THE ACIT, CIRCLE - 1, Rajahmundry V. Gowthami Educational Acadamy Pvt. Ltd., Tanuku

ITA 280/VIZ/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1136 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C SUBRAHMANYAMAR
• Assessee Lawyers: A NARAYANA RAO
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Valuation report
• Section: 50C

Judgement Text

ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.181/VIZAG/2014 ( / ASSESSMENT YEAR: 2010-11) M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD. TANUKU VS. ACIT, CIRCLE - 1, RAJAHMUNDRY [PAN: AABCG 3765A] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.280/VIZAG/2014 ( / ASSESSMENT YEAR: 2010-11) ACIT, CIRCLE - 1, RAJAHMUNDRY VS. M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD. TANUKU ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI C. SUBRAHMANYAM,AR / RESPONDENT BY : SHRI A. NARAYANA RAO, DR / DATE OF HEARING : 11. 0 4.20 16 / DATE OF PRONOUNCEMENT : 27.05.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DIRECTED AGAINST THE ORDER OF CIT(A), VISAKHAPA TNAM DATED 19.3.2014 FOR THE ASSESSMENT YEAR 2010-11. ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN EDUCA TIONAL ACADEMY, DURING THE YEAR, ASSESSEE HAD SOLD 3 PIECES OF LAND TO BHOGAVALLI APARNA ON DIFFERENT DATES, AS FOLLOWS: DATE DOCUMENT NO. DOCUMENT CONSIDERATION MARKET VALUE AS PER REGISTERING AUTHORITY 22.10.2009 2980/2009 ` 4,52,000/- ` 26,85,000/- 04.12.2009 3472/2009 ` 4,56,000/- ` 45,14,400/- N.A. 3538/2009 ` 2,89,000/- ` 28,61,100/- ` 1,00,60,500/- IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT T HE ASSESSEE HAS CLAIMED CAPITAL LOSS OF ` 3,43,993/- ON THE ABOVE TRANSACTION. THE A.O. CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE MARKET VALUE ADOPTED BY THE REGISTERING AUTHORITY SHOULD NOT BE TAKEN AS TH E FULL VALUE OF CONSIDERATION. IT WAS SUBMITTED BEFORE THE A.O. TH AT CERTAIN GAS PIPE LINES OF ONGC PASSED THROUGH THE SAID PLOTS, WHICH WOULD CAUSE HINDRANCE TO THE AGRICULTURAL OPERATIONS OF THE LAN D IN CASE OF LEAKAGE. IN VIEW OF THE LIMITATIONS AND CONSTRAINTS IN THE U SE OF THE SAID LAND, THE MARKET VALUE ADOPTED BY THE REGISTERING AUTHORITY W AS NOT APPLICABLE. THE ASSESSING OFFICER AFTER CONSIDERING THE ABOVE E XPLANATION OF THE ASSESSEE, HE HAS OBSERVED THAT THE PROPERTIES WERE SOLD TO ASSESSEES ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 3 DAUGHTER FOR A VERY REDUCED PRICES. HOWEVER, THE A .O. HAS REFERRED THE MATTER TO THE VALUATION OFFICER TO ASCERTAIN THE FA IR MARKET VALUE. BUT THE A.O. COMPLETED THE ASSESSMENT BY CONSIDERING TH E SALE CONSIDERATION AS PER SECTION 50C OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') OF ` 1,00,60,500/- WITHOUT WAITING FOR THE REPORT OF THE VALUATION OFFICER. ASSESSEE CARR IED MATTER IN APPEAL BEFORE THE CIT(A) AND FILED A VALUATION REPORT BEFO RE THE CIT(A). THE ASSESSEE HIMSELF HAS GOT THE VALUATION THROUGH APPR OVED VALUER, WHO VALUED THE PROPERTY AT ` 45 LAKHS AND THE VALUATION AUTHORITY VALUED THE PROPERTIES AT ` 72.62 LAKHS. BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUBMITTED THAT THE VALUE ADOPTED BY THE APPROVED VA LUER HAS TO BE CONSIDERED BUT NOT THE VALUE ADOPTED BY THE VALUATI ON OFFICER. HOWEVER, THE LD. CIT(A) NOT ACCEPTED THE REQUEST OF THE ASSE SSEE TO ADOPT THE VALUATION AS PER THE APPROVED VALUER ON THE GROUND THAT THIS WAS NOT FILED BEFORE THE A.O. HOWEVER, HE HAS ACCEPTED THE VALUE DETERMINED BY THE VALUATION OFFICER OF ` 72.62 LAKHS AS A FULL VALUE OF CONSIDERATION AND DIRECTED THE A.O. TO RECOMPUTE THE CAPITAL GAIN S ACCORDINGLY. 3. ON BEING AGGRIEVED, THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE US. ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 4 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE HAD SOLD 3 PROPERTIES FOR ` 11,97,000/-. THE VALUE OF THE PROPERTY AS PER THE REGISTERING AUTHORITY IS OF ` 1,00,60,500/-. WHEN THE A.O. HAS CALLED THE ASSESSEE TO EXPLAIN WHY THE RATE FIXED BY THE REGISTERING AUTHORITY SHOULD NOT BE APPLIED, IT WAS SUBMITTED BEFORE THE A.O. THAT CERTAIN GAS PIPE LINES OF ONGC PASSED THR OUGH THE SAID LAND AND THEREFORE, THERE ARE LIMITATIONS AND CONSTRAINT S IN THE USE OF THE LAND AND MARKET VALUE FIXED BY REGISTERING AUTHORIT Y CANNOT BE APPLIED. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANAT ION OF THE ASSESSEE AND HE HAS REFERRED THE MATTER TO THE VALUATION OFF ICER TO ASCERTAIN THE FULL VALUE OF THE SALE CONSIDERATION. HOWEVER, WIT HOUT WAITING FOR THE REPORT FROM VALUATION AUTHORITY, HE ADOPTED A SALE CONSIDERATION AS PER SECTION 50C OF THE ACT AND ASSESSMENT WAS COMPLETED . SUBSEQUENTLY, THE ASSESSEE HAS OBTAINED THE REPORT FROM THE VALUA TION AUTHORITY AS WELL AS FROM THE APPROVED VALUER AND FILED BEFORE T HE LD. CIT(A). THE LD. CIT(A) REJECTED THE REPORT OF THE APPROVED VALU ER ON THE GROUND THAT IT IS AMOUNTING TO ADDITIONAL EVIDENCE BECAUSE IT W AS NOT FILED BEFORE THE A.O. HOWEVER, HE HAS ACCEPTED THE VALUE ADOPTED BY THE VALUATION OFFICER AND DIRECTED THE A.O. TO RECOMPUTE THE CAPI TAL GAINS. WE FIND THAT BEFORE THE A.O., NEITHER THE REPORT OF THE VAL UATION OFFICER NOR ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 5 REPORT OF THE APPROVED VALUER WERE AVAILABLE. BOTH THE REPORTS WERE FILED BEFORE THE LD. CIT(A). IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT TO ASCERTAIN THE SALE CONSIDERATION, IT IS NEC ESSARY TO EXAMINE BOTH THE REPORTS BY THE A.O. UNDER THESE FACTS AND CIRC UMSTANCES OF THE CASE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT( A) AND DIRECT THE A.O. TO EXAMINE THE ENTIRE FACTS OF THE CASE AND DE CIDE KEEPING IN VIEW OF THE REPORT OF THE VALUATION OFFICER AS WELL AS A PPROVED VALUER, DE-NOVO IN ACCORDANCE WITH LAW, AFTER GIVING REASONABLE OPP ORTUNITY TO THE ASSESSEE. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 TH MAY16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 27.05.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT M/S. GOWTHAMI EDUCATIONAL ACADEM Y PVT. LTD., P.B. NO.7, TANUKU 2. / THE RESPONDENT THE ACIT, CIRCLE-1, RAJAHMUNDRY ITA NO.181 & 280/VIZAG/2014 M/S. GOWTHAMI EDUCATIONAL ACADEMY PVT. LTD., TANUKU 6 3. ) / THE CIT, VISAKHAPATNAM 4. ) ( ) / THE CIT(A), VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM