Smt. Delwin Philomina D'Souza, Bangalore V. ITO, Bangalore

ITA 471/BANG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8560 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JT
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.471/BANG/2014 ASSESSMENT YEAR : 2006-07 SMT. DELWIN PHILOMINA DSOUZA, PUTTAPPA TEMPLE STREET, DEVANAHALLI, BANGALORE 562 110. PAN: AUUPD 9764C VS. THE INCOME TAX OFFICER, WARD 9(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. PRATIBHA R., ADVOCATE RESPONDENT BY : SHRI SUNIL KUMAR AGARWALA, JT. CIT(DR) DATE OF HEARING : 30.03.2016 DATE OF PRONOUNCEMENT : 31.03.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 15.1.2014 OF THE CIT(APPEALS), LTU, BANGALORE INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT (APPEALS) GROSSLY ERRED IN PASS ING THE ORDER IN THE MANNER HE DID. ITA NO.471/BANG/2014 PAGE 2 OF 5 2. THE LEARNED CIT (APPEALS) OUGHT TO HAVE APPRECI ATED THAT THE LAND WHICH WAS SOLD BY THE APPELLANT FOR A SALE CONSIDERATION OF RS.36.30 LAKHS WAS A LITIGATED LAND AND HENCE DI D NOT HAVE MUCH MARKETABLE VALUE. ACCORDINGLY, THE ESTIMATE OF THE SALE PROCEEDS TO BE RS.72.60 LAKHS AS CONFIRMED BY THE C IT (APPEALS) IS OPPOSED TO LAW AND IS LIABLE TO BE DELETED. 3. THE LEARNED CIT (APPEALS) OUGHT TO HAVE APPRECI ATED THAT THE IMPUGNED LAND SOLD WAS A LITIGATED LAND AND THA T THE BUYER OF THE LAND FROM THE APPELLANT HAD INCURRED SUBSTANTIA L LEGAL EXPENSES TO REGULARIZE THE LITIGATION, DUE TO WHICH THE LAND FETCHED THE SALE CONSIDERATION OF RS.72.60 LAKHS. B UT FOR THIS REGULARIZATION, IT WOULD NOT HAVE FETCHED THE SAID SALE CONSIDERATION. ACCORDINGLY, THE LEARNED CIT (APPEAL S) OUGHT NOT TO HAVE CONFIRMED THE SALE CONSIDERATION OF RS.72.6 0 LAKHS. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS. THE LEA RNED CIT (APPEALS) OUGHT TO HAVE ADOPTED THE SALE CONSIDERA TION OF RS.36.30 LAKHS WHICH WAS THE ACTUAL SALE CONSIDERAT ION DULY ACKNOWLEDGED IN THE ABSOLUTE SALE DEED DATED 0L.07. 2005 BY THE APPELLANT. ACCORDINGLY, THE LEARNED CIT (APPEALS) C OULD NOT CHALLENGE THE SANCTITY OF THE REGISTERED DOCUMENT. CONSEQUENTLY, THE DIFFERENCE OF SALE CONSIDERATION AS ESTIMATED B Y THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (APPEALS) IS LIABLE TO BE DELETED IN FULL. 5. THE LEARNED CIT (APPEALS) OUGHT TO HAVE DELETED THE INTEREST CHARGED UNDER SECTIONS 234A AND 2348 OF TH E ACT. 6. WITHOUT PREJUDICE, THE ESTIMATE OF SALE CONSIDER ATION AS CONFIRMED BY THE LEARNED CIT (APPEALS) IS HIGHLY AR BITRARY, UNREALISTIC AND THE SAME IS LIABLE TO BE REDUCED SU BSTANTIALLY. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEA L MAY BE ALLOWED. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER WITH THE SUBMISSION THAT ITA NO.471/BANG/2014 PAGE 3 OF 5 ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER U/S. 144 R.W.S. 147 OF THE ACT, WITHOUT AFFORDING PROPER OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 3. BEFORE THE CIT(APPEALS), THE ASSESSEE HAS CONTEN DED THAT THE MARKET RATE OF LAND SOLD CANNOT BE ADOPTED BY INVOK ING THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT, 1961 [HEREINAFTE R REFERRED TO AS THE ACT] BECAUSE THE LAND IN QUESTION WAS UNDER LITIGA TION, BUT THESE ASPECTS WERE NOT EVEN EXAMINED BY THE CIT(APPEALS) AND THE CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO. IN SUPPORT OF HER CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENT ION TO THE ORDER PASSED BY THE DEPUTY COMMISSIONER, BANGALORE RURAL DISTRIC T. 4. THE LD. DR, BESIDES PLACING RELIANCE ON THE ORDE RS OF LOWER AUTHORITIES, HAS CONTENDED THAT BEFORE THE AO THE A SSESSEE HAS NOT RAISED ANY OBJECTION WITH REGARD TO INVOKING THE PROVISION S OF SECTION 50C OF THE ACT, THEREFORE THE AO RIGHTLY MADE THE ADDITIONS HA VING INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT. 5. HAVING CAREFULLY EXAMINED THE ORDER OF LOWER AUT HORITIES IN LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE AO HAS FRAM ED THE ASSESSMENT AFTER ISSUING FEW NOTICES TO THE ASSESSEE AND MADE THE AD DITION HAVING INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT. BEFORE T HE CIT(APPEALS), THE ASSESSEE HAS PLACED EVIDENCE WITH REGARD TO LITIGAT ION OF OWNERSHIP WITH RESPECT TO THE LAND IN QUESTION, BUT THIS ASPECT WA S NOT EXAMINED WHILE ITA NO.471/BANG/2014 PAGE 4 OF 5 ASCERTAINING THE MARKET VALUE OF THE DISPUTED LAND. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE RIGHT CO URSE TO ASCERTAIN THE MARKET VALUE OF THE LAND WAS ONLY TO MAKE A REFEREN CE TO THE DVO, WHO CAN ASCERTAIN THE MARKET VALUE OF THE LAND IN LIGHT OF THE LITIGATION IN RESPECT OF THE IMPUGNED LAND. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER TO THE ASSESSIN G OFFICER WITH A DIRECTION TO READJUDICATE THE ISSUE OF VALUATION OF THE LAND SOLD BY THE ASSESSEE IN ORDER TO COMPUTE THE CAPITAL GAIN BY MA KING REFERENCE TO THE DVO, WHO CAN EXAMINE THE MARKET VALUE OF THE LAND I N LIGHT OF THE LITIGATION MADE BY CERTAIN OTHER PARTIES. NEEDLESS TO MENTION HERE THAT PROPER OPPORTUNITY BE AFFORDED TO THE ASSESSEE. ACCORDINGL Y, THE APPEAL OF THE ASSESSEE IS DISPOSED OF. 6. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH, 2016. SD/- SD/- ( A.K. GARODIA ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 31 ST MARCH, 2016. /D S/ ITA NO.471/BANG/2014 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.