Rabindra Kumar Khedia(HUF), Purulia V. I.T.O, Ward-3(4), Purulia, Purulia

ITA 2354/KOL/2013

• Counselvise Citation: 235423514 RSA 2013
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2013
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS JCIT LD
• Assessee Lawyers: A K SARKAR FCA LD
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Valuation report; Non passing of speaking order
• Section: 143(3); 50C

Judgement Text

ITA NO . 2354 4/KOL/1 3 - SMC - MVS RABINDRA KUMAR KHEDIA(HUF) 1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH: KOLKATA BEFORE HON BLE SRI MAHAVIR SINGH, JM I.T.A NO . 2 354 /KOL/201 3 A.Y 2009 - 10 RABINDRA KUMAR KHEDIA (HUF) V S. I.T.O WARD - 3( 4 ), KOLKA TA PAN: A A IHR3372Q ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT/ASSESSEE: SHRI A.K SARKAR, FCA, LD.AR FOR THE RESPONDENT/DEPARTMENT : S MT. RANU BISWAS, JCIT / LD. SR. DR DATE OF HEARING: 2 3 - 07 - 2015 DATE OF PRONOUNCEMENT : 23 - 07 - 201 5 10/09/2015 ORDER TH IS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF LD. C IT(A) , ASANSOL DATED 01 - 07 - 2013 . ASSESSMENT WAS FRAMED BY I.T.O WARD - 3( 4 ) , PURULIA FOR THE ASSESSMENT YEAR 2009 - 10 U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS ORDER DATED 30 - 12 - 2011 . 2. T HE SOLE ISSUE OF TH IS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITIO N MADE BY AO ON ACCOUNT OF COMPUTATION OF CAPITAL GAIN BY TAKING THE TOTAL SALE CONSIDERATION AS PER CIRCLE RATE I.E. AT RS. 86,49,763/ - AS AGAINST SALE CONSIDERATION RECORDED IN SALE DEED AT RS.50,50,000/ - . FOR THIS , ASSESSEE HAS RAISED FOLLOWING TWO GR OUNDS: -- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER WITHOUT PROPER APPRECIATION AND/OR DISCUSSION ABOUT THE CASE AND ITS BACK - GROUND AND UPHO LDING THE ASSESSMENT ORDER TECHNICALLY. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) RATIONALLY AND JUDICIOUSLY SHOULD HAVE RECORDED AND ANALISED THE FACTORS LEADING TO THE CALCULATION AND QUANTIFICATION OF THE CAPITAL GA IN AMOUNT ASCERTAINED BY THE LD. ASSESSING OFFICER AND ALLOWED APPROPRIATELY. ITA NO . 2354 4/KOL/1 3 - SMC - MVS RABINDRA KUMAR KHEDIA(HUF) 2 3 . BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE HAS SOLD ONE ANCESTRAL PROPERTY OF LAND MEASURING AT 101 KATHA FOR A TOTAL SALE CONSIDERATION ( AS PER SALE DEED) AT RS.5 0, 50,000/ - . THE ASSESSEE DECLARED CAPITAL GAIN S A FTER INDEXING THE COST INFLATION INDEX BY TAKING VALUATION AT RS.5,05,000/ - . THE ASSESSEE HAS ALSO INVESTED THIS CAPITAL GAIN IN BONDS ISSUED BY NATIONAL HIGHWAY AUTHORITY OF INDIA AND CLAIMED EXEMPTION U/S. 54EC OF THE ACT 1961. THE AO REQUISITIONED THE INFORMATION FROM SUB - REGISTRAR OFFICE , PURULIA . THE VALUE AS INFORMED BY SUB - REGISTRAR , PURULIA , AS PER CIRCLE RATE IS AT RS. 86,49,763/ - . THE AO ADOPTED THE VALUE OF SALE CONSIDERATION OF THE PROPERTY IN T ERM OF SECTION 50C OF THE ACT AT RS.86,49,763/ - AS VALUED BY THE SUB - REGISTRAR , PURULIA. ACCORDINGLY, HE ASSESSED THE LONG TERM CAPITAL GAINS AFTER ALLOWING EXEMPTION OF BONDS PURCHASED OF NATIONAL HIGHWAY AUTHORITY OF INDIA IN TERM OF PROVISIONS OF SE CTION 54C OF THE ACT AT RS. 7,10,663 / - . 4. AGGRIEVED , ASSESSEE PREFERRED APPEAL BEFORE CIT(A) , WHO DISMISSED THE APPEAL OF ASSESSEE BY A NON SPEAKING ORDER. THE ISSUE WAS NOT DISCUSSED AT ALL. 5. NOW BEFORE ME, SHRI A.K SARKAR, FCA , LD. COUNSEL FOR THE ASSESSEE MADE A REQUEST THAT HE IS NOT OBJECTING TO ADOPTION OF CIRCLE RATE IN TERM OF SECTION 50C OF THE A CT , BUT S ECTION 50C(2) PROVIDES THE VALUATION OF PROPERTY SHOULD BE REFERRED TO DVO FOR ASCERTAIN ING THE FAIR MARKET VALUE I.E. THE MARKET VALUE. HE PARTICULARLY REFERRED TO THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT IN GA NO. 3686 OF 2013 ITAT NO.221 OF 2013 ORDER DATED 13.03.2014, WHEREIN HON BLE CALCUTTA HIGH COURT HAS LAID DOWN CERTAIN PRI NCIPLES IN REGARD TO VALUATION TO BE MADE BY DVO IN TERM OF SECTION 50C OF THE ACT, WHICH ARE AS UNDER: - WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ADVANCED BY THE LEARNED ADVOCATES APPEARING FOR THE PARTIES. THE SUBMISSION OF MS. GHUTGHUTIA THAT THE REQUI REMENT OF CLAUSES A) AND B) OF SUB - SECTION 2 OF SECTION 50C HAS NOT BEEN MET BY THE ASESSEE, CAN HARDLY BE ACCEPTED. THE REQUIREMENT OF CLAUSE (B) OF SUB - SECTION 2 OF SECTION 50C WAS EVIDENTLY MET. THE ONLY QUESTION IS WHETHER THE REQUIREMENT OF CLAUSE ( B) OF SUB - SECTION 2 OF SECTION 50C WAS EVIDENTLY MET. THE ONLY QUESTION IS WHETHER THE REQUIREMENT OF CLAUSE (A) OF SUB - SECTION 2 OF SECTION 50C WAS MET BY THE ASSESSEE. ITA NO . 2354 4/KOL/1 3 - SMC - MVS RABINDRA KUMAR KHEDIA(HUF) 3 WE HAVE ALREADY SET OUT HEREINABOVE THE RECITAL APPEARING IN THE DEEDS OF CONVEYANCE UPON WHICH THE ASSESSEE WAS RELYING. PRESUMABLY, THE CASE OF THE ASSESSEE WAS THAT PRICE OFFERED BY THE BUYER WAS THE HIGHEST PREVAILING PRICE IN THE MARKET. IF THIS IS HIS CASE THEN IT IS DIFFICULT TO ACCEPT THE PROPOSITION THAT THE ASSESSEE HAD ACCEPTE D THAT THE PRICE FIXED BY THE DISTRICT SUB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. NO SUCH INFERENCE CAN BE MADE AS AGAINST THE ASSESSEE BECAUSE HE HAD NOTHING TO DO IN THE MATTER. STAMP DUTY WAS PAYABLE BY THE PURCHASER. IT WAS FOR THE PURCH ASER TO EITHER ACCEPT IT OR DISPUTE IT. THE ASSESSEE COULD NOT, ON THE BASIS OF THE PRICE FIXED BY THE SUB - REGISTRAR, HAVE CLAIMED ANYTHING MORE THAN THE AGREED CONSIDERATION OF A SUM OF RS. 10 LAKHS WHICH ACCORDING TO THE ASSESSEE, WAS THE HIGHEST PREVA ILING MARKET PRICE. IT WOULD FOLLOW AUTOMATICALLY THAT HIS CASE WAS THAT THE FAIR MARKET VALUE OF THE PROPERTY COULD NOT BE R S. 35 LAKHS AS ASSESSED BY THE DISTRICT SUB REGISTRAR . IN A CASE OF THIS NATURE THE ASSESSING OFFICER SHOULD, IN FAIRNESS, HAVE G IVEN AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C . AS A MATTER OF COURSE, IN ALL SUCH CASES THE ASSESSING OFFICER SHOULD GIVE AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MAD E BY THE DEPARTMENTAL VALUATION OFFICER. FOR THE AFORESAID REASONS, WE ARE OF THE OPINION THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C , IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INTEND THAT CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPA YER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPE RLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. 6. I N TERM OF THE ABOVE, THE LD. COUNSEL FOR THE ASSESSEE HAS REQUESTED TO REMIT THE MATTER TO THE FILE OF THE AO FOR RECONSIDERATION. ON QUERY FROM THE BENCH, LD.SR.DR HAS NOT OBJECTED TO THIS PROPOSAL. SHE ALSO AGREED THAT THE ISSUE CAN BE REMITTED TO THE FILE OF THE AO FOR FURTHER REFERENCE TO DVO TO ASCERTAIN THE FAIR MARKET VALUE AND FOR ASSESSING THE SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. 7. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. I FIND SUBSTANCE IN THE ARGU MENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE FOR THE SIMPL E REASON THAT PROVISIONS OF SECTION 50C CLEARLY PROVIDES THAT THE PROPERTY SHOULD BE REFERRED TO THE DVO FOR ASCERTAINING THE FAIR MARKET VALUE . BUT, I FIND THAT THE DVO S REPORT HAS ALREADY BE EN OBTAINED BY THE AO AND PROPERTY WAS REFERRED TO DVO VIDE HIS LETTER DATED 29 - 12 - 2011 . THE DVO VALUED THE PROPERTY AND ESTIMATED THE FAIR ITA NO . 2354 4/KOL/1 3 - SMC - MVS RABINDRA KUMAR KHEDIA(HUF) 4 MARKET VALUE AT RS.81,30,800/ - AS ON 5.12.2008. NEITHER THE AO NOR THE CIT(A) HAS CONSIDERED THIS REPORT. EVEN OPPOR TUNITY WAS NOT PROVIDED TO CONTROVERT THIS VALUATION REPORT OF THE DVO TO THE ASSESSEE. IN TERM OF THE FACTUAL ASPECT AND LEGAL POSITION, I REMIT THIS ISSUE TO THE FILE OF THE AO TO CONSIDER THE DVO S REPORT AND ALSO ALLOW OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO REBUT THIS REPORT. IN TERM OF THE ABOVE, THE ASSESSEE S APPEAL IS SET ASIDE TO THE FILE OF AO AND IS ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 - 07 - 2015 10/09/2015 SD/ - DATED : 23 - 07 - 2015 [ MAHAVIR SINGH, JUDICIAL MEMBER ] 10/09/2015 *PP /SR.P.S. COPY OF THE ORDER FORWARDED TO: 1. APPELLANT - RABINDRA KUMAR KHEDIA (HUF) 2 RESPONDENT : ITO , WARD 3( 4 ), PURULIA 3 . THE CIT, 4 . THE CIT(A), KOLKATA 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY, / BY ORDER A SSTT. REGISTRAR