Suman Properties, Pune V. Income-tax Officer, Ward - 5(3), Pune

ITA 2630/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8769 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 14-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 43CA; 50C; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO .2630 /PUN/201 7 / ASSESSMENT YEAR : 201 4 - 15 SUMAN PROPERTIES, C 405 - 406, KUMAR BUSINESS COURT, MUKUNDNAGAR, PUNE - 411037 PAN : ABRFS1252N ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 5(3), PUNE / RESPONDENT ASSESSEE BY : S HRI SHARAD VAZE REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 09 - 09 - 2019 / DATE OF PRONOUNCEMENT : 13 - 09 - 2019 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27 - 06 - 2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 4, PUNE FOR ASSESSMENT YEAR 2014 - 15. 2. HEARD BOTH PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE THAT THE ASSESSEE IS A FIRM AND IS A BUILDER AND DEVELOPER . THE ASSESSEE CONDUCTS 2 ITA NO .2630/PUN/2017, A.Y. 2014 - 15 ITS BUSINESS IN THE NAME AND STYLE OF M/S. SUMAN PROPERTIES. DURING THE COURSE OF LIMITED SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE DIFFERENCE IN AGREED SALE CONSIDERATION AND MARKET VALUE AS DETERMINED BY THE STAMP VALUATION AUTHORITY IN RESPECT OF FIVE PROPERTIES TO THE EXTENT OF RS.72,20,568/ - . ACCORDING TO THE ASSESSING OFFICER THE PROVISIONS OF SECTION 43CA OF THE ACT IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE , AS THE AGREED SALE CONS IDERATION RECEIVED BY THE ASSESSEE IS LESS THAN THE MARKET VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY. THE ASSESSEE WAS ASKED TO EXPLAIN WHY PROVISION U/S. 43CA SHOULD NOT BE MADE APPLICABLE. A CCORDING TO ASSESSING OFFICER , THE ASSESSEE FILED REPL Y , BUT NO JUSTIFICATION WHATSOEVER SUBMITTED BY THE ASSESSEE IN RESPECT OF APPLICABILITY OF PROVISIONS OF SECTION 43CA OF THE ACT. THEREBY, THE ASSESSING OFFICER HELD THE MARKET VALUE AS DETERMINED BY THE STAMP VALUATION AUTHORITY IS DEEMED TO BE FULL VAL UE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF AN ASSET AND ADDED THE ABOVESAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE VIDE HIS ORDER DATED 06 - 12 - 2016 PASSED U/S. 143 OF THE ACT. 3. BEFORE COMMISSIONER OF INCOME TAX (APPEALS), IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS IN FACTS BY NOT REFERRING THE VALUATION OF FLAT SALES TO THE DEPARTMENTAL VALUATION OFFICER IN TERMS OF SECTION 43CA(2) R.W.S. 50C(2) OF THE ACT. THE COMMISSIONER OF I NCOME TAX (APPEALS) IN ITS IMPUGNED ORDER IN PARAS 5.3 AND 5.3.3 HELD THAT THE GROUNDS RAISED BY THE ASSESSEE IN RESPECT OF CHALLENGING THE ACTION OF ASSESSING OFFICER IN REFERRING THE MATTER TO DVO FOR DETERMINATION OF FAIR MARKET VALUE IS NOT MAINTAINABLE IN THE ABSENCE OF SPECIFIC GROUND RAISED PRAYING TO DELETE THE ADDITION MADE BY ASSESSING OFFICER IN TERMS OF SECTION 43CA OF THE ACT AND UPHELD THE ORDER OF ASSESSING OFFICER . 3 ITA NO .2630/PUN/2017, A.Y. 2014 - 15 4. AS AGGRIEVED B Y THE ORDER OF COMMISSIONER OF INCOME TAX (APPE ALS), THE ASSESSEE BEFORE US CHALLENGING THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING GROUNDS OF APPEAL ANNEXED TO FORM NO. 36 AND RAISED ADDITIONAL GROUND BY WAY OF APPLICATION DATED 22 - 08 - 2019 WHICH IS PLACED ON RECORD. THE MAIN CONTENT ION OF SHRI SHARAD VAZE , THE LD. AR IS THAT THE ASSESSING OFFICER FAILED TO REFER THE MATTER TO THE DVO FOR DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTIES IN TERMS OF SUB - SECTION (2) OF SECTION 43CA OF THE ACT. 5. ADMITTEDLY, THE VALUE SAID TO HAV E BEEN RECEIVED BY THE ASSESSEE OR AGREED TO RECEIVE ON THE TRANSFER OF PROPERTIES IS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. THE SUB - SECTION (1) OF SECTION 43CA EXPLAINS IF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANS FER OF AN ASSET BY THE ASSESSEE IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF STATE GOVERNMENT IS DEEMED TO BE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. FURTHER, THE SUB - SECTION (2) OF SE CTION 43CA EXPLAINS THAT THE PROVISIONS OF SUB - SECTION (2) AND (3) OF SECTION 50C IS APPLICABLE IF THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE UNDER SUB - SECTION (1) OF SECTION 43CA OF THE ACT. 6. IT IS PERTINENT TO NOTE THAT SUB - SECTION (2) OF SECTIO N 50C PROVIDES JURISDICTION TO THE ASSESSING OFFICER TO REFER THE VALUATION OF CAPITAL ASSET TO VALUATION OFFICER IF THE ASSESSEE CLAIMED THAT VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF PROPERTIES AS ON THE DATE OF TRANSFER. THEREFORE, IT IS CLEAR THE ASSESSING OFFICER OUGHT TO HAVE EXERCISED ITS JURISDICTION IN REFERRING THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER UNDER SUB - SECTION (2) OF SECTION 43CA OF THE ACT. WE NOTE THA T THE SAID CHALLENGE WAS NOT MADE 4 ITA NO .2630/PUN/2017, A.Y. 2014 - 15 BEFORE THE ASSESSING OFFICER , THOUGH RAISED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT CONSIDERED IN PROPER PERSPECTIVE. THEREFORE, WE FIND FORCE IN THE ARGUMENTS OF LD. AR, THAT THE ASSESSING OFFICER OUGHT T O HAVE REFERRED FOR VALUATION OF CAPITAL ASSET TO VALUATION OFFICER. THEREBY, TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND SUBMISSIONS OF LD. AR AND LD. DR, WE DEEM IT PROPER TO REMAND THE MATTER TO THE FILE OF ASSESSING OFFICER F OR ITS FRESH CONSIDERATION IN TERMS OF OBSERVATIONS INDICATED ABOVE. THUS, GROUND NOS. 1 TO 4 AND ADDITIONAL GROUND RAISED BEFORE US ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2019. SD/ - SD/ - ( R.S. SYAL ) ( S.S. VISWANETHRA RAVI ) VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 13 TH SEPTEMBER, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 3, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE