M/s Talati Marketing, Indore V. The ITO, Indore

ITA 358/IND/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9515 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR MITRA
• Assessee Lawyers: SHANKAR SINGH ITP
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Valuation report
• Section: 50C; 37

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.358/IND/2010 A.Y. 2007-08 M/S. TALATI MARKETING CO., 175, SR COMPOUND, A.B. ROAD, INDORE PAN AAGFK 3888 E APPELLANT VS ITO-3(1), INDORE RESPONDENT APPELLANT BY : SH. SHANKAR SINGH, ITP RESPONDENT BY : SH. PRADEEP KUMAR MITRA, SR. DR O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A)-I, INDORE, DATED 16.3.2010 ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF LONG TERM CAPITAL GAIN OF RS.12,61,000/ - CALCULATED TO RS.12,61,000/- BY THE LD. ASSESSING OFFICER AGAINST THE LONG TERM CAPITAL GAIN OF RS.1,69,160/- DISCLOSED AND CALCULATED BY THE 2 ASSESSEE WHILE FILING THE INCOME TAX RETURN. THE LD. ASSESSING OFFICER MADE THE ADDITION WITHOUT REFERRING THE MATTER TO THE VALUATION OFFICER. 2. THAT THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE ILLEGAL ACTION OF THE ASSESSING OFFICER OF APPLYING THE PROVISIONS OF SECTION 50C. 3. THAT THE LD. CIT(A) FURTHER ERRED IN NOT CONSIDERING THE VALUATION REPORT DATED 18.2.2010 ISSUED BY APPROVED REGISTERED VALUER MAHESH AGRAWAL & ASSOCIATES, INDORE. THE LD. CIT(A) IS UNJUSTIFIED IN CONSIDERING THE VALUATION REPORT FIL ED ALONG WITH AN APPLICATION UNDER RULE 46A. 4. THAT THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.20,900/- ON ACCOUNT OF SERVICE TAX MADE BY THE LD. ASSESSING OFFICER. 2. DURING HEARING OF THE APPEAL, WE HAVE HEARD SHRI SHANKAR SINGH, LD. COUNSEL FOR THE ASSESSEE AND SHRI PRADEE P KUMAR MITRA, LEARNED SR. DR. THE LD. COUNSEL FOR THE ASSESSEE DI D NOT PRESS GROUND NO.4 FOR ADDITION OF RS.20,900/- ON ACCOUNT OF SERV ICE TAX, THEREFORE, THIS GROUND IS DISMISSED AS NOT PRESSED. 3. FOR THE ADDITION OF LONG TERM CAPITAL GAIN OF RS .12,61,000/-, THE CONTENTION MADE ON BEHALF OF THE ASSESSEE IS TH AT THE ADDITION WAS MADE WITHOUT REFERRING THE MATTER TO THE VALUATION OFFICER AND FURTHER THE APPLICATION OF PROVISIONS OF SEC. 50C IS WITHOUT BA SIS. IT WAS ALSO SUBMITTED THAT THE VALUATION REPORT DATED 18.2.2010 , DULY SIGNED BY THE 3 APPROVED REGISTERED VALUER WAS ALSO NOT CONSIDERED AS THE REPORT WAS FILED ALONG WITH AN APPLICATION UNDER RULE 46A WHER EAS THE LD. SR. DR DEFENDED THE IMPUGNED ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE FIRM IS CARRYING ON THE BUSINESS OF LUBRICANTS, OIL, GREASE AND INDUSTRIAL OILS ON S EMI-WHOLESALE AS WELL AS RETAIL BASIS. THE ASSESSEE FIRM MAINTAINED REGULAR BOOKS OF ACCOUNTS WHICH WERE DULY AUDITED AS REQUIRED U/S 44AB OF THE ACT. THE BOOKS WERE DULY PRODUCED AND THE SAME WERE TEST-CHECKED B Y THE ASSESSING OFFICER. THE ASSESSEE SHOWED LONG TERM CAPITAL GAIN OF RS.1,69,160/- WHICH WAS ASSESSED AT RS.12,61,000/- BY APPLYING TH E PROVISIONS OF SEC. 50C WHILE FRAMING THE ASSESSMENT. THE ASSESSEE OBJE CTED THE SAME AND ASSESSING OFFICER IS REQUIRED TO REFER THE VALU ATIONS OF CAPITAL ASSET TO A VALUATION OFFICER. IT IS SEEN THAT NO BASIS HA S BEEN MENTIONED FOR FIXING THE SALE CONSIDERATION OF PLOT AT RS.16,61,0 00/-. THE VALUATION REPORT, FILED BY THE ASSESSEE ALONG WITH WRITTEN SU BMISSIONS, WAS NEITHER CONSIDERED NOR REMANDED TO THE VALUATION OFFICER. AS PER THE PROVISIONS OF SUB-SECTION (2) OF SECTION 50, THE ASSESSING OFF ICER IS REQUIRED TO REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFIC ER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTION (2 )(3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (I) AND SUB- SECTIONS (6) AND (7) OF 4 SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH TAX ACT, 1957 (27 OF 1957) SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. THEREF ORE, WITHOUT GOING INTO THE MERIT OF THE CASE, THE IMPUGNED REMAINING GROUN DS ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISS UE AFRESH BY MAKING A REFERENCE TO THE DVO IN ACCORDANCE WITH LAW. NEEDLE SS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD WILL BE PROVIDE D TO THE ASSESSEE AND ASSESSEE IS ALSO AT LIBERTY TO FILE ANY EVIDENCE, I F ANY, IN SUPPORT OF ITS CLAIM. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 16 TH MARCH, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16.3.2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE 5 !VYAS!