SH. GURINDER SINGH KHURANA, AMRITSAR V. INCOME TAX OFFICER, WARD - 3(1), AMRITSAR

ITA 475/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7755 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-04-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 17-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PADAM BAHL LD
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER A ND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.475(ASR)/2017 ASSESSMENT YEAR: 2014-15 SH. GURINDER SINGH KHURANA, 24, GOKAL KA BAGH, AMRITSAR [PAN:ABSPK 4468M] VS. INCOME TAX OFFICER, WARD 3(1), AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL (LD. CA) RESPONDENT BY: SH. CHARAN DASS (LD. DR) DATE OF HEARING: 09.04.2019 DATE OF PRONOUNCEMENT: 24.04.2019 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 24.05.2017 PASSED BY THE LD. CIT(A)-1, AMRITSAR U/S 250(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WHEREB Y THE APPEAL OF THE ASSESSEE CHALLENGING THE ADDITION, PARTLY ALLOWED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS DOIN G THE BUSINESS OF STEEL MANUFACTURING AND BEING AN INDIVIDUAL FILED ITS RETURN OF INCOME FOR THE ASST. YEAR. 2014-15, TO THE TUNE OF RS. 1,47,145/- ON DATED 04.10.2014. THE CASE OF THE ASSESSEE CAME INTO SCRUTINY, WHE REBY IT WAS REVEALED THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION, HAS SOLD TWO PROPERTIES SITUATED AT MULTAI, DISTRICT BEITUL (M. P) FOR A TOTAL CONSIDERATION OF RS.25,00,000/- (RS.14,00,000/-AND RS.11 ,00,000/-). THE STAMP VALUATION AUTHORITY HAS TAKEN THE VALUE OF THE PROPERTIES UNDER ITA NO.475/ASR/2017 (A.Y.2014-15) SH. GURINDER SINGH KHURANA VS. ITO 2 CONSIDERATION AT RS.2,37,58,000/- (RS.1,78,90,000/- AND RS.58,68,000/). THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS HAD FILED VALU ATION REPORTS FOR THE PROPERTIES UNDER CONSIDERATION WHICH ACCO RDING TO VALUATION OFFICER VALUED AT RS.13,68,000/- AND RS.10,8 9,000/-. THE SAID VALUATION REPORT WAS NOT RELIED UPON BY THE ASSESSING OF FICER AND THE AO SOUGHT THE VALUATION OF PROPERTIES FROM THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT AT JABALPUR. TILL THE PASSING AN ASSESSMENT ORDER ON 30.12.2016, NO VALUATION REPORT HAS BEEN RECEIVED BY THE AO THEREFORE, THE ASSESSING OFFICER HAD TAKEN THE VALUE OF PROPERTIES TO THE TUNE OF RS.2,37,58,000/- AS DETERMINED BY THE STAMP V ALUATION OFFICER, MULTAI, DIST: BEITUL (M.P), BY INVOKING THE PROVISIO NS OF SEC.50C OF THE ACT AND ULTIMATELY MADE THE ADDITION OF RS.2,12,58,000/- INTO THE RETURN OF INCOME OF THE ASSESSEE. 3. THE ASSESSEE CHALLENGED THE SAID ASSESSMENT ORDER BEFORE T HE LD. CIT(A). THE VALUATION OFFICER OF THE REVENUE DEPARTM ENT FILED THE VALUATION REPORT BEFORE THE LD. CIT(A) ON DATED 30. 01.2017 WHEREBY THE VALUE OF THE PROPERTIES UNDER CONSIDERATION HAS BEEN DE TERMINED AT RS.67,53,800/- (RS.37,48,100 AND RS.30,05,700/-). THOU GH, IT WAS PLEADED BEFORE THE LD. CIT(A) THAT IT IS A SETTLED LA W THAT THE MARKET VALUE OF THE RENTED PREMISES IS ALWAYS ON THE LOWER SIDE AND EVEN UNDER WEALTH TAX ACT, AS PER SCHEDULE-III OF THE WEALTH TA X ACT, 1957, THE MARKET VALUE OF THE RENTED PROPERTIES WAS TAKEN AT LO WER FIGURES AND BECAUSE IN THE INSTANT CASE THE PROPERTIES ARE NOT VACANT BUT IN FACT ARE RENTED PROPERTIES AND THEREFORE THE DIFFERENCE IN THE ASSESSED VALUE AND DECLARED VALUE IS RS.42,53,800/- ONLY, HENCE, THE SAME MAY BE CONSIDERED FOR THE TAXATION PURPOSES. THE LD. CIT(A) D ID NOT IMPRESS UPON THE CLAIM RAISED BY THE ASSESSEE, HOWEVER, TAKEN T HE VALUE AT RS.67,53,800/- AS PER VALUATION REPORT OF THE VALUATI ON OFFICER OF THE ITA NO.475/ASR/2017 (A.Y.2014-15) SH. GURINDER SINGH KHURANA VS. ITO 3 REVENUE DEPARTMENT, FOR CALCULATION OF INCOME FROM CAPI TAL GAIN. THE LD. CIT(A) ALSO ACCEPTED THE CLAIM OF THE ASSESSEE THAT BECAUSE T HE PROPERTIES UNDER CONSIDERATION ARE ANCESTRAL AND HELD F OR MORE THAN THREE YEARS SO THE ASSESSED VALUE OF PROPERTIES ARE TO BE CALCULA TED FOR LONG TERM CAPITAL GAIN AND BE TAXED AT THE SPECIAL RATE OF 20% ONLY. 4. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AND RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT THE LD. CIT(APPEALS)-1, AMRITSAR HAS GR OSSLY ERRED IN CONFIRMING THE VALUATION OF PROPERTIES SOLD BY THE ASSESSEE AT RS.37,48,100/- AND RS.30,05,700/- AS MADE BY THE DEPARTMENTAL VALUATIO N OFFICER UNDER SECTION 50C OF THE INCOME TAX ACT. 2. THAT THE LD.CIT(APPEALS)-1, AMRITSAR HAS ERRE D IN NOT DECIDING THE CLAIM OF THE ASSESSEE THAT THE PROPERTIES SOLD BY HIM WERE TENANTED PROPERTIES AND THEREFORE THE VALUATION OF SAME HAD TO LOWER THAN UNDER LAND AND BUILDING METHOD. 3. THAT THE CIT(APPEAL)-1, AMRITSAR HAS GROSSL Y ERRED IN NOT CONSIDERING THE VALUATION REPORT FILED BY THE ASSESSEE IN RESPE CT OF THE PROPERTY SOLD BY HIM. 5. AT THE TIME OF HEARING OF APPEAL, AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT UNDOUBTEDLY THE PROPERT IES UNDER CONSIDERATION ARE RENTED PROPERTIES AND HAVE BEEN DULY SHOWN IN THE RETURN OF INCOME FOR THE ASST. YEAR: 2014-15. FURTHER THE PROPERTIES HAVE BEEN RENTED OUT TO THE TELECOM DEPARTMENT FOR THE LA ST AROUND 25 YEARS. THE ASSESSEE HAS ALSO FILED COPY OF LEASE AGREEMENT AND TH E COMMUNICATION OF THE TELECOM DEPARTMENT I.E., BSNL WH ICH GOES TO SHOW THAT THE PROPERTIES UNDER CONSIDERATION HAVE BEEN RENT ED OUT. THE ASSESSEE CLAIMED THAT THERE ARE CERTAIN DIFFERENT PARAMET ERS FOR VALUATION OF THE PROPERTIES WHICH IS VACANT AND RENTED AS PER SCHE DULE-III OF THE WEALTH TAX ACT, 1957, THE VALUATION OF THE PROPERTY WHICH IS RENTED OUT HAS TO BE VALUED DIFFERENTLY THEN THE GENERAL/VACANT PROPERTY. THEREFORE, ITA NO.475/ASR/2017 (A.Y.2014-15) SH. GURINDER SINGH KHURANA VS. ITO 4 THE ASSESSEE PRAYED THAT THE VALUATION OF THE PROPERTY HAS TO BE DONE BY CONSIDERING THE PROPERTIES AS TENANTED/ RENTED PROPERTI ES. 6. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORDE RS PASSED BY THE ITAT KOLKATA BENCH B IN THE CASE OF HELIGERS DEVELOPM ENT & CONSTRUCTION CO. (P) LTD. VS. DCIT, CENTRAL CIRCLE-II, KOLKATA AND ITAT CHENNAI BENCH B IN THE CASE OF RAJKUMAR KUMBHAT (DEC EASED) VS. ITO, BUSINESS WARD-XV(4), CHENNAI AND EMPHASIZED THAT THE PR OPERTIES UNDER CONSIDERATION ARE REQUIRED TO BE VALUED AS PER SEC.50C OF THE ACT, BUT NOT OTHERWISE WHICH IN THE INSTANT CASE HAS ALREADY BEEN DONE AND HENCE NO INTERFERENCE IS REQUIRED IN THE ORDER UNDER CHALLENGE. IN OUR CONSIDERED VIEW THE CASES RELIED UPON BY THE LD. DR ARE FACTUALLY DISSIMILAR TO THE FACTS OF THE INSTANT CASE, H ENCE, NOT APPLICABLE TO THE INSTANT CASE BECAUSE IN THAT CASES THE SCHEDULE-III OF THE WEALTH TAX ACT WAS NOT IN CONSIDERATION. 7. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL ON R ECORD. THE SOLE ISSUE RELATES TO THE VALUATION OF THE PROPERTY AS V ACANT PROPERTY OR TENANTED PROPERTY. WE FIND FORCE IN THE CONTENTION OF THE LD. AR THAT THE PROPERTIES WHICH ARE VACANT AND WHICH WERE RENTED HAVIN G DIFFERENT VALUES AND ACCORDING TO SCHEDULE-III OF THE WEALTH TAX ACT, 1957 PARAMETERS FOR VALUATION OF THE PROPERTIES VACANT AND RENTED, HAVE BEEN DISTINCT AND SEPARATE. IN THE INSTANT CASE FROM THE VALUATION REPORT DATED 3 0.01.2017 OF THE VALUATION OFFICER, INCOME TAX DEPARTMENT, JABALAP UR, IT REFLECTS THAT ASPECTS QUA TENANCIES OF PROPERTIES HAVE NOT BEEN TAKEN I NTO CONSIDERATION WHILE DETERMINING THE VALUE AND THEREFO RE PARAMETERS FOR VALUATION OF THE TENANTED PROPERTIES WOULD BE DIFFE RENT, HENCE, FOR SUBSTANTIAL JUSTICE, WE FEEL IT APPROPRIATE TO REMAND T HE ISSUE IN HAND TO THE FILE OF THE LD. ASSESSING OFFICER TO DECIDE AFRESH AFT ER GETTING VALUED ITA NO.475/ASR/2017 (A.Y.2014-15) SH. GURINDER SINGH KHURANA VS. ITO 5 THE PROPERTIES UNDER CONSIDERATION AS TENANTED, FROM TH E VALUATION OFFICER OF THE REVENUE DEPARTMENT. WITHOUT DOUBT, THE TERMS OF THE LEASE (TENANCY) SHALL HAVE TO BE GIVEN REGARD TO. WE DECIDE ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.04.2019. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:24.04.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. GURINDER SINGH KHURANA, 24, GOKAL KA BAGH, AMRI TSAR (2) INCOME TAX OFFICER, WARD 3(1), AMRITSAR (3) THE CIT(A)-1, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER