ACIT 17(3), MUMBAI V. MITHAILAL S. DALSINGAR SINGH, MUMBAI

ITA 3528/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1272 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Opportunity of being heard; Principle of natural justice; Valuation report
• Section: 143(3); 50C

Judgement Text

1 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.2525 /MUM/2013 ( / ASSESSMENT YEAR : 2006-07) SHRI MITHAILAL S. DALSINGAR SINGH, 501/502, 5 TH FLOOR, ROYAL STATUS CHS LTD., SIR BHALCHANDRA ROAD, DADAR (E), MUMBAI 400 014. / V. ACIT 17(3), 614, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. ./ PAN : AOHPS3278K ( / APPELLANT ) .. ( / RESPONDENT ) ./ I.T.A. NO.3528 /MUM/2013 ( / ASSESSMENT YEAR : 2006-07) ACIT 17(3), 614, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. / V. SHRI MITHAILAL S. DALSINGAR SINGH, SHOP NO. 18, TIMBER TERRACE, K.A. SUBRAMANIUM ROAD, MATUNGA, MUMBAI 400 019. ./ PAN : AOHPS3278K ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI HARI S. RAHEJA REVENUE BY : SHRI SUMAN KUMAR, D.R. / DATE OF HEARING : 03-04-2017 / DATE OF PRONOUNCEMENT : 10-04-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE BEFORE THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI (H EREINAFTER CALLED THE TRIBUNAL). SINCE COMMON ISSUES ARE INVOLVED, THESE CROSS APPEALS ARE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMM ON ORDER FOR THE 2 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 SAKE OF CONVENIENCE AND BREVITY. THESE APPEALS ARE DIRECTED AGAINST THE APPELLATE ORDER DATED 15 TH FEBRUARY, 2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 29, MUMBAI (H EREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2006- 07, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSMENT ORDER DATED 24 TH DECEMBER, 2008 PASSED BY LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INC OME-TAX ACT,1961 (HEREINAFTER CALLED THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO. 2525/MUM/2013 FOR ASSESSMENT YEAR 2006-07 IN THE ME MO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN HOLDING THAT PROVISIONS OF SECTION 50C ARE APPLI CABLE ON SALE/TRANSFER OF CAPITAL ASSETS BEING PLOT NO. 749 AND 750. THE APPELLANT SUBMITS THAT THE PROVISIONS OF SECTIO N 50C ARE NOT APPLICABLE AS THE AGREEMENT FOR SALE WAS NO T REGISTERED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN ACCEPTING THE STAMP DUTY VALUATION OF POWER OF ATTORNEY REGISTERED WITH THE SUB-REGISTRAR OF ASSUR ANCES WITHOUT CONSIDERING VARIOUS NEGATIVE FACTORS ATTACH ED TO THE PROPERTY SOLD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN TAKING THE APPELLANT'S SHARE IN PLOT NO.750 AT 1 /4TH SHARE AS AGAINST APPELLANT'S CLAIM OF 1/8TH SHARE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN TAKING THE DEEMED SALE PRICE OF THE SUBJECT PROP ERTY AT RS. 3,72,42,000/- ON THE BASIS OF VALUATION DONE BY THE STAMPING AUTHORITIES AS ON DATE OF REGISTRATION OF POWER OF ATTORNEY I.E. ON 12.09.2005. THE APPELLANT SUBMITS THAT THE MARKET VALUE SHOULD BE TAKEN AS ON 25.05.1996 I .E. DATE ON WHICH THE M.O.U. WAS SIGNED WITH THE PURCHA SER. 3 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN ACCEPTING THE VALUATION REPORT OF THE DV.O. WITH OUT CONSIDERING ANY OF THE NEGATIVE FACTORS ATTACHED TO THE PROPERTY. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN I TA NO. 3528/MUM/2013 FOR ASSESSMENT YEAR 2006-07 IN THE ME MO OF APPEAL FILED WITH THE TRIBUNAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) AS ERRED IN CONSIDERING THE AASESSEE'S SHARE IN THE PROPERTY SITUATED AT CTS N O.749 AT 1/8TH WITHOUT APPRECIATING THE FACT THAT THE ASS ESSEE ON HIS OWN SHOWN HIS SHARE IN THE SAID PROPERTY AT 1/4TH AND WORKED OUT THE TAXABLE CAPITAL GAINS ACCORDINGL Y IN HIS COMPUTATION OF INCOME FILED ALONG WITH RETURN OF INCOME. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DIRECTING TH E AO TO ALLOW DEDUCTION U/S 54E TO THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE NEITHER CL AIMED THE SAME AS DEDUCTION IN HIS ORIGINAL RETURN NOR TH E RETURN WAS REVISED AND HENCE AGAINST THE RATIO LAID DOWN IN THE CASE OF GOETZE INDIA LTD. VS CIT REPORTED IN 2841TR 323(SC). 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE AS SESSING OFFICER RESTORED. 4. THE GENESIS OF THESE CROSS APPEALS ARE THE INCOM E FROM LONG TERM CAPITAL GAIN WHICH HAD ARISEN TO THE ASSESSEE ON THE SALE OF TWO PLOTS BY THE ASSESSEE BOTH SITUATED AT VILLAGE NAHU R, TALUKA KURLA BHANDUP , ONE PLOT BEARING SURVEY NUMBER 73, CTS NO . 750 ADMEASURING 1600 SQUARE YARDS AND SECOND PLOT BEARI NG SURVEY NO. 63 , CTS NO. 749 ADMEASURING 4000 SQUARE YARDS. TH E DISPUTE HAD ARISEN BETWEEN THE RIVAL PARTIES WITH RESPECT TO TH E SHARE OF THE ASSESSEE IN THE SAID PLOT BEARING SURVEY NO. 63 , C TS NO. 749 ADMEASURING 4000 SQUARE YARDS SITUATED AT VILLAGE NAHUR, TALUKA 4 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 KURLA BHANDUP WHEREIN LEARNED CIT(A) HELD THAT ASSE SSEES SHARE IS 1/8 TH IN THE PLOT SAID PLOT BASED ON DVO FINDINGS , WHI LE LEARNED DR IS CONTENDING THAT THE ASSESSEE SHARE IN THE SAID P LOT BEARING SURVEY NO. 63 , CTS NO. 749 ADMEASURING 4000 SQUARE YARDS SITUATED AT VILLAGE NAHUR, TALUKA KURLA BHANDUP IS 1/4 , WHICH AS PER LEARNED DR HAS LED TO GRAVE MISTAKE COMMITTED BY LEARNED CI T(A) LEADING TO APPELLATE ORDER OF LEARNED CIT(A) BEING SERIOUSLY VITIATED AS THE DETERMINATION OF THE SHARE OF THE ASSESSEE IN THE S AID PLOT GOES TO THE ROOT OF THE MATTER . IT WAS SUBMITTED BY LEARNED DR THAT LEARNED CIT(A) HAS MERELY ACCEPTED DVO REPORT WITHOUT ANY APPLICAT ION OF MIND, WHILE NO FINDING OF FACT HAS BEEN GIVEN BY LEARNED CIT(A) AS TO SHARE OF THE ASSESSEE IN THE SAID PLOT OF LAND. IT WAS SUBMI TTED BY LEARNED DR THAT NO REMAND REPORT WAS CALLED BY LEARNED CIT(A) FROM THE AO FOR HIS COMMENTS BEFORE ACCEPTING THE ASSESSEES CONTEN TION AS TO SHARE IN SAID PLOT AND PRINCIPLES OF NATURAL JUSTICE ARE BREACHED AND IT IS IN VIOLATION OF RULE 46A(3) OF INCOME-TAX RULES, 1962 AS NO OPPORTUNITY FOR REBUTTAL WAS GRANTED TO AO. IT WAS SUBMITTED BY LEARNED DR THAT DVO IS NOT COMPETENT TO DECIDE ABOUT THE SHARE OF T HE ASSESSEE IN PLOT AND THE DVO EXCEEDED HIS JURISDICTION BY SO DECIDIN G THE SHARE OF THE ASSESSEE IN PLOT AS HIS MANDATE IS ONLY RESTRICTED TO DETERMINE THE VALUATION BASED ON PROVISIONS AND MANDATE OF 1961 ACT AND 1962 RULES. THUS, LEARNED DR PRAYED THAT THE APPELLATE ORDER OF LEARNED CIT(A) BE SET ASIDE AND ISSUE MAY BE RESTORED TO TH E FILE OF LEARNED CIT(A) FOR DE-NOVO ADJUDICATION OF THE MATTER ON ME RITS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS N O REGISTERED AGREEMENT WITH THE BUILDER. THE DOCUMENTS REGISTER ED WERE POWER OF ATTORNEYS ONLY AND NOT THE AGREEMENT FOR SALE, HE NCE, SECTION 50C OF 1961 ACT IS NOT APPLICABLE. IT IS CONTENDED THAT T HE AUTHORITIES BELOW ADOPTED STAMP DUTY VALUATION WHICH IS LEGALLY UNSUS TAINABLE. IT IS ALSO SUBMITTED THAT THE DVO HAS NOT CONSIDERED THE OBJECTIONS RAISED BY THE ASSESSEE VIDE LETTER DATED 8.3.2011, SUBMITT ED IN RESPONSE TO NOTICE DATED 09-02-2011 ISSUED BY DVO . THE SAID NO N-CONSIDERATION OF OBJECTIONS HAS LED TO SERIOUS PREJUDICE TO THE A SSESSEE. IT WAS 5 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 SUBMITTED THAT THE MOU W.R.T. THESE PROPERTIES WAS REGISTERED ON 25.05.1996 AND POWER OF ATTORNEY WAS REGISTERED ON 12.09.2005.IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE A LSO THAT MATTER MAY BE SET ASIDE SO THAT THERE IS PROPER CONSIDERAT ION OF THE OBJECTIONS BY THE AUTHORITIES BELOW. THUS, IN NUTSH ELL BOTH THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. D.R. HAD BOTH FAIRLY AGREED THAT THESE ISSUES IN CROSS APPEAL REQUIRES RECONSIDERATI ON BY AUTHORITIES BELOW AND MATTER NEED TO BE SET ASIDE FOR RE-DETERM INATION OF THE ISSUES ON MERITS, AFTER GRANTING PROPER AND SUFFIC IENT OPPORTUNITY TO THE ASSESSEE AND THE AO AS PER RULE 46A(3) OF 1962 RULES, ALSO AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE. THUS, K EEPING IN VIEW FACTUAL MATRIX OF THE CASE , SUBMISSIONS MADE BY BO TH THE PARTIES BEFORE US AS DETAILED ABOVE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, AND ALSO KEEPING IN VIEW THAT PROCEEDINGS HAD BEEN VITIATED AT THE APPELLATE STAGE WITH LD. CIT(A) AS DETAILED ABOVE, WE ARE INCLINED TO SET ASIDE THIS MATTER BACK TO THE FILE OF THE LD. CIT(A ) FOR DE NOVO DETERMINATION OF THE ISSUE ON MERITS AFTER CONSIDER ING THE OBJECTIONS RAISED BY THE ASSESSEE. NEEDLESS TO SAY THE ASSESS EE MAY BE GRANTED PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LA W BY LEARNED CIT(A).THE COGENT EVIDENCES AND EXPLANATIONS SO SUB MITTED BY THE ASSESSEE IN ITS DEFENCE SHALL BE ADMITTED BY LEARNE D CIT(A) IN ACCORDANCE WITH LAW BEFORE ADJUDICATING THE ISSUES IN APPEAL , AFTER FOLLOWING THE MANDATE OF SECTION 46A(3) OF 1962 RUL ES. WE ORDER ACCORDINGLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 2525/MUM/2013 AND APPEAL OF THE REVENUE IN ITA NO. 3528/MUM/2013 FOR ASSESSMENT YEAR 2006-07 ARE ALLOW ED FOR STATISTICAL PURPOSES. 6 ITA NO. 2525/MUM/203 & ITA NO. 3528/MUM/2013 ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2017. !' # $ 10-04-2017 SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER ! MUMBAI ; # DATED 10-04-2017 . ) . ./ R.K. R.K. R.K. R.K. , EX. SR. PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. * / CIT- CONCERNED, MUMBAI 5. +, ))-. , -. , ! / DR, ITAT, MUMBAI B BENCH 6. /0 / GUARD FILE. / BY ORDER, + ) //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI