MANOJ SHANKARRAO BHAGAT, Yavatmal V. ITO-WARD-1, Amaravati

ITA 312/NAG/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9647 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SH. G.D.AGRAWAL, HONBLE PRESIDENT AND SH. MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.312/NAG/2014 (ASSESSMENT YEAR: 2009-10) MANOJ SHANKARRAO BHAGAT, PLOT NO.41, VAISHALI COLONY, NANDURKAR COLLEGE ROAD, YAVATMAL444602. PANAHPPB6610F VS ITO, WARD1, AAYAKAR BHAWAN, AMBAPETH, AMARAVATI. (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH.R.K.BARAL, SR.DR DATE OF HEARING 08.03.2018 DATE OF PRONOUNCEMENT 08.03.2018 O R D E R PER BENCH THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF LD.CIT(A)-II, NAGPUR VIDE ORDER NO.CIT(A)-II/02/12-13 DATED 04.02.2014. THE ASSESSMENT WAS FRAMED BY ITO, WARD-1, AMRAVATI U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) FOR A.Y. 2009-10 VIDE HIS ORDER DATED 28.12.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF LD.CIT(A) CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF SHORT TERM CAPITAL GAIN WITHOUT REFERRING THE SAME D.V.O IN TE RMS OF SECTION 50C(2) OF THE ACT. FOR THIS, THE ASSESSEE HAS RAISED FOLLOWING TW O GROUNDS:- 1. THAT THE LEARNED INCOME TAX OFFICER GROSSLY ERR ED IN MAKING ADDITIONS AS SHORT TERM CAPITAL GAINS AMOUNTING TO RS.4,43,00,000/-. 2. THAT THE ADDITION OF SHORT TERM CAPITAL GAINS IN VIEW OF SECTION 50C OF THE INCOME TAX ACT, 1961 WITHOUT REFERRING THE S AME TO DVO OR APPROVED VALUER IS BAD IN LAW. ITA NO. 312/NAG/2014 PAGE | 2 3. BRIEF FACTS OF THE CASE ARE THAT SH. MANOJ SHANK ARRAO BHAGAT, THE ASSESSEE PURCHASED AGRICULTURAL LAND ADMEASURING 2. 91 HECTARES FROM TWO SISTERS NAMELY (I) SMT. VATSALABAI DANGE AND (II) S MT. TULSABAI BHOYAR. THIS PROPERTY WAS PURCHASED VIDE AGREEMENT DATED 01.12.2 006 AND THE RELEVANT FEATURE OF THE AGREEMENT IS REPRODUCED IN THE ASSES SMENT ORDER WHICH READS AS UNDER:- THE LAND IS ACQUIRED UNDER URBAN LAND CEILING ACT , 1976 AND THE ASSESSEE WAS REQUIRED TO MAKE THE LAND FREE FROM AC QUISITION AND AFTER THAT THE LAND WILL BE CONVERTED INTO LAYOUT. THE A SSESSEE WILL SELL THE PLOTS AND THE OWNERS WILL GET RS.50/- PER SW. FT. ON SALE . THE AGREEMENT WAS AFFIXED WITH THUMB IMPRESSION OF THE TWO LADIES AND SIGNED BY THE ASSESSEE. 4. THIS PROPERTY WAS SOLD BY THE ASSESSEE DURING TH E YEAR UNDER CONSIDERATION FOR A SUM OF RS.1.55 CRORE AS PER AGR EEMENT. THE AO RECEIVED INFORMATION AND ACCORDING TO HIM, THE FAIR MARKET V ALUE AS ADOPTED BY STAMP DUTY AUTHORITIES U/S 50C OF THE ACT IS RS.4.44 CROR ES. THE AO TAKING THE FAIR MARKET VALUE AT RS.4.44 CRORES ASSESSED THE SHORT T ERM CAPITAL GAIN AT RS.4.43 CRORES. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BE FORE LD.CIT(A) WHO ALSO CONFIRMED THE ACTION OF THE AO BY OBSERVING IN PARA 6.5 AS UNDER:_ 6.5. WITH REGARD TO THE CONTENTION OF THE APPELLAN T THAT THE PROVISIONS OF SECTION 50C SHOULD NOT BE APPLIED, THERE IS NO SUBS TANCE IN THE SUBMISSION MADE BY THE APPELLANT. THE FACTS OF THE CASE LAW RE LIED UPON BY THE APPELLANT ARE DIFFERENT AND ARE NOT APPLICABLE TO T HE CASE UNDER CONSIDERATION. IT WAS EVIDENT THAT THE FAIR MARKET VALUE OF THE SAID PROPERTY AS PER THE STAMP VALUATION AUTHORITIES WAS RS.44400000/- AND IN THE ABSENCE OF ANY REQUEST MADE BY THE APPELLANT WITH THE LD. AO TO REFER THE SAID PROPERTY FOR VALUATION TO THE DVO, T HERE WAS NO REASON FOR ITA NO. 312/NAG/2014 PAGE | 3 THE LD. AO TO DO SO. ALSO THE APPELLANT HAS NOT ALT ERNATIVELY FURNISHED ANY VALUATION REPORT OF REGISTERED VALUER SO AS TO ESTA BLISH THAT THE FAIR MARKET VALUE OF THE SAID PROPERTY IS LESS THAN RS. 4440000 0/-. IN VIEW OF THE ABOVE SITUATION, I SEE NO INFIRMITY IN THE ACTION O F THE APPELLANT TO APPLY THE PROVISIONS OF SECTION 50C OF THE ACT. CONSIDERING T HE TOTALITY OF FACTS I SEE NO REASON TO INTERFERE WITH THE ACTION OF THE LD. A O TO COMPUTE THE SHORT TERM CAPITAL GAIN ARISING ON THE SAID TRANSACTION A T RS. 44300000/-. THE ADDITION MADE IN THIS REGARD IS HEREBY CONFIRMED. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. NONE IS PRESENT OF BEHALF OF THE ASSESSEE. WHEN LD. SR.DR WAS APPRISED OF THE GROUNDS REGARDING NON-REFERENCE OF THIS PROP ERTY TO THE D.V.O FOR ASCERTAINING THE FAIR MARKET VALUE U/S 50C(2) OF TH E ACT, HE FAIRLY CONCEDED THAT THE MATTER CAN BE SET ASIDE TO THE FILE OF THE AO F OR FRESH ADJUDICATION OF THE ISSUE AFTER ALLOWING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO REFERRING THE PROPERTY TO D.V.O TO ASCERTAIN THE C ORRECT MARKET VALUE IN TERMS OF SECTION 50C(2) OF THE ACT FOR THE PURPOSE OF COM PUTATION OF CAPITAL GAIN. IN VIEW OF THE ABOVE, WE SET ASIDE THIS ISSUE TO THE F ILE OF THE AO AND REMAND THE MATTER BACK FOR FRESH ADJUDICATION. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH MARCH, 2018. SD/ SD/ (G.D.AGRAWAL) (MAHAVIR SINGH) HONBLE PRESIDENT JUDICIAL MEMBER DATED: 08 TH MARCH, 2018 *AMIT KUMAR* ITA NO. 312/NAG/2014 PAGE | 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), NAGPUR 4. THE CIT, NAGPUR 5. THE DR, BENCH, ITAT, NAGPUR BY ORD ER ASSISTANT REGISTRAR ITAT, NAGPUR BENCH, NAGPUR