ITO, New Delhi V. Shri Shriyansh Prasad Jain, New Delhi

ITA 3866/DEL/2013

• Counselvise Citation: 386620114 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 10-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL KUMAR TAYAGI
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUD ICIAL MEMBER ITA NO: 3866/DEL/2013 AY : - 2009-10 INCOME TAX OFFICER VS. SHRIYANSH PRASAD JAIN WARD-47 (2) OVERNI TE EXPRESS LTD. NEW DELHI. OVER NITE HOUSE, PATEL NAGAR NEW DELHI 110 008 (PAN AATPJ1544M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUJIT KUMAR, SR. DR RESPONDENT BY : SHRI SUNIL KUMAR TAYAGI, CA DATE OF HEARING : 10.9.2015 DATE OF PRONOUNCEMENT : 30.9.2015 O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAINST THE ORDER DATED 26.04.2013, PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXX, NEW DELHI . THE BRIEF FACTS OF THE CASE, AS BORNE O UT FROM THE RECORDS, ARE THAT ORDER U/S 143(3) WAS PASSED ON 29.12.2011 AT AN ASSESSED INCOME OF RS. 37,01,410/- AGAINST THE RETURNED INCOME OF RS. 9,85,831/-. AN ADDITION OF RS. 27,15,579/- WAS MADE BY THE AO U/S 50C OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). THE AO HAD OBSERVED THAT THE ASSESSEE HAD SOLD A CO -OWNED PROPERTY FOR A TOTAL SALE CONSIDERATION OF RS. 1,20,00, 000/- VIDE SALE DEED EXECUTED ON 27.12.2008. ITA NO.3866/DEL/2013 ITO VS. SHRIYA NSH PRASAD JAIN 2 THIS PROPERTY WAS CO-OWNED BY THE ASSESSEE WITH A 5 0% SHARE THEREIN. THE MARKET VALUE OF THE PROPERTY WAS RS. 1,55,52,000/- FOR THE PURPOSES OF STAMP DUTY VALUATION. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSEE SOUGHT A REFERRAL TO THE DVO FOR VALUATION OF THE PROPERTY A ND ON HIS REQUEST THE MATTER WAS REFERRED TO THE DVO U/S 50C(2) OF THE ACT. THE DVO IN HIS VALUATION REPORT CALCULATED THE VALUE OF THE PROPERTY SOLD AT RS. 62 ,63,250/-, AS AGAINST RS. 60,00,000/- DECLARED BY THE ASSESSEE, BEING ONE-HAL F OF HIS SHARE IN THE JOINT PROPERTY. THE AO HOWEVER IGNORED THE REPORT OF THE DVO AND TOOK THE VALUE OF SALE CONSIDERATION FOR 50% SHARE OF THE ASSESSEE AT RS.7 7,76,000/- U/S 50C OF THE ACT. THE AO WAS OF THE OPINION THAT SECTION 50C OF THE A CT MAKES IT OBLIGATORY TO TREAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AS THE DEEMED SALE CONSIDERATION RECEIVED/ACCRUED AS A RESULT OF TRANS FER. ACCORDINGLY A LONG TERM CAPITAL GAIN OF RS. 27,15,579/- WAS CALCULATED AND ADDED TO THE INCOME OF THE ASSESSEE. 2. ON APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, DIRECTED THE AO TO TAKE THE VALUE OF SALE CONSIDERATION AT RS. 62,63,250/- ON THE BASIS OF THE DVO REPORT. THE CIT(A) ALSO NOT ED THAT THE SAME VALUE WAS TAKEN AND ACCEPTED BY LD. CIT(A), JAIPUR IN THE CAS E OF MRS. SUNITA JAIN, THE OTHER CO-OWNER OF THE PROPERTY. IN THE APPEAL BEFORE US, IT IS THE DEPARTMENTS CONTENTION THAT THE LD. CIT(A) HAS ERRED IN ACCEPTING THE VALU ATION MADE BY THE DVO IN RESPECT OF ANOTHER PORTION OF THE PROPERTY OWNED BY THE CO- OWNER AND IN REDUCING THE ADDITION TO RS. 2,63,250/- ON ACCOUNT OF LONG TERM CAPITAL GAINS AS PER PROVISIONS OF 50C OF THE ACT. THE LD. AR ON THE OTHER HAND HAS AR GUED THAT ASSESSEE HAD DECLARED THE SALE CONSIDERATION OF RS. 60,00,000/- AS PER TH E SALE DEED. THE STAMP DUTY ITA NO.3866/DEL/2013 ITO VS. SHRIYA NSH PRASAD JAIN 3 AUTHORITY HAD VALUED THE SAME AT RS. 77,76,000/- AN D WHEN THE ASSESSEE DISPUTED THE SAME, THE MATTER WAS REFERRED TO THE DVO BY THE AO. IT WAS ALSO SUBMITTED THAT VALUATION IS A SUBJECTIVE MATTER AND DIFFERENT VALU ES COULD BE ARRIVED AT BY DIFFERENT VALUERS AND SINCE SECTION 50C IS A DEEMING PROVISIO N, THE ASSESSEE SHOULD NOT BE DENIED THE BENEFIT OF A LOWER VALUATION. 3. WE HAVE DULY CONSIDERED THE FACTS OF THE CASE AND THE SURROUNDING CIRCUMSTANCES. IT IS UNDISPUTED THAT THE ASSESSEE D ID OBJECT TO THE ACTION OF THE AO AND ACCORDINGLY THE MATTER WAS REFERRED TO THE DVO. IN OUR CONSIDERED OPINION, ONCE THE ASSESSEE HAS RAISED OBJECTIONS AGAINST THE VALU E ADOPTED BY THE STAMP DUTY AUTHORITY AND THE AO HAS REFERRED THE MATTER TO THE DVO AT HIS INSTANCE, THE REPORT OF THE DVO CANNOT BE IGNORED AND THE AO IS DUTY BOU ND TO ADOPT LOWER OF EITHER THE VALUATION MADE BY THE DVO OR THAT OF THE STAMP DUTY AUTHORITY. AS PER SECTION 50C(1), THE VALUATION AS FIXED BY THE STAMP VALUATI ON AUTHORITY IS TAKEN AS A BENCH MARK. AS PER SECTION 50C(2), THE BENCH MARK CAN BE REVIEWED BY MAKING A REFERENCE TO THE VALUATION OFFICER IF THE ASSESSEE CLAIMS THAT SUCH VALUE EXCEEDS THE FAIR MARKET VALUE. AS PER SECTION 50C(3), IF THE VA LUATION AS ARRIVED AT BY THE DVO IS FOUND TO BE HIGHER THAN THE VALUE AS FIXED BY THE S TAMP VALUATION AUTHORITY, THEN THE VALUE AS FIXED BY THE STAMP VALUATION AUTHORITY BEI NG THE LOWER OF THE TWO IS TO BE APPLIED. ON A SIMILAR FOOTING, WHERE THE VALUATION, AS ARRIVED AT BY THE DVO, IS LESS THAT THE VALUATION AS PER THE STAMP DUTY AUTHORITY, THE VALUATION AS PER THE DVO SHOULD BE ADOPTED. THE LEARNED CIT(A) HAS ADJUDICAT ED THE ISSUE ON SIMILAR LINES. WE ALSO FIND FROM RECORDS THAT THE LEARNED CIT(A) - II, JAIPUR HAS ALSO DISCUSSED THE SAME ISSUE IN HIS ORDER DATED 30/08/2012 IN APPEAL NO. 531/11-12, IN WHICH THE CASE OF THE OTHER CO-OWNER MRS. SUNITA JAIN WAS CON SIDERED AND HE HAS ALSO PEGGED ITA NO.3866/DEL/2013 ITO VS. SHRIYA NSH PRASAD JAIN 4 THE VALUATION AT RS.62,63,250/- BEING THE VALUE OF THE OTHER HALF OF THE PROPERTY. THEREFORE, IN THE CIRCUMSTANCES OF THE CASE, IT IS OUR CONSIDERED OPINION THAT THE LD. CIT(A)S ACTION IN TAKING THE VALUE CALCULATED BY T HE DVO FOR CALCULATION OF LONG TERM CAPITAL GAINS IS PERFECTLY IN ORDER. WE ACCORD INGLY UPHOLD THE ORDER OF THE LD. CIT(A) AND DECLINE TO INTERFERE. 4. IN THE RESULT THE APPEAL FILED BY THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. SD/- SD/- (J. SUDHAKAR REDDY) (S UDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 30. 9. 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 11.9.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 11.9.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER ITA NO.3866/DEL/2013 ITO VS. SHRIYA NSH PRASAD JAIN 5 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER