Sivasankaran Uma, Pondicherry V. DCIT Puducherry Circle, Puducherry

ITA 2783/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1068 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 20-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: T VASUDEVAN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2783/CHNY/2017 ' (' / ASSESSMENT YEAR : 2013-14 SMT. SIVASANKARAN UMA, NO.261, BUSSY STREET, PUDUCHERRY 605 001. PAN : AAQPU 7482 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, PUDUCHERRY CIRCLE, PUDUCHERRY. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, JCIT 0 . 1$ / DATE OF HEARING : 16.08.2018 2!( . 1$ / DATE OF PRONOUNCEMENT : 12.09.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, D ATED 14.09.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DETER MINATION OF FAIR MARKET VALUE UNDER SECTION 50C OF THE INCOME-TAX AC T, 1961 (IN SHORT 'THE ACT') FOR THE PURPOSE OF COMPUTING CAPITAL GAI N. 2 I.T.A. NO.2783/CHNY/17 3. SHRI T. VASUDEVAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE SOLD 4622 SQ.FT. OF LAND AT KULATHU METTU STREET, PONDICHERRY REVENUE V ILLAGE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS TAKEN THE SALE CO NSIDERATION AT 1,15,50,000/- FOR COMPUTATION OF CAPITAL GAIN. HOW EVER, THE ASSESSING OFFICER HAS TAKEN THE SALE CONSIDERATION AS 2,19,57,000/- ON THE BASIS OF GUIDELINE VALUE FOR THE PURPOSE OF LEVYING CAPITAL GAIN TAX. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS ALSO CLAIMED IMPR OVEMENT COST TO THE EXTENT OF 34,96,567/-. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO SOLD ANOTHER LAND AT REDDIYARPALA YAM REVENUE VILLAGE FOR A SALE CONSIDERATION OF 26,72,000/-. THE ASSESSEE HAS ALSO CLAIMED IMPROVEMENT COST TO THE EXTENT OF 14,22,524/-. THE ASSESSEE HAS OBTAINED A REGISTERED VALUERS REPORT. ACCORDI NG TO THE LD. COUNSEL, WHEN THE REGISTERED VALUER WAS IN THE PROCESS OF VA LUING THE PROPERTY, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT PROC EEDING WITHOUT REFERRING THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER. 4. REFERRING TO SECTION 50C(2) OF THE ACT, THE LD.C OUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE CLAIMED T HE MARKET VALUE OF THE PROPERTY IS LESS THAN THE GUIDELINE VALUE, THE ASSESSING OFFICER HAS NO OPTION EXCEPT TO REFER THE MATTER TO THE DEPARTMENT AL VALUATION OFFICER. A SIMILAR CLAIM OF THE ASSESSEE WAS ALLOWED BY MADRAS HIGH COURT IN S. 3 I.T.A. NO.2783/CHNY/17 MATHURAJA V. CIT (2014) 369 ITR 483. THEREFORE, AC CORDING TO THE LD. COUNSEL, THE CIT(APPEALS) IS NOT JUSTIFIED WHEN THE RE IS A MANDATORY REQUIREMENT FOR REFERRING TO MATTER TO THE DEPARTME NTAL VALUATION OFFICER. 5. ON THE CONTRARY, SHRI R. CLEMENT RAMESH KUMAR, T HE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE HAS NOT CHALLENGED THE MARKET VALUE / GUIDELINE VALUE TAKEN BY THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDING. SINCE THE OB JECTION WAS NOT MADE BY THE ASSESSEE, ACCORDING TO THE LD. D.R., IT IS N OT CORRECT TO SAY THAT THE MATTER NEEDS TO BE REFERRED TO THE DEPARTMENTAL VAL UATION OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE VERY FACT THAT THE ASSESSEE IS CHALLENGING THE ADOPTION OF GUIDELINE V ALUE AS MARKET VALUE BY THE ASSESSING OFFICER, SHOWS THAT THE ASSESSEE C LAIMS THAT MARKET VALUE IS LESS THAN THE GUIDELINE VALUE. MOREOVER, SECTION 50C OF THE ACT IS A DEEMING PROVISION FOR THE PURPOSE OF LEVYING T AX ON THE DEEMED CAPITAL GAIN. IT IS ALSO A WELL SETTLED PRINCIPLES OF LAW THAT GUIDELINE VALUE IS ONLY TO GUIDE THE SUB-REGISTRAR TO FIND OUT THE MARKET VALUE FOR THE PURPOSE OF LEVYING TAX. THEREFORE, GUIDELINE VALUE CANNOT BE EQUATED TO MARKET VALUE. 7. THERE MAY BE SOME INSTANCES WHERE THE GUIDELINE VALUE WOULD BE EQUAL TO MARKET VALUE. HOWEVER, IN MAJORITY CAS ES, GUIDELINE VALUE 4 I.T.A. NO.2783/CHNY/17 MAY NOT REPRESENT THE MARKET VALUE. THE MARKET VAL UE IS NOTHING BUT A PRICE THAT MAY BE AGREED BETWEEN THE WILLING PURCHA SER AND SELLER. MARKET VALUE IS NOT A CONSTANT FIGURE. IT MAY VARY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THE MARKET VALUE WOULD DEPEND UPON VARIOUS FACTORS, SUCH AS SIZE OF THE LAND, LOCATION OF THE LAND, AVAILABILITY OF INFRASTRUCTURE AROUND THE LAND, ACCESS TO THE PR OPERTY, POTENTIALITY FOR FUTURE DEVELOPMENT, AVAILABILITY OF PUBLIC TRANSPOR T SYSTEM, EDUCATIONAL INSTITUTIONS, HOSPITAL, ETC. THESE FACTORS NEED TO BE TAKEN INTO CONSIDERATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE CLAIMS THAT THE MARKET VALUE OF T HE PROPERTY IS LESS THAN GUIDELINE VALUE, IT IS OBLIGATORY ON THE PART OF THE ASSESSING OFFICER TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION O FFICER TO FIND OUT THE MARKET VALUE. SINCE SUCH AN EXERCISE WAS NOT DONE BY THE ASSESSING OFFICER, THIS NEEDS TO BE RECONSIDERED. ACCORDINGL Y, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSU E IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER TO FIN D OUT THE MARKET VALUE OF THE PROPERTY ON THE DATE OF SALE AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE O PPORTUNITY TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NO.2783/CHNY/17 ORDER PRONOUNCED IN THE COURT ON 12 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 12 TH SEPTEMBER, 2018. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A), PUDUCHERRY 4. PRINCIPAL CIT, PUDUCHERRY 5. 69 ,1 /DR 6. :' ; /GF.