ITO- 2(1), Moradabad V. M/s. Govind Narain Verma, HUF, Moradabad

ITA 4180/DEL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2765 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value
• Section: 50C; 2(14); 142(1); 148

Judgement Text

ITA NO.4180/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 4180 /DEL/2013 A.Y. 200 9 - 10 INCOME TAX OFFICER, WARD 2(1), MORADABAD VS. M/S GOVIND NARAIN VERMA, (HUF), A-36, DEV VIHAR COLONY, KANTH ROAD, MORADABAD (PAN:AADHG1204P) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. T. VASANTHAN, SR. DR ASSESSEE BY : NONE PRESENT DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 11 1111 11- -- -1 11 12 22 2- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 04 0404 04- -- -1 11 1- -- -201 201 201 2016 66 6 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THE REVENUE HAS FILED THIS APPEAL AGAINST THE ORDE R DATED 11.4.2013 PASSED BY THE LD. CIT(A), BAREILLY ON THE FOLLOWING GROUNDS:- 1. THE LD. COMMISSIONER OF INCOME TAX(APPEAL) HAS ERRE D IN LAW IN ALLOWING THE ASSESSEE'S APPEAL AND ANNULLING THE OR DER PASSED BY THE AO. 2. THE ORDER OF LD. COMMISSIONER OF INCOME TAX/APPEAL ) IS ERRONEOUS AND BAD IN LAW AND DESERVES TO BE CANCELLED-RAND TH E ORDER PASSED BY THE A.O. DESERVES TO BE SUSTAINED ON THE FACTS OF T HE CASE. 3. THE SPIRIT OF SECTION SOC REGARDING FULL VALUE, OF CONSIDERATION HAS NOT BEEN APPRECIATED BY THE LD. COMMISSIONER OF INC OME TAX(APPEAL). THE FULL VALUE OF CONSIDERATION AND INDEX COST OF A CQUISITION WERE RIGHTLY ADOPTED BY THE AO IN RESPECT OF BOTH THE PROPERTIES . 4. EVEN IF THE LD. COMMISSIONER OF INCOME TAX(APPEAL) WAS OF THE VIEW THAT THE MATTER SHOULD HAVE BEEN REFERRED TO THE VALUATI ON OFFICER ULS SOC 2(A) OF I.T.ACT, 1961, HE MIGHT HAVE DIRECTED THE A.O. T O MAKE VALUATION AFTER ITA NO.4180/DEL/2013 2 REFERRING TO VALUATION OFFICER, IF A.O. HAS MADE VA LUATION WITHOUT ANY SUCH REFERENCE. 5. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX( APPEAL) IH ANNULLING THE ASSESSMENT IS NOT ACCEPTABLE AS FAR AS THE MATTER O F REFERRING THE CASE TO VALUATION OFFICER IS CONCERNED. THE MATTER MAY BE S ET ASIDE TO THE FILE OF THE A.O. FOR REFERRING THE CASE TO VALUATION OFFICER AS REQUIRED U/S SOC 2(A) OF THE I.T.ACT, 1961. 6. ANY GROUNDS OF APPEAL WHICH MAY BE TAKEN AT THE TIME OF HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED THE RETURN OF INCOME ON 30.03.2010 SHOWING TOTAL INCOME OF RS 8,17,996/- AN D INCOME FROM AGRICULTURE RS. 10,200/-. FROM AIR, THE INFORMATION WAS RECEIVE D THAT THE ASSESSEE HAS SOLD A PROPERTY AND THE ASSESSEE FAILED TO DISCLOSE THE INCOME FROM CAPITAL GAIN IN ITS RETURN. AO ISSUED A NOTICE U/S 148 OF THE I.T. ACT, 1961 TO THE ASSESSEE ON 05.01.2012 WHICH WAS DULY SERVED UPON THE ASSESSEE ON 18.01.2012. THE ASSESSEE DID NOT FILE ANY RETURN OF ITS INCOME AND A NOTICE U/S 142(1) WAS ALSO ISSUED ON 28.02.2012 WHICH WAS ALSO SERVED UPON THE ASSESSEE ON 02.03.2012. IN COMPLIANCE TO NOTICE U/S 148 THE ASSESSEE FILED ITS RETURN OF INCOME ON 14.03.2012. A NOTICE U/S 143(2) AND 142(1)(II) WAS ISSUED ON 30.04.2012 WHICH WAS DULY SERVED ON 04.05.2012. IN COMPLIANCE TO ABO VE NOTICES SHRI ASHISH VERMA LEGAL HEIR OF LATE SHRI GOVIND NARAIN VERMA K ARTA OF ASSESSEE H.U.F. ALONGWITH SHRI SANJEEV KUMAR AGRAWAL, FCA, HIS AUTH ORIZED REPRESENTATIVE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TI ME AND PRODUCED THE REQUIRED DOCUMENTS AND FILED THE REQUIRED DETAILS A ND EXPLANATIONS. THE ASSESSEE COMPUTED LONG TERM CAPITAL GAIN TREATING T HE FAIR MARKET VALUE AS CONSIDERATION RECEIVED ON THE TRANSFER OF PROPERTY. IN THE RETURN FILED IN COMPLIANCE TO NOTICE U/S. 148. VIDE NOTICE U/S. 14 2(1)(II) DATED 24.5.2012 THE ASSESSEE WAS ASKED WHY THE FAIR MARKET MAY NOT BE T AKEN, AS TAKEN BY THE AUTHORITY OF STATE GOVERNMENT FOR THE PURPOSE OF PA YMENT OF STAMP DUTY, AS PER ITA NO.4180/DEL/2013 3 THE PROVISIONS OF SECTION 50C OF THE I.T. ACT, 1961 . ASSESSEE FILED ITS REPLY, WHICH WAS NOT ACCEPTABLE BECAUSE THE LAND UNDER QUESTION IS WITHIN 8 KMS. FROM MUNICIPAL LIMIT OF MORADABAD AS CERTIFIED BY THE TE HSILDAR SADAR, MORADABAD. AO OBSERVED THAT AS PER THE PROVISIONS OF SECTION 2(14) OF THE I.T. ACT, 1961 IT IS URBAN LAND AND NOT AGRICULTURAL LAND. THEREFORE, THE FAIR MARKET VALUE IS TAKEN AS PER VALUE DETERMINED BY THE AUTHORITY OF THE STATE GOVERNMENT FOR STAMP DUTY PURPOSES AS PER THE PROVISIONS OF SECTION 50C OF TH E I.T. ACT, 1961 AND CAPITAL GAIN IS WORKED OUT ACCORDINGLY. THEREAFTER, THE AO ASSESSED THE TOTAL INCOME OF RS. 75,74,760/- U/S. 148/143(3) OF THE I.T. AT, 196 1 VIDE HIS ORDER DATED 15.6.2012. 3. AGGRIEVED BY THE AFORESAID ASSESSMENT ORDER, AS SESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 11.4 .2013 HAS ANNULLED THE ASSESSMENT ORDER. 4. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER DATED 114.2013 PASSED BY THE LD. CIT(A). 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR HIS A UTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FI LED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRESENT APPEAL, WE AR E OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE, THEREFORE, WE ARE DECIDING THE PRESENT APPEAL EXPA RTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL FILED BY THEM. HE ITA NO.4180/DEL/2013 4 STATED SPIRIT OF SECTION 50C REGARDING FULL VALUE O F CONSDIERATION HAS NOT BEEN APPRECIATED BY THE LD. CIT(A). THE FULL VALUE OF CONSIDERATION AND INDEX COST OF ACQUISITION WERE RIGHTLY ADOPTED BY THE AO IN RESPE CT OF BOTH THE PROPERTIES. HE FURTHER STATED THAT THE LD. CIT(A) WAS OF THE VIEW THAT THE MATTER SHOULD HAVE BEEN REFERRED TO THE VALUATION OFFICER U/S. 50C2(A ) OF THE I.T. ACT, 1961, HE MIGHT HAVE DIRECTED THE AO TO MAKE VALUATION AFTER REFERRING TO VALUATION OFFICER, IF AO HAS MADE VALUATION WITHOUT ANY SUCH REFERENCE. THAT THE LD. CIT(A) HAS ANNULLED THE ASSESSMENT WHICH IS NOT ACCEPTABLE AS FAR AS THE MATTER OF REFERRING THE CASE TO VALUATION OFFICER IS CONCERNE D. THEREFORE, HE REQUESTED THE BENCH THAT MATTER MAY BE SET ASIDE TO THE FILE OF THE AO FOR REFERRING THE CASE TO VALUATION OFFICER AS REQUIRED U/S. 50C2(A) OF TH E I.T. ACT, 1961. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE RECO RDS ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. WE FIND CONSIDERABLE C OGENCY IN THE ARGUMENT OF THE LD. DR THAT LD. CIT(A) WAS OF THE VIEW THAT THE MAT TER SHOULD HAVE BEEN REFERRED TO THE VALUATION OFFICER U/S. 50C(2) OF THE I.T. AC T, 1961, HE MIGHT HAVE DIRECTED THE AO TO MAKE VALUATION AFTER REFERRING TO VALUA TION OFFICER, BUT AO HAS MADE VALUATION WITHOUT ANY SUCH REFERENCE. THE REQU EST OF THE LD. DR OF SETTING ASIDE THE MATTER TO THE FILE OF THE AO FOR REFERRIN G THE CASE TO VALUATION OFFICER AS REQUIRED U/S. 50C2(A) OF THE I.T. ACT, 1961 SEEMS T O BE GENUINE ONE. WE ALSO FIND THAT LD. CIT(A) IN HIS IMPUGNED ORDER VIDE ORD ER DATED 11.4.2013 AT PAGE 23 HAS HELD AS UNDER:- THUS FROM WHAT HAS BEEN DISCUSSED ABOVE, AND ALSO KEEPING IN VIEW THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY T HE COUNSEL AND THE REPLY OF THE APPELLANT BEFORE THE AO, IT IS CLE AR THAT THE AO IGNORED THE PROVISIONS OF SECTION 50C(2)(A) VARIED THE COST OF ACQUISITION OF PROPERTY WITHOUT ALLOWING ANY OPPORT UNITY TO THE ITA NO.4180/DEL/2013 5 ASSESSEE IN THIS REGARD. IN THIS BACK GROUND OF T HE FACTS, AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT SO FRAMED BY THE AO IS NOT VALID IN THE EYES OF LAW AND IS VOID AB-INITIO. AS SUCH THE ASSESSMENT ORDER PASSED BY THE AO IS ANNULLED. 7.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE IN DISPUTE NEEDS TO BE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE SAME. ACCORDINGLY, WE REMIT BACK THE ISSUE IN DISPUTE TO THE FILE OF THE AO FOR REFERRING THE CASE TO VALUA TION OFFICER AS REQUIRED UNDER SECTION 50C2(A) OF THE I.T. ACT, 1961 AND THEREAFTE R DECIDE THE ISSUE IN DISPUTE AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/1/2016. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [O.P. KANT O.P. KANT O.P. KANT O.P. KANT] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE: 04-1-2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES