MEENAKUMARI RANKA, MUMBAI V. ASST CIT RG 24(2), MUMBAI

ITA 3836/MUM/2013

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4170 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-05-2013
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 3836 /MUM/201 3 ( ASSESSMENT YEAR : 2004 - 05 ) SMT. MEENAKUMARI RANKA OFF. NO.5, BLDG. NO.7 MALAD CHS LTD PODDAR ROAD MALAD (EAST), MU MBAI 400 097 VS. THE ASST. COMMISSIONER OF INCOME TAX RANGE 24(2) MUMBAI PAN/GIR NO. AACCPR1122J (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI CHETAN A KARIA REVENUE BY MS. N. HEMALATHA DATE OF HEARING 21 / 08 /2019 DATE OF PRONOUNCEMENT 23 / 08 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 3836/MUM/2013 FOR A.Y. 2004 - 05 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 34, MUMBAI IN APPEAL NO. CIT(A)/34/IT/256/2006 - 07 DATED 05/02/201 3 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 30/11/2006 BY THE LD. ASST. COMMISSIONER OF INCOME TAX - 24(2), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 2 2. THOUG H THE ASSESSEE HAS RAISED SEVERAL GROUNDS, THE ONLY EFFECTIVE ISSUE TO BE ADJUDICATED HEREIN IS WITH REGARD TO DETERMINATION OF FAIR MARKET VALUE OF SALE CONSIDERATION OF THE PROPERTY SOLD BY THE ASSESSEE. 3. WE HAVE HEARD RIVAL SUBMISSIONS. WE FIND THAT T HE ASSESSEE HAD SOLD HER OFFICE PREMISES AT NO.143, MITTAL COURT, NARIMAN POINT ADMEASURING 1162 SQ.FT VIDE AGREEMENT DATED 08/09/2003 FOR RS.81 LAKHS. THE STAMP DUTY AUTHORITY ASSESSED THE STAMP DUTY VALUE FOR THE SAID PROPERTY AT RS.1,28,59,000/ - THIS IS THE VALUE IN TERMS OF SECTION 50C OF THE ACT. THE PURCHASER OF THE PROPERTY DID NOT DISPUTE THE LEVY OF STAMP DUTY ON THE ENHANCED CONS IDERATION AND HAD DULY PAID THE STAMP DUTY WITHOUT RAISING ANY DISPUTE THEREON, AS STATED BY THE LD. AR BEFORE US. SINCE THE STAMP DUTY VALUE WAS HIGHER THAN THE SALE CONSIDERATION REITERATED BY THE ASSESSEE, THE ASSESSEE IN TERMS OF SECTION 50C (2) OF THE ACT REQUESTED THE LD. AO TO REFER THE MATTER TO DISTRICT VALUATION OFFICER (LD. DVO) FOR DETERMINING THE FAIR MARKET VA LUE OF THE PROPERTY SOLD. THE LD. DVO VALUED THE PROPERTY AT RS.1,29,56,300/ - WHICH WAS HIGHER THAN THE VALUE AS PER SECTION 50C AT RS.1,28,59,000/ - . ACCORDINGLY, THE LD. AO DETERMINED THE FULL VALUE OF CONSIDERATION AS PER SECTION 50C OF THE ACT AT RS.1,2 8,59,000/ - WHILE COMPUTING THE CAPITAL GAINS IN THE ASSESSMENT. THE ASSESSEE RAISED SEVERAL OBJECTIONS IN THE VALUATION REPORT SUBMITTED BY THE LD. DVO. THE ASSESSEE ALSO MADE SPECIFIC PLEA BEFORE THE LD. CIT(A) THAT THE RELEVANT SALE INSTANCES WERE ACTUAL LY FURNISHED BY THE ASSESSEE BEFORE THE LD. DVO AND THE SAME WERE IGNORED BY THE LD. DVO WHILE VALUING AT A HIGHER FIGURE AT RS.1,29,56,300/ - . THE LD. CIT(A) HOWEVER, DID NOT AGREE TO THESE CONTENTIONS OF THE ASSESSEE AND HELD THAT THE LD. AO HAD FOLLOWED THE PROVISIONS OF THE ACT AND HAD COMPUTED THE CAPITAL GAINS ACCORDINGLY WHICH DOES NOT REQUIRE ANY INTERFERENCE. ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 3 3.1. DURING THE COURSE OF PROCEEDINGS BEFORE US, THE BENCH ON AN EARLIER OCCASION HAD CALLED FOR A REPORT FROM THE LD. DVO TO BE ADDRESSED TH ROUGH THE LD. CIT DR GIVING THE P ARA WISE REPLY OF VARIOUS OBJECTIONS FILED BY THE ASSESSEE AGAINST THE DVOS REPORT. WE FIND THAT THE LD. DVO HAD SUBMITTED HIS REPORT IN REFERENCE NO.DVO - I/MUM/MISC/2019 - 20/151 DATED 08/08/2019. THE LD. AR ARGUED THAT THE LD. DVO HAD ALSO ANNEXED THE COMPARABLE INSTANCES IN HIS REPORT WHEREIN THE HIGHEST RATE WAS CONSIDERED AT RS.8375 PER SQ. FT AND LOWEST RATE WAS CONSIDERED AT RS.6937/ - PER SQ.FT AND THE WEIGHTED AVERAGE RATE THEREON WORKED OUT TO RS.7838/ - PER SQ.FT DUR ING THE RELEVANT PERIOD I.E., FIRST HALF YEARLY PERIOD OF 2002. WHILE THIS IS SO, WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE VALUATION MADE BY THE LD. DVO FOR THE VERY SAME PROPERTY IN HIS FIRST HALF OF 2003 AT RS.11,150/ - PER SQ. FT FOR THE PROPERT Y IN THE VERY SAME PREMISES. WE FIND FROM THE PERUSAL OF THE REPORT OF THE LD. DVO AND THE PAR A WISE REPLY GIVEN BY HIM, NOWHERE THE LD. DVO HAD GIVEN SPECIFIC REASONS FOR VALUING THE SUBJECT MENTIONED PROPERTY AT 11150/ - PER SQ.FT AS ON 08/09/2003 BY QUOT ING SPECIFIC SALE EXAMPLE NEAR ABOUT TO THE DATE OF SALE I.E., 08/09/2003. 3.2. ON THE CONTRARY , THE ASSESSEE HAD FURNISHED COMPARABLE SALE INSTANCES BEFORE THE LD. DVO ON THE DATES WHICH ARE POSTERIOR TO THE DATE OF SALE MADE BY THE ASSESSEE. WE FIND THA T ASSESSEE HAD SUBMITTED SALE INSTANCES IN MARCH AND APRIL 2004 AT TULSIYANI CHAMBERS IN THE VERY SAME LOCALITY OF NARIMAN POINT WHEREIN THE RATE PER SQ.FT WERE RS.6384/ - AND RS.6530/ - PER SQ.FT IN MARCH AND APRIL 2004 RESPECTIVELY. THE ASSESSEE HAS ALSO FURNISHED THE SALE INSTANCES IN THE MITTAL COURT PREMISES ITSELF BEFORE THE LD. DVO ON THE NEAR ABOUT DATES SUCH AS 30/06/2003 WHEREIN THE OFFICE PREMISES AT MITTAL COURT WAS SOLD OUT AT RS.5,592/ - PER SQ. FT. ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 4 WE FIND THAT ASSESSEE HAD GIVEN THE FOLLOWING SALE INSTANCES BEFORE THE LD. DVO WHICH COULD BE SU MMARISED IN THIS TABULATED FORM: - SR . NO. OFFICE DATE OF SALE CONSIDERATIO N BUILT UP AREA SQ FT RATE PER SQ. FT. AS PER DVO/ ASSESSEE OFFICE NUMBER 143/B 08.09.200 3 81,00,000 1162 6,97 1 SALE TRANSACTIO N IN DISPUTE 1. OFFICE NO. 123 - A 30.06.2003 67,50,000 1207 5,592 ASSESSEE 2. OFFICE NO. 63A AND CAR PARKING 21.01.2003 84,54,810 1207.8 3 (OFFI CE) 140 (CAR SPACE) 7,000 ASSESSEE 3. OFFICE NO. 154 23.05.2002 97,00,000 1399 6,933 DVO 4 OFFICE NO. 74A 23.05.2002 1,00,00,000 1194 8375 DVO AVERAG E 3,49,04,81 0 5,007 6,971 3.3. FROM THE AFORESAI D TABLE, IT COULD BE SAFELY CONCLUDED THAT THE AVERAGE OF THE SALE INSTANCES IN THE VERY SAME LOCALITY OF THE SUBJECT MENTIONED PROPERTY IN THE NEAR ABOUT DATES WAS RS 6971 PER SQ. FT AND THE SALE PRICE CALCULATED BY THE ASSESSEE WAS ALSO AT RS.6971/ - PER SQ.FT. ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 5 THIS ITSELF GOES TO PROVE THAT THERE W ERE CERTAIN OBVIOUS FLAWS IN THE REPORT OF THE LD. DVO. MOREOVER IN THE LD. DVOS PARA WISE REPLY DATED 08/08/2019, WE FIND THAT THE LD. DVO HAD SPECIFICALLY STATED THAT THE FAIR MARKET VALUE WAS WORK ED OUT AFTE R ANALYZING THE COMPARATIVE SALE INSTANCES OF PROPERTIES VIS - - VIS THE SUBJECT MENTIONED PROPERTY BY CONSIDERING THE TIME FACTOR, FLOOR LEVEL, SPECIFICATION, STATUS, SEA VIEW, SIMILAR ENVIRONMENT ETC. WHEN THE LD. DVO HAD ALSO CONSIDERED THE COMPARABLE SAL E INSTANCES WHICH ARE NOT IN CONSONANCE WITH THE COMPARABLE SALE INSTANCES PROVIDED BY THE ASSESSEE BEFORE HIM, THEN IT CANNOT BE CONCLUDED THAT THE REPORT OF THE LD. DVO HAD TO BE BRUSHED ASIDE COMPLETELY. WE FIND IN THE INSTANT CASE THAT THE LD. DVO HAD CONSIDERED THE EXORBITANT PRICE WHICH IS NOT AT PAR WITH THE COMPARABLE SALE INSTANCES DESPITE THOSE DETAILS BEING FILED BY THE ASSESSEE BEFORE HIM. THE LD. AO HAD CONSIDERED THE REPORT OF THE LD. DVO AND SINCE THE VALUE DETERMINED BY THE LD. DVO IS MORE T HAN THE VALUE U/S.50C OF THE ACT, THE LD. AO HAD ADOPTED VALUE U/S.50C OF THE ACT. THE CRUCIAL POINT IS THE REPORT OF THE LD. DVO IS NOT SUBJECTED TO ANY APPEAL PROCEEDINGS UNDER THE INCOME TAX ACT, WHEREAS THE VALUATION REPORT GIVEN IN TERMS OF 16A OF THE WEALTH TAX ACT, 1957 COULD BE APPEALED BEFORE THE LD. CIT(A) IN TERMS OF SECTION 23A OF THE WEALTH TAX ACT AND ALSO BEFORE THE APPELLATE TRIBUNAL IN TERMS OF SECTION 24 OF THE WEALTH TAX ACT. IN THIS PECULIAR SITUATION, THE ASSESSEES DOORS ARE ETERNALLY CLOSED AS THE REPORT ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 6 OF THE LD. DVO IS BINDING ON THE LD. AO SO IF THERE IS A HUGE VARIATION BETWEEN THE ASSESSEES CONSIDERATION AND THE FAIR MARKET VALUE DETERMINED BY THE LD. DVO, THEN THE OBJECTIONS RAISED BY THE ASSESSEE ON THE DVOS REPORT ARE TO BE ADJUDICATED BY THE APPELLATE AUTHORITIES. FROM THE ABOVE OBSERVATIONS, WE COULD SAFELY CONCLUDE THAT THE LD. DVO DESPITE HAVING COMPARABLE SALE INSTANCES BEFORE HIM IN THE VERY SAME PREMISES ON THE NEAR ABOUT DATES TO THE DATE OF SALE I.E. 08/09/2003 (I.E. DATE OF SALE EXECUTED BY THE ASSESSEE) , THE LD. DVO HAD ADOPTED THE EXORBITANT RATE OF RS. 1 1150 PER SQ.FT , WHICH IN OUR CONSIDERED OPINION , CANNOT BE ACCEPTED. HENCE, WE DEEM IT FIT AND APPROPRIATE THAT INCREMENTAL VALUE OF 5% OVER AND ABOVE THE SALE CONS IDERATION REPORTED BY THE ASSESSEE SHOULD BE CONSTRUED AS FAIR MARKET VALUE IN THE FACTS OF THE INSTANT CASE. WE FIND BY CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE THAT THE FAIR MARKET VALU E COULD BE DETERMINED AT RS.85, 05,000 / - WITH A N ENHANCEMENT OF 5% WITHOUT THE AGREEMENT VALUE OF THE ASSESSEE (81,00,000 + (5% OF 81 LACS)) = 85,05,000) , WHICH IN OUR CONSIDERED OPINION , WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE GROUND NO.1 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 4. THE GROUN D NO.2 PERTAINS TO CHARGING OF INTEREST U/S.2 3 4C OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. 5. THE GROUND NOS.3 & 4 ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. ITA NO.3836/MUM/2013 SMT. MEENAKUMARI RANKA 7 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON THIS 23 / 08 /201 9 SD/ - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 08 / 2019 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//