PADAM KUMAR MITTAL, KHATAULI V. ITO, KHATAULI, KHATAULI

ITA 3823/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4073 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: V K GOEL
• Keywords: Value adopted by valuation officer; Opportunity of being heard; Principle of natural justice; Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 3823 /DEL/201 7 [A.Y. 20 09 - 1 0 ] SHRI PADAM KUMAR MITTAL VS. THE I.T.O S/O SHRI KISHAN LAL MITTAL KHATAULI PROP. M/ S ALKA ENTERPRISES KHATAULI PAN : AJQPM 9493 G ITA NO. 3824/DEL/2017 [A.Y. 2009 - 10] SHRI SA TYAVEER MITTAL VS. THE I.T. O S/O SHRI KISHAN LAL MITTAL KHATAULI MOHALLA GANESH PURI, KHATAULI PAN : CAFPM 8517 D [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 9 . 1 0.2017 DATE OF PRONOUNCEMENT : 11 . 1 0.2017 ASSESSEE BY : SHRI V.K. GOEL, ADV REVENUE BY : SHRI T. VASANTHAN S R. DR ORDER THE ABOVE TWO APPEALS FILED BY TWO DIFFERENT BUT CONNECTED ASSESSEE S ARE DIRECTED AGAINST TWO SEPARATE ORDERS DATED 1.3.2017 & 30.3.2017 OF THE CIT(A), MUZAFFARNAGAR RELATING TO A.Y. 2009 - 10. SINCE IDENTICAL GROUNDS HAVE BEE N TAKEN BY THE ASSESSEE S , THEREFORE, THESE 2 WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ALMOST IDENTICAL GROUNDS HAVE BEEN RAISED IN BOTH THE APPEALS. FIRST OF ALL, I AM TAKING UP THE AP PEAL IN ITA NO. 3823/DEL/2017 IN THE CASE OF PADAM KUMAR MITTAL. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT LD. A.O. IS IN ERROR TAKING THE VALUATION OF THE PROPERTY SOLD DURING THE F.Y. 2008 - 09 OF RS. 98,21,000/ - . HOWEVER, AS P ER CIRCLE RATE IT WAS RS. 1,09,47,000/ - AND SALE CONSIDERATION WAS ONLY RS. 17,00,000/ - AND LD. CIT(A) HAS REDUCED THE COST OF ACQUISITION RS. 86,80,800/ - ON THE BASIS OF VALUATION THAT MADE BY THE DVO BUT DVO HAS NOT PROVIDED ANY OPPORTUNITY BEING HEARD A ND VALUATION MADE BY DVO AND ADOPTED BY A.O. AS WELL AS CIT(A) IS ERRONEOUS AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2. THAT THE A.O. HAS TAKEN THE COST OF THE LAND AS ON 01 - 04 - 1981 @ RS. 300/ - PER SQ. YD. AND CIT(A) CONFIRMED THE SAME @ RS. 350/ - PER SQ. YD. BOTH THE AUTHORITIES HAVE IGNORED THE FACT THAT THE ASSESSEE'S LAND WAS COMMERCIAL LAND AND AS PER TEHSILDAAR THE RATE OF THE COMMERCIAL LAND @ RS. 2460/ - PER SQ. YD. AND THE ASSESSEE ALSO FILED THE VALUATION AS ON 01 - 04 - 1981 BY GOVT. APPROVE D VALUER. THE A.O. HAS NOT CONSIDERED THIS FACT AND CIT(A) ALSO IGNORED THE SAME. THEREFORE, BOTH THE AUTHORITIES HAS PASSED THE ORDER AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 3. THAT LD. A.O. ISS UED PENALTY PROCEEDINGS U/S 271 (1)(C) WITHOUT SATISFACTIO N OF A.O. 3 3. FACTS , IN BRIEF, IN THE CASE OF SHRI PADAM KUMAR MITTAL ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE PROPERTY SOLD BY THE ASSESSEE WAS SHOWN AT RS. 19 LAKHS WHEREAS THE VALUE DETERMINED AS PER THE STAMP DUTY VALUATION WAS AT RS. 1,09, 47,000/ - . THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER [DVO] WHICH WAS REFERRED ACCORDINGLY. BUT TILL THE DATE OF COMPLETION OF ASSESSMENT, NO SUCH REPORT WAS RECEIVED FROM THE DVO. THE ASSESSING OFFICER, IN THE ABSENCE OF VALUATION REPORT, COMPUTED LONG TERM CAPITAL GAIN ON THE BASIS OF CIRCLE RATE. 4. THE LD. CIT(A), IN THE FIRST ROUND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. WHEN THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL, THE TRIBU NAL CAME TO THE CONCLUSION THAT THE DVO HAS NOT CONSIDERED THE OBJECTIONS OF THE ASSESSEE AND THE ASSESSING OFFICER WAS DIRECTED TO REFER THE MATTER TO THE DVO TO CONSIDER THE OBJECTIONS OF THE ASSESSEE. 5. BEFORE THE ASSESSING OFFICER, IN THE SECOND ROUND, THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO KEEP THE ASSESSMENT IN ABEYANCE TILL THE DISPOSAL OF THE OBJECTIONS BY THE DVO. IN FACT, THE DVO HAS WRITTEN THAT HE HAS CONSIDERED THE OBJECTIONS AND DISPOSED OF THE OBJECTIONS 4 AND WHATEVER FAIR MARK ET VALUE IS CONVEYED, IS THE FAIR MARKET VALUE. 6. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 7. I HAVE HEARD BOTH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS RECEIVED VALUATION REPORT BY DVO DATED 02 - 12 - 2015 RECEIVED ON 06 - 12 - 2015. IN THIS REGARD, THE ASSESSEE STRONGLY OBJECTED THAT THE VALUATION OF THE PROPERTY WAS MADE WITHOUT PROVIDING ANY OPPORTUNITY OF BEING HEARD, EVEN NO NOTICE FOR V ALUATION IS RECEIVED B Y THE ASSESSEE. THIS IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND VALIDATION OF I.T.A.T. IT WA S FURTHER SUBMITTED THAT THE AS PER LETTER FROM UP ADMINISTRATION, THAT THE VALUATION OF COMMERCIAL PROPERTY CAN BE MADE BY DVO WITH THE FOLLOWING DIRECTIONS, HE WILL TAKE 15 MT. PROPERTY FOR THE PURPOSE OF VALUATION AS PER DIRECTION THE PROPERTY IS APPROXIMATELY 6 MTR. AWAY FROM THE ROAD SIDE, WHICH IS TO BE EXCLUDED FROM THE 15 MTR. OF THE PROPERTY. ACCORDING TO WHICH COMMERCIAL AREA OF THE LAND IS (105 X 27/9) = 310 SQ. MTR. . HOWEVER, ITAT HAS TAKEN THE COMMERCIAL LAND 480.15 SQ. MTR . @ 13,000 / - PER SQ. MTR . FOR THE REM AIN ING LAND HAS TAKEN VALUE OF REM AIN ING PROPERTY AS RESIDENTIAL RATES, WHICH IS NOT A CORRECT FACT. BECAUSE ON THE DAT E OF VALUATION , 5 THERE WAS RESIDENCE AREA OF 27.50 SQ. MTR. BALANCE LAN D WAS ON AGRICULTURE LAND FOR WHICH AGRICULTURE VALUE IS TO BE TAKEN CIRCLE RATE, WHICH I S MENTIONED IN SALE DEED YOUR HONOUR HAS NOT TAKEN THE AREA OF THE LAND ON THE BASIS OF SALE DEED . AS PER DIRECTION ITAT HAS TAKEN CIRCLE RATE OF THE P ROPERTY TO DETERMINE VALUATION OF THE PROPERTY HAS NOT TAKEN AS DETERMINE D S TAMP ETC, BUT FOR THE PURPOSE OF CAPITAL GAIN MARKET RATE BASED UPON LOCAL INQUIRY SHOULD BE TAKEN, WHICH EXERCISE HAS NOT BEE N DONE . THE ASSESSEE ALSO FURNISHED VALUATION REPORT OF DEPARTMENTAL APPROVED VALUER SH. B.B. GUPTA , WHICH IS BASED UPON MARKET VALUE OF THE PROPERTY, WHICH IS MORE APPROPRIATE TO DETERMINE VALUATION OF THE PROPERTY. THEREFORE, VALUATION DETERMINE D IS ERRO NEOUS AS NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE AND NO EFFORTS W ERE MADE TO DETERMINE MARKET VALUE AFTER LOCAL INQUIRY AND NOT CONSIDER ED THE VALUATION REPORT. 8. IN THAT VIEW OF THE MATTER, I AM OF THE CONSIDERED OPINION THAT THE DVO HAS NOT CON SIDERED AND DISPOSED OF THE OBJECTIONS RAISED BY THE ASSESSEE AS DIRECTED BY THE ITAT. THEREFORE, IN THE INTEREST OF JUSTICE, THE ASSESSING OFFICER IS DIRECTED TO REFER THE MATTER TO THE DVO TO DISPOSE OF THE OBJECTIONS OF THE ASSESSEE AND AFTER CONSIDERI NG THE 6 SAME TO DECIDE THE APPEAL AFRESH. ACCORDINGLY, GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . NOW COMING TO ITA NO. 3824/DEL/2017, I FIND THAT THE ISSUES RAISED IN THIS APPEAL ARE IDENTICAL TO THE ISSUES INVOLVED IN THE CASE OF SHRI PADAM KUMAR MITTAL IN ITA NO. 3823/DEL/2017 DECIDED BY ME HEREINABOVE. ACCORDINGLY, MY ORDER HEREINABOVE ON THESE ISSUES SHALL BE IDENTICALLY APPLICABLE IN THIS CASE ALSO. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PU RPOSES. 10 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 . 1 0.2017. SD/ - [B.P. JAIN] ACCOUNTANT MEMBER DATED: 11 TH OCTOBER , 2 017 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI