Sonia Goel, New Delhi V. ITO, New Delhi

ITA 2539/DEL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3665 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 27-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 30-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: BEDOBANI CHAUDHURI
• Keywords: Reopening of assessment; Valuation report; Assessment record; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.2539/DEL/2015 ASSESSMENT YEAR 2008-09 SMT. SONIA GOEL, C-3/2, PRASHANT VIHAR, DELHI-110085 PAN: AEIPG 0788G VS. ITO, WARD-21(1), NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : S/SHRI KAPIL GOEL & MUKUL GUPTA, ADV., ASSESSEE(S) BY : MS. BEDOBANI CHAUDHURI, SR.D.R. / DATE OF HEARING : 27/03/2017 / DATE OF PRONOUNCEMENT: 10/04/2017 ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LEARNED CIT(A)- XIII, NEW DELHI VIDE ORDER DATED 18.03.2015 FOR THE ASSESSMENT YEAR 2008- 09. 2. THE RETURN OF INCOME FOR A.Y. 2008-09 WAS FILED ON 19.03.2009. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND VIDE ASSESSMENT ORDER DATED 31.12.2010, THE ASSESSMENT WAS COMPLETED. IN THE ASSESSMENT ORDER, IT WAS MENTIONED THAT THE ASSESSMENT WAS COM PLETED SUBJECT TO THE OUTCOME OF THE VALUATION REPORT OF THE VALUATIO N OFFICER. THEREAFTER, THE SAID REPORT WAS RECEIVED ON 06.04.2011 BY THE A O IN WHICH THE VALUE OF THE PROPERTY SOLD BY THE ASSESSEE IN THE YEAR UN DER CONSIDERATION WAS DETERMINED AT RS. 3,66J7,300/- AS AGAINST RS. 77,50 ,000/- DECLARED BY THE ASSESSEE. PURSUANT THERETO, A NOTICE UNDER SECT ION 148 OF THE ACT ITA NO.2539/DEL/2015 2 WAS ISSUED TO THE ASSESSEE ON 09.04.2012. 3. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, T HE ASSESSEE OBJECTED TO VALUE DETERMINED BY THE VALUATION OFFICER. THE A O DISMISSED THOSE OBJECTIONS AND MADE AN ADDITION OF RS. 48,21,216/- ON ACCOUNT OF UNDERSTATED CAPITAL GAIN IN THE HANDS OF THE ASSESS EE BY ORDER DATED 10.03.2014. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 10.03.20 14, THE ASSESSEE FILED APPEAL BEFORE CIT(A) AND VIDE IMPUGNED ORDER DATED 18.03.2015, THE APPEAL OF THE ASSESSEE WAS DISMISSED. 5. THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAIS ED THE FOLLOWING GROUNDS OF APPEAL: 2. 3. 1. THAT THE ASSESSMENT ORDER AS WELL AS CIT APPELL ATE ORDER IS AGAINST THE LAW AND FACTS OF THE CASE . - 2. THAT THE LD . ITO WAS NOT JUSTIFIED TO INITIATE THE PROCEED I NGS UNDER SEC 1 48 WHEN I HAVE FILED ALL REQUIRED DOCUMENTS IN THE OR I G I NA L PROCEEDINGS AND AS PER RECENT JUDGMEN T S , T H E CO URT HE L D THAT MATER I A L OBTAINED . SUBSEQUENT TO ASSESSMEN T O R DE R I S N O T VA LI D GROUND FOR REOPENING THE ASSESSMENT . 3. T H AT LD . I TO WAS IN . ERROR TO REOPEN THE ASSESSMENT U / S. 117/1 48 ON THE BASIS OF S OLE REASON OF VALUATION REPORT B ECAUSE THE VALUATION REPORT IS ONLY EXPERT OPINION . 4. THAT THE APPELLANT HAS DECLARED THE SALE OF ASSE STS IN REGU L AR ASSESSMENT , THEREFORE THERE WAS NO FAILURE OR OMISSION TO D I SCLOSE MATERIAL FACTS . 5. THA T THE L D . ITO AS WELL AS HON ' BLE CIT ( A ) WERE NOT JU ST I F I ED TO NOT ACCEPT THE CONTENTION OF APPELLANT IN RESPECT OF COMPARABLE CASES FOR REJECTING THE VA L UAT I O N R EPO R T PR E P A R ED BY VA L UATION OFFICER . 6. TH A T TH E LE A RN E D ITO AS WE LL AS HON ' B L E C I T ( A ) WAS I N ER R OR ITA NO.2539/DEL/2015 3 NO T TO ACCE PT TH E V A LU E MENT I O N ED I N THE SALE DEED WH I C H WAS ACCEPTED BY R EGIST R AR AND CO LL ECTED THE STAMP DUTY . THAT THE LD . CIT ( A) WAS ALSO UNJUSTIFIED AND WITHOUT APPLICATION OF MIND TO CONFIRM THE ADDITIONS MADE BY THE LD . I TO W I THOUT GOING TO THE FACTS AND CONTENTIONS MADE BY ME. 6. GROUNDS NO.1 TO 4 PERTAIN TO THE VALIDITY AND TH E JURISDICTION OF THE AO TO HAVE ISSUED NOTICE UNDER SECTION 148 OF THE A CT. THE LD. AR SUBMITS THAT THE SOLE REASON FOR ISSUANCE OF NOTICE OF REAS SESSMENT WAS THE VA LU ATION R EPORT AND THAT IS ONLY AN EXPERT OPINION . HE RELIED UPON THE JU D GM ENT PASSED BY THIS TR I BUNAL IN THE CASE OF ACIT VS. SH . SA I DAN K A POO R , I T A NO . 4496/DE1/2012 DATED 13 . 01 . 2016. HE FURTHER SUBMITS THAT ALL TH E REQUIRED DOCUMENTS WERE SUBMITTED DUR I NG THE OR I G I NAL P R O CEEDING S AND THE MATERIAL OBTAINED SUBSEQUENT TO THE ASSES SME N T OR D E R C ANN OT BE USED TO REOPEN AN ASSESSMENT . THE LD. DR ON THE OTHER HA N D R EL I ED UPON THE ORDER PASSED BY THE AO AND THE CIT(A) . 7. I HAVE H EARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD A ND J U DGMEN T S. T H E NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESS EE ON 09 ~ 0 4. 20 12. T HE SAID NOT I CE WAS OBJECTED BY THE ASSESSEE V I DE LETTER D A T E D 07.02.2014 STATING AS UNDER:- SUBJECT: CHALLENGING OF ISSUE OF NOTICE U/S.148 OF INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2008-09. THAT YOUR PREDECESSOR REFERRED THAT MATTER TO DISTR ICT VALUATION OFFICER FOR DETERMINATION OF MARKET VALUE OF PROPERTY I.E. BEAR ING NO. PLOT NO.3, POCKET 5 BLOCK-E, SECTOR 7, ROHINI, DELHI OF WHICH LONG TERM CAPITAL GAIN WAS SHOWN IN RETURN. YOUR PREDECESSOR WAS NOT RECEIVED THE VALUA TION REPOT OF DVO UP TO TIME OF ASSESSMENT. THAT MY PRIME OBJECTION IN RESPECT OF ISSUE OF NOTI CE U/S. 148 READ WITH SECTION 147 FOR REOPENING OF ASSESSMENT THAT, IT IS NECESSA RY ACTION FOR THE REVENUE OF ESTABLISH THAT THE ASSESSES HAS FAILED TO DISCLOSED A FACT OR MATERIAL TRULY AND CORRECTLY AND THE SAME HAD LEAD TO ESCAPE ASSESSMEN T IF MATERIAL FACT AND CONTEMPAOUS RECORDS PLACED BEFORE THE ITO AT THE TI ME OF ORIGINAL ASSESSMENT, ITA NO.2539/DEL/2015 4 THE ASSESSEE TO BE SAID HAVE DONE HIS DUTY. THAT THE APPELLANT HAD FULLY AND TRULY DISCLOSED AL L THE MATERIAL OF FACTS ABOUT THE SHORT TERM CAPITAL GAINS BY PROVIDING PHOTOCOPY OF THE RELEVANT DOCUMENTS OR TRANSFER. THEREAFTER THE APPELLANT HAS DONE EVERYTH ING WHICH THE LAW REQUIRES AND FULFILL THE OBLIGATION. KEEPING IN VIEW THE AFORESAID FACTS AND PREVAILING DECISION OF THE HIGHER COURTS, IT IS THEREFORE PRAYED BEFORE YOUR HONOR THAT MAY KIND LY FILE THE NOTICE AND DROP THE PROCEEDINGS U/S.148 INCOME TAX ACT, 1961. THE ASSESSEE HAS CITED FOLLOWING CASES IN SUPPORT O F HIS CASE. (I) SMT. KANTAMANI VENKATA SATYAVATI VS. ITO (1967) 64 ITR 516 (AP) (II) ITO VS. UNITED HOYELS PVT. LTD. (1983) 16 TTJ (DEL) 176 (III) NEW EXCELSIOR THEATER PVT. LTD. VS. M.B. NAIK ITO ( 1990) 83 CTR (BOMBAY) 62 (IV) M/S. KP VAGHES VS. ITO (1998) 24 CTR (SC) 358 (V) M/S. BRITANNIA INDUSTRIES LTD. VS. DCIT AND ORS (19 95) 238 ITR 57 (DEL) (VI) M/S. TARA CHAND MOUDRA VS. UOI AND ORS (2000) ITR 1 87 (RAJ.) 8. I T C AN B E S EE N FR OM THE OBJECTIONS RAISED BY THE ASSESSEE DU RI NG THE R E ASSE S SME NT PROCEEDINGS THAT THERE WAS NO CHALLENGE TO THE V AL I DITY OF THE N O TICE WITH RESPECT TO THE GROUNDS RAISED IN THE PRESENT APPEA L I . E. ( I) REOPENING O N THE BASIS OF VALUATION REPORT (II) MATER I AL OBTA I NED SUB S EQUENT TO ASSESSMENT ORDER FOR ISSUANCE OF NOTICE UNDER SE CT I ON 14 8 . T H E RE WERE NO OBJECTIONS TAKEN BY THE ASSESSEE I N THE R E AS S E S SME NT P R OCEED I NGS ON AFORESAID GROUNDS. IT IS SETTLED LAW THAT I F T HE A S S E S SE E CHOOSES NOT TO CHALLENGE THE NOTICE I SSUED UNDER SEC T ION 14 8 O F T H E AC T T HE SAME IS TO BE TREATED AS VALID AND FINA L . THE OBJECT I ONS RAISED BY TH E ASSESSEE PERTAIN TO THE SUFFICIENCY OF R EASONS FOR ISSUANCE OF N OT ICE UN DER SECTION 148 . THE SAME CANNOT BE GONE IN TO AT T HE STAGE O F R E A SSE SSM ENT. THE JUDGMENT RELIED UPON BY THE ASSESSEE IS NO T AP PLICABLE IN TH E P R ESENT CASE IN VIEW OF THE FAILURE OF THE ASSESSEE T O CHALLENGE TH E V A LI DI T Y OF THE NOT I CE U N DER SECT I ON 148 . IN T H E CASE OF N. GO VINDRAJU VS. ITO , ITA NO.504 OF 2013, THE HON'BLE HIGH COUR T OF K A RTANAKA H E L D AS UNDER:- ITA NO.2539/DEL/2015 5 19. THE QUESTION WHICH FIRST ARISES IS WITH REGARD TO THE VALIDITY OF THE REOPENING PROCEEDINGS, WHICH IS BY ISSUANCE OF NOTI CE UNDER SECTION 148, REASONS FOR WHICH ARE TO BE RECORDED UNDER SUB-SECT ION (2). THE ASSESSEE HAS AN OPPORTUNITY TO CHALLENGE THE REASONS GIVEN F OR ISSUANCE OF NOTICE AND IF THE SAME ARE FOUND TO BE VAGUE OR ILLEGAL OR WIT HOUT ANY BASIS, THE NOTICE WOULD BECOME INVALID. 20. IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS. I TO (1999) 236 ITR 34 (SC) WHERE SUCH NOTICE HAD BEEN CHALLENGED, THE SUPREME COURT HELD THAT WHAT IS TO BE SEEN IS WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT CAN REOPEN THE CA SE. THE SUFFICIENCY OF CORRECTNESS OF THE MATERIAL IS NOT TO BE CONSIDERED AT THIS STAGE. RELYING ON THIS DECISION, THE APEX COURT, IN THE CASE OF ASSTT . CIT V. RAJESH JHAVERI STOCK BROKERS (P.) LTD. [2007] 291 ITR 500/161 TAXM AN, 316, WHILE CONSIDERING THE ISSUANCE OF NOTICE UNDER SECTION 14 7 OF THE ACTY PRIOR TO THE AMENDMENT OF 2009, HAS HELD THAT THE FINAL OUTCOME OF THE PROCEEDINGS IS NOT RELEVANT AND AT THE INITIAL STAGE, WHAT IS REQU IRED IS REASON-TO BELIEVE BUT NOT ESTABLISHED FACT OF ESCAPEMENT OF INCOME. I T FURTHER HELD THAT AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHE THER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FO RMED A REQUISITE BELIEF WHETHER THE MATERIAL WOULD CONCLUSIVELY PROVE THE E SCAPEMENT IS NOT THE CONCERN AT THIS STAGE. 21. THIS WOULD CLEARLY MEAN THAT THE ISSUANCE OF NO TICE IS JUSTIFIABLE. IF THE ASSESSEE CHOOSES NOT TO CHALLENGE THE NOTICE OR IF IT IS CHALLENGED AND FOUND TO BE VALID, THEN IN EITHER CASE, SUCH NOTICE IS TO BE TREATED AS VALID AND FINAL. SINCE THE VALIDITY OF THE NOTICE ISSUED UNDER SECTION 148(2) CAN BE CHALLENGED OR IS SUBJECT TO JUDICIAL SCRUTINY, IN O UR VIEW, THE ASSESSMENT OR REASSSESSMENT OF ANY OTHER INCOME IN THE CASE OF A VALIDLY ISSUED NOTICE CANNOT BE SAID TO BE A CASE OF FISHING AND ROVING E NQUIRY. THE ASSESSEE HAS THE OPPORTUNITY TO CHALLENGE THE NOTICE, AND IF IT IS HELD TO BE INVALID FOR NOT GIVING ADEQUATE REASONS FOR REOPENING THE ASSESSMEN T, THE ENTIRE REOPENING PROCEEDINGS WOULD LAPSE. IN SUCH A CASE THERE WOULD BE NO QUESTION OF ASSESSMENT OF EITHER SUCH INCOME OF THE FIRST PART OF SECTION N147 OR ANY OTHER INCOME OF ITS SECOND PART. BUT IF THE NOTICE IS EITHER NOT CHALLENGED OR IF CHALLENGED AND FOUND TO BE JUSTIFIED, IT WOULD B E A CASE OF REOPENING THE ASSESSMENT ON THE BASIS OF A VALID NOTICE. 9. THE BEL I EF THAT T HE AO MAY FORM CAN BE BASED ON INFORMAT I ON OBTA I NED FR O M TH E O R IGINAL ASSESSMENT RECORD. IN THE CASE OF M/S U.S . FOODS {P} LTD . V S. D CL T , THIS TR I BUNAL HELD AS UNDER:- 7.4 IT IS WELL SETTLED THAT AT THE TIME OF ISSUE O F NOTICE UNDER SECTION 148, IT IS ONLY THE RELEVANCY OF THE REASONS THAT CAN BE LOOKE D INTO AND NOT THE SUFFICIENCY [S. NARAYANAPPA V. CIT [1967] 63 ITR 219 (SC). ITA NO.2539/DEL/2015 6 10. IN VIEW THE REOF , THE G R OUNDS R A I SED BY THE ASSESSEE RELATING TO THE VALIDIT Y OF N O TI CE UNDER SECT I ON 148 OF THE ACT ARE DISMISSED . G R OUNDS N O . 1 T O 4 AR E DI S MISSED. 11. GR O U N D S NO. 5 , 6 AND 7 RELATE TO THE CORRECTNESS OF THE VALUATION REPO R T. THE LD . AR CO NT ENDS THAT THE REVE N UE WAS NOT JUSTI F IED TO ACCEPT THE VA L UE MEN T I O N ED I N T HE SALE DEEDS RELIED UPON BY THE V A L UA TI ON O F F I CER AND R EJECT IN G TH E COM P ARABLE CASES GIVEN BY THE ASSESSEE . 12. I HAVE H E AR D THE SUBMISSIONS AND PERUSED THE VALUATION R EPORT . THE OB J E CTIONS R A I SED BY THE ASSESSEE DUR I NG THE COURSE OF ASSESSMENT ARE AS UNDE R :- THAT THE VALUATION HAS TAKEN THE COMPARABLE CASE O F PROPERTY WAS LOCATED AT PRASHANT VIHAR, OUTER RING ROAD, NEW DELHI AND M Y OBJECTION OVER THIS IS AS UNDER: (I) THAT THE PROPERTY IN QUESTION WAS LOCATED AT SE CTOR-7, ROHINI WHICH WAS LYING ABOUT 2 K.M. FROM OUTER RING ROAD. THEREFORE, THE COMPARISON OF PROPERTY CANNOT BE MADE ON THIS BASIS. (II) THAT PROPERTY LYING AT OUTER RING ROAD IS TO B E USED COMMERCIAL DUE TO LOCATION AND PROPERTY IN QUESTION IS PURELY RESIDEN TIAL AND THEREFORE, THERE IS NO COMPARISON ON THIS POINT. (III) THAT AS PER VALUATION REPORT, THE LEARNED VAL UER HAS ADMITTED THE INSTANCE PROPERTY IS LOCATED ON THE AREA NEAR TO MA IN ROAD AND PROPERTY IN QUESTION IS IN THE INERT AREA OF ROHINI. HENCE THE RATE REDUCED WAS VERY NOMINAL WHEN ACTUALLY THE DIFFERENCE IS IN MULTIPLE . (IV) THAT THE SHAPE OF PROPERTY IN QUESTION WAS NOT RECTANGULAR IN SHAPE WHICH IS GREAT DISADVANTAGE OF PROPERTY FOR RESALE AND THE VALUATION OFFICER WAS REDUCED VERY NOMINAL I.E. 30% WHEN SUCH TYPE OF PROPERTY WAS USED TO SELL AT LEAST 25% OF MARKET VALUE. (V) THAT THE PLOT AREA OF PROPERTY IN QUESTION IS T HREE TIMES BIGGER AS COMPARE TO INSTANCE PROPERTY. THE BIGGER PROPERTY A LWAYS REQUIRE MORE MONEY AND THE NUMBER OF PURCHASES ARE ALWAYS LESS A ND THE PROPERTY CANNOT BE SOLD, THE BIGGER PROPERTY ON THE SAME RAT E OF SMALLER PLOT. (VI) THAT THE PROPERTY IN QUESTION WAS IN CO-OWNERS HIP OF SIX PERSON AND ITA NO.2539/DEL/2015 7 INSTANCE PROPERTY WAS OF DDA. WHEN CO-OWNERS ARE MO RE AND IT IS DIFFICULT IN CO-OPERATION AND KEEP WATCH INTEREST OF EVERY CO -OWNER. 13. IN THE VALUA T I O N REPO R T THE SAID OBJECTIONS RAISED BY THE ASSESSEE HAVE B E EN ELAB O R A T E L Y CONS I DERED AND REQUI R ED ADJUSTMENTS/DEDUCTIONS W I TH RESPECT TO LOCATION, SHAPE, SIZE AND CO-OWNERSHIP WERE GIVEN T O D E TERM I NE T HE N ET RATE PER SQ. METER. THE LD . AR HAS FA I LED TO PO I N T O U T ANY SPEC IFI C D EF ECT IN THE SAID REPORT . THE OBJECTIONS ARE N E IT HER SUB S TANTIATE D NOR SUPPO R TED BY EVIDENCE . IN VIEW THEREOF , GROUNDS N OS . 5 , 6 AND 7 AR E D I SMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 10 TH APRIL, 2017 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 10/04/2017 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR