V.Sambasivan, CHENNAI V. ITO Non ?Corporate Ward 14(1), CHENNAI

ITA 2575/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2334 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 05-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C; 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI , . , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER / I.T.A. NO.2575/CHNY/2018 /ASSESSMENT YEAR: 2011-12 SHRI V.SAMBASIVAN, F2, NO.99, 1 ST FLOOR, VELLALAR STREET, KODAMBAKKAM, CHENNAI-600 024. VS THE INCOME TAX OFFICER, NON-CORPORATE WARD-14(1) CHENNAI-600 034. PAN:ANUPS3352E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. D.ANAND, ADVOCATE /RESPONDENT BY : MR. SRIDHAR DORA, JCIT /DATE OF HEARING : 07.03.2019 /DATE OF PRONOUNCEMENT : 07.03.2019 / O R D E R PER S.JAYARAMAN, AM: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-14, CHENNAI, I N ITA NO.212/CIT(A)-14/2015-16 / 21/CIT(A)-14/2016-17 DA TED 29.06.2018 FOR THE ASSESSMENT YEAR 2011-12. 2. THE LD AR SUBMITTED THAT SHRI V.SAMBASIVAN, THE ASSESSEE, AN INDIVIDUAL, ACQUIRED A VACANT HOUSE SITE IN 1962. SINCE THERE WAS A DISPUTE, HE REGISTERED A GENERAL POWER OF ATTORNEY ON 16.03.2011 IN FAVOUR OF ONE MR.SURESH KUMAR. IT IS MENTIONED IN T HE POWER OF ATTORNEY 2 ITANO.2575/CHNY/2018 THAT FOR 80,00,000/- OUT OF WHICH 40.00 LAKHS WAS RECEIVED ON 20.06.2010 AND THE AGGREGATE OF BALANCE OF 40.00 LAKHS WAS RECEIVED ON 15.03.2011. THE ASSESSEE ACQUIRED A V ACANT SITE ON 20.12.2011 AT KASAPURAM VILLAGE, TAMBARAM TALUK , K ANCHIPURAM DIST. FOR 38,22,350/- AND CONSTRUCTED A BUILDING ON IT FOR 38,44,195/- AND CLAIMED DEDUCTION U/S.54F. THE ASSESSING OFFICER THOUGH ASSESSED THE CAPITAL GAINS IN THE ASSESSMENT YEAR 2011-12, HOWE VER, REFERRED THE PROPERTY TO THE VALUATION OFFICER AND ASSESSED THE FAIR MARKET VALUE AT 1,48,88,260/-. HE REFUSED TO ALLOW THE ASSESSEES CLAIM OF DEDUCTION U/S.54F STATING, INTER ALIA, THAT ASSESSEE HAS NO T INVESTED THE MONEY UNDER CAPITAL GAINS INVESTMENT SCHEME. AGGRIEVED, T HE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND LD. CIT(A) DISMISSED T HE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD. AR SUBMITTED THAT THOUGH THE ASSESSEE HAS TAKEN VARIOUS GROUNDS IN THIS APPEAL, HE PLEADED THAT IF THE ISSUES OF QUANTUM OF VALUATION U/S.50C AND THE ASSESSEES DEDUCTIO N CLAIM U/S.54F ARE DECIDED, IT WOULD SERVE THE INTERESTS OF JUSTICE AND HENCE, THE ASSESSEE WOULD NOT BE INTERESTED IN PURSUING TH E OTHER ISSUES IN THE GROUNDS. THE LD. AR INVITED OUR ATTENTION TO THE PAPER BOOK WHEREIN COPY POWER OF ATTORNEY, COPY OF LETTER RECEIVED FRO M ASSESSEE TO ASSESSING OFFICER, COPY OF VALUATION REPORT, COPY OF SALE DEED, COPY OF 3 ITANO.2575/CHNY/2018 CONSTRUCTION AGREEMENT AND A COPY OF CONSTRUCTION COMPLETION REPORT ARE FILED AND ALSO INVITED OUR ATTENTION TO PAGE 3 1 OF THE PAPER BOOK, WHEREIN THE VALUATION OFFICER MENTIONED THE RATES A S UNDER:- 5.0 : RATES 5.1 LAND RATE: VIDE THIS OFFICE LETTER NO.F.NO.VO-I /MDS/CG(01)/2015-16 DATED 18.05.2015 , THE SUB-REGISTRAR, VELACHERI, SOUTH CHENNAI, CHENNAI-42, WAS REQUESTED TO FURNISH THE GUIDELINE RATE AND SALE INSTANCES IN THAT LOCALITY . IN RESPONSE TO THIS OFFICE LETTER MENTIONED ABOVE, THE SUB-REGISTRAR, VELACHERI, CHENNAI-42 , VIDE HER LETTER NO.08/2015, DATED: 26.08.2015 HAS FURNISHED THE GUI DE LINE VALUE OF LAND IN MADIPAKKAM VILLAGE, RAJAGOPALAPURAM IS 1063/SQFT AS ON 01.08.2007 TO 31.03.2012 AND 01.04.2012 TO 11.01.2013 IS 2500/- /SQFT AND 12.01.2013 TO UPTO DATE 3500/SQFT. THE LD.AR ALSO INVITED OUR ATTENTION TO THE REPORT WHEREIN THE VALUATION OFFICER HAS RECORDED THE ASSESSEES CONTENTION THA T THAT THE IMPUGNED PROPERTY IS A DISPUTED PROPERTY AND A DISPUTE IS PENDING BEFORE THE HIGH COURT, HENCE MARKET VALUE SHOULD NOT BE TA KEN INTO ACCOUNT. FURTHER, THE LD AR SUBMITTED THAT THOUGH THE VALUAT ION OFFICER WHILE VALUING THE PROPERTY HAD TAKEN COGNIZANCE OF THE F ACT THAT THE ASSESSEES PROPERTY IS A DISPUTED ONE AND CASE IS PENDING BEFORE HIGH COURT, THERE WAS AN ENCUMBRANCE IN THE COURT IN SO ME PORTION OF THIS PROPERTY, THE BUILDER HAS ALSO NOT CONSTRUCTED OR L EFT A PORTION OF 2310 SQ.FT UNTOUCHED ETC, IN SPITE OF SUCH FACTS THE VA LUATION OFFICER ADOPTED 106.3% INCREASE DUE TO TIME GAP ON THE GUIDELINE VA LUE AND GRANTED OVERALL REBATE OF 10% FOR DETERMINING THE FAIR MARK ET VALUE. THEREFORE, 4 ITANO.2575/CHNY/2018 THE LD AR SUBMITTED THAT WHEN THE IMPUGNED PROPER TY IS IN DISPUTE AND A CASE IS PENDING IN HIGH COURT, WHEN FULL PROP ERTY IS NOT UTILIZED, IT IS CLEAR THAT IMPUGNED PROPERTY IS WITH A LOT OF R ISK AND HENCE ADOPTION OF GUIDELINE VALUE WOULD MEET THE ENDS OF JUSTICE . SINCE THE GUIDELINE OF THE PROPERTY EVEN UP TO ASSESSMENT YEAR 2012-13 I.E UP TO 31.03.2012 STOOD AT 1063 PER SQ.FT, PLEADED THAT VALUE FOR 50C BE ADOPTED AT RS.1063/- PER SQ.FT. 3.1 WITH REGARD TO THE CLAIM OF DEDUCTION U/S. 54F, THE LD. AR SUBMITTED SINCE THE ASSESSEE HAS PURCHASED A VACANT SITE ON 20.12.2011 AND CONSTRUCTED A HOUSE WITHIN THE PE RMITTED TIME LIMIT SPECIFIED U/S 54(2) TO CLAIM THE DEDUCTION U/S 54F, HIS CLAIM U/S 54F MAY BE ALLOWED. HE INVITED OUR ATTENTION TO THE CONSTRU CTION COMPLETION REPORT DATED 20.12.2013 FURNISHED BY THE PROMOTER , WHEREIN THE TOTAL VALUE OF THE CONSTRUCTION IS MENTIONED AT 38,44,195/-. HE ALSO INVITED OUR ATTENTION TO THE ELECTRICITY CARD AND SUBMITTED THAT ELECTRICITY CONNECTION WAS OBTAINED ON 10.11.2012 AND SUBMITTE D THE RELEVANT PARTICULARS AS UNDER: * DETAILS OF PURCHASE OF LAND ON 20.12.2011 MEASURING 2,282 SQ.FT. -PLOT NO.2, KASPAPURAM VILL AGE, 38,22,350 TAMBARAM TALUK, KANCHIPURAM DIST. STAMP DUTY, REGN. 3,44,140 41,66,490 ** CONSTRUCTION OF BUILDING MEASURING 2,200 SQ.FT. 38,43,760 COMPLETED IN DECEMBER 2013-AS PER AGREEMENT AND COM PLETION LETTER 5 ITANO.2575/CHNY/2018 * DETAILS OF PAYMENT MADE 5.12.2012 BANK OF BARODA TRF 100,000 24.12.12 BANK OF BARODA TRF 3,722,350 3,822,350 STAMP DUTY 26.12.2011 BANK OF BARODA TRF 344,140 4, 166,490 TOTAL DETAILS OF PAYMENT MADE-CONSTRUCTION 3,843,760 PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THE FACTS REMAIN THAT THE ASSESSEE HAD 7546 SQFT OF DISPUTED VACANT LAND. BECAUSE OF PENDING DISPUTE IN THE HIGH COURT, HE HAS TRANSFERRED BY A POA ON 16.03.2011 AND RECEIVED CONSIDERATION OF RS.80,00,000/- WITHIN ASSESSMENT YEAR 2011-12. IN IT, THE PURCHASER HAS CONSTRUCTED A BUILDING LEAVING A PORTION O F 2310 SQ.FT UNTOUCHED. SINCE THE TRANSFER OR SALE IS NOT REGISTERED, THE A O COULD NOT ASCERTAIN THE GUIDELINE VALUE FOR ADOPTING THE SAME U/S 50C . ON REFERENCE, THE VO DETERMINED THE FMV AT RS. 1,48,88,260/-, WHICH IS ADOPTED BY THE AO. THE ASSESSEE CONTENDS THAT THAT THE IMPUGNED PROPERTY IS A DISPUTED PROPERTY, A DISPUTE IS PENDING BEFORE THE HIGH COURT AND HENCE HE TRANSFERRED IT BY THE GPA AND RECEIVED CON SIDERATION OF RS.80,00,000/- ONLY. THIS CONSIDERATION IS NOT DISP UTED. DUE TO THE PENDING DISPUTE, THE BUILDER (PURCHASER) HAS ALSO N OT CONSTRUCTED ON THE ENTIRE LAND AND LEFT A PORTION OF 2310 SQ.FT UNTOUC HED. THEREFORE, IT IS CLEAR THAT THERE WAS AN ENCUMBRANCE. WHEN THE IMPUGNED PROPERTY 6 ITANO.2575/CHNY/2018 IS IN DISPUTE AND A CASE IS PENDING IN THE HIGH COURT, WHEN FULL PROPERTY IS NOT UTILIZED BY THE PURCHASER, IT IS CL EAR THAT IMPUGNED PROPERTY IS WITH A LOT OF RISK. IN SUCH FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT ADOPTION OF FAIR MARKET VALUE IS UNREASONABLE AND HENCE WE HOLD THAT ADOPTION OF GUIDELINE VALUE WOULD ME ET THE ENDS OF JUSTICE. SINCE THE GUIDELINE VALUE OF THE PRO PERTY UP TO ASSESSMENT YEAR 2012-13 I.E UP TO 31.03.2012 STOOD AT 1063 PER SQ.FT, WE DIRECT THE AO TO ADOPT THE VALUE FOR 50C AT RS.1063/- PE R SQ.FT. 5. THE NEXT ISSUE IS AS TO WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION CLAIMED U/S. 54F. SINCE THE ASSESSEE HAS PURCHASED A VACANT SITE ON 20.12.2011 AND CONSTRUCTED A HOUS E WITHIN THE PERMITTED TIME LIMIT SPECIFIED U/S 54(2) TO CLAIM T HE DEDUCTION U/S 54F, AS PER THE DETAILS SPECIFIED IN PARA 3.1 SUPRA, WE AR E OF THE VIEW THAT THE ASSESSEES CLAIM U/S 54F NEEDS TO BE ALLOWED AND HENCE DIRECT THE A O TO DO SO TO THAT EXTENT. SINCE THE ASSESSEE HAS NOT ARGUED ALL OTHER GROUNDS OF APPEAL, THEY ARE DISMISSED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MARCH, 2019. SD/- SD/- ( ) ( . ) (GEORGE MATHAN) (S.JAYARAMAN) ( ! / JUDICIAL MEMBER) ( ! / ACCOUNTANT MEMBER) 7 ITANO.2575/CHNY/2018 /CHENNAI, # /DATED 07 TH MARCH, 2019 SOMU '( )( /COPY TO: 1. APPELLANT 2. RESPONDENT 3. * ( ) /CIT(A) 4. * /CIT 5. ( . /DR 6. 1 /GF