Shri K.S. Kathirvel (HUF), CHENNAI V. ITO, Coimbatore

ITA 2467/CHNY/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5162 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PK SENTHIL KUMAR
• Assessee Lawyers: S SRIHAR
• Keywords: Sale consideration of property below Jantri Value; Depreciation; Principle of natural justice; Cost of acquisition; Fair market value
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO. 2 4 67/MDS/2016 / ASSESSMENT YEAR :20 09 - 1 0 SHRI K.S. KATHIRVEL (HUF), NEW NO. 16/17, TEACHERS COLONY, PODANUR, COIMBATORE 641 023. [PAN: A A IH K 6826J ] VS. THE INCOME TAX OFFICER , NON CORPORATE WARD 4 ( 3 ) , C OIMBATORE . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S . SRIHAR, ADVOCATE / RESPONDENT BY : SHRI P.K. SENTHIL KUMAR, J CIT / DATE OF HEARING : 25 . 0 4 .201 8 / DATE OF P RONOUNCEMENT : 05 . 0 6 .201 8 / 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. COMMI SSIONER OF INCOME TAX (APPEALS) 3, COIMBATORE DATED 2 7 . 0 5 .201 6 RELEVANT TO THE ASSESSMENT YEAR 20 09 - 1 0 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN ITS APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 3, COIMBATORE DATED 27.05.2016 IN I.T.A.NO.118/15 - 16 FOR THE ABOVE MENTIONED ASSESSMENT YEA R IS CONTRARY TO LAW, FACTS, AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN PARTLY CONFIRMING THE ADDITION MADE IN THE COMPUTATION OF LONG TERM CAPITAL GAINS ON THE APPLICATION OF SECTION 50C OF I.T.A. NO. 2467/M/16 2 THE ACT WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION AND OUGHT TO HAVE APPRECIATED THAT THE ENTIRE RE - COMPUTATION OF LONG TERM CAPITAL GAINS WAS WRONG, ERRONEOUS, UNJUSTIFIED, INCORRECT AND NOT SUSTAINABLE IN LAW. 3. THE CIT (APPEALS) ERRED IN CONFIRMING THE RE - WORKING OF THE INDEXED C OST OF ACQUISITION BEING THE FAIR MARKET VALUE AS ON 01.04.1981 IN THE COMPUTATION OF LONG TERM CAPITAL GAINS WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION AND OUGHT TO HAVE APPRECIATED THAT THE CORRECTNESS OF ADOPTION OF INDEXED COST OF ACQUISITION B EING THE FAIR MARKET VALUE AS ON 01.04.1981 AT RS.68,10,372/ - BY THE APPELLANT WAS NOT ADJUDICATED THEREBY VITIATING THE DECISION IN RELATION THERETO. 4. THE CIT (APPEALS) ERRED IN MISREADING THE GROUNDS RAISED IN THIS REGARD BEFORE HIM AND OUGHT TO HAVE APPRECIATED THAT NOT CONSIDERATION OF RELEVANT GROUNDS RAISED WITH REGARD TO INDEXED COST OF ACQUISITION WOULD VITIATE HIS DECISION. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT FIXATION OF THE INDEXED COST OF ACQUISITION IN THE RE - COMPUTATION OF LONG TERM CAPITAL GAINS ON ALL FACETS WAS WRONG, ERRONEOUS, UNJUSTIFIED, INCORRECT AND NOT SUSTAINABLE IN LAW. 6. THE CIT (APPEALS) WENT WRONG IN RECORDING THE FINDINGS IN THIS REGARD IN PAGE 4 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTI FICATION. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 8. THE APPELLANT CRAVES LEA VE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN ON 24 .0 6 .201 0 DECLARING INCOME OF .1 , 15 , 8 6 1 / - FROM OTHER SOURCES . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THE ASSESSEE FILED ALL DETAILS AGAINST THE STATUTORY NOTICES. AFTER VERIFYING THE DETAILS FILED BY THE ASSESSEE, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] BY ASSESSING NET INCOME AT .68,68,607/ - AFTER MAKIN G ADDITION TOWARDS LONG TERM CAPITAL GAINS OF .67,52,746/ - . I.T.A. NO. 2467/M/16 3 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL. AFTER CONSIDERING THE SUBMISSIONS AS WELL AS FACTS OF THE CASE, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4. ON BEING AGG RIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. AGAINST THE LONG TERM CAPITAL GAINS DETERMINED BY THE ASSESSING OFFICER AT . 67,52,746/ - , THE LD. CIT(A) HAS OBSERVED AS UNDER: 6.0 I HAVE CONSIDERED THE GROUNDS OF APPEAL RAISED APPELLANT AND THE ASSESSMENT ORDER. THE GROUND TAKEN BY THE APPELLANT IS AGAINST THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAINS AMOUNTING TO RS. 67, 52,746/ - . THE ASSESSING OFFICER HAS ADOPTED MARKET VALUE AT RS. 345/ - PER SQUARE FEET TOTALING TO RS.2,03,06,700/ - AND THE 1/3RD OF THIS AMOUNT WORKS OUT TO RS. 67,68,900/ - . THIS IS THE VALUE WORKED OUT BY THE SUB REGISTRAR. THE APPELLANT'S AR CONTENTED TH AT IN APPEAL THE DISTRICT REGISTRATION OFFICER HAS REDUCED THE STAMP VALUE FROM RS.3,41,512/ - TO RS. 2,27,675/ - . THE RELIEF GIVEN BY THE DISTRICT REGISTRATION OFFICER WORKS OUT TO RS.1,13,837/ - . THIS AMOUNT IS RELIEF IN STAMP DUTY GIVEN BY THE DISTRICT REG ISTRATION OFFICER. THE STAMP DUTY IS 8% OF THE TOTAL VALUE WHICH WORK OUT TO RS.4,27,675/ - (RS.2,00,000/ - PAID + RS.2,27,675/ - PAYABLE AS DETERMINED BY DRO). THE CORRECT GUIDELINE VALUE WORKS OUT TO RS.53,45,937/ - (427675/8 X 100 AND NOT RS. 67 ,68,900/ - WORKED OUT BY THE ASSESSING OFFICER. AS REGARDS, FAIR MARKET VALUE AS ON 1.4.1981 THE APPELLANT RIGHTLY CONTENDS THAT IT CANNOT BE LESS THAN THE PURCHASE COST IN 1961, UNLESS CLEAR REASON FOR DEPRECIATION OF LAND PRICES (WHICH IS NOT PROBABLE) AR E BROUGHT OUT. THE CONTENTION OF INDEXED COST (ACQUISITION ( F.M.V. AT RS. 10,000/ - AS ON 1/4/1981) IS ACCEPTED. 6. THE INDEXED COST OF ACQUISITION CLAIMED AS PER THE RETURN OF INCOME WAS .68,10,372/ - . HOWEVER, THE ASSESSING OFFICER ALLOWED .16,144/ - AS THE INDEXED COST OF ACQUISITION WITHOUT GIVING ANY REASON OR BASIS. IT IS AN I.T.A. NO. 2467/M/16 4 ADMITTED FACT THAT THE IMPUGNED PROPERTY WAS PURCHASED IN THE YEAR 1961 FOR .10,000/ - . IF AT ALL THE SAME VALU E IS CONSIDERED FOR THE PURPOSE OF ARRIVING AT THE INDEXED COST OF ACQUISITION, THE SAME COULD HAVE BEEN .58,200/ - [ .10,000/100X582]. ONCE THE PROPERTY WAS PURCHASED IN THE YEAR 1961 FOR .10,000/ - , NO DOUBT, DEFINITELY THE FAIR MARKET VALUE SHOULD BE MO RE THAN THE SAID PURCHASE VALUE SINCE THE PROPERTY WAS PURCHASED TWENTY YEARS PRIOR TO 01.04.1981. THE ASSESSING OFFICER HAS NOT REFERRED THE MATTER TO THE DVO FOR OBTAINING FAIR MARKET VALUE. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, WE DIRECT THE ASSESSIN G OFFICER TO REFER THE MATTER TO THE DVO FOR OBTAINING FAIR MARKET VALUE FOR COMPUTATION OF LONG TERM CAPITAL GAIN/LOSS BY GIVING SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 05 TH JUNE , 201 8 AT CHENNAI. SD/ - SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 05 . 0 6 .201 8 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.