUE OF THE PROPERTY AT .1,08,76,189/ - AND AS PER THE ABOVE DIRECTIONS, THE JOINT SUB - REGISTRAR HAS COLLECTED THE DEFICIT I.T.A. NO . 2277 /M/ 15 6 REGISTRATION FEE OF .57,560/ - . THEREFORE, THE VALUE OF THE PROPERTY SHOULD BE .1,08,76,000/ - [ROUNDED OFF]. BY FILING COPY OF THE SALE DEED, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE ALONE HAS NOT ENJOYED THE ENTIRE SALE CONSIDERATION OF THE PROPERTY AND THE ASSESSEE WAS HOLDING ONLY 1/3 RD SHARE OF THE SAID PROPERTY. WE FIND FORCE IN THE ARGUMENT ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE SALE DEED OF THE PROPERTY AND WORK OUT THE CAPITAL GAINS AFRESH. 8. WITH REGARD TO DETERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981 FOR THE PROPERTIES AT SL. NO. 1 TO 3 IN THE ASSESSMENT ORDER, IT IS A FACT THAT THE JOINT SUB - REGISTRAR, CHENNAI NORTH VIDE HIS LETTER DATED 03.02.2014 FURNISHED THE ASSESSING OFFICER THE VALUE OF THE PROPERTY AS ON 01.04.1981 AT .2,50,000/ - AS WELL AS .6,00,000/ - . AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSE SSING OFFICER IS DIRECTED TO VERIFY THE ACTUAL COST OF THE PROPERTY AND IF THERE IS ANY INSTANCE OF PROPERTY SOLD AT .6,00,000/ - , THE SAME SHOULD BE ADOPTED FOR COST OF ACQUISITION AS ON 01.04.1981 FOR THE ABOVE SAID PROPERTIES. ACCORDINGLY, ON BOTH COUNT S, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE ISSUES TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE AND DECIDE THE ISSUES AFRESH AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. I.T.A. NO . 2277 /M/ 15 7 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 16 TH SEPTEMBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 16 . 0 9 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.