GALAXY KNIVES P.LTD, MUMBAI V. ITO 6(3)(4), MUMBAI

ITA 3164/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4034 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 08-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2013
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.31 64/M/2013 (ASSESSMENT YEAR: 2005 - 2006 ) M/S. GALAXY KNIVES PVT LTD., 132/134, PRADHAN BUILDING, S.V.P. ROAD, DONGRI, MUMBAI 400 009. / VS. ITO - 6(3)(4), AAYAKAR BHAVAN, 5 TH FLOOR, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCG2813R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NISHIT GANDHI, AR / RESPONDENT BY : SHRI K.P.R.R. MURTHY, DR / DATE OF HEARING : 08.03.2016 / DATE OF PRONOUNCEMENT : 20 .04.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 25.4.2013 IS AGAINST THE ORDER OF THE CIT (A) - 12, MUMBAI DATED 3.1.2013 FOR THE ASSESSMENT YEAR2005 - 06. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS / ADDITIONAL GROUND WHICH READ AS U NDER: - 1.1. THE LD CIT (A) ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO ADOPT THE VALUE DETERMINED IN THE PRELIMINARY VALUATION REPORT PREPARED BY THE DVO IN RESPECT OF FACTORY LAND AND BUILDING AT NASIK WITHOUT CONSIDERING THE OBJECTIONS RAISED BY THE APPELLANT BEFORE THE DVO AND DIRECTING THE DVO TO PREPARE THE FINAL REPORT AFTER CONSIDERING THE OBJECTIONS RAISED BY THE APPELLANT. 1.2. THE APPELLANT CONTENDS THAT THE DVO HAS NOT CONSIDERED THE OBJECTIONS RAISED BY THE APPELLANT AND HAS WRONGLY PROP OSED TO VALUE THE MARKET VALUE OF PROPERTY AT RS. 95,07,000/ - INSTEAD OF THE CORRECT MARKET VALUE OF RS. 45,00,000/ - WHICH IS THE ACTUAL CONSIDERATION RECEIVED BY THE APPELLANT AND THE AMOUNT OF PROPOSED VALUATION CANNOT BE TAKEN INTO CONSIDERATION FOR COM PUTING THE CAPITAL GAINS. ADDITIONAL GROUND READS AS UNDER : - IT IS THE SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, SECTION 50C IS NOT AT ALL APPLICABLE TO THE APPELLANTS CASE AND, THEREFORE, THE REFERENCE TO DVO WAS NOT IN AC CORDANCE WITH THE LAW. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE WRITTEN NOTE DATED 8.3.2016 STATING THAT THIS I S THE CASE OF SECOND ROUND OF THE PROCEEDINGS 2 BEFORE THE ITAT. IN THE FIRST ROUND, THE MATTER WAS REMANDED TO THE FILE OF THE AO VIDE THE TRIBUNALS ORDER DATED 22.1.2010. DESPITE THE INSTRUCTIONS OF THE TRIBUNAL IN ITS ORDER (SUPRA), THE OFFICERS GAVE AN EFFECT TO THE ORDER OF THE TRIBUNAL IN FORM BUT NOT IN SUBSTANCE. THOUGH, THE CIT (A) CALLED FOR REMAND REPORT FROM THE AO, THE SAME WAS SUBMITTED WITHOUT ANY SUBSTANCE. FURTHER, IN THE SAID WRITTEN NOTE, IT IS MENTIONED THAT THE ASSESSING OFFICER DID NOT APPRECIATE THE FACT OF CLOSURE OF THE BUSI NESS OF THE ASSESSEE AND HURRIEDLY PROCEEDED TO COMPLETE THE FIRST APPELLATE PROCEEDINGS FOR THE SECOND TIME. LD COUNSEL FOR THE ASSESSEE ALSO BROUGHT TO OUR NOTICE THE ADDITIONAL GROUND FILED BEFORE US FOR THE FIRST TIME INVOKING THE PROVISIONS OF SECTIO N 50C OF THE ACT. THE ISSUE PLACED BEFORE US FOR ADJUDICATION, VIDE THE SAID ADDITIONAL GROUND, RELATES TO THE ACTION OF THE AO IN MAKING ADDITION U/S 50C OF THE ACT ON SALE OF LEASEHOLD RIGHTS IN LAND AT NASIK. FURTHER, LD COUNSEL FOR THE ASSESSEE READ OUT THE FOLLOWING FEW LINES. ......HOWEVER, THE CIT (A) REFUSED TO ENTERTAIN THE SAID CONTENTION OF THE APPELLANT SIMPLY ON THE GROUND THAT RECORDS PERTAIN TO PROCEEDINGS BEFORE THE DVO WERE NOT AVAILABLE WITH HIM AND THEREAFTER WENT ON TO CONFIRM THE S AID VALUATION MERELY ON THE PRESUMPTION THAT SINCE FINAL VALUATION WAS DONE AT A LATER DATE, THE OBJECTION WOULD HAVE BEEN TAKEN CARE OF BY THE DVO....(PARA 9 OF THE CIT (A)S ORDER, SECOND TIME). 3. ANOTHER RELEVANT EXTRACTION FROM PARA 8 OF THE SAID W RITTEN SUBMISSION OF THE ASSESSEE READS AS UNDER: - 8.......IN THE ALTERNATIVE, IT IS URGED THAT THE ENTIRE ISSUE OF CAPITAL GAINS ON THE SALE OF LEASE HOLD RIGHTS IN MIDC LAND AT NASIK BE RESTORED TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN ACCORDA NCE WITH LAW AND IN VIEW OF THE SUBMISSIONS AS AFORESAID. 4. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE AO, KEEPING ALL THE ISSUES OPEN TO AO AND D I R E C T T H E A O TO FINALISE THE ISSUE AS PER THE DUE PROCESS OF LAW. WE ORDER ACCORDINGLY. IT IS NEEDLESS TO MENTION THAT AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, REGULAR GROUNDS AS WELL AS THE ADDITIONAL GROUND RAISED BY THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 2 0 T H APRIL, 2016. S D / - S D / - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 0 .4.2016 3 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI