ITO-34(1)(3), Mumbai V. DIPIKA DINESH KOCHAREKAR, Mumbai

ITA 2374/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6400 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 15-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Salary income; Fair market value; Valuation report; Set aside; Capital Gains
• Section: 143(3); 50C; 54F; 142(1); 250; 251; 143(2); 55A; 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 2374/MUM/2019 (A.Y: 2014-15) ITO 34(1)(3) RMNO. 805, 8 TH FLOOR, KAUTILYA BHAVAN BKC, MUMBAI 400051. VS. DIPIKA DINESH KOCHAREKAR 22/1611 DATTADHAM, CHS VEER SHRIKANT KESHAW HADKAR MARG, KALACHOWKI, MUMBAI 400033. PAN/GIR NO. : AIFPK4309P APPELLANT .. RESPONDENT APPELLANT BY : MS. RIDHI MISHRA, DR RESPONDENT BY : MS. DINK LE H ARIYA, AR DATE OF HEARING 01.04.2021 DATE OF PRONOUNCEMENT 20 .04.2021 / O R D E R PER PAVAN KUMAR GADALE JM: THE REVENUE HAS FILED THE APPEAL AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 46, MUMB AI, PASSED U/S. 143(3) AND 250 OF THE INCOME TAX ACT, 1 961. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO ADOPT THE VALUE DETERMINED BY THE DVO OF RS. 1,61,13,000/- AS AGAINST THE VALUE D ETERMINED BY THE STAMP DUTY AUTHORITY OF RS. 5,99,76,000/- WITHOUT A NY DISCUSSION ON THE MERITS OF THE BASIS OF VALUATION MADE BY THE DVO CONSIDERING SUBSTANTIAL DIFFERENCE OF RS. 4,35,44,100/- WHICH W AS NOT JUSTIFIED CONSIDERING THAT BOTH THE VALUES HAVE BEEN DETERMIN ED BY COMPETENT AUTHORITIES FOR PURPOSE OF VALUATION OF PROPERTY. ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 2 2. WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN GIVING RELIEF TO T HE ASSESSEE WITHOUT PROVIDING AN OPPORTUNITY TO THE AO FOR COMMENTING U PON THE BASIS OF THE VALUATION OF THE DVO AND ACCEPTABILITY THEREOF ESPECIALLY TAKING INTO CONSIDERATION THE HUGE DIFFERENCE IN VALUE DET ERMINED BY TWO COMPETENT AUTHORITIES NAMELY THE STAMP DUTY AUTHORI TY AND THE DVO AND ALSO THAT SUCH VALUATION REPORT OF THE DVO WAS NEVER BEFORE THE AO WHEN HE MADE THE IMPUGNED ASSESSMENT. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. C IT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RE STORED. 4. THE APPELLANT CRAVES LEAVE,TO ADD, AMEND OR ALT ER ALL OR ANY OF THE GROUNDS OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE IS AN INDIVIDUAL, AND HAS INCOME FROM SALARY AND INCOME F ROM OTHER SOURCES. THE ASSESSE HAS FILED THE RETURN OF INCOME FOR THE A.Y 2014-15 ON 16.06.2015 WITH A TOTAL INCO ME OF RS. 5,46,170/-.SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER THE CASS TO VERIFY AND EXAMINE THE C APITAL GAINS ON SALE OF PROPERTY AND FURTHER THE SALE CONS IDERATION IS LESS THAN THE VALUE AS PER STAMP DUTY VALUATION AUTHORITIES. THE A.O. HAS ISSUED NOTICE U/S 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE. IN COMP LIANCE, THE LD. AR OF THE ASSESSE APPEARED FROM TIME TO TIM E AND FILED THE DETAILS. DURING THE FINANCIAL YEAR 2013-1 4, THE ASSESSE HAS SOLD HER ANCESTRAL PROPERTY ON 28.03.20 14 FOR A SALE CONSIDERATION OF RS. 99,50,000/-, WHEREAS TH E MARKET VALUE AS PER THE GOVERNMENT VALUE IS RS. 5,99,76,000/-. SUBSEQUENT TO THE SALE, THE ASSESSE WAS INTENDING TO INVEST IN A RESIDENTIAL FLAT VALUE OF RS. 92,03,652/-AND THEREFORE HAS DEPOSITED ENTIRE SALE ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 3 CONSIDERATION IN THE CAPITAL GAINS ACCOUNT SCHEME B EFORE DUE DATE OF FILING RETURN OF INCOME AND CLAIMED EXE MPTIONS U/S 54F OF THE ACT. SINCE THE GOVERNMENT VALUE IS RS.5,99,76,000/- THEREFORE, THE A.O FOUND THAT THER E IS DIFFERENCE IN CONSIDERATION REPORTED IN THE SALE DE ED AND MARKET VALUE AND APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT AND RECOMPUTED THE LONG TERM CAPITAL GAINS OF RS.4,61,12,450/-AND ASSESSED THE TOTAL INCOME OF RS4,66,58,620/- AND PASSED ORDER U/S 143(3) OF THE ACT ON 27.12.2016. 3. AGGRIEVED BY THE ORDER, THE ASSESSE HAS FILED TH E APPEAL WITH THE CIT(A). THE LD.CIT(A) CONSIDERED TH E FACTS, GROUNDS OF APPEAL, FINDINGS OF THE A.O AND DVO REPO RT AND RELIED ON THE JUDICIAL DECISIONS AND ALLOWED RELIEF ON THE DISPUTED ISSUE BY DIRECTING THE A.O. TO ADOPT VALUE OF SALE AS DETERMINED BY THE DVO AND PARTY ALLOWED THE APP EAL. AGGRIEVED BY THE CIT(A) ORDER, THE REVENUE HAS FILE D AN APPEAL WITH THE HONBLE TRIBUNAL. 4.AT THE TIME OF HEARING, THE LD.DR SUBMITTED THAT THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ADOPT THE V ALUE DETERMINED BY THE DVO AS AGAINST THE VALUE DETERMIN ED BY THE REGISTERING AUTHORITY AND FURTHER, NO OPPORTUNI TY WAS PROVIDED TO THE A.O. 5. CONTRA, THE LD. AR SUPPORTED THE ORDER OF THE LD .CIT(A) AND SUBMITTED THAT THE SALE VALUE AS PER DVO REPOR T HAS ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 4 TO BE ADOPTED BY THE AO. THE LD.CIT(A) HAS CONSIDER ED THE FACTS AND PROVISIONS OF LAW AND DIRECTED THE A.O TO ADOPT THE DVO VALUE AND PRAYED FOR DISMISSAL OF THE REVE NUE APPEAL. 6.WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL ON RECORD. THE SOLE DISPUTED ISSUE ENVISAGED BY THE LD.DR THAT THE CIT(A) ERRED IN DIRECTING THE A.O TO ADOPT DVO REPORT VALUE WHICH IS LOWER THAN THE REGISTERING AU THORITY. THE LD. AR SUBMITTED THAT THE VALUE AS PER DVO REPO RT IS BINDING ON THE AO AND REQUIRED TO BE MANDATORILY AP PLIED. WE FIND ON PERUSAL OF THE CIT(A) ORDER, AT THE TIME OF ASSESSMENT THE ASSESSE HAS AGITATED THE APPLICABILI TY OF PROVISIONS OF SEC. 50C OF THE ACT FOR ADOPTING THE VALUE DETERMINED BY THE REGISTERING AUTHORITY, THEREFORE THE MATTER WAS REFERRED TO THE DEPARTMENTAL VALUATION O FFICER (DVO) AS PER SEC. 55A(A) OF THE ACT. WHEREAS,THE DV O REPORT WAS NOT RECEIVED IN THE ASSESSMENT PROCEEDIN GS AND THE ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE A CT ON 27.12.2016. SUBSEQUENT TO THE ASSESSMENT ORDER, THE ASSESSE HAS FILED AN APPEAL ON 24.01.2017 WITH THE CIT(A). AS PER THE OBSERVATIONS OF THE CIT(A) THE DVO REPOR T DATED 10.03.2017 WAS SENT TO THE A.O ONLY AFTER COMPLETIO N OF ASSESSMENT.THE VALUE DETERMINED BY THE DVO IS RS.1,61,13,000/-.WE FIND THAT THE POWERS U/S 251 OF THE ACT OF THE CIT(A) ARE CO TERMINUS WITH THE A.O. TH EREFORE, THE CIT(A) CONSIDERED THE PROVISIONS OF LAW, DVO RE PORT ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 5 AND RELIED ON THE HONBLE TRIBUNAL DECISIONS AND GR ANTED RELIEF TO THE ASSESSE. WE CONSIDERED IT APPROPRIATE TO REFER TO THE OBSERVATIONS OF CIT(A) AT PAGE 6 PARA 6.1 TO 6.1.8 OF THE ORDER. 6.1 GROUND NO. 1 6.1.1. THE ONLY EFFECTIVE GROUND RAISED BY THE APPE LLANT IS REGARDING SALE OF THE PROPERTY SITUATED AT PEN, MAHARASHTRA FOR AN AMOUNT OF RS.99,50,000/ AND ADOPTION OF VALUE OF PROPERTY U/S 50C AS DETERM INED- BY THE REGISTERING AUTHORITY. THE REGISTERING AUTHORITY DE TERMINED THE FAIR VALUE OF THE PROPERTY FOR AN AMOUNT OF RS.5,99,76,000/-. UNDER SECTION 50 OF THE INCOME TAX ACT, 1961, WHILE DETERMINING LONG TERM C APITAL GAIN THE ASSESSING OFFICER ADOPTED THE VALUE DETERMINED BY T HE REGISTERING AUTHORITY. 6.1.2. AT THE TIME OF ASSESSMENT THE APPELLANT AGIT ATED AGAINST THE VALUE DETERMINED BY THE REGISTERING AUTHORITY. THEREFORE, THE MATTER WAS REFERRED TO DEPARTMENTAL VALUATION OFFICER (DVO) AS PER SECTION 55A (A) OF THE INCOME TAX ACT, 1961.THE REPORT OF DVO WAS N OT RECEIVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE DVO SENT ITS REPORT DATED 10.03.2017 TO AO ONLY AFTER COMPLETION OF ASSESSMEN T. APPELLANT ALSO FILED THE REPORT PREPARED BY DVO DURING APPELLANT PROCEED INGS. THE VALUE DETERMINED BY DVO IS RS.1,61,13,000/-. THE APPELLAN T CONTENDED THAT VALUE DETERMINED BY DVO SHOULD BE TAKEN FOR DETERMI NING THE LONG TERM CAPITAL GAIN AND NOT THE VALUE DETERMINED BY T HE REGISTERING AUTHORITY. 6.1.3. IN SUPPORT OF THIS CLAIM, THE APPELLANT PLAC ED RELIANCE ON THE JUDGMENT OF THE HON'BLEKOIKATTA IT AT, IN THE CASE OF [2012] 19 TAXMANN.COM 121 (KOL.) IN THE IT AT KOLKATA BENCH 'C' WHERE IN THE HON'BLE IT AT HELD AS UNDER: ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 6 SECTION 50C, READ WITH SECTION 48, OF THE INCOME TA X ACT, 1961 - CAPITAL GAINS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDE RATION IN CERTAIN CASES- ASSESSMENT YEAR 2005-06 - ASSESSEE SOLD A PROPERTY AND DISCLOSED SALE CONSIDERATION FOR HER HALF SHARE AT RS.20 LAKHS AND COMPUTED LONG TERM CAPITAL GAINS AT NIL BY TAKING INDEXED COST OF ACGU ISITION AT RS.30.81 LAKHS - ASSESSING OFFICER NOTICED THAT STAMP VALUATION OF P ROPERTY WAS AT RS.1.3 CRORES - ACCORDINGLY, ADOPTING STAMP DUTY VALUATION , | ASSESSING OFFICER COMPUTED LONG TERM CAPITAL GAIN AT RS.50.70 LAKHS T OWARDS SHARE OF ASSESSEE = ON APPEAL, COMMISSIONER (APPEALS) REFERR ED MATTER TO DVO FOR ASCERTAINING FAIR MARKET VALUE OF SNID PROPERTY AND DIRECTED ASSESSING OFFICER TO ADOPT VALUE OF PROPERTY AS PER VALUATION BY DVO - FAIR MARKET VALUE AS ASSESSED BY DVO WAS LOWER THAN VALUE ADOPT ED BY STAMP DUTY AUTHORITIES - WHETHER VALUE ADOPTED BY DVO HAD TO B E ADOPTED BY ASSESSING OFFICER FOR THE PURPOSE OF COMPUTATION OF LTCG - HELD, YES [IN FAVOUR OF ASSESSEE] 6.1 4. RELIANCE IS ALSO PLACED ON THE JUDGMENT OF HON'BLE OF HIGH COURT OF ALLAHABAD IN THE CASE OF [2013] 30 TAXMANN.COM 2 93 (ALLAHABAD) WHERE IN THE HON'BLE HIGH COURT HELD AS UNDER: SECTION 50C OF THE INCOME-TAX ACT, 1961 - CAPITAL G AINS -FULL VALUE OF CONSIDERATION IN CERTAIN CASES, SPECIAL PR OVISION FOR - DVO'S REPORT - ASSESSMENT YEAR 2003-04 - ASSESSEE SOLD A PROPERTY FOR CERTAIN CONSIDERATION - ASSESSING OFFICER REJECTED VALUATIO N OF PROPERTY DONE BY ASSESSEE'S REGISTERED VALUER AND REFERRED MATTER TO DVO TO OBTAIN FAIR MARKET VALUE - HE ALSO REJECTED FULL VALUATION DONE BY DVO AND ADOPTED VALUATION DONE BY STAMP VALUATION AUTHORITIES AS FU LL VALUE OF CONSIDERATION RECEIVED AND ACCORDINGLY CALCULATED C APITAL GAINS - WHETHER WHEN ASSESSING OFFICER HAD OBTAINED DVO'S R EPORT, SAME WAS BINDING ON HIM - HELD, YES - WHETHER, THEREFORE, VALUATION DONE BY DVO WAS TO BE ADOPTED AS SALE CONSIDERATION - HELD, YES [PARA 11] [IN FAVOUR OF ASSESSEE]. ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 7 6.1.5. FURTHER RELIANCE IS PLACED ON THE JUDGMENT O F HON'BLE OF IT AT KOLKATA IN THE CASE OF [2014] 43 TAXMANN.COM 29 (KO LKATA - TRIB.) WHERE IN THE HON'BLE IT AT HELD AS UNDER: SECTION 50C OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES (V ALUATION OF ASSET) - ASSESSMENT YEAR 2009-10 - WHETHER WHERE DVO, ON REF ERENCE BEING MADE TO HIM UNDER SECTION 50C(2) HAD VALUE PROPERTY LOWER T HAN THAT OF REGISTRATION AUTHORITY, ASSESSING OFFICER HAD TO PROCEED WITH AS SESSMENT IN CONFORMITY WITH ESTIMATE GIVEN BY VALUATION OFFICER HELD, YES [PARA 7] [IN FAVOUR OF ASSESSEE] 6.1.6. FURTHER RELIANCE IS PLACED ON THE JUDGMENT O F HON'BLE OF IT AT VISHAKHAPATNAM IN THE CASE OF [2014] 45 TAXMANN.COM 141 (VISHAKHAPATNAM- TRIB.) WHERE IN THE HON'BLE IT AT HELD AS UNDER: SECTION 50C OF THE INCOME-TAX ACT, 1961 -CAPITAL GA INS - SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES (VALUA TION MADE BY DVO) - ASSESSMENT YEAR 2006-07 - WLIETHER WHERE FAIR MARKE T VALUE DETERMINED BY DVO ON A REFERENCE MADE BY ASSESSING OFFICER IN TERMS O F SUB-SECTION (2) OF SECTION 50C IS LESS THAN VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY THEN SUCH FAIR MARKET VALUE DETERMINED BY DVO HAS T O BE TREATED AS FULL VALUE OF CONSIDERATION RECEIVED BY ASSESSEE FOR PUR POSE OF COMPUTING CAPITAL GAIN - HELD, YES [PARA 10] [IN FAVOUR OF REVENUE] 6.1.7. RELIANCE IS ALSO PLACED ON THE JUDGMENT HON' BLE OF IT AT - PUNE BENCH 'SMC' IN THE CASE OF SHRI ANIL MURLIDHARDESHM UKH V/S. THE INCOME TAX OFFICER WARD 3 (2), NASHIK [ITA NO.L821/ PUN/2017 - A.Y.- 2013-14] WHERE IN THE HON'BLE IT AT HELD AS UNDER: IT IS CRYSTAL CLEAR THAT GENERALLY, WHEN THE A.O HA S OBTAINED THE DVO REPORT THEN THE SAME IS BINDING. IT IS THUS CLEAR THAT THE REPO RT OF THE DVO IS BINDING ON THE AO, UNLESS THE ASSESSEE SHOWS SOME GLARING MISTAKES IN SUCH VALUATION. ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 8 6.1.8. THE FACTS OF THE APPELLANT ARE SIMILAR TO TH E FACTS OF THE CASES DECIDED BY HON'BLE ITATS AND HIGH COURTS AS DISCUSSED IN TH E FOREGOING PARAS. THEREFORE RESPECTFULLY FOLLOWING THE ABOVE DISCUSSE D JUDGMENTS OF HON'BLE ITATS AND HIGH COURT, AO IS DIRECTED TO TAKE THE VA LUE OF SALE AS DETERMINED BY THE DVO AND NOT THE VALUE DETERMINED BY THE REGISTERING AUTHORITY. AO IS ALSO DIRECTED TO ALLOW ANY EXEMPTI ON CLAIMED BY THE APPELLANT, IF ALLOWABLE AS PER THE PROVISIONS OF TH E INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE DISCUSSION, AO IS FURTHER DIRE CTED TO RE-COMPUTE THE LONG TERM CAPITAL GAIN AND CONSEQUENTLY INTEREST LI ABILITY U/S234|A,234B'& 234C OF THE INCOME TAX ACT, 1961. : 7. IN THE RESULT , THE APPEAL IS PARTLY ALLOWED. 7. THE LD.DR COULD NOT CONTROVERT THE OBSERVATIONS OF THE CIT(A) WITH ANY NEW COGENT MATERIAL OR EVIDENCE S. WE FIND THAT THE CIT(A) HAS CONSIDERED THE JUDICIAL DE CISIONS AND PASSED REASONED ORDER, WHICH CANNOT BE INTERFER ED AND ACCORDINGLY WE UPHOLD THE SAME AND DISMISS THE GROU NDS OF APPEAL OF THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.0 4.2021 SD/- SD/- (SHAMIM YAHYA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 20.04.2021 ITA NO. 2374/MUM/2019 DIPIKA DINESH KOCHAREKAR 9 KRK, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. , , / DR, ITAT, MUMBAI 6. * / GUARD FILE. / BY ORDER, //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBAI