R.Premkumaran, CHENNAI V. ACIT, CHENNAI

ITA 346/CHNY/2015

• Counselvise Citation: 34621714 RSA 2015
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 03-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-02-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T BANUSEKAR
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Depreciation; Valuation report
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! , ' #$ BEFORE SHRI N.R.S.GANESAN, JUDICIAL MMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO. 346/MDS/2015 / ASSESSMENT YEAR : 2005-06 R. PREMKUMARAN, NO.8, (OLD NO.11), KAMARAJ PARK STREET, ROYAPURAM, CHENNAI 600 013. PAN AAEPP8602P APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-VI(2), CHENNAI. RESPONDENT) / APPELLANT BY : SHRI T. BANUSEKAR, FCA / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT ! / DATE OF HEARING : 03.08.2015 '# ! / DATE OF PRONOUNCEMENT: 28.08.2015 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 28 .11.2014. - - ITA 346/1 5 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO REOPENING OF ASSESSMENT AND ALSO ADOPTION OF VALUATION MADE BY THE DEPARTMENT VALUATION OFFICER FOR THE PURPOSE OF DETERMINING THE SALE CONSIDERATION IN TE RMS OF SEC.50C(2) OF THE I.T. ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SOLD A PROPERTY SITUATED AT BUILDING NO.8, KAMARAJ PARK ST ., ROYAPURAM, CHENNAI -13. THE SALE CONSIDERATION AS PER THE REG ISTERED DOCUMENT WAS ` 15 LAKHS. HOWEVER, THE SALE CONSIDERATION WAS FOUND TO BE VALUED AT ` 44,20,000/- FOR THE PURPOSE OF STAMP DUTY AS PER THE SALE DEED EXECUTED VIDE SALE DEED NO.207 5/2004 DATED 23.06.2004. THE ASSESSEE DID NOT FILE THE RE TURN OF INCOME BEFORE DUE DATE OF FILING OF RETURN. THE AS SESSEE HAS NOT OFFERED CAPITAL GAIN TAX FOR THE ASSESSMENT YEAR. THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE ACT ON 28.1.20 10. THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED, FILED A RETURN ON 4.3.2010 SHOWING TOTAL INCOME OF ` 44,42,839/-. THOUGH THE ASSESSING OFFICER REFERRED THE MATTER TO THE DVO, V ALUATION REPORT WAS NOT RECEIVED AT THE TIME OF ASSESSMENT. HOWEVER, THE ASSESSING OFFICER DETERMINED THE LONG TERM CAPITAL GAIN AT ` 42,82,136/- BY ADOPTING THE SALE CONSIDERATION OF ` 44,20,000/- - - ITA 346/1 5 3 U/S.50C OF THE ACT AND ASSESSED THE INCOME AT ` 44,92,140/-. WHILE DOING SO, THE ASSESSING OFFICER ALSO DISALLOW ED THE CLAIM OF COST OF IMPROVEMENT OF PROPERTY DURING YEAR 1998 -99, 1999- 2000 AT ` 5,41,000/- AND ` 2,93,750/- RESPECTIVELY, AS THE ASSESSEE DID NOT PRODUCE THE DOCUMENTARY EVIDENCE F OR INCURRING THE COST OF IMPROVEMENT OF THE PROPERTY. AGGRIEVED BY THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMIS SIONER OF INCOME-TAX(APPEALS). 4. IN THE COURSE OF APPELLATE PROCEEDINGS, THE COMM ISSIONER OF INCOME-TAX(APPEALS) REMANDED THE MATTER TO THE A SSESSING OFFICER AND THE ASSESSING OFFICER ESTIMATED THE VAL UE OF THE PROPERTY AT ` 29,56,000/- AS AGAINST ` 44,20,000/- ADOPTED BY HIM AT THE TIME OF ASSESSMENT. IN THE MEANWHILE, T HE ASSESSEE PRODUCED A COPY OF VALUATION REPORT BY A REGISTERED VALUER, SRI K.N.GANESAN, CIVIL ENGINEER DATED 19.11.2010 AT ` 17,59,261/- HOWEVER, THE COMMISSIONER OF INCOME-TAX(APPEALS), H AS NOT AGREED WITH THE VALUATION REPORT BY THE REGISTERED VALUER BY OBSERVING THAT THE DISTRICT VALUATION OFFICER CONSI DERED ALL THE OBJECTIONS OF THE ASSESSEE AND ADOPTED VALUE OF THE LAND AT ` 636.30 PER SQ.FT. AS AGAINST THE GUIDELINE VALUE OF LAND AT ` 909 - - ITA 346/1 5 4 PER SQ.FT. THE TOTAL AREA OF THE LAND WAS AT 3600 SQ.FT. THE DVO ADOPTED THE VALUE OF THE LAND AT ` 22,90,680/- CONSIDERING THE GRADED DEPRECIATION IN THE VALUE OF THE IAND DUE TO PECULIAR FACTS OF THE CASE. SIMILARLY, THE DVO ALSO VALUED T HE VALUE OF THE BUILDING AT ` 8,73,256/- AFTER CONSIDERING THE VARIOUS OBJECTIONS OF THE ASSESSEE AND ALSO CONSIDERING THE DEPRECIATION OF THE BUILDING. THE CIT(APPEALS) OBS ERVED THAT THE VALUATION DETERMINED BY THE DISTRICT VALUA TION OFFICER WAS BASED ON MATERIAL FACTS AND ALSO BASED ON COMPA RABLE INSTANCES. ON THE OTHER HAND, THE OPINION GIVEN BY THE REGISTERED VALUER SRI R.NILAKANTAN ON THE VALUATION DONE BY THE DVO WAS NOT BASED ON ANY MATERIAL FACTS AND ALS O WAS NOT BASED ON ANY COMPARABLE INSTANCE. THE OPINION G IVEN BY REGISTERED VALUER SRI R.NILAKANTAN WAS JUST ESTI MATION WITHOUT ANY SCIENTIFIC DATA. THE CIT(APPEALS) FURTH ER SUBMITTED THAT THE REASONS GIVEN BY SRI R.NILAKANTA N, REGISTERED VALUER FOR ESTIMATING THE VALUE OF THE B UILDING ARE ALSO NOT BASED UPON ANY SCIENTIFIC DATA. UNDER THE CIRCUMSTANCES, THE VALUE OF THE PROPERTY BOTH LAND AND BUILDING ESTIMATED BY REGISTERED VALUER SRI R.NILAK ANTAN IS - - ITA 346/1 5 5 REJECTED BY THE CIT(APPEALS). REGARDING THE REJECTI ON OF THE COST OF IMPROVEMENT CLAIMED BY THE ASSESSEE, THE CI T (APPEALS) HELD THAT THE AO HAD RIGHTLY REJECTED THE CLAIM AS NO DOCUMENTARY EVIDENCE WAS PRODUCED BY THE ASSESSE E FOR INCURRING EXPENDITURE FOR IMPROVEMENT, IF ANY, EVEN DURING THE APPELLATE PROCEEDINGS. ACCORDING TO HIM, THE RE LIANCE MADE BY THE AR OF THE ASSESSEE ON THE VALUATION REP ORT GIVEN BY SRI N.GANESAN, CIVIL ENGINEER IS ALSO NOT ACCEPTABLE AS SRI N.GANESAN WAS NOT AN APPROVED VAL UER, AS POINTED OUT BY THE DVO IN HIS REPORT DATED 31.10 .2012 AND ALSO DUE CREDIT WITH RESPECT TO RCC ROOFED STRU CTURE AND AC ROOF STRUCTURE WAS ALREADY GIVEN BY THE DVO IN H IS REPORT DATED 31.10.2012. FURTHER, THE CIT(APPEALS) OBSERVED THAT THE DVO IN HIS REPORT DATED 31.10.201 2 MENTIONED THAT THE AC SHEETED SHED WAS A RECENT CONSTRUCTION. THEREFORE, THE CLAIM OF THE ASSESSEE THAT THE CONSTRUCTION WAS MADE IN THE F.Y. 1997-98 & 1998-99 WAY BACK 12 YEARS AND CREDIT IS REQUIRED, TO BE GIVEN IS REJECTED BY THE CIT(APPEALS). MOREOVER, NO DOCUMENTARY EVIDE NCE IS FORTHCOMING FROM THE AR OF THE ASSESSEE ABOUT THE COST - - ITA 346/1 5 6 OF IMPROVEMENT, IF ANY. UNDER THE FACTS AND CIRCUMS TANCES OF THE CASE, THE CIT(APPEALS) REJECTED ALL THE CONT ENTIONS OF THE AR OF THE ASSESSEE AND DIRECTED THE AO TO AD OPT THE VALUE OF ` 29,56,500/- AS DETERMINED BY THE DVO FOR THE PURPOSE OF ARRIVING AT CAPITAL GAINS U/S 50C OF THE IT ACT. HOWEVER, THE CIT (APPEALS) FAILED TO DEAL WITH THE ISSUE OF REOPENING OF ASSESSMENT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS PAID SALE CONSIDERATION OF ` 15 LAKHS ON 5.2.2003, THOUGH THE SALE DEED WAS EXECUTED ON 23.6.2004. FU RTHER, HE SUBMITTED THAT THE POSSESSION OF THE PROPERTY WA S HANDED OVER TO THE PURCHASER ONLY AFTER THREE YEARS OF THE SALE DEED AND THE ASSESSEE HIMSELF WAS STAYING THE SAID PROPERTY AND ENJOYED THE POSSESSION OF THE PROPERTY . FURTHER, THE LD. AR SUBMITTED THAT THE ISSUE RELATI NG TO REOPENING WAS NOT ADJUDICATED BY THE CIT(APPEALS). WE HAVE GONE THROUGH THE ORDER OF THE CIT(APPEALS). ADMITTEDLY, WE FIND THAT THE ASSESSEE HAS RAISED TH E ISSUE - - ITA 346/1 5 7 REGARDING THE REOPENING OF ASSESSMENT AS GROUND NO. 2 BEFORE THE CIT(APPEALS) BUT THE SAME WAS NOT ADJUDI CATED BY HIM. HOWEVER, THE CIT(APPEALS) DEALT WITH THE I SSUE OF ADOPTION OF VALUE OF SALE CONSIDERATION FOR DETERMI NING THE CAPITAL GAINS. IN OUR OPINION, THE ISSUE OF REOPEN ING OF ASSESSMENT WILL GO TO THE ROOT OF THE MATTER AND IT IS APPROPRIATE TO DECIDE THIS ISSUE FIRST BEFORE DECID ING THE ISSUE RELATING TO THE ADDITION MADE BY THE AO. ACC ORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT THE ISSUE OF R EOPENING TO THE FILE OF THE CIT(APPEALS) FOR FRESH ADJUDICATION AND HE SHALL DECIDE THIS ISSUE FIRST AND THEREAFTER HE HAS TO DECIDE OTHER ISSUES IF NECESSARY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 28 TH OF AUGUST, 2015 AT CHENNAI. SD/- SD/- ( $ . . $ . %& ) ( ' ( ) * ) N.R.S.GANESAN + ,-./01.2334.15+ 6 78 /JUDICIAL MEMBER ! 789::3;/<./<=>?@>1 '6 /CHENNAI, A7 /DATED, THE 28 TH AUGUST, 2015. MPO* - - ITA 346/1 5 8 7& BCDC /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. E+ /CIT(A) 4. E /CIT 5. CF% G /DR 6. %HI /GF.