Income Tax Officer, International Taxation. Ward-1, Panaji., Panaji V. Mr. Ulrich Angerer., Goa

ITA 419/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93467 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 04-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NISHANT K
• Assessee Lawyers: PRADEEP KULKARNI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , HONBLE ACCOUNTANT MEMBER ITA NO. 419 /PNJ/2014 (ASST. YEAR : 20 11 - 1 2 ) ITO, INTERNATIONAL TAXATION, WARD - 1, PANAJI. VS. MR. ULRICH ANGERER, H.NO. 9/14 , OPP. COLVA CHURCH, COLVA, SALCETE, GOA. PAN NO. BBMPA 5738 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRADEEP KULKARNI - CA DEPARTMENT BY : SHRI NISHANT K. - D.R. DATE OF HEARING : 15 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 15 / 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THIS IS AN APPEAL BY THE REVENUE PREFERRED AGAINST THE ORDER OF L D. CIT (A), PANAJI, DATED 1 0 /0 9 /201 4 PERTAINING TO A.Y. 20 11 - 12 . 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS UNDER: - 2. LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITIONS MADE IN ACCORDANCE WITH THE PROVISION OF SECTION 50C(1) WHERE THE MARKET VALUE OF CAPITAL ASSET DETERMINED BY THE STAMP VALUATION AUTHORITY WAS DEEMED TO BE THE FULL VALUE OF CONSIDERATION WHICH THE ASSESSEE HAD NOT DISPUTED BEFORE THE APPELLATE AUTHORITIES OR THE COURT UNDER STAMP DUTY ACT. 2 ITA NO. 419 /PNJ/2014 3. LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE PROVISION OF SECTION 50 C(2) WERE AVAILABLE TO THE ASSESSEE TO PLEA BEFORE THE ASSESSING OFFICER TO REFER VALUATION OF THE PROPERTY TO VALUATION OFFICER. 4. LEARNED CIT(A) HAS ERRED IN CONSIDERING THE FACT THAT THE ASSESSEE DID NOT MADE ANY CLAIM BEFORE THE ASSESSING OFFICER T HAT FAIR MARKET VALUE OF THE PROPERTY UNDER TRANSFER IS LESS THAN THE VALUATION DONE BY THE STAMP VALUATION AUTHORITY. 5. LEARNED CIT(A) HAS ERRED IN HOLDING THAT AO DID NOT REJECTED THE VALUATION REPORT BEFORE CONCLUDING THAT THE ASSESSEE HAS NOT DECLARED FULL VALUE OF CONSIDERATION CONTRARY TO THE FACT THAT NO SUCH VALUATION REPORT WAS PRODUCED BY THE ASSESSEE AND THAT THE PROVISIONS OF SECTION DO NOT REQUIRE THE AO TO CONCLUDE THAT THE ASSESSEE HAS NOT DECLARED FULL VALUE OF CONSIDERATIONS. 3. THE ASSESSEE IS A NON - RESIDENT INDIVIDUAL, WHO FILED HIS RETURN OF INCOME ELECTRONICALLY DECLARING TOTAL INCOME AT RS. NIL. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND , ACCORDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY KNOW N AS CABECEIRA DE PRIMEIRO LANCO DE RAAIS OR PRAI LANCO ADMEASURING 1200 SQ. MTR. SITUATED AT BETALBATIM, DESCRIBED IN THE LAND REGISTRATION OFFICE OF SALCETE UNDER N O . 35121 OF NEW SERIES, NOT ENROLLED IN THE LAND REVENUE OFFICE BUT SURVEYED UNDER NO. 96/1 OF BETALBATIM VILLAGE ON 11/10/2010 FOR RS. 20,00,000/ - . THE SAID PROPERTY WAS PURCHASED ON 03/01/2001 FOR RS. 10,00,000/ - . THE ASSESSING OFFICER FURTHER OBSERVED THAT THE VALUE ADOPTED BY THE SUB - REGISTRAR FOR STAMP DUTY PURPOSE WAS RS. 44.25 3 ITA NO. 419 /PNJ/2014 LAC. WHEREAS A SSESSEE HAS SHOWN SALE CONSIDERATION AT RS. 20 LAC. ASSESSEE WAS ASKED TO EXPLAIN WHY VALUE ADOPTED FOR STAMP DUTY PURPOSE SHOULD NOT BE ADOPTED AS SALE CONSIDERATION FOR COMPUTATION OF CAPITAL GAINS. THE ASSESSEE FILED THE FOLLOWING REPLY: - I HAVE SOLD A PROPERTY AT BE TALBATIM, GOA FOR RS. 20,00,000/ - ONLY AND NOT RS. 44,25,000/ - . THE VALUATION OF THE PROPERTY FOR THE PURPOSE OF STAMP DUTY WAS TAKEN AT RS. 44,25,000/ - HOWEVER I HAVE RECEI V ED A SUM OF ONLY RS. 20,00,000/ - . THE PROPERTY UNDER QUESTI ON WAS UNDER LITIGATION AND HENCE SOLD AT LESSER VALUE AS I WAS IN URGENT NEED OF FUNDS. THE ASSESSING OFFICER DID NOT ACCEPT THE SUBMISSION OF THE ASSESSEE AND PROCEEDED TO COMPUTE THE LONG TERM CAPITAL GAIN BY TAKING THE STAMP DUTY VALUE AS THE FULL SALE CONSIDERATION. 4 . AGGRIEVED BY THIS, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) AND ONCE AGAIN TOOK THE SAME STAND AS WAS TAKEN BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . IT WAS EXPLAINED TO THE LD. CIT(A) THAT THE PROPERTY SOLD BY THE ASSESSEE WAS UNDER LITIGATION AND A BUNGALOW CONSTRUCTED WAS DEMOLISHED BY THE GOA COASTAL ZONE AUTHORITY FOR CRZ VIOLATIONS BECAUSE OF WHICH THE ASSESSEE HAD TO S ELL THE PROPERTY FOR RS. 20,00,000/ - . AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND TAKING A LEAF OUT OF A NEWSPAPER REPORT, LD. CIT(A) WAS CONVINCED THAT NO PERMANENT STRUCTURE OF ANY KIND CAN BE ERECTED ON THE IMPUGNED LAND. 4 ITA NO. 419 /PNJ/2014 THE ASSESSING OFFICER HA S NOT CONSIDERED THE CIRCUMSTANCES RELATING TO LAND AND HAS MECHANICALLY APPLIED THE PROVISIONS OF SEC. 50C OF THE ACT. RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KHOOBSURAT RESORTS PVT. LTD. [ 2012 (11) TMI 590] WHICH READS AS UNDER: - TH E E XPRESS PROVISION OF SECTION 50 - C ENABLING THE REVENUE TO TREAT THE VALUE DECLARED BY AN ASSESSEE FOR PAYMENT OF STAMP DUTY, CANNOT BE A LEGITIMATE GROUND FOR CONCLUDING THAT THERE WAS UNDERVALUATION, IN THE ACQUISITION OF IMMOVABLE PROPERTY. T HE FINDING CANNOT START AND CONCLUDE WITH THE FACT THAT SUCH STAMP DUTY VALUE OR BASIS IS HIGHER THAN THE CONSIDERATION MENTIONED IN THE DEED. THE COMPULSION FOR SUCH HIGHER VALUE, IS THE MANDATE OF THE STAMP ACT, AND PROVISIONS , WHICH LEVY STA MP DUTY AT PRE - DETERMINED OR NOTIFIED DATES. IN THE PRESENT CASE, THE REVENUE DID NOT RELY ON ANY OBJECTIVE FACT OR CIRCUMSTANCES; CONSEQUENTLY, THE COURT HOLDS THAT THERE IS NO INFIRMITY IN THE APPROACH OF THE LOWER AUTHORITIES AND THE TRIBUNAL, GRANTING RELIEF TO THE ASSESSE E IN FAVOUR OF THE ASSESSEE. LD. CIT(A) FINALLY CONCLUDED BY HOLDING THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MECHANICALLY APPLYING THE PROVISIONS OF SEC. 50C AND ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO DELETE THE AD DITIONS MADE. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. LEARNED DR STRONGLY SUPPORTED THE ASSESSMENT ORDER. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 5 ITA NO. 419 /PNJ/2014 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BE L OW. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS SHOWN S A LE CONSIDERATION FROM THE SALE OF IMPUGNED PROPERTY, WHOSE STAMP DUTY VALUE WAS MUCH HIGHER. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE HAD SOLD THE PROPERTY UNDER DURESS. IT IS ALSO AN UNDISPUTED FACT THAT THE BUNGALOW ERECTED ON THE IMPUGNED LAND WAS DEMOLISHED BY THE LOCAL AUTHORITIES. SUCH FACTS LEAD TO ONLY ONE CONCLUSION THAT THE STAMP DUTY VALUATION IS NOT DONE CONSID ERING THESE RELATED FACTORS. IN OUR CONSIDERED O PINION, THE MATTER SHOULD HAVE BEEN REFERRED TO THE DISTRICT VALUATION OFFICER (DVO) TO VALUE THE PROPERTY AFTER CONSIDERING ALL THE RELATED FACTS IN THE IMPUGNED LAND. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO REFER THE MATTER TO THE DVO MENTIONING THE SPECIAL CHARACTER OF THE IMPUGNED PROPERTY AND DECIDE THE ISSUE AFRESH AFTER GIVING REASONABLE AND FAIR OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE R E V E NUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ( ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 201 5 ). S D / - S D / - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 6 T H JUNE , 201 5 . 6 ITA NO. 419 /PNJ/2014 VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 7 ITA NO. 419 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 5 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 6 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 6 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 6 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 6 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 5 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 16 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER