The I.T.O.-4(3), Agra V. Sh. Om Prakash Mahajan, Agra

ITA 419/AGR/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0374 (ITAT-AGRA)
• Duration Of Justice: 8 year(s) 6 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 26-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: NITIN SINGH
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C; 54F; 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.419/AGR/2010 ASSESSMENT YEAR: 2004-05 INCOME TAX OFFICER-4(3), VS. SRI OM PRAKASH MAH AJAN, AGRA. 34, DAYAL BAGH ROAD, AGRA. (PAN: ABJPM 4753 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA, JR. D.R. RESPONDENT BY : SHRI NITIN SINGH, C.A. DATE OF HEARING : 24.11.2011 DATE OF PRONOUNCEMENT : 26.12.2011 ORDER PER BENCH : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E IMPUGNED ORDER DATED 09.08.2010 PASSED BY THE LD. CIT(A)-II, AGRA FOR TH E ASSESSMENT YEAR 2004-05 ON THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFI CER TO REFER THE MATTER OF VALUATION OF PROPERTY TO THE DVO WITHOUT PROPERLY APPRECIATING THE PROVISIONS OF SECTION 50C WHICH AR E SPECIFIC ABOUT FAIR MARKET VALUE AND MOREOVER, THE PROPERTY IN QUE STION IS LAND ONLY AND DOES NOT INVOLVE ANY CONSTRUCTION. ITA NO.419/AGR/2010 A.Y. 2004-05 2 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFI CER TO COMPUTE THE CAPITAL GAIN ON THE BASIS OF VALUATION DONE BY THE DVO. 3. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), AGRA BEING ERRONEOUS IN LAW AND ON FACTS DESERVES TO BE QUASHED AND THAT OF THE ASSESSING OFFICER DESERVES TO BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E THAT ON THE BASIS OF INFORMATION RECEIVED BY THE ASSESSING OFFICER DURIN G THE FINANCIAL YEAR IN DISPUTE, THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 09/23.02.2007 TO THE ASSESSEE CALLING FOR A RETURN BEING THERE HAD BEEN INCOME ESCAPING ASSESSMENT. A CCORDING TO THE ASSESSMENT ORDER, THE ADDL. D.I.T. (INV.), AGRA INFORMED TO TH E A.O. THAT THE ASSESSEE HAS PURCHASED TWO IMMOVABLE PROPERTIES FOR ` 8,85,020/- IN FINANCIAL YEAR 1997-98 AND ` 2,15,270/- IN THE F.Y. 2001-02 AND LATER ON IN HE Y EAR 1998-99 INVESTED ` 20,75,000/- TOWARDS THE IMPROVED COST OF CONSTRUCT ION AND SOLD FOR ` 42,45,000/- AND ` 12,50,000/- AND THE ASSESSEE HAS PAID THE STAMP DUT Y ON THE CIRCLE RATE OF ` 73,45,000/- AND ` 36,74,000/-. THE ASSESSEE IN HIS RETURN FILED FOR THE ASSESSMENT YEAR 2004-05 HAS SHOWN LONG TERM CAPITAL GAIN OF ` 4,95,288/- (54,95,000 43,64,033 5,19,689 1,15,990) AFTER INDEXATION, AVAILING EXE MPTION UNDER SECTION 54F OF THE ACT AND SETTING OFF LONG TERM CAPITAL LOSS FOR THE ASSE SSMENT YEAR 2002-03 AND THEREBY ITA NO.419/AGR/2010 A.Y. 2004-05 3 HE VIOLATED THE PROVISIONS OF SECTION 50C OF THE AC T INSERTED W.E.F. 01.04.2003. THE ASSESSING OFFICER WAS OF THE OPINION THAT IN VI EW OF THE PROVISIONS OF SECTION 50C, THE ASSESSEE HAS FAILED TO SHOW FULL VALUE OF CONSIDERATION I.E. ` 1,10,24,000/- WHILE CALCULATING THE CAPITAL GAIN ON WHICH THE STA MP DUTY IS PAID. THEREFORE, THE INCOME TO THE TUNE OF ` 55,29,000/- (1,10,24,000 54,95,000) HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT FOR THE ASSESSMENT YEAR 2004-05. IN RESPONSE TO THE NOTICE ISSUED BY THE A SSESSING OFFICER UNDER SECTION 148 OF THE ACT DATED 09/23.02.2007, THE ASSESSEE FI LED HIS REPLY ON 12.04.2007 ALONGWITH COPY OF RETURN AND VALUATION REPORT OF TH E REGISTERED VALUER HAVING BEEN FILED ON 30.11.2006 STATING THAT RETURN ORIGINALLY FILED BE TREATED AS A RETURN TO BE FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 O F THE ACT. THE ASSESSING OFFICER ALSO ISSUED QUESTIONNAIRE ALONGWITH NOTICE UNDER SE CTION 142(1) OF THE ACT DATED 30.07.2007 TO THE ASSESSEE TO FILE REQUISITE DETAIL S SPECIFIED THEREIN. IN RESPONSE TO THE SAME, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED WRITTEN REPLIES FROM TIME TO TIME AND THE CASE WAS DISCUSSED WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAS WORKED OUT THE CAPITAL GAIN ON THE BASIS OF VALUATION REPORT A T ` 54,95,000/- AND HE HAS NEITHER CLAIMED THAT THE VALUE ADOPTED OR ASSESSED BY THE S TAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF TH E PROPERTY AS ON THE DATE OF TRANSFER NOR SUBMITTED ANY EVIDENCE AS THE VALUE SO ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS BEEN DISPUTED IN ANY APPEAL OR ITA NO.419/AGR/2010 A.Y. 2004-05 4 REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY O THER AUTHORITY, COURT OR HIGH COURT. THEREFORE, THE PROPERTY UNDER QUESTION HAS NOT BEEN REFEREED TO THE VALUATION CELL OF THE DEPARTMENT AND THE TOTAL SALE CONSIDERATION HAS BEEN TAKEN AT ` 1,10,24,000/- AS PER CIRCLE RATE IN VIEW OF PROVISI ONS OF SECTION 50C(1) OF THE ACT AND THE A.O. COMPLETED THE ASSESSMENT BY MAKING THE ADDITION OF ` 45,23,253/- ON ACCOUNT OF LONG TERM CAPITAL GAIN VIDE ORDER DATED 18.12.2007 PASSED UNDER SECTION 143(3)/147 OF THE ACT. AGGRIEVED BY THE SA ME, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE T HE IMPUGNED ORDER DATED 09.08.2010 PARTLY ALLOWED THE APPEAL OF THE ASSESSE E BY ALLOWING THE BENEFIT IN DISPUTE TO THE ASSESSEE. NOW, THE REVENUE IS AGGRI EVED BY THE SAME AND FILED THE PRESENT APPEAL. 3. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REP RESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND, ON THE C ONTRARY, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD. FI RST APPELLATE AUTHORITY. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENU E AUTHORITIES. WE ARE OF THE CONSIDERED OPINION THAT IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER HAS NOT MADE ANY REFERENCE TO THE D.V.O. FOR VALUATION OF T HE PROPERTY IN DISPUTE DURING THE ASSESSMENT PROCEEDINGS, BUT THE LD. FIRST APPEL LATE AUTHORITY VIDE ORDER DATED ITA NO.419/AGR/2010 A.Y. 2004-05 5 02.09.2009 PASSED UNDER SECTION 250(4) OF THE ACT D IRECTED THE ASSESSING OFFICER TO REFER THE MATER TO THE VALUATION OFFICER AND IN COMPLIANCE OF THE SAME THE D.V.O. ESTIMATED THE VALUE OF THE TWO PROPERTIES AT ` 42,48,500/- AND ` 21,24,300/-. IT IS ALSO CLEAR THAT THE ASSESSEE HAS AGITATED THE VALUE OF PROPERTY BEFORE THE ASSESSING OFFICER THAT THE FAIR MARKET VALUE OF THE PROPERTY WAS LESS THAN THE VALUE AS ADOPTED BY THE STAMP VALUATION AUTHORITY. BUT T HE ASSESSING OFFICER HAS ACTED IN ARBITRARILY MANNER WITHOUT REFERRING THE PROPERT Y FOR VALUATION TO THE D.V.O. BEING ONCE IT IS CONTESTED BY THE ASSESSEE THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE O F PROPERTY AS ON THE DATE OF TRANSFER. IT IS ADMITTED FACT THAT NO REFERENCE WA S MADE BY THE ASSESSING OFFICER TO THE D.V.O. DURING THE ASSESSMENT PROCEEDINGS BUT TH IS IRREGULARITY DONE BY THE ASSESSING OFFICER HAS BEEN TAKEN CARE BY THE LD. FI RST APPELLATE AUTHORITY BY DIRECTING THE ASSESSING OFFICER TO REFER THE MATTER TO THE D.V.O. AND THE D.V.O. ESTIMATED THE VALUE OF TWO PORTIONS OF LAND SOLD AT ` 63,72,800 (I.E. ` 42,48,500 AND ` 21,24,300/-). AFTER GOING THROUGH THE PROVISIONS O F SECTION 50C(2) OF THE ACT, WE ARE OF THE VIEW THAT WHERE THE VALUATION AS CERTAINED BY THE D.V.O. EXCEEDS THE VALUATION OF THE PROPERTY OF STAMP VALUATION AU THORITY, THE VALUE ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY WILL BE TAKEN TO BE THE FULL VALUE OF CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN, BUT WHERE THE VALUATION ESTIMATED BY THE D.V.O. IS LESS THAN THAT ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY, THE VALUE ESTIMATED BY THE D.V .O. WILL BE TAKEN AS FULL VALUE ITA NO.419/AGR/2010 A.Y. 2004-05 6 OF CONSIDERATION. THE LD. FIRST APPELLATE AUTHORIT Y HAS RIGHTLY APPRECIATED THE FACTS AND THE LEGAL PROVISIONS APPLICABLE IN THE CASE OF THE ASSESSEE AND HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO COMPUTE THE CAPIT AL GAIN ON THE VALUATION AS DONE BY THE D.V.O. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY. WE UPHOLD THE ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL FILED BY THE REVENUE. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26.12.2011). SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 26 TH DECEMBER, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY