Smt. Sangeeta Ganpati Jadhav, Pune V. Assistant Commissioner of Income-Tax, Circle -4, Pune

ITA 463/PUN/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8268 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 06-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BARVE
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA No. 463/PUN/2020 नधा रण वष / Assessment Year : 2015-16 Sangeeta Ganpati Jadhav, Flat No.D-406, Neha Co.op. Housing Society, S.No.41, Sus, Maharashtra – 411 045 PAN : AEFPJ8933A Vs. ACIT, Circle-4, Pune Appellant Respondent ITA No. 464/PUN/2020 नधा रण वष / Assessment Year : 2015-16 Sunita Ashok Khot, 6, Payal Apartments, Deep Society, Sanghavi Nagar, Aundh, Maharashtra – 411 007 PAN : BDBPK8696K Vs. ITO, Ward-2(5), Pune Appellant Respondent आदेश / ORDER PER R.S.SYAL, VP : These two appeals by different but connected assessees arise out of the orders passed by the CIT(A) on 03-10-2019 & 17-10-2019 respectively in relation to the assessment year 2015-16. Since these appeals are based on similar facts and Assessee by Shri D.R. Barve Revenue by Shri M.G. Jasnani/ Shri Piyush Kumar Singh Yadav Date of hearing 21-02-2022 Date of pronouncement 23-02-2022 ITA Nos.463 & 464/PUN/2020 2 common grounds, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. 2. Both the appeals are time barred by 87 days. The assessees have filed affidavits giving the reasons for the delay. We are satisfied with the same. The delay is condoned and the appeals are admitted for disposal on merits. 3. The factual scenario in the appeal of Smt. Sangeeta Ganpati Jadhav is that she filed her return declaring total income of Rs.20,76,520/- comprising, inter alia, of long term capital gain. During the course of assessment proceedings, it was observed by the Assessing Officer (AO) that the assessee along with her two sisters, namely, Smt. Sunita Ashok Khot, the other appellant in this batch of appeals and Smt. Anita Vishwanath Nayak entered into a development agreement on 17-05-2014 with Magarpatta City Development Company Pvt. Ltd. in respect of a land admeasuring total area 30R situated at Sr.No.71/3B, 71/8, 9 etc., at village Mundhwa, Tal. Haveli, District Pune for a consideration of Rs.2.55 crore. The AO observed that the assessee had adopted value of land at Rs.17/- per sq.ft. on the basis of a valuation report given by a ITA Nos.463 & 464/PUN/2020 3 Government Approved Valuer. On perusal of such report, he observed that the Valuer had not given any sale instance in the nearby area. The AO proposed to adopt the market value of the property at Rs.15/- per sq.ft. as on 01-04-1981 for the purpose of computation of capital gain. Vide Order Sheet noting dated 14-12-2017, the assessee agreed for adoption of the market value at Rs.15/- per sq.ft. as on 01-04-1981 subject to District Valuation Officer’s (DVO) report. The AO further observed that the consideration received by the assessee was Rs.85.00 lakh which itself was shown as sale consideration for the computation of capital gain. Invoking the provisions of section 50C of the Income-tax Act, 1961 (hereinafter also called `the Act’), the AO observed that the stamp value of the property at Rs.1,35,70,000/- was required to be substituted for actual amount of full value of consideration. The assessee agreed for this also, but again subject to rider of substituting it with the value as determined by the DVO, which is, in fact, in accordance with section 50C(2) of the Act. For determining the fair market value of the land at Mundhwa as on the date of sale, a reference was made u/s.55A/50C(2) to the DVO, Income-tax, Solapur on 18-09-2017. No Valuation report of ITA Nos.463 & 464/PUN/2020 4 the DVO was received up to the time close to the lapse of the time limit for completion of assessment. Since the assessment was getting time barred, the AO completed the assessment by taking the value of land at Mundhwa at Rs.1,35,70,000/- subject to rectification/revision as per the valuation report of DVO. That is how, the AO computed capital gain at Rs.1,19,16,650/- from which exemption u/s.54F was allowed and finally long term capital gain was determined at Rs.64,94,004/-. The assessee preferred appeal before the ld. CIT(A), who, for the reasons ascribed in the impugned order, dismissed the same. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 4. We have heard both the sides and perused the relevant material on record. It is seen that the AO rejected the report of the Registered Valuer taking the rate of Rs.17 per sq.ft. as on 1.4.1981. He chose a rate of Rs.15 per sq.ft. on ad hoc basis, which the assessee agreed subject to its substitution with the value as determined by the DVO. Similar is the position qua the stamp value taken by the AO as full value of consideration, which the assessee again agreed for the purposes of computation of capital gain subject to its substitution with the ITA Nos.463 & 464/PUN/2020 5 value as per the report of DVO, Solapur. The AO also made a reference to the DVO for determining the values. As the report of the DVO was not received till the assessment was getting time barred, the AO finalised the assessment on the basis of the ad hoc rate of Rs.15 per sq.ft. and the stamp value. He, however, mentioned in the order to make necessary rectification on the receipt of the report of the DVO. Unfortunately, there is neither any reference to the receipt of the report of the DVO nor of carrying out any rectification to align the original computation of capital gain with the values as per the DVO’s report. This course of action is impermissible. The contention of the ld. DR that the assessee did not extend co-operation to the DVO as a result of which the valuation could not take place, is neither here nor there. It is trite that even if an assessee does not extend co-operation in any proceedings under the Act, there are well defined ways and means to complete the proceedings. Once the assessment was finalised by expressly agreeing and specifically mentioning that the computation of capital gain was “subject to rectification/revision as per valuation report of the DVO”, it was all the more obligatory on the part of the AO to honour his ITA Nos.463 & 464/PUN/2020 6 words and do the needful. It is a matter of record that the AO did not give effect to his own undertaking which was a pre- condition of the assessee accepting the values proposed by the AO. In such a scenario, we are unable to countenance the view taken by the authorities below in the matter of computation of capital gain. We, therefore, set aside the impugned order and remit the matter to the file of the AO for obtaining the report of the DVO as admitted in the assessment order and then compute fresh amount of capital gain as per law after allowing adequate opportunity of hearing to the assessee. Needless to say, the assessee will be at liberty to put across all the arguments before the AO/CIT(A) which are germane to the issue under consideration. 5. The appeal in the case of Smt. Sunita A. Khot, the other appellant in this batch of appeals, is based on identical facts. Both the sides fairly conceded that the factual matrix of this appeal is mutatis mutandis similar to that of Smt. Sangeeta Ganpati Jadhav. Following the view taken hereinabove, we set-aside the impugned order and remit the matter to the file of the AO for re-deciding this issue in accordance with our directions contained in the earlier part of the order. ITA Nos.463 & 464/PUN/2020 7 6. In the result, both the appeals are allowed for statistical purposes. Order pronounced in the Open Court on 23 rd February, 2022. Sd/- Sd/- (S.S.VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दनांक Dated : 23 rd February, 2022 Satish आदेश क त ल प अ े षत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. 4. The CIT(A)-3, Pune The Pr.CIT-2, Pune 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, पुणे “B” / DR ‘B’, ITAT, Pune 6. गाड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA Nos.463 & 464/PUN/2020 8 Date 1. Draft dictated on 21-02-2022 Sr.PS 2. Draft placed before author 22-02-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *