Bharat Himatlal Mehta, Ahmedabad V. ITO, Ward-5(3)(4), Ahmedabad

ITA 355/AHD/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8848 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 31-10-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Fair market value
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER I .T .A . N o . 3 5 5/ A h d /2 0 19 ( A s s e s s me nt Y ea r : 20 1 4- 15 ) B h ar a t Hi m a tl a l Me hta 9, 4 t h Fl oor , B a ns ar i A pp a r t me n t, R u ks h m an i Par k S o c ie t y, Ka nk a r i a A h m e d a b ad V s . I T O War d - 5 ( 3) ( 4 ) , A h me da ba d [ P AN N o. A C C P M 8 8 3 9K ] (Appellant) .. (Respondent) Appellant by : Shri S. N. Divatia, Adv. & Shri Samir Vora, A.R. Respondent by : Shri V. K. Mangla, JCIT D a t e of H ea r i ng 01.11.2022 D a t e of P r o no u n ce me nt 09.11.2022 O R D E R PER SUCHITRA KAMBLE - JM: This appeal is filed by the assessee against the order dated 28.12.2018 passed by the Ld. CIT(Appeals)-5, Ahmedabad for A.Y. 2014-15. 2. The grounds of appeal raised by the assessee read as under: “1.1 The order passed u/s.250 on 28-12-2018 for A.Y.2014-15 by CIT(A)-5 A’bad confirming the FMV as on 1-4-1981 at Rs. 1,66,000/- as per DVO as against value as per Regd Valuer at Rs.4,10,700/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant in respect of FMV as on 1-4-1981. ITA No. 355/Ahd/2019 Bharat Himatlal Mehta vs. ITO Asst.Year –2014-15 - 2 - 2.1 The ld. CIT(A) has grievously erred in law and or on facts in confirming the FMV as on 1-4-1981 at Rs. 1,66,000/- as per DVO as against value as per Regd valuer at Rs.4,10,700/-. 2.2 That in the facts and circumstances of the case as well as n law, the ld. CIT(A) ought not to have confirming the FMV as on 1-4-1981 at Rs. 1,66,000/- as per DVO as against value as per Regd valuer at Rs.4,10,700/-. 2.3 The learned A.O. ought to have allowed exemption U/s 54F in respect of new Residential house property purchased which was not claimed due to long term capital loss declared in the return. It is therefore prayed that the LTCG be assessed as per Regd valuer’s report instead of DVO and addition may be deleted.” 3. The assessee filed return of income on 05.08.2014 declaring total income of Rs. 31,340/-. The assessee derives income from dividend and interest. During the year under consideration the assessee has sold property at Rajpur-Hirpur, TP Scheme No. 4. On sale of this property the Long Term Capital Loss (LTCL) was worked out at (-)Rs. 87,45,388/-. The assessee submitted the working of the land rate of Ahmedabad Stamp Duty city division-1 (ready reckoner). The Assessing Officer observed that the cast of property of Rs. 15,22,299/- determined by the assessee appeared to be very high for the year 1981-82 and therefore, the matter was referred to District Valuation Officer (DVO) to work out the cost of the property at Rs. 1,66,000/- as on 01.04.1981. The assessee claim indexation of Rs. 15,22,299/-. The Assessing Officer observed that the assessee did not produce any documentary evidence of the creation of the Banakhat and the repayment for the cancellation of the Banakhat. The Assessing Officer made addition of Rs. 51,90,000/- as Long Term Capital Gain (LTCG). ITA No. 355/Ahd/2019 Bharat Himatlal Mehta vs. ITO Asst.Year –2014-15 - 3 - 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. As regards, Ground No. 1.1 and 1.2 as well as 2.1 and 2.2 the Ld. A.R. submitted that the entire reference made under Section 55A(2)(b)(i) was illegal because Assessing Officer had not pointed out any reasons or justifying circumstances for making the reference to District Valuation Officer (DVO) and not accepting the ready reckoner rate. The Ld. A.R. further submitted that he has obtained a fresh valuation report dated 11.10.2017 who has estimated fair market value as on 01.04.1981 at Rs. 4,10,700/-. The registered valuer’s report submitted as additional evidence and remand report was called for, however, CIT(A) has not fully considered the objection of the assessee related to DVO. As regards, Ground No. 2.3 which is an alternative plea wherein the assessee should be allowed exemption under Section 54F of the Act in respect of new residential house property purchase which was not claimed due to Long Term Capital Loss declared in the return. 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the DVO’s report has not taken cognizance of the commercial property and therefore, the matter needs appropriate adjudication and verification, therefore, it will ITA No. 355/Ahd/2019 Bharat Himatlal Mehta vs. ITO Asst.Year –2014-15 - 4 - be appropriate to remit back this issue to the file of the Assessing Officer for proper adjudication and taking cognizance of the DVO’s report along with registered valuer’s report. Needless to say the assessee be given opportunity of hearing by following principles of natural justice. 8. In result, appeal of the assessee is partly allowed for statistical purposes. This Order pronounced in Open Court on 09/11/2022 Sd/- Sd/- (WASEEM AHMED) ACCOUNTANT MEMBER (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 09/11/2022 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 02.11.2022 2. Date on which the typed draft is placed before the Dictating Member 02.11.2022 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S .11.2022 5. Date on which the fair order is placed before the Dictating Member for pronouncement .11.2022 6. Date on which the fair order comes back to the Sr.P.S./P.S 09 .11.2022 7. Date on which the file goes to the Bench Clerk 09.11.2022 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................