Uma Reddy, CHENNAI V. ITO, CHENNAI

ITA 2971/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90330 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , ! ' , # $% & [BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] ./ I.T.A.NO.2971/MDS/2014 / ASSESSMENT YEAR : 2008-09 SMT. UMA REDDY NO.22, RUTLAND GATE IVTH STREET CHENNAI 600 006 VS. THE INCOME TAX OFFICER BUSINESS WARD XV(1) CHENNAI [PAN AAAPU 7292 C] ( '( / APPELLANT) ( ')'( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /RESPONDENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 25-05-2015 ! / DATE OF PRONOUNCEMENT : 25-05-2015 * / O R D E R PER D. KARUNAKARA RAO, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS-V), CHENNAI, DA TED 8.10.2014, FOR ASSESSMENT YEAR 2008-09. 2. AT THE OUTSET, BRINGING OUR ATTENTION TO ALL THE GR OUNDS OF APPEAL IN GENERAL AND GROUND NOS.4 & 5 IN PARTICULA R, THE LD. COUNSEL ITA NO.2971/14 :- 2 -: FOR THE ASSESSEE SUBMITTED THAT THIS IS A CASE WHE RE ASSESSEE SOLD A LONG TERM CAPITAL ASSET AND THE CAPITAL GAINS WERE OFFERED TO TAX IN THE RETURN OF INCOME. THE ASSESSEE SOLD A PROPERTY FOR A SUM OF ` 80 LAKHS. HOWEVER, IN THE ASSESSMENT, THE ASSESSING O FFICER INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND THE SALE C ONSIDERATION OF ` 1,07,06,400/- WAS CONSIDERED AS THE DEEMED SALE CON SIDERATION INSTEAD OF ` 80 LAKHS. BRINGING OUR ATTENTION TO PARA 4 OF THE ASSESSMENT ORDER, THE LD. COUNSEL FOR THE ASSESSEE DEMONSTRATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER GIVIN G THE REASONS FOR SELLING PROPERTY FOR ONLY ` 80 LAKHS, THE LESSER CONSIDERATION. . HOWEVER, THE ASSESSING OFFICER IGNORED THE SAID SUB MISSION OF THE ASSESSEE AND THE REASONS FOR LESSER CONSIDERATION A ND PROCEEDED TO INVOKE THE PROVISIONS OF SECTION 50C OF THE ACT MEC HANICALLY. THE ASSESSING OFFICER DID NOT REFER THE PROPERTY IN QUE STION TO THE VALUATION AUTHORITIES AS MENTIONED IN SUB-SECTION 2 OF SECTIO N 50C OF THE ACT. IN FIRST APPELLATE PROCEEDINGS BEFORE THE CIT(A), T HOUGH THERE WAS NO FORMAL GROUND RAISED RELATING TO REQUEST FOR MAKING REFERENCE TO THE VALUATION CELL, GROUND NO.3 WAS RAISED IN FORM NO.3 5 OBJECTING TO ADOPTION OF THE GUIDELINE VALUE. THE CIT(A) HAS NO T DIRECTED THE ASSESSING OFFICER FOR MAKING A REFERENCE TO THE VAL UATION CELL BEFORE FINALIZING THE APPEAL. ITA NO.2971/14 :- 3 -: 3. IN THE BACKDROP OF ABOVE FACTS, THE LD. COUNSEL FOR THE ASSESSEE REQUESTED FOR REMANDING THE ISSUE TO THE A SSESSING OFFICER WITH THE DIRECTION TO THE ASSESSING OFFICER FOR MA KING A REFERENCE TO THE VALUATION CELL AS PER THE PROVISIONS OF SECTION 50C(2) OF THE ACT. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSI NG OFFICER NEEDS TO REFER THE PROPERTY TO VALUATION CELL WHEN THE SRO P RICE IS ADOPTED AGAINST THE LESSER SALE CONSIDERATION OFFERED IN TH E RETURN OF INCOME. TO SUPPORT THE SAME, LD. COUNSEL FILED A COPY OF TH E ORDER OF THE TRIBUNAL IN THE CASE OF GWL PROPERTIES LTD VS ITO(O SD) IN I.T.A.NO.409/MDS/2013 FOR ASSESSMENT YEAR 2005-06 D ATED 15.5.2015, WHEREIN THE TRIBUNAL UNDERLINED THE NEED FOR MAKING A REFERENCE WHEN THE ASSESSEE MADE AN OBJECTION TO THE ASSESSING OF FICERS ACTION IN ADOPTING THE PROVISIONS OF SECTION 50C OF THE ACT I N RESPECT OF PROPERTY. HE ALSO FILED A JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF S. MUTHURAJA VS CIT [2014] 369 ITR 483 TO SUPPORT THE ABOVE. 4. AFTER HEARING THE LD. COUNSEL FOR THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AND ON PERUSAL OF THE CITED DECISIONS BEFORE US, WE ARE OF THE OPINION TH AT REJECTING THE ASSESSEES OBJECTIONS AGAINST ADOPTING THE GUIDELIN E PRICE IS NOT JUSTIFIED WITHOUT MAKING THE IMPUGNED PROPERTY TO T HE VALUATION CELL FOR VALUATION PURPOSES. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE ITA NO.2971/14 :- 4 -: CIT(A) AND DIRECT THE ASSESSING OFFICER TO MAKE A R EFERENCE TO THE DEPARTMENTAL VALUATION OFFICER AS PER THE PROVISION S OF SECTION 50C(2) OF THE ACT. REGARDING THE OTHER GROUNDS RAISED IN THE APPEAL, WE FIND IT IS PREMATURE TO ADJUDICATE THE SAME AS GROUND NO S. 4 & 5 ARE ALLOWED FOR STATISTICAL PURPOSES. ACCORDINGLY, ALL THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OF MAY, 2015, AT CHENNAI. SD/- SD/- ( ! ' ) (CHALLA NAGENDRA PRASAD) # / JUDICIAL MEMBER ( . ) (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 25 TH MAY, 2015 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+, - / DR 3. *./ / CIT(A) 6. ,01 / GF