Shri Devang N. Vadodariya, Surendranagar V. ACIT, Surendranagar Circle, Surendranagar

ITA 2706/AHD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6340 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPLICANT VK SINGH
• Assessee Lawyers: PF JAIN
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Reassessment proceedings

Judgement Text

SP NO.150/AHD/2017 & ITA NO.2706/AHD/2017 DEVANG N VADODARIYA VS ACIT. ASSESSMENT YEAR : 2012-13 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] S.P. NO.150/AHD/2017 (ARISING OUT OF ITA NO.2706/AHD/2017) AND ITA NO.2706/AHD/2017 ASSESSMENT YEAR: 2012-13 DEVANG NARENDRABHAI VADODARIYA ........... .. APPELLANT/APPLICANT 2, RAJIV SOCIETY, JUNA NARI KENDRA ROAD, SURENDRANAGAR 363 001 [PAN : AANPV 7057 R] VS. THE ASST. COMMISSIONER OF INCOME-TAX ........ .......................RESPONDENT SURENDRANAGAR CIRCLE, SURENDRANAGAR-363001 APPEARANCES BY: PF JAIN FOR THE APPELLANT/APPLICANT VK SINGH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 05.01.2018 DATE OF PRONOUNCING THE ORDER : 05.01.2018 O R D E R PER PRAMOD KUMAR, AM: 1. AS THIS STAY PETITION WAS BEING HEARD, THE BENCH WAS OF THE VIEW THAT THE RELATED APPEAL ITSELF CAN BE DISPOSED OF AT THIS ST AGE. WHEN THIS PROPOSITION WAS PUT TO THE LEARNED REPRESENTATIVES, THEY AGREED THAT TH E APPEAL CAN BE TAKEN UP FOR HEARING ON MERITS. WITH THE CONSENT OF THE PARTIES , THEREFORE, WE TAKE UP THE APPEAL FOR DISPOSAL. THE STAY PETITION IS, ACCORDINGLY, D ISMISSED AS INFRUCTUOUS. 2. THIS APPEAL IS DIRECTED AGAINST LEARNED CIT(A)S ORDER DATED 13 TH OCTOBER 2017, IN THE MATTER OF ASSESSMENT UNDER SECTION 143 (3) R.W.S. 147 OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2012-13. SP NO.150/AHD/2017 & ITA NO.2706/AHD/2017 DEVANG N VADODARIYA VS ACIT. ASSESSMENT YEAR : 2012-13 PAGE 2 OF 4 3. GRIEVANCES RAISED BY THE ASSESSEE, IN SUBSTANCE, ARE TWOFOLD (A) FIRST, AGAINST LEARNED CIT(A)S UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS; AND (B) SECOND, AGAINST LEARNED CIT(A)S UPHOLDING THE ADDI TION OF RS.73,47,517/- ON ACCOUNT OF SHORT TERM CAPITAL GAINS. 4. LEARNED COUNSEL FOR THE ASSESSEE DID NOT PRESS T HE GRIEVANCE, ON THE REOPENING ISSUE, AND THE SAME IS, ACCORDINGLY, DISM ISSED AS NOT PRESSED. 5. AS REGARDS ADDITION OF RS.73,47,517/- ON ACCOUNT OF SHORT TERM CAPITAL GAINS, THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE JANTRI VALUE ( I.E. STAMP DUTY VALUATION) IS MUCH HIGHER THAN THE STATED SALE CONSIDERATION. ACCORDI NGLY, THE ASSESSING OFFICER RECOMPUTED THE SHORT TERM CAPITAL GAINS BY ADOPTING JANTRI VALUE AS DEEMED SALE CONSIDERATION UNDER SECTION 50C. IT WAS ON THIS BAS IS THAT THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION OF RS.73,47,517/- TO THE SHORT TERM CAPITAL GAINS DISCLOSED BY THE ASSESSEE. AGGRIEVED, ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE I S NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 6. LEARNED COUNSEL HAS POINTED OUT THAT EVEN THOUGH THE ASSESSEE HAS OBJECTED TO THE ASSESSING OFFICERS ADOPTION OF JANTRI VALUE AS DEEMED SALE CONSIDERATION UNDER SECTION 50C, HE DID NOT REFER THE VALUATION O F THE SAID PROPERTY, OR OFFER TO DO SO, TO THE DEPARTMENTAL VALUATION OFFICER UNDER SEC TION 50C(2). IT IS POINTED OUT THE PRESENT LEGAL POSITION IS THAT EVEN WHEN ASSESSEE D ID NOT MAKE A SPECIFIC REQUEST FOR DVO REFERENCE, THE ASSESSING OFFICER MUST OFFER TO DO SO. HE RELIES UPON A COORDINATE BENCH DECISION OF THIS TRIBUNAL, IN THE CASE OF RAJ KUMARI AGARWAL VS. DCIT, [(2014) 150 ITD 597], IN SUPPORT OF THIS PROP OSITION. LEARNED DEPARTMENTAL REPRESENTATIVE WAS GRACIOUS ENOUGH TO STATE THAT, I N SUCH A SITUATION, HE HAS NO OBJECTION TO THE MATTER BEING REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF ENABLING A REFERENCE TO THE DEPA RTMENTAL VALUATION OFFICER. LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ACCEPTS THI S SUGGESTION. 7. THE PLEA OF THE LEARNED COUNSEL IS INDEED WELL T AKEN. WHETHER THE ASSESSEE MAKES A SPECIFIC REQUEST FOR REFERENCE TO THE DVO O R NOT, WHEN ASSESSEE DISPUTES THE VALUATION AS PER STAMP DUTY AUTHORITY, THE ASSE SSING OFFICER MUST GIVE AN OPTION TO THE ASSESSEE TO FOLLOW THE COURSE PROVIDED BY TH E LAW. A COORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF RAJ KUMARI AGARWAL (SUPRA) , HAS OBSERVED AS FOLLOW:- WE FIND THAT HERE IS A CASE IN WHICH THE ASSESSEE HAS SPECIFICALLY OBJECTED TO THE ADOPTION OF STAMP DUTY VALUATION RATE. THE MERE FACT THAT THE APPELLANT HAS NOT CHALLENGED THE STAMP DUTY VALUATION CANNOT BE PUT AGAINST THE ASSESSEE. THE AUTHORITY FOR THE THIS PROPOSITION IS CONTAINED IN, HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT, IN THE CASE O F CIT VS CHANDRA NARAIN CHAUDHURI ([2013] 38TAXMANN.COM 275 (ALLAHABAD), WH EREIN THEIR LORDSHIPS HAVE OBSERVED THAT, THE QUESTION AS TO WHETHER THE ASSESSEE FILED ANY OBJECTIONS BEFORE THE STAMP VALUATION AUTHORITY TO DISPUTE THE VALUATION, OR FILED APPEAL OR REVISION OR MADE REFERENCE BEFORE A NY AUTHORITY, COURT OR THE HIGH COURT UNDER SUB SECTION (2) (B) OF SECTION 50 C OF THE ACT IS NOT OF ANY SP NO.150/AHD/2017 & ITA NO.2706/AHD/2017 DEVANG N VADODARIYA VS ACIT. ASSESSMENT YEAR : 2012-13 PAGE 3 OF 4 RELEVANCE IN THIS CASE, AS THE AO HIMSELF OBSERVED THAT THE ASSESSEE DID NOT DISPUTE THE STAMP VALUATION BEFORE THE STAMP VALUAT ION AUTHORITY. THERE MAY BE SEVERAL REASONS FOR THE PURCHASER NOT TO FILE SU CH OBJECTION. A PURCHASER MAY NOT GO INTO LITIGATION, AND PAY STAMP DUTY, AS FIXED BY THE STAMP VALUATION AUTHORITY, WHICH MAY BE OVER AND ABOVE TH E FAIR MARKET VALUE OF THE PROPERTY, AS ON THE DATE OF TRANSFER, THOUGH THE AM OUNT SO DETERMINED HAS NOT BEEN ACTUALLY RECEIVED BY OWNER OF THE PROPERTY. T HE POSITION AS TO WHETHER REFERENCE SHOULD BE MADE TO THE DVO, EVEN WHEN THER E IS NO SPECIFIC PLEA TO THAT EFFECT BY THE ASSESSEE, IS NOW WELL SET OUT IN HONBLE CALCUTTA HIGH COURTS JUDGMENT IN THE CASE OF SUNIL KUMAR AGARWAL CIT ( GA NO 3686/2013 IN ITAT NO 221/ 2013; JUDGMENT DATED 13TH MARCH 201 4), WHEREIN THEIR LORDSHIPS HAVE, INTER ALIA, OBSERVED AS FOLLOWS:- .WE ARE OF THE OPINION THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INT END THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VAL UATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIV E A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEF IT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MAD E BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAV E BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGI NG A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVID ED BY LAW. 7. AS THERE IS NO BINDING JUDICIAL PRECEDENT CONTRA RY TO WHAT HAS BEEN HELD BY HONBLE CALCUTTA HIGH COURT, AS ABOVE, THE ESTEEMED VIEWS OF THEIR LORDSHIPS, EVEN THOUGH FROM A NON JURISDICTIONAL HI GH COURT, BIND US AS WELL. 8. IN THE LIGHT OF THE ABOVE LEGAL POSITION, THE PL EA OF THE ASSESSEE, AS SET OUT IN THE GROUND OF APPEAL, IS INDEED WELL TAKEN. THE PREVAILING LEGAL POSITION IS NOW LIKE THIS. ONCE THE ASSESSEE CLAIMS THAT THE AC TUAL MARKET VALUE OF THE LAND OR BUILDING IS LESS THAN STAMP DUTY VALUATION ADOPTED BY THE AUTHORITIES, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO REFER TH E VALUATION OF SAID LAND OR BUILDING TO THE DEPARTMENTAL VALUATION OFFICER. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS NOT DONE SO. IN VIEW OF THIS FACTUAL POSITION, AND IN THE LIGHT OF THE DISCUSSIONS ABOVE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO AFTER MAKING A REFERENCE TO THE DVO, AND COMPLETING THE ASSESSMENT ON THE BASIS OF THE VALUATION SO RECEIVED FROM THE DVO. WHILE SO DECIDI NG THE MATTER AFRESH, THE ASSESSING OFFICER WILL DECIDE THE MATTER IN ACCORDA NCE WITH THE LAW, BY WAY OF A SPEAKING ORDER AND AFTER GIVING A REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. WE DIRECT SO. 8. RESPECTFULLY FOLLOWING THE VIEWS SO EXPRESSED BY THE COORDINATE BENCH, WE REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFIC ER FOR THE LIMITED PURPOSE OF ENABLING SP NO.150/AHD/2017 & ITA NO.2706/AHD/2017 DEVANG N VADODARIYA VS ACIT. ASSESSMENT YEAR : 2012-13 PAGE 4 OF 4 A REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER, AND THUS ASSESSEES AVAILING THE OPTION UNDER SECTION 50C(2). THE MATTER THUS STAND S RESTORED TO THE FILE OF THE ASSESSING OFFICER IN THE TERMS INDICATED ABOVE. AS THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, AS ABOVE, OTHER ISSUES ON MERITS NEED NO ADJUDICATION AT THIS STAGE. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODA Y ON 5 TH DAY OF JANUARY, 2018. SD/- SD/- S S GODARA PRAMOD K UMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 5 TH DAY OF JANUARY, 2018 *BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION: ......PREPARED AS PER MANUSC RIPT OF HONBLE AM-ATTACHED 05.01.2018 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 05.01.2018...... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: .. 05.01.2018...... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: .. 05.01.2018. . 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : .. 05.01.2018.................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: .. 8. DATE OF DESPATCH OF THE ORDER: ......