Shri. Tejinder Singh Balbir Singh Renu, Nagpur V. Deputy Commissioner of Income Tax,Circle-4, Nagpur

ITA 45/NAG/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84660 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 18-03-2011
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: HARISH BHONEJA
• Keywords: Gift; Cost of acquisition; Fair market value; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . /ITA NO.45/NAG/2011 ( AY: 2007 - 2008 ) SHRI TEJINDER SINGH RENU, C/O. M/S. J.S. UBEROI & CO., CHARTERED ACCOUNTANTS, 2, SAT - PRATAP, BEZONBAGH, KAMPTEE ROAD, NAGPUR - 440 004. / VS. DCIT CIRCLE - 4, NAGPUR. ./ PAN : ABWPR0406N ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARISH BHONEJA / RESPONDENT BY : SHRI A.R. NINAWE, JCIT / DATE OF HEARING : 03.09.2014 / DATE OF PRONOUNCEMENT : 05 .09.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSSESSEE ON 18.3.2011 IS AGAINST THE ORDER OF THE CIT (A) - II, NAGPUR DATED 18.1.2011 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING EFFECTIVE GROUND WHICH READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COST ADOPTED FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS IS ERRONEOUS AND BASED ON SURMISES & CONJECTURES. 3. DURING THE PROCEEDINGS BEFORE US, AT THE VERY OUTSET, SHRI HARISH BHONEJA, LD COUN SEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE GROUND AND MENTIONED THAT THIS IS THE CASE OF MAKING A GIFT BY THE FATHER A PROPERTY ON 28.3.1980 I.E., PRIOR TO 1.4.1981. THE SAID PROPERTY IS VALUED AT RS. 36,000/ - ON THE DATE OF MAKING OF GIFT. THIS THE CASE WHERE ASSET HAS TO BE VALUED CONSIDERING THE MARKET VALUE AS ON 1.4.1981. THE PROPERTY VALUE AS ON DATE IS RS. 8,91,869/ - . REVENUE IS OF THE OPINION THAT RS. 36,000/ - SHOULD BE CONSIDERED AS VALUE AS ON 1.4.1981 IN PLACE OF THE SAID AMOUNT OF RS. 8,91,869/ - , WHICH IS SUPPORTED BY THE VALUATION REPORT. THE LIMITED ISSUE IN THIS CASE IS WHETHER THE AO IS JUSTIFIED IN ADOPTING THE VALUE OF THE 2 PROPERTY AT RS. 36,000/ - AS AGAINST THE FIGURE OF RS. 8,91,869/ - , WHICH IS PROPERLY VALUED BY THE REG ISTERED VALUERS. IN THIS REGARD, LD COUNSEL MENTIONED THAT THE SAID GIFT OF PROPERTY WAS CONFIRMED ON 30.5.1986. FURTHER, THE LD COUNSEL DEMONSTRATED THAT THE DECISION OF THE SPECIAL BENCH, ITAT IN THE CASE OF MANJULA SHAH VS. DCIT [2010] 35 SOT 105 (MUM) (SB) APPLIES TO THE PRESENT CASE AND THERE IS NO DISPUTE IN THIS REGARD. THUS, THE LIMITED ISSUE BEFORE US TO BE ADJUDICATED IS WHETHER THE AO / CIT (A) IS JUSTIFIED IN CONSIDERING ONLY RS. 36,000/ - AS THE COST OF ACQUISITION OF THE ASSET IGNORING THE REGISTERED VALUE OF RS. 8,91,869/ - . LD COUNSEL DEMONSTRATED IN THIS REGARD THAT THE ASSESSEE H AS AN OPTION AND HE RELIES HEAVILY ON THE PROVISIONS OF SECTION 55(2)(B)(II) . BRINGING OUR ATTENTION TO THE DECISION OF THE ITAT, CHANDIG ARH BENCH IN THE CASE OF VISHWANATH SHARMA VS. ACIT [2013] 58 SOT 267 (CHANDIGARH), LD COUNSEL READ OUT THAT ASSESSEE HAS STATUTORY OPTION FOR ADOPTION OF FAIR MARKET VALUE, AS ON 1.4.1981 AND ONCE ASSESSEE HAS EXERCISED HIS OPTION FOR ADOPTION OF FAIR MA RKET VALUE OF IMPUGNED ASSET, WITHIN MEANING OF SECTION 55(2)(B)(II) , REVENUE AUTHORITIES ARE REQUIRED TO ACT IN CONSONANCE WITH PROVISIONS OF SAID SECTION AND CANNOT ARBITRARILY THRUST UPON ASSESSEE COST OF ACQUISITION, OF THEIR CHOICE. 4. ON THE OTHE R HAND, SHRI A.R. NINAWE, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES AND ON PERU SAL OF THE IMPUGNED ORDER, WE FIND THE REVENUE AUTHORITIES HAVE IGNORED THE SAID PROVISIONS OF SECTION 55(2)(B)(II) OF THE ACT. IN OUR OPINION, THE ASSESSEE HAS A CASE CONSIDERING THE DECISION OF THE ITAT, CHANDIGARH BENCH IN THE CASE OF VISHWANATH SHARMA (SUPRA). FOR THE LIMITED PURPOSE, WE DIRECT THE AO TO EXAMINE THE CLAIM / ARGUMENTS OF THE ASSESSEE IN THE LIGHT OF THE SAID DECISION OF THE SAID CHANDIGARH BENCH DECISION IN THE CASE OF VISHWANATH SHARMA (SUPRA). IT IS ALSO RELEVANT TO MENTION HERE THA T THE AO CANNOT MAKE A REFERENCE NOW, CONSIDERING THE DECISION OF THE ITAT, AGRA BENCH IN THE CASE OF PYARE MOHAN MATHUR (HUF) VS. ITO [2011] 46 SOT 315 (AGRA). AO NEEDS TO RECOMPUTED THE CAPITAL GAINS AFTER TAKING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981, WHICH HAPPENED IN THE 3 CASE OF PYARE MOHAN MATHUR (HUF) (SUPRA). ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOS ES. ORDER PRONO UNCED IN THE OPEN COURT ON 5 TH SEPTEMBER, 2014 . SD/ - SD/ - (VIVEK VARMA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; 5 /09/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , / DR, ITAT, NAGPUR. 6. / GUARD FILE . //TRUE COPY// / BY ORDER, (SR. PRIVATE SECRETARY) / ITAT, NAGPUR