The DCIT, Trivandrum V. Late Sri.C.P. Vasudevan Nair Rep by POA holder Ms.Deepa Nair, Trivandrum

ITA 365/COCH/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5501 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Fair market value
• Section: 50C; 37; 6; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI P. K. BANSAL, VICE PRESIDENT AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NOS.365/COCH/2015 ASSESSMENT YEAR:2007-08 LATE C. P. VASUDEVAN NAIR, REP. BY POA HOLDER MS. DEEPA NAIR, SREEPARAMESWARAM, KUMARAPURAM TRIVANDRUM. PAN:AEKPP 3128 D VS DY.C.I.T., CENTRAL CIRCLE, TRIVANDRUM. (RESPONDENT) (APPELLANT) SHRI A. DHANRAJ, SR. D. R. APPELLANT BY NONE RESPONDENT BY 05/10/2017 DATE OF HEARING 05/10/2017 DATE OF PRONOUNCEMENT ORDER PER P. K. BANSAL, V.P. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 30/03/2015 BY TAKING THE FOLLOWING COM MON GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, KOCHI IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. IN VIEW OF THE FACTS & CIRCUMSTANCES OF THE CASE , THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFF ICER TO REFER THE SALE OF PROPERTY FOR VALUATION U/ S 50C(2 ) AS THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY TO DO 2 VALUATION U/S 50C(2) DURING THE ASSESSMENT PROCEEDINGS. 3. THE LEARNED CIT(A) SHOULD HAVE CONSIDERED THE FA CT THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS BEEN GIVEN SUFFICIENT OPPORTUNITIES TO STATE AN Y OBJECTION FOR ADOPTING THE VALUE ADOPTED BY SRO. 4. THE LEARNED CIT(A) OUGHT TO HAVE NOTICED THAT TH E DVO HAS NOT GIVEN ANY REASON FOR THE HUGE DIFFERENCE OF RS.3,55,00,000/- IN THE VALUATION. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE, IN RESPONSE TO THE NOTICE UNDER SECTION 153A, FILED HIS RETURN ON 15/05/2008 SHOWING CAPITAL GAIN ON THE SALE OF 695 CENTS OF THE LAND T O M/S PARTHAS INFOPARK (P) LTD. AT RS.25,82,850/- AFTER CLAIMING THE EXEMP TION UNDER SECTION 54C AT RS.50 LAKHS. THE ASSESSEE ADMITTED THE SALE CON SIDERATION AT RS.6,94,65,000/- AS VALUED BY THE SUB REGISTRAR OFF ICE @RS.1,00,000/- PER CENT. SUBSEQUENTLY, THE SRO VIDE LETTER NO.222 /2009 DATED 29/05/2009 COMMUNICATED THAT HE HAS ADOPTED THE VAL UE AT RS.10,50,00,000/- AS SALE CONSIDERATION FOR THE PUR POSE OF STAMP DUTY THEREFORE, THE ASSESSING OFFICER AFTER GIVING AN OP PORTUNITY TO THE ASSESSEE COMPUTED THE CAPITAL GAIN BY TAKING VALUE OF THE SALE CONSIDERATION AT RS.10,50,00,000/- IN ACCORDANCE WI TH THE PROVISIONS OF SECTION 50C AND COMPUTED THE CAPITAL GAIN AT RS.8,7 4,95,792/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT (A) REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER UNDER SECT ION 50C(2). THE DISTRICT VALUATION OFFICER, VIDE ITS REPORT DATED 14/03/2014 , VALUED THE IMPUGNED PROPERTY SOLD BY THE ASSESSEE @RS.1,00,000/- PER CE NT ADMEASURING 694.65 CENT AT RS.6,94,65,000/-. THE CIT(A) THEREF ORE, DIRECTED THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAIN BY TA KING THE FULL VALUE OF THE CONSIDERATION AT RS.6,94,65,000/- IN PLACE OF R S.10,50,00,000/-. THE REVENUE HAS COME IN APPEAL BEFORE US. THE ONLY QUE STION BEFORE US IS WHETHER THE CIT(A) HAS RIGHTLY DIRECTED THE DISTRIC T VALUATION OFFICER TO 3 MAKE THE VALUATION UNDER SECTION 50C(2) AND ALSO DI RECTED THE ASSESSING OFFICER TO ADOPT THE VALUE OF THE SALE CONSIDERATIO N AT RS.6,94,65,000/- AS VALUED BY THE DISTRICT VALUATION OFFICER IN PLACE O F RS.10,50,00,000/- FOR CAPITAL GAIN COMPUTATION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, CAREFULLY C ONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECTION 50C AND NOTED THA T NO DOUBT THE PROVISION OF SECTION 50C(1) EMPOWERS THE ASSESSING OFFICER TO TAKE THE STAMP VALUATION TO BE THE FULL VALUE OF THE CONSIDE RATION FOR THE PURPOSE OF SECTION 48 BUT SECTION 50C(2) ENTRUSTS UPON THE OBLIGATION ON THE ASSESSING OFFICER TO REFER THE VALUATION OF THE CAP ITAL ASSET TO THE DVO IN CASE THE ASSESSEE CLAIMS THAT THE STAMP VALUATION A S TAKEN UNDER SECTION 50C EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY A S ON THE DATE OF THE TRANSFER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISION OF SUB SECTION 2,3,4,5 AND 6 OF SECTION 16A OF THE WEALTH TAX ACT SHALL, WITH NECESSARY MODIFICATION, APPLY ALONG WITH PROVISIONS OF SECTION 23(1), (6) & (7), SECTION 24(5), SECTION 34AA, SECTION 35 & 37 O F THE WEALTH TAX ACT SHALL ALSO BE APPLICABLE WITH REFERENCE TO SUCH REF ERENCE. IN THE IMPUGNED CASE, WE NOTED THE ASSESSEE HAS NOT OBJECT ED THE STAMP VALUATION BEFORE THE ASSESSING OFFICER BUT HAS OBJE CTED THE SAME BEFORE THE CIT(A). THE CIT(A) HAS CO-TERMINUS POWER WITH THE ASSESSING OFFICER. THE CIT(A) AFTER ENTERTAINING THE OBJECTI ON OF THE ASSESSEE REFERRED THE MATTER TO THE DVO AND DVO HAS VALUED T HE IMPUGNED CAPITAL ASSET AT RS.6,94,65,000/- VIDE REPORT DATED 14/03/2 014 AND ACCORDINGLY, THE CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO CO MPUTE THE CAPITAL GAIN BYTAKING THE ALE CONSIDERATION OF THE SAID CAPITAL ASSET AT RS.6,94,65,000/- IN PLACE OF RS.10,50,00,000/-. LEARNED D. R. IN TH IS REGARD AGITATED BEFORE US WHILE LEARNED A.R. BEFORE US RELIED ON TH E ORDER OF HON'BLE 4 ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. DR. IND RA SWAROOP BHATNAGAR [2012] 349 ITR 210 (ALL) IN WHICH WE NOTED THAT THE HON'BLE HIGH COURT RELYING ON THE DECISION GIVEN UNDER THE WEALTH TAX ACT IN THE CASE OF CWD VS. DR. H. RAHMAN 189 ITR 307 HELD THAT WHEN TH E ASSESSING OFFICER HAS OBTAINED THE DVO REPORT, THE SAME IS BINDING. IN THE INSTANT CASE ALSO, WE NOTED THAT CIT(A), WHO HAS COTERMINOUS POW ER WITH THE ASSESSING OFFICER, HAS OBTAINED THE DVO REPORT THER EFORE, THE VALUE WORKED OUT BY THE DVO, IN OUR VIEW, WILL BE BINDING ON THE ASSESSING OFFICER. NO CONTRARY DECISION WAS BROUGHT TO OUR K NOWLEDGE. IN VIEW OF THIS WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A) DIRECTING THE ASSESSING OFFICER TO TAKE THE VALUE O F THE SALE CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN UNDER SECTION 48 AT RS.6,94,65,000/- IN PLACE OF RS.10,50,00,000/-. WE, THEREFORE, DISMISS THE APPEAL TAKEN BY THE REVENUE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/10/2017) SD/. SD/. (GEORGE GEORGE K.) (P. K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT DATED:05/10/2017 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5. D.R., I.T.A.T., COCHIN ASSTT. REGISTRAR