ITO, UDAIPUR V. Shri Shiv Kumar Rangwani, UDAIPUR

ITA 327/JODH/2013

• Counselvise Citation: 32723314 RSA 2013
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 10-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R H GOHEL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NOS. 327/JU/2013 A.Y: 2008-09 THE I.T.O VS. SHRI SHIV KUMAR RANGWANI WARD 1(4) 2039, WARD 4, UDAIPUR OPP POWER HOUSE SAJJANGARH ROAD, UDAIPUR PAN NO. AEYPR 5578 J (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI R.H. GOHEL DATE OF HEARING : 31.10.2013 DATE OF PRONOUNCEMENT : 31.10.2013 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE CIT(A), UDAIPUR, DATED 01. 03.2013 FOR A.Y 2008-09. 2 2. AT THE TIME OF HEARING, DESPITE HAVING BEEN DULY SERVED, NOBODY CAME TO REPRESENT THE CASE OF THE ASSESSEE-RESPONDENT NOR ANY ADJOURNMENT PETITION WA S FILED. THEREFORE, WE PROCEED TO DECIDE THIS APPEAL AFTER HEARING THE LD. D.R. EXPARTE QUA THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE SOLE ISSUE RAIS ED IN THIS APPEAL ARE THAT THE ASSESSEE SOLD A HOUSE PROP ERTY SITUATED AT A-02, KRISHNA COMPLEX, HARIDAS JI KI MA GRI, UDAIPUR IN WHICH HIS SHARE WAS 1/3 RD ONLY. THERE WERE TWO REGISTRIES OF FACE VALUE OF 20,00,000/- EACH ON 27/03/2008. THE REGIST RAR HAS ADOPTED MARKET VALUE OF ONE PORTION AT RS. 36,52,760/- IN A LL IN WHICH ASSESSEE'S SHARE WAS 1/3 RD . SIMILARLY, THE SECOND PROPERTY WAS VALUED FOR STAMP DUTY PURPOSES BY THE REGISTRAR AT RS. 80,94,606/-. THE ASSESSEE'S SHARE WAS 1/3 RD HERE TOO. AS BOTH THE PORTIONS ARE SITUATED AT SAME PLACE AND INCLUDED IN ONE HOUSE TH E VALUE ADOPTED FOR STAMP DUTY PURPOSES BY THE REGISTRAR FOR PROPER TY NO 2 HAS BEEN CHALLENGED BY THE ASSESSEE. AT THE TIME OF FILING O F RETURN THE ASSESSEE HAS VOLUNTARILY CALCULATED LONG TERM CAPIT AL GAIN ON SALE OF PROPERTY NO.1 ON THE BASIS OF VALUE ADOPTED BY THE REGISTRAR 3 CONSIDERING THE PROVISIONS OF SECTION 50C(1) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHO RT]. THE ASSESSEE HAD ADOPTED THE SAME VALUE FOR COMPUTATION OF LONG TERM CAPITAL GAIN FOR PROPERTY NO. 2 WHICH WAS CONSIDERED BY THE REGISTRAR FOR PROPERTY NO 1, TREATING THAT VALUE AS PROPER AND F AIR MARKET VALUE AS ON THE DATE OF TRANSFER CONSIDERING THE PROVISIO NS OF SECTION 50C (2). DURING THE COURSE OF ASSESSMENT U/S 143(3) THE ASSESSEE HAS BROUGHT TO THE NOTICE OF AO THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR PROPERTY NO. 2 HAS BEEN DIS PUTED AND CHALLENGED SO PROVISION OF SECTION 50C (1) WERE NOT APPLICABLE FOR THIS PROPERTY. FURTHER THE ASSESSEE HAS MADE HIS CL AIM BEFORE THE AO THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABL E) BY THE STAMP VALUATION AUTHORITY U/SS (1) EXCEED THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. THE AO HAS NOT CONSIDERED THE OBJECTION OF ASSESSEE AND HAS RECOMPUTED THE LONG T ERM CAPITAL GAIN BY INVOKING PROVISION OF SECTION 50C(1) WITHOU T REFERRING THE MATTER TO THE DVO AS REQUESTED BY THE ASSESSEE, REJ ECTING THE CLAIM OF ASSESSEE EVEN THOUGH THE ASSESSEE HAS PROVIDED E VIDENCES RELATED TO DISPUTES ON ACCOUNT OF VALUE ADOPTED BY THE REGISTRAR. ACCORDINGLY THE AO HAS MADE ADDITION IN THE DECLARE D LONG TERM 4 CAPITAL GAIN ON THIS ACCOUNT. THE ID. AO HAS FURTHE R TREATED THE COST OF CONSTRUCTION AND YEAR OF CONSTRUCTION AS 01/04/1 993 AS AGAINST THE YEARS MENTIONED AND STATED BY THE ASSESSEE AND ACCORDINGLY INDEXED COST OF ACQUISITION HAS BEEN ADOPTED FOR CA LCULATION OF CAPITAL GAINS BY HIM. AGGRIEVED BY THE ORDER THE AS SESSEE PREFERRED APPEAL AND THE LD. CIT(A) HAS DELETED THE ENTIRE AD DITION ON THE PREMISE THAT THE PROVISION S OF SECTION 50C(1) OF T HE ACT WOULD NOT APPLY FOR THE PURPOSES OF COMPUTING LONG TERM CAPIT AL GAIN BECAUSE THE A.O. HAS FAILED TO REFER THE MATTER TO THE DVO AND HAS IGNORE THE PROVISION OF SECTION 50C(2) OF THE ACT. NOW T HE REVENUE IS AGGRIEVED AND HAS FILED THIS APPEAL CHALLENGING THE ABOVE DELETION. 4. WE HAVE HEARD THE SUBMISSIONS OF THE LD. D.R. AN D HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. FR OM THE RECORDS, IT IS FOUND FOR A FACT THAT THE ASSESSEE HAD CHALLE NGED THE ADOPTION OF A PARTICULAR AMOUNT AS VALUATION OF THE SECOND P ROPERTY BEFORE THE SUB-REGISTRAR. THE ASSESSEE HAS CLAIMED THAT IT IS NOT A MARKET VALUE OF THIS PROPERTY AS HAS BEEN ADOPTED BY THE S UB-REGISTRAR AND ONLY THE VALUATION ADOPTED BY THE SUB-REGISTRAR IN RESPECT OF PROPERTY NO. 1 HAS TO BE TREATED AS FAIR MARKET VAL UE OF THE 5 PROPERTY NO. 2. WHEN THE ASSESSEE DISPUTED THE ADO PTION OF A PARTICULAR VALUE OF THE PROPERTY ADOPTED U/S 50C(1) OF THE ACT, PROVISIONS OF SECTION 50C(2) COME INTO PLAY AND ACT S AS A BUFFER BETWEEN THE TWO. IT SEEMS THAT THE A.O. HAS NOT CO NSIDERED AND APPRECIATED THE PROVISIONS OF SECTION 50C OF THE AC T IN ITS CORRECT PERSPECTIVE. AS PER SECTION 50C OF THE ACT, THE VA LUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP IN RESPECT OF LAND OR BUILDING OR BOTH , SHALL FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER. THE VALUE ADOPTED BY STAMP DUTY AUTHORITY DOES NOT IPSO FACTO BECOME THE REAL CONSIDERATION OR DEEMED CONSIDERATION IN T HE ABSENCE OF ANY OTHER COGENT REASON. WHEN THE ASSESSEE DISPUTE D THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY, IT BECOME THE SUBJECT MATTER OF DISPUTE UNTIL IT IS FINALLY DECIDED SAME VALUE A S ADOPTED BY THE SUB-REGISTRAR CANNOT BE ADOPTED BY THE A.O. NO LA W PERMITS THE A.O. TO ESTIMATE THE FAIR MARKET VALUE IN CONTRAVEN TION OF PROVISIONS OF THE ACT. IN THE PRESENT CASE, IT IS A N UNDENIABLE FACT THAT THE ASSESSEE HAD DISPUTED THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY, THEREFORE, PROVISIONS OF SECTION 50C(1) ARE NOT APPLICABLE 6 AT THE TIME OF FILING OF RETURN DEDUCTION OR AT THE TIME ASSESSMENT OF INCOME BY THE A.O. FURTHER, HE HAS NOT MADE REF ERENCE TO THE DVO AND THIS FACT IS ALSO FATAL TO HIS ACTION. THE DISPUTE REGARDING STAMP DUTY WAS STATED TO BE STILL PENDING AND SUBJE CT MATTER OF LITIGATION BEFORE THE JURISDICTIONAL HIGH COURT. W HILE COMING TO THE DATE OF COMPLETION OF THE CONSTRUCTION, THE A.O. HA S ADOPTED THE DATE OF PERMISSION GRANTED AS PER SALE DEED. HOWEV ER, THE ASSESSEE HAS MENTIONED THAT IN THE ENCLOSED SITE MAP ATTACHE D ALONGWITH THE SALE DEED, IT IS CLEARLY MENTIONED THAT THE COMPLET ION OF FIRST FLOOR TOOK PLACE IN THE YEAR 1988. IT WAS BROUGHT TO THE NOTICE OF THE CIT THAT THE CONSTRUCTION WAS GOT DONE BY ASSESSEES FA THER AND NOT BY HIM. SO, WE CAN SAFELY CONCLUDE THAT THE CONSTRUCT ION WAS COMPLETED EARLIER BUT OFFICIAL PERMISSION WAS GRANT ED IN THAT AREA WAS GRANTED LATER ON BY CLEARANCE OF THE ISSUE RELA TED TO PERMISSION OF CONSTRUCTION IN THE AREA SITUATED NEARBY LAKES I N UDAIPUR. THE ABOVE VEHEMENT REASONS STATED ABOVE COMPELS US TO A CCEPT THE FINDING OF THE LD. CIT(A) AND FIND THE DELETION OF RS. 15,60,080/- IN ORDER. ACCORDINGLY, WE CANNOT ALLOW THE APPEAL OF THE REVENUE. 7 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 31 ST OCTOBER, 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST OCTOBER, 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR