Vimalchand Jain, Chennai V. ITO, Non Corporate Ward 6(3), Chennai

ITA 357/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4203 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Valuation report
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI S.JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.357/CHNY/2018 / ASSESSMENT YEAR : 2009-10 MR.S.D.VIMALCHAND JAIN , HUF AADINATH COMPLEX, NO.124,NSC BOSE ROAD, CHENNAI 600 079. VS. INCOME TAX OFFICER, NON CORPORATE WARD-6(3), CHENNAI-6. PAN AAKHS 9450 E ( / APPELLANT) ( /RESPONDENT) WTA NO.4/CHNY/2018 ASSESSMENT YEAR :2008-09 MR.S.D.VIMALCHAND JAIN (HUF) NO.55,NSC BOSE ROAD, SOWCARPET, CHENNAI 600 079. VS. WEALTH TAX OFFICER, NON CORPORATE WARD-6(3), CHENNAI-6. PAN AAKHS 9450 E ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.D.ANAND, ADVOCATE !' /RESPONDENT BY : MR.CLEMENT RAMESH KUMAR, ADDITIONAL CIT, D.R # $ %& / DATE OF HEARING : 01 - 1 0 - 201 8 '( %& / DATE OF PRONOUNCEMENT : 04 - 1 0 - 201 8 ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 2 -: ! / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO.357/CHNY/2018 & WTA NO.4/CHNY/2018 ARE TH E APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHENNAI IN ITA NO.38/CI T(A)-5/CHENNAI FOR THE ASSESSMENT YEAR 2009-10 & IN ITA NO.220/CIT (A)-5/ 2016-17 BOTH DATED 04.12.2017 FOR THE ASSESSMENT YEAR 2008 -09 RESPECTIVELY. 2. MR.D.ANAND REPRESENTED ON BEHALF OF THE ASSESSEE, AND MR.CLEMENT RAMESH KUMAR REPRESENTED ON BEHALF THE OF THE REVENUE. ITA NO.357/CHNY/2018 3. IT WAS SUBMITTED BY THE LD.A.R THAT THE ASSESSE E IS A HUF, WHO IS IN THE BUSINESS OF MONEY LENDING. IT WAS A SUBMISSION THAT THE ASSESSEE HAD SOLD AN IMMOVABLE PROPERTY DURING THE RELEVANT ASSESSMENT YEAR, WHICH WAS LAND AND BUILDING AT OLD DOOR NO.3/17,NEW DOOR NO.83,ANNA SALAI,CHENNAI-2. IT WAS A SUBMISSION THAT THE SAID PROPERTY WAS SOLD FOR ` 85 LAKHS. IT WAS A SUBMISSION THAT THE LD. ASSESSING OFFICER HAD COMPLETED THE ASSESSM ENT U/S.143(3) OF THE ACT ON 31.12.2011 BY INVOKING THE PROVISIONS OF THE SECTION 50C OF THE ACT AT ` 1,28,78,625/-. IT WAS A FURTHER SUBMISSION THAT THE ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 3 -: ASSESSEE PREFERRED AN APPEAL BEFORE THE ITAT AND TH E TRIBUNAL VIDE ITS ORDER NO.ITA NO.1207/MDS/2013 DATED 01.01.2016 HAD RESTORED THE ISSUE TO THE FILE OF LD. ASSESSING OFFICER WITH A D IRECTION TO REFER THE MATTER TO THE DVO AND TO OBTAIN VALUATION IN RESPEC T OF THE SAID PROPERTY FROM THE DVO. IT WAS A SUBMISSION THAT THE DVO HAD FURNISHED HIS VALUATION REPORT DATED 25.05.2017, VA LUING THE PROPERTY AT ` 92,52,000/-. IT WAS A SUBMISSION THAT WHEN VALUING THE PROPERTY, THE DVO HAD MADE AN ADDITION ON ACCOUNT OF TIME GAP , BETWEEN 01.08.2007 TO 31.05.2008, A INCREASE IN LAND RATE O N ` 5601/- SQ.FT. @ 11% PER ANNUM AND CONSEQUENTLY FOR 10 MONTHS INCREA SED THE VALUE BY ` 514/- PER SQ.FT. IT WAS A SUBMISSION THAT THE ASSES SEE HAVING DISCLOSED THE VALUE AT ` 85,51,828/- WAS THE VALUE AT WHICH THE PROPERTY WAS SOLD AND THE DVO HAVING ARRIVED AT ` 92,52,000/-,THE SAME WAS WITHIN A VARIATION OF LESS THAN 15% AND AS PER THE PROVISIONS OF THE SECTION 55A(B)(I) OF THE ACT, THE VARIATION BEING LESS THAN 15%, NO ADDITION WAS LIABLE TO BE MADE AND THE VALUATION AS DECLARED BY THE ASSESSEE WAS LIABLE TO BE ADOPTED FOR THE PURPOSE O F COMPUTING THE LONG TERM CAPITAL GAINS. 4. IN REPLY, THE LD.D.R VEHEMENTLY SUPPORTED THE O RDER OF THE CIT(APPEALS). ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 4 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF PROVISIONS OF THE SECTION 55A(B)(I) OF THE ACT CLEA RLY SHOWS THAT VARIATION OF 15% IS PERMITTED IN RESPECT OF VALUATI ON AS DISCLOSED BY THE ASSESSEE AND AS VALUED BY THE DVO. HERE, THE D IFFERENCE BETWEEN THE SALE CONSIDERATION AS DISCLOSED BY THE ASSESSEE AND AS ARRIVED AT BY THE DVO IS ONLY ` 7,14,110/-, WHICH IS LESS THAN 10%, CLEARLY NO ADDITION IS LIABLE TO BE MADE AND THE LONG TERM CAP ITAL GAINS IS TO BE COMPUTED BY APPLYING THE VALUE AS DISCLOSED BY THE ASSESSEE. CONSEQUENTLY, THE ADDITION AS MADE BY THE LD. ASSES SING OFFICER AND CONFIRMED BY THE LD.CIT(A), STANDS DELETED. 5.1 WE ARE NOT GOING INTO ESTIMATING THE NET VALUE OF LAND UNDER THE PRETEXT OF PROBABLE INCREASE IN LAND VALUE ON A CCOUNT OF TIME GAP BETWEEN GUIDELINE VALUE DATE AND THE TRANSACTION DA TE AS THE ADDITION MADE BY THE LD. ASSESSING OFFICER AND SUSTAINED BY THE LD.CIT(A), IS BEING DELETED ON ACCOUNT OF VARIATION WHICH IS LESS THAN 10% IN VIEW OF THE PROVISIONS OF THE SECTION 55A(B)(I) OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.357/CHNY/2018 STANDS ALLOWED. ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 5 -: WTA NO.04/CHNY/2018 7. IT WAS SUBMITTED BY LD.A.R THAT THIS IS AN APPE AL AGAINST THE WEALTH TAX VALUATION DONE BY THE LD. ASSESSING OFFI CER. IT WAS A SUBMISSION THAT THIS WAS THE SINGLE PROPERTY OWNED BY THE ASSESSEE AND CONSEQUENTLY NO WEALTH TAX WAS LIABLE TO BE ASS ESSED IN THE HANDS OF THE ASSESSEE IN SO FAR AS SINGLE ASSET IS EXEMPT UNDER THE WEALTH TAX ACT, ALSO ON ACCOUNT OF THE FACT THAT THIS WAS RENTED OUT PREMISES DURING THE RELEVANT ASSESSMENT YEAR, WHEN IT WAS SO LD. 8. IN REPLY, THE LD.D.R SUBMITTED THAT THIS WAS TH E ONLY PROPERTY, HAS NOT BEEN VERIFIED BY THE LD. ASSESSIN G OFFICER. IT WAS A SUBMISSION THAT HE HAD NO OBJECTION, IF THE ISSUES WERE RESTORED TO THE FILE OF THE AO FOR RE-ADJUDICATION. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTICED THAT THE PROPERTY AT OLD DOOR NO.3/17, NEW DOOR NO.83, ANNA SALAI,CHENNAI-2, WHICH HAS BEEN SOLD BY THE ASSESSEE, WAS THE ONLY PROPERTY OWNED B Y THE ASSESSEE AND AS TO WHETHER IT WAS A RENTED OUT PREMISES HAS NOT BEEN ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 6 -: CONSIDERED BY THE LD. ASSESSING OFFICER. THIS BEIN G SO, IN THE INTEREST OF JUSTICE, THIS ISSUE IS RESTORED TO THE FILE OF L D. ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTING ADEQUATE OPPORTUNITY OF BEING HEARD. THE LD. ASSESSING OFFICER IS TO VERIFY WHETHER IT I S ONLY THE PROPERTY OWNED BY THE ASSESSEE AND AS TO WHETHER THIS WAS A TENANT PROPERTY DURING THE RELEVANT TIME. IN THE EVENT, ANSWER TO A NY OF THE SAID ISSUES IN POSITIVE, THEN NO WEALTH TAX IS LIABLE TO BE LEV IED IN RESPECT OF THE SAID PROPERTY. HERE, AS PER THE VALUATION REPORT PA CED BEFORE US, IN THE DESCRIPTION OF THE PROPERTY REGARDING THE OWNERSHIP HISTORY, IT DOES MENTION THAT PROPERTY IS A TENANTED PROPERTY. THOUG H WE CAN ANALYZE ALL SUCH DOCUMENTS AS IT IS RECORDED BY THE DVO, ST ILL THIS ISSUE IS RESTORED TO THE FILE OF LD. ASSESSING OFFICER FOR R E-ADJUDICATION AS THIS ISSUE HAS NOT BEEN CONSIDERED BY THE LD. ASSESSING OFFICER AND THE LD.CIT(A). IN THE CIRCUMSTANCES, THE ISSUE IN THIS APPEAL IS RESTORED TO THE FILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATI ON AFTER GRANTING ADEQUATE OPPORTUNITY OF BEING HEARD. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN W TA NO.04/CHNY/2018 STANDS PARTLY ALLOWED FOR STATISTIC AL PURPOSES. ITA NO.357/CHNY/2018 WTA NO.4/CHNY/2018 :- 7 -: 11. TO SUMMARIZE THE RESULT, THE APPEALS OF THE AS SESSEE IN ITA NO.357/CHNY/2018 IS ALLOWED, AND IN WTA NO.04/CHNY/ 2018 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 04 TH OCTOBER, 2018, AT CHENNAI. SD/ - SD/ - ( ) (S. JAYARAMAN) ' # /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ # / JUDICIAL MEMBER ) $ / CHENNAI * / DATED: 04 TH OCTOBER, 2018. K S SUNDARAM + !%,- . -% / COPY TO: 1 . / APPELLANT 4. # /% / CIT 2. !' / RESPONDENT 5. -01 !%2 / DR 3. # /% () / CIT(A) 6. 15 6$ / GF