ITO 16(2)(1), MUMBAI V. NARENDRA NATH KUMAR, MUMBAI

ITA 3884/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79224 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-06-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMBIT MISHRA
• Assessee Lawyers: REEPAL G TRAISHAWALA
• Keywords: Capital asset; Fair market value; Valuation report
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , ! BEFORE SHRI SANJAY ARORA, AM AND DR. S. T. M. PAVA LAN, JM ' # I.T.A. NO. 3884/MUM/2012 ( / ASSESSMENT YEAR: 2001-02) ITO-16(2)(1), MATRU MANDIR, MUMBAI-400 007 # VS. NARENDRA NATH KUMAR 171, KSHITIJ NEPEANSEA ROAD, MUMBAI-400 036 $ #'%' ./PAN/GIR NO. AADPK 3579 K ( $& /APPELLANT ) : ( '($& / RESPONDENT ) $&)* / APPELLANT BY : SHRI SAMBIT MISHRA '($&)* / RESPONDENT BY : SHRI REEPAL G. TRAISHAWALA DATE OF HEARING : 19.06.2014 DATE OF ORDER : 24.06.2014 '+# O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-28, MUMBAI (CIT(A) FOR SH ORT) DATED 30.03.2012, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) R/W S. 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2001-02 VIDE ORDER DATED 29.03.2004. 2. THE ISSUE ARISING IN THE INSTANT APPEAL IS THE V ALIDITY OF THE REFERENCE BY THE ASSESSING OFFICER (A.O.) TO THE DEPARTMENTAL VALUAT ION OFFICER (DVO) U/S. 55A OF THE ACT. THE SUBSIDIARY ISSUE ARISING IS QUA THE ADJUSTMENT MADE BY THE A.O. TO THE ASSESSEES 2 ITA NO. 3884/MUM/2012 (A.Y. 2001-02) ITO VS. NARENDRA NATH KUMAR RETURNED LONG TERM CAPITAL GAIN (LTCG) ON A CONSIDE RATION OF THE DVOS REPORT, I.E., ON MERITS. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE ISSUE ARISING IN THE I NSTANT CASE STANDS COVERED BY THE DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. PUJA PRINTS [2014] 360 ITR 697 (BOM). VIDE THE SAID DECISION, THE HONBLE COUR T HAS SINCE CLARIFIED THAT REFERENCE TO THE DVO, WHICH IN THE INSTANT CASE WAS MADE BY THE A.O. FOR THE PURPOSE OF DETERMINING THE FAIR MARKET VALUE, AS ON 01.04.1981, OF THE CAP ITAL ASSET TRANSFERRED COULD BE, PRIOR TO THE AMENDMENT TO S.55A(2) BY FINANCE ACT, 2012 W.E. F. 01.07.2012, ONLY WHERE IN HIS OPINION ITS FAIR MARKET VALUE EXCEEDS THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE, AND THAT THE AMENDMENT TO THE SAID ACT, SUBSTITUTIN G THE WORDS IS LESS THAN ITS FAIR MARKET VALUE BY THE WORDS IS AT VARIANCE WITH ITS FAIR M ARKET VALUE IN THE SAID PROVISION, WOULD ONLY BE PROSPECTIVE, I.E., W.E.F. 01.07.2012. IN TH E PRESENT CASE, IT IS THE ADMITTED, UNDISPUTED POSITION BETWEEN THE PARTIES THAT THE A. O. CONSIDERED THE FAIR MARKET VALUE ( AS ON 01.04.1981) OF THE CAPITAL ASSET TRANSFERRED AS CLAIMED BY THE ASSESSEE ON THE BASIS OF THE VALUATION REPORT BY AN APPROVED VALUER TO BE ON THE HIGHER SIDE, SO THAT THE SAME WAS, IN HIS VIEW, AT A LOWER SUM. THE SAID REFERENCE IS THUS NOT LEGALLY VALID. 3.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON BE ING CONFRONTED WITH THE SAID DECISION, CONCEDED TO THE LEGAL ISSUE ARISING IN TH E INSTANT CASE AS BEING SQUARELY COVERED BY THE SAID DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. UNDER THE CIRCUMSTANCES AFORE-NOTED, WE HAVE NO HESITATION IN HOLDING, FOLLOWING THE SAID DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT SUPRA, THA T THE REFERENCE BY THE A.O. IN THE INSTANT CASE WAS LEGALLY NOT PERMISSIBLE. THE SUBSIDIARY QU ESTION AFORE-REFERRED, WHICH CONCERNS THE VALUATION ON MERITS, WOULD THEREFORE NOT ARISE FOR OUR CONSIDERATION. 3 ITA NO. 3884/MUM/2012 (A.Y. 2001-02) ITO VS. NARENDRA NATH KUMAR 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ,- ./ ) ,) .01! ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 19, 2014 AT THE CONCLUSION OF THE HEARING ITSELF. SD/- SD/- (DR. S. T. M. PAVALAN) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 2 34 MUMBAI; 5 DATED : 24.06.2014 # ROSHANI , SR. PS ! ' #$%& ' &$ # COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT 3. '' 2 6. 7 8 / THE CIT(A) 4. '' 2 6. / CIT CONCERNED 5. 9: ;'.<= ' <=- 2 34 / DR, ITAT, MUMBAI 6. ; >? 4 # GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 2 34 / ITAT, MUMBAI