Shri Bhaveshbhai Hirabhai Talavia, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(1), RAJKOT-GUJARAT

ITA 345/RJT/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2356 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 23-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHAKRAVARTY
• Assessee Lawyers: RD LALCHANDANI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , ! , ! #$ BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.345/RJT/2013 ( / ASSESSMENT YEAR : 2008-09) SHRI BHAVESHBHAI HIRABHAI TALAVIA C/O. M/S.PATEL TIMBER MART 7 LALI PLOT, KUVADVA ROAD RAJKTO / VS. THE INCOME TAX OFFICER WARD-1(1), RAJKOT !) ./ ./ PAN/GIR NO. ACVPP 1735 C ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+. / APPELLANT BY : SHRI R.D. LALCHANDANI, ADV. ,-)+/. / RESPONDENT BY : SHRI V.K. CHAKRAVARTY, D.R. 0/ / DATE OF HEARING 30/12/2015 12 / / DATE OF PRONOUNCEMENT 13/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, RAJKOT [CIT(A) IN SHORT] DATED 18/7/2013 PERTAINING TO ASSESSMENT YEAR (AY) 2008-09. THE ONLY EFFECTIVE GROUND OF THE ASSESSEE READS AS UNDER:- ITA NO.345/RJT/ 2013 SHRI BHAVESHBHAI HIRABHAI TALAVIA VS. ITO ASST.YEAR 2008-09 - 2 - THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN CONFIRMING ADDITION OF RS.1,87,307/- UNDER THE PROVISIONS OF S ECTION 50C OF THE ACT. THE ADDITION IS NOT JUSTIFIED. WITHOUT PREJUDICE TO GROUND NO.1 THE MATTER WAS NOT REFERRED TO THE VALUATION DEPARTMENT TO WORK OUT THE MARKET VALUE. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 27/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.1,87,307/- ON ACCOUNT OF THE VALUATI ON ADOPTED BY THE STAMP VALUATION OF THE AUTHORITY. THE ASSESSEE BE ING AGGRIEVED BY THE ASSESSMENT ORDER, PREFERRED AN APPEAL BEFORE THE LD .CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISS ED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE AS SESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE, SHRI R.D. LALCH ANDANI, ADVOCATE SUBMITTED THAT THE AUTHORITIES BELOW HAVE MISDIRECT ED THEMSELVES. HE SUBMITTED THAT THE ACTION OF THE AUTHORITIES BELOW IS CONTRARY TO THE LAW. HE SUBMITTED THAT THE ASSESSEE BY MISTAKE PURCHASED THE STAMP-PAPERS OF A HIGHER VALUE. HOWEVER, THE SALE CONSIDERATION WA S LESSER AND HIGHER THAN THE CIRCLE RATE. THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE AO PROCEEDED ON THE BASIS OF THE FORM NO.1 ATTACHED WITH THE SALE-DEED. HE SUBMITTED THAT THE VALUATION WAS TAKE AS PER THE STAMP PAPER. HE ITA NO.345/RJT/ 2013 SHRI BHAVESHBHAI HIRABHAI TALAVIA VS. ITO ASST.YEAR 2008-09 - 3 - SUBMITTED THAT THE AO, IN CASE, WAS NOT SATISFIED W ITH VALUATION DECLARED BY THE ASSESSEE OUGHT TO HAVE REFERRED TO THE DVO F OR ASCERTAINING MARKET VALUE. 3.1. ON THE CONTRARY, LD.DR SHRIV.K. CHAKRAVARTY S UPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE TO BE DETERMINED IS WHETHER SECTION 50C OF THE ACT WOULD BE APPLICABLE ON THE FACTS OF THE PRESENT CASE. UN DISPUTEDLY, AS PER SECTION 50C OF THE ACT, THE AO IS AUTHORIZED TO ADO PT THE VALUE OF AN IMMOVABLE ASSET ON THE BASIS OF THE VALUE ADOPTED O R ASSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURP OSE OF PAYMENT OF STAMP DUTY IN RESPECT OF TRANSFER OF IMMOVABLE ASSE T. IN THE PRESENT CASE, THE STAMP VALUATION AUTHORITY HAVE ADOPTED TH E VALUE OF THE STAMP- PAPERS SUBMITTED BY THE ASSESSEE. THERE IS NO MATE RIAL ON RECORD THAT THE ASSESSEE HAS MADE ANY REPRESENTATION TO THE STAMP V ALUATION AUTHORITY FOR REFUND OF THE STAMP DUTY PAID IN EXCESS. IT IS ALS O NOT IN DISPUTE THAT WHEN THE AO PROCEEDED ON THE BASIS OF THE VALUE ADO PTED BY THE STAMP VALUATION AUTHORITY, HOWEVER, THE AO OUGHT TO HAVE REFERRED THE VALUATION OF THIS CAPITAL ASSET TO A VALUATION OFFI CER WHEN THE ASSESSEE CLAIMS THAT THE STAMP VALUATION AUTHORITY HAS ADOPT ED OR ASSESSED THE ITA NO.345/RJT/ 2013 SHRI BHAVESHBHAI HIRABHAI TALAVIA VS. ITO ASST.YEAR 2008-09 - 4 - VALUE IN EXCESS OF THE FAIR MARKET VALUE OF THE PRO PERTY AS ON DATE OF TRANSFER. THE LD.COUNSEL FOR THE ASSESSEE HAS POIN TED OUT THAT SUCH CLAIM WAS MADE BEFORE THE AO AND THE AO WITHOUT REFERRING THE ISSUE OF VALUATION OF CAPITAL ASSET WITH REGARD TO ITS FAIR MARKET VALUE TO THE VALUATION AUTHORITY AD PROCEEDED TO ADOPT THE VALUA TION AS RECORDED BY THE STAMP VALUATION AUTHORITY IN FORM NO.1. THE LD .COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGEMENT OF THE HO NBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT ALLD AND ANR. VS. SHRI CHANDRA NARAIN CHAUDHRI IN INCOME TAX APPEAL NO.287 OF 2011, WHERE IN THE HONBLE HIGH COURT HAS HELD THAT THE AO HAS TO RECORD VALID REASONS, WHICH ARE JUSTIFIABLE IN LAW. HE IS NOT REQUIRED TO ADOPT AN EVASIVE APPROACH OF APPLYING DEEMING PROVISION WITHOUT DECIDING THE OBJ ECTION OR TO REFER THE MATTER TO THE DVO UNDER SECTION 55-A OF THE ACT AS A MATTER OF COURSE. IN THE PRESENT CASE, THE AO HAS NOT REFER TO THE MA TTER TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE OF THE CAPITAL ASS ET. MOREOVER, THE ASSESSEE HAS POINTED OUT THAT DUE TO INADVERTENT MI STAKE IN CALCULATION OF STAMP DUTY PAYABLE, THE STAMP VALUATION AUTHORITY A DOPTED THE VALUE ON THE BASIS OF STAMP-PAPER SUBMITTED, WITHOUT REFERRI NG TO PREVALENT JANTRI VALUE (CIRCLE VALUE) AND SALE CONSIDERATION. UNDER THESE FACTS, WE ARE UNABLE TO CONFIRM THE FINDINGS OF THE AUTHORITIES B ELOW AND, ACCORDINGLY, DIRECT THE AO TO DELETE THE ADDITION. THUS, GROU ND RAISED IN THE ASSESSEES APPEAL IS ALLOWED. ITA NO.345/RJT/ 2013 SHRI BHAVESHBHAI HIRABHAI TALAVIA VS. ITO ASST.YEAR 2008-09 - 5 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 13 TH DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ! ! ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13/ 01 /2016 . .,.. ./ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-I, RAJKOT 5. 9:, , , /DR,ITAT,RAJKOT 6. :EFG0 / GUARD FILE. / BY ORDER, -9, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION 8.1.16 (DICTATION-PAD 9- PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..8.1.16 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 13.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER