VALARMATHI (MOTHER AND GUARDIAN OF TAMILARASI - MINOR), CHENNAI V. ITO NCW 2(2), CHENNAI

ITA 3364/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3311 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital Gains
• Section: 50C; 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B (SMC ) BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NO. 3364/CHNY/2018 ! / ASSESSMENT YEAR : 2010-2011. SMT. VALARMATHI, (MOTHER AND GUARDIAN OF TAMILARASI - MINOR) OLD NO.43, NEW NO.14, ROSARY CHURCH ROAD, MYLAPORE, CHENNAI 600 004. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 2(2) CHENNAI [PAN AIYPV 5191M] ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. T.N. SEETHARAMAN, ADV &' '# $ % /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. ( ) $ * /DATE OF HEARING : 22-10-2019 +,! $ * /DATE OF PRONOUNCEMENT : 08 -11-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2 , CHENNAI ITA NO .3364/2018 :- 2 -: (CIT(A) FOR SHORT) DATED 31.10.2018 FOR THE ASSE SSMENT YEAR (AY) 2010-2011. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) IS OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS BAD IN LAW. 2. THE COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS RIGHTLY ADOPTED THE GUIDELINE VALUE OF RS.15,41,491/- AS THE SALE CONSIDERATION (OF VACANT LAND AT CHENGALPATTU) BY INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, AND DISMISSING THE APPEAL. 3. THE APPELLANT SUBMITS THAT AS THE MOTHER AND GUA RDIAN OF HER DAUGHTER TAMILARASI (MINOR AGED 12 YEARS) SHE H AD SOLD A PIECE OF VACANT LAND MEASURING 1141 SQ.FT SITUATED IN T.S.NO.18312C1, WARD I, BLOCK NO.6, RAJAJI STREET, CHENGALPATTU WITH A 3 FEET WIDE COMMON PASSAGE (TOT AL AREA INCLUDING THE PASSAGE 1252 SQ.FT) VIDE SALE DEED DT.09.04.2009 REGISTERED AS DOCUMENT NO.1717 OF 200 9 WITH THE JOINT SUB-REGISTRAR II, CHENGALPATTU FOR A SA LE CONSIDERATION OF RS.5,79,7501- (LAND RATE RS.508 PE R SQ.FT) AND OFFERED LONG TERM CAPITAL GAIN OF RS.4,23,4861- WHILE THE ASSESSING OFFICER HAD COMPUTED THE LTCG AS RS.13,85 ,227/- ADOPTING RS.15,41,491/- (LAND RATE RS.1351 PER SQ.F T) AS SALE CONSIDERATION INVOKING SECTION 50C OF THE ACT. 4. THE APPELLANT FURTHER SUBMITS THAT ON A REFERENC E MADE BY THE ASSESSING OFFICER U/S 50C(2) OF THE ACT TO THE VALUATION OFFICER, IN THE COURSE OF THE PROCEEDINGS U/S 16A(5 ) OF THE WT ACT, 1957 R.W SECTION 50C(2) OF THE IT ACT, 1961, T HE APPELLANT HAD RAISED THE FOLLOWING OBJECTIONS. (I) THE SUBJECT PROPERTY IS SITUATED ON THE BACKSID E OF RAJAJI STREET AND IS LAND LOCKED ON 3 SIDES AND ACCESS TO THE PROPERTY IS LIMITED THROUGH A 3 FEET WIDE COMMON PASSAGE ITA NO .3364/2018 :- 3 -: (II)LN VIEW OF THE SEVERE RESTRICTIONS ON THE ACCES S TO THE PROPERTY AND THREAT BY THE OWNER OF THE FRONT PORTI ON TO EXERCISE HIS RIGHT AND CLOSE THE PASSAGE OF REMAINI NG 3 FEET THE APPELLANT WAS COMPELLED TO SELL THE PROPERTY TO THE OWNER OF THE FRONT PORTION. (III) THE PROPERTY ALSO SUFFERED FROM THE DISADVANT AGE OF BEING A MINORS PROPERTY WITH ATTENDANT HAZARDS TO THE PU RCHASER. 5. THE APPELLANT SUBMITS THAT THE ABOVE NEGATIVE IN DICATORS WHICH RESULTED IN RESTRICTED SALE VALUE AS COMPARED WITH THE GUIDE LINE VALUE HAVE NOT BEEN GIVEN DUE WEIGHT / C REDENCE EITHER BY THE VALUATION OFFICER OR BY THE COMMISSIO NER (APPEALS) BEFORE WHOM THE SAID OBJECTIONS WERE URGE D. 6. THE APPELLANT INVITES A REFERENCE TO PARA 5.2 OF THE ORDER DT.05.09.2018 U.S 16A(5) OF THE WT ACT, 1957 R.W.S 50C(2) OF THE IT ACT, 1961 OF THE ASSISTANT VALUATION OFFICER , UNIT II, VALUATION CELL, INCOME TAX DEPARTMENT, CHENNAI WHER EIN UNDER THE HEAD RATES THE VALUATION OFFICER HAS SET OUT THE GUIDELINE VALUE OF HOUSE SITE LAND FURNISHED BY THE JOINT SUB -REGISTRAR II, CHENGALPATTU AS BELOW: FROM 1-4-2003 TO 31-07-2007 FOR RAJAJI SALAI @ RS.5 891- PER SQ.FT AND FROM 01-08-2007 TO 31-03-2012 FOR RAJAJI SALAI @ RS .1000/- PER SQ.FT CONSIDERING THE ABOVE DATA FURNISHED BY THE STAMP V ALUATION AUTHORITY AND THE NEGATIVE INDICATORS REFERRED TO I N GROUND NO.4 ABOVE IT IS SUBMITTED THAT THE VALUE ADOPTED A S RS.1351/- PER SQ.FT FOR THE SUBJECT PROPERTY SOLD ON 09.04.20 09 FOR PURPOSES OF COMPUTATION OF CAPITAL GAIN IS UNREALIS TIC, ARBITRARY AND HIGHLY EXCESSIVE. 7. THE APPELLANT URGES AND SUBMITS THAT THE COMMISS IONER (APPEALS) OUGHT TO HAVE ACCEPTED THE ACTUAL SALE CO NSIDERATION AND THE LONG TERM CAPITAL GAIN ADMITTED AND GRANTED APPROPRIATE RELIEF. 8. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE HONBL E TRIBUNAL BE PLEASED TO ALLOW THE APPEAL AND RENDER JUSTICE. ITA NO .3364/2018 :- 4 -: 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL AND MINOR REPRESENTE D BY MOTHER AND GUARDIAN. THE RETURN OF INCOME FOR THE AY 2010- 11 WAS NOT FILED VOLUNTARILY U/S.139(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSING OFFICER HAD COME TO KNOW THAT HE HA D SOLD THE PROPERTY VIDE DOCUMENT NO.1717/2009, DATED 09.04.20 09 FOR CONSIDERATION OF K5,79,750/- WHOSE MARKET VALUE IS K15,41,491/-. BASED ON THIS INFORMATION, THE ASSESSING OFFICER FO RMED AN OPINION THAT INCOME HAD ESCAPED ASSESSMENT AND ACCORDINGLY ISSUED NOTICE U/S.148 OF THE ACT ON 29.03.2017. AGAINST THE SAI D RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE INCOME TAX OFF ICER, NON CORPORATE WARD 2(2), CHENNAI (HEREIN AFTER REFERRED AS ASSESSING OFFICER) VIDE ORDER DATED14.12.2017 PASSED U/S. 14 3(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS.15,58,020/-. WHILE DOING SO, THE ASSESSING OFFICER ADOPTED VALUE FOR STAMP DUTY PURPOSE AS DEEMED CONSIDERATION UNDER THE PROVISION S OF SECTION 50C OF THE ACT AND ASSESSED TO CAPITAL GAINS. ASSESSEE HAD OBJECTED ADOPTION OF MARKET VALUE AS DEEMED CONSIDERATION AN D REQUESTED THE ASSESSING OFFICER TO REFER THE MATTER TO THE DVO. ACCORDINGLY, THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO. THE REPORT FROM THE DVO WAS NOT RECEIVED BY THE ASSESSING OFFICER. HOW EVER, THE ITA NO .3364/2018 :- 5 -: ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER ADOPTING VALUE FOR STAMP DUTY PURPOSE FOR DEEMED PURPOSE. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A), WHO VIDE IMPUGNED ORDER CONFIRMED THE A CTION OF THE ASSESSING OFFICER (AO). 5. BEING AGGRIEVED BY THE ORDER OF THE CIT(A), THE AP PELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. LD. COUN SEL SUBMITTED THAT ASSESSEE HAD FILED OBJECTIONS BEFORE DVO VIDE LETT ER DATED 10.08.2018. IT WAS CONTENDED THAT THE DVO HAD NOT CONSIDERED THE OBJECTIONS FILED BY THE ASSESSEE, ACCORDINGLY THE V ALUATION REPORT IS NOT VALID IN LAW. THEREFORE, HE SUBMITTED THAT THE MA TTER SHOULD BE REMITTED FOR DENOVO ASSESSMENT. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL RELATES TO ADOPTION OF THE VALUE ADOPTED FOR SALE DEED PURPOSE AS DEEMED CONSIDERATI ON U/S.50C OF THE ACT. ADMITTEDLY, ASSESSEE HAD FILED OBJECTIONS FOR ADOPTION OF THE MARKET VALUE OF THE DEEMED CONSIDERATION U/S.50C OF THE ACT AND THE ITA NO .3364/2018 :- 6 -: ASSESSING OFFICER HAD RIGHTLY REFERRED THE MATTER TO THE DVO, BUT THE REPORT OF THE DVO WAS RECEIVED SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT. THEREFORE, WE ARE OF THE CONSIDERED OP INION THAT THE MATTER SHOULD BE SENT BACK TO THE ASSESSING OFFICER TO THE STAGE OF RECEIPT OF DVO REPORT FOR DENOVO ASSESSMENT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 8TH DAY OF NOVEMBER, 201 9, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED:8TH NOVEMBER, 2019. KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF