SHRI BANWARI LAL SHARMA, Jaipur V. INCOME TAX OFFICER, WARD-1-5, Jaipur

ITA 475/JPR/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3318 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONISHA CHOUDHARY JT
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Retrospective amendment; Fair market value; Valuation report; Validity of assessment; Competent authority; Set aside; Capital Gains
• Section: 143(3); 50C; 142(1); 292BB; 55A; 13; 22; 32; 147; 148; 37; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES, A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NOS. 475/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2008-09 SHRI BANWARI LAL SHARMA 45B, SANTOSH SAGAR COLONY, BHARAMPURI, JAIPUR CUKE VS. THE INCOME TAX OFFICER, WARD 1(5), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AKEPS1038A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NOS. 558/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2008-09 THE INCOME-TAX OFFICER, WARD-1(5), JAIPUR CUKE VS. SHRI BANWARI LAL SHARMA 45B, SANTOSH SAGAR COLONY, BHARAMPURI, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AKEPS1038A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT MONISHA CHOUDHARY (JT.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 25/3/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 14/06/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND BY THE REVENUE WHICH ARE DIRECTED AGAINST THE ORDER OF LD. CIT (A) , KOTA DATED 02.01.2019 PERTAINING TO A.Y. 2008-09. 2. IN ITA NO. 475/JP/2019, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ASSESSMENT (SET -ASIDE) U/S 144 R.W.S 147 OF THE INCOME TAX ACT, 1961 PASSED BY LD. AO IN THE INDIVIDUAL CAPACITY OF ASSESSEE AS AGAINST REPRESENTATIVE ASS ESSEE OF SMT. PAMELA JEAN COLLECO, WHICH IS IN VIOLATION OF THE DIRECTI ON OF HONBLE ITAT AND THEREFORE, THE IMPUGNED ASSESSMENT ORDER DESERVES T O BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION TO THE TUNE OF RS.29,51,572/- OUT OF ADDITION MADE BY LD. AO. APPE LLANT PRAYS ADDITION CONFIRMED BY LD. CIT(A) DESERVES TO BE DELETED. 3. IN ITA NO. 558/JP/2019, THE REVENUE HAS TAKEN THE F OLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING CERTAI N CONCESSIONS IN VALUE OF THE PROPERTY AS AGAINST THE VALUATION MADE BY TH E DVO WHO IS AN EXPERT IN THE FIELD AND HAS TAKEN INTO CONSIDERATIO N ALL THE ASPECTS OF THE PROPERTIES PARTICULARLY THE SITUATION OF THE PROPER TIES IN QUESTION? 4. THE LD. AR SUBMITTED THAT IN THIS CASE, AN ORDER WAS INITIALLY PASSED U/S 163 OF THE INCOME TAX ACT, 1961 DATED 24.03.2011 WH EREIN THE ASSESSEE WAS HELD AS REPRESENTATIVE ASSESSEE (WITHIN THE MEANING OF SECTION 160 OF THE I.T. ACT, 1961) OF SMT. PAMELA COLLECO, A NON-RESIDENT. THE ASSESSEE WAS APPOINTED AS THE POWER OF ATTORNEY HOLDER BY SMT. PAMELA COLL ECO IN RESPECT OF HER IMMOVABLE PROPERTY SITUATED AT 55-A AND 55-B, OPP. CENTRAL JAIL, AGRA ROAD, JAIPUR IN TERMS OF SPECIFIC POWER OF ATTORNEY MADE AND EXECUTED ON 21.03.2005. THE ASSESSEE ON THE BASIS OF SUCH POWER OF ATTORNEY HAD EXECUTED TWO SEPARATE SALE DEEDS ON 26.05.2007 FOR THE TRANS FER OF THE IMMOVABLE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 3 PROPERTY UNDER REFERENCE AND SOLD THE SUBJECT PROPE RTY TO SHRI VIVEK GUPTA AND SHRI ASHISH GUPTA, I.E. ONE PLOT TO EACH OF THE TWO PURCHASERS. 5. THE LD. AO HOWEVER, ISSUED NOTICES U/S 163 OF TH E ACT BY ALLEGING THAT SMT. PAMELA COLLECO BEING A NON RESIDENT HAS NOT PA ID DUE TAXES ON HER INCOME FROM SALE OF ABOVE PROPERTY, THUS ASSESSEE ( SH. BANWARI LAL SHARMA) SHOULD BE TREATED AS HER AGENT. THEREAFTER, WITHOUT GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE, THE LD. AO PROCEEDED TO PASS ORDER U/S 163 OF THE ACT, THEREBY HOLDING ASSESSEE AS REPRESENTATIVE ASS ESSEE/ AGENT OF SMT. PAMELA COLLECO. FURTHER, SEPARATE ORDERS U/S 163 WE RE ALSO PASSED IN THE CASE OF BOTH THE PURCHASERS I.E. SH. VIVEK GUPTA AND SH. ASHISH GUPTA. 6. AGGRIEVED BY THE AFORESAID ORDERS U/S 163, THE A SSESSEE AS WELL AS BOTH THE PURCHASERS I.E. SH. VIVEK GUPTA AND SH. ASHISH GUPTA PREFERRED APPEALS BEFORE THE LD. CIT(A), WHO ALLOWED THE APPEALS OF S H. VIVEK GUPTA AND SH. ASHISH GUPTA, HOWEVER DISMISSED THE APPEAL OF ASSES SEE. THUS, LD. CIT(A) UPHELD THE ACTION OF LD. AO IN TREATING ASSESSEE AS THE AGENT OF SMT. PAMELA COLLECO, HOWEVER, HELD THAT SH. VIVEK GUPTA AND SH. ASHISH GUPTA COULD NOT HAVE BEEN TREATED AS HER AGENTS. 7. AGGRIEVED BY THE SAID ORDERS OF LD. CIT(A), THE ASSESSEE AS WELL AS DEPARTMENT FILED APPEAL BEFORE THE ITAT, JAIPUR BEN CH, JAIPUR WHICH WERE CLUBBED AND DECIDED TOGETHER AS ITA NOS. 890, 952, 958/JP/2012 VIDE ORDER DATED 05.03.2014, WHEREIN, ALL THE THREE APPEALS WE RE DISMISSED AS A RESULT OF WHICH ASSESSEE WAS HELD AS THE REPRESENTATIVE ASSES SEE FOR SMT. PAMELA COLLECO. 8. SIMULTANEOUSLY, THE PROCEEDINGS IN THE HANDS OF THE ASSESSEE WERE RE- OPENED U/S 147 AS REPRESENTATIVE ASSESSEE FOR SMT. PAMELA COLLECO AND THE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 4 ASSESSMENT FOR THE SUBJECT ASSESSMENT YEAR WAS COMP LETED U/S 144/147 OF THE INCOME TAX ACT, 1961 VIDE ORDERS DATED 29.12.2011 W HEREIN ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN AT RS. 6,34,62,35 6/- WAS MADE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS BY INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961. ON THE OTHER HAND, IN THE CASE OF PURCHASERS I.E. SH. VIVEK GUPTA AND SH. ASHISH GUPTA, ASSESSMENTS W ERE COMPLETED U/S 147 / 143(3) OF THE ACT AND ADDITION ON ACCOUNT OF CAPITA L GAIN OF RS. 6,34,62,356/- WAS MADE ON SUBSTANTIVE BASIS. 9. AGAINST THE ORDER OF LD. AO, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER HOLDING THE ASSESSEE AS REPRE SENTATIVE ASSESSEE OF SMT. PAMELA COLLECO, SUSTAINED THE ADDITION MADE ON ACCO UNT OF LONG TERM CAPITAL GAIN ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSES SEE. 10. AGGRIEVED BY THE SAID ORDER OF LD. CIT(A), ASSE SSEE PREFERRED AN APPEAL BEFORE THE ITAT, JAIPUR BENCH. THE ITAT VIDE ITS OR DER DATED 05.03.2014 SET- ASIDE THE MATTER TO THE ASSESSING OFFICER WITH THE DIRECTIONS TO REFER THE MATTER TO VALUATION OFFICER FOR DETERMINATION OF THE FAIR MARKET VALUE OF THE SUBJECT PROPERTY. 11. IN COMPLIANCE OF THE SAID DIRECTIONS OF THE ITA T, THE LD. AO REFERRED THE MATTER TO VALUATION OFFICER U/S 55A OF THE ACT FOR THE PURPOSE OF DETERMINATION OF FMV OF THE SUBJECT PROPERTY. THEREAFTER, BY MISI NTERPRETING THE VALUATION DONE BY THE VALUATION OFFICER, THE LD. AO PASSED TH E IMPUGNED ASSESSMENT ORDER U/S 147/143(3)/(SET-ASIDE) OF THE ACT AND MAD E ADDITION OF RS. 2,83,94,600/- ON ACCOUNT OF CAPITAL GAINS IN TH E HANDS OF ASSESSEE BY TAKING THE FULL VALUE OF CONSIDERATION U/S 50C AT R S. 6,00,00,000/- IN RESPECT OF BOTH THE PLOTS. ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 5 12. AGGRIEVED BY THE SAID ASSESSMENT ORDER, THE ASS ESSEE PREFERRED APPEAL BEFORE LD. CIT(A), WHICH WAS DECIDED VIDE ORDER DAT ED 02.01.2019, WHEREIN LD. CIT(A) DIRECTED THE LD. AO TO CONSIDER VALUE OF EAC H HOUSE AT RS.1,72,78,488/- AS AGAINST RS.3,00,00,000/- ORIGINALLY VALUED BY TH E DVO AND ADOPTED BY THE BY LD. AO. 13. IN THE AFORESAID FACTUAL BACKGROUND OF THE MAT TER, THE LD AR SUBMITTED THAT IN GROUND NO. 1 , THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN CONFIRMING THE ASSESSMENT (SET ASIDE) U/S 144 R.W.S .147 OF THE INCOME TAX ACT PASSED BY LD. AO IN HIS INDIVIDUAL CAPACITY AS AG AINST REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO. 14. IT WAS SUBMITTED THAT AS NARRATED ABOVE, THE FI NAL OUTCOME AFTER THE ORDERS OF ITAT REMAINED THAT, THE ACTION OF LD. AO IN TREATING THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO WAS UPHELD, HOWEVER, THE MATTER WAS SET-ASIDE TO THE FILE OF ASSESSING OFFIC ER WITH THE CLEAR DIRECTION TO PASS FRESH ASSESSMENT ORDER AND COMPUTE CAPITAL GAI NS IN THE HANDS OF ASSESSEE, AFTER PROPERLY DETERMINING THE FAIR MARKE T VALUE (FMV) OF THE SUBJECT PROPERTY BY REFERRING THE MATTER TO VALUATION OFFIC ER AND TO GIVE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 15. FURTHER, OUR REFERENCE WAS DRAWN TO THE FIRST PAGE OF THE IMPUGNED ASSESSMENT ORDER WHICH CARRIES THE FOLLOWING NARRAT ION AND PARTICULARS ABOUT THE ASSESSEE: 1. ASSESSEES NAME IS SHOWN AS : SHRI BANWARI LAL SHAR MA 2. ASSESSEES STATUS HAS BEEN SHOWS AS : INDIVIDUAL 3. NATURE OF ASSESSEES BUSINESS IS SHOWN AS : SALARY & CAPITAL GAIN ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 6 16. IT WAS SUBMITTED THAT THE ABOVE NARRATION AND P ARTICULARS OF THE ASSESSEE WOULD SHOW THAT THE ASSESSMENT ORDER SO PASSED IS P RIMA FACIE ILLEGAL AND WITHOUT THE AUTHORITY OF LAW. IT MUST BE NOTED THAT THE ORIGINAL ASSESSMENT IN THE HANDS OF ASSESSEE WAS COMPLETED IN THE NAME OF SHRI BANWARI LAL SHARMA (AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA J EAN COLLECO) THEREBY SHOWING THAT THE ASSESSEE IS BEING ASSESSED IN THE CAPACITY OF REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO. FURTHER, IN T HE ORIGINAL ASSESSMENT, THE STATUS OF ASSESSEE WAS SHOWN AS AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO AND THE NATURE OF BUSINESS WAS SHOWN AS N.A.. IT IS THUS EVIDENT THAT, WHEN THE ORIGINAL ASSESSMENT WAS SET- ASIDE BY THE HONBLE ITAT TO THE FILE OF LD. AO WITH THE DIRECTION TO COMPLET E ASSESSMENT DE NOVO, THE SAME COULD HAVE BEEN DONE ONLY IN THE HANDS OF THE ASSESSEE IN THE CAPACITY OF REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLL ECO AND NOT AS AN INDIVIDUAL. HOWEVER, THE FRESH ASSESSMENT ORDER SO PASSED DOES NOT SHOW ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO, BUT AS AN INDIVIDUAL. THIS ACTION OF LD. AO IS CLEARLY BAD IN LAW AND RENDERS THE ENTIRE ASSESSMENT ORDER NULL AND VOID. ON APPEAL, LD. CIT( A) ALSO UPHELD THE VALIDITY OF ASSESSMENT ORDER SO PASSED IN INDIVIDUAL CAPACI TY OF ASSESSEE BY TREATING THE SAME AS MISTAKE CURABLE U/S 292BB OF THE ACT. 17. IT WAS SUBMITTED THAT IN THE INSTANT CASE, NO I NCOME IN THE SHAPE OF CAPITAL GAIN HAS ACCRUED TO THE ASSESSEE, AND THERE FORE, HE CANNOT BE ASSESSED WITH AN INCOME WHICH HAS NOT ACCRUED TO HIM. ACCRUA L OR RECEIPT OF INCOME IS THE BASIS FOR CHARGING TAX ON SUCH INCOME BY ASSESS EE IN HIS INDIVIDUAL CAPACITY. IN THE INSTANT CASE HOWEVER , BY WAY OF THE ORIGINAL ASSESSMENT ORDER, THE ASSESSEE WAS TAXED BY VIRTUE OF A LEGAL FICTION CREATED BY SECTION 160 OF THE ACT, WITH EFFECT OF WHICH ASSESSEE WAS ASSESSED AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO. IN OTHER WORDS, BY WAY OF THIS LEGAL FICTION, ASSESSEE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 7 WAS REQUIRED TO PAY TAX IN RESPECT OF THE INCOME AC CRUED TO AND RECEIVED BY SMT. PAMELA JEAN COLLECO. 18. IT WAS SUBMITTED THAT TAX CAN BE CHARGED FROM A PERSON ONLY BY THE AUTHORITY OF LAW, AND NOT AS PER THE DIKTAT OR CONV ENIENCE OF THE ASSESSING OFFICER. IT IS SUBMITTED THAT IN THE SET-ASIDE ASSE SSMENT ORDER, THE LD. AO HAS FLOUTED THE BASIC PROVISIONS OF THE INCOME TAX LAW AND IMPOSED TAX LIABILITY IN HIS INDIVIDUAL NAME, IN RESPECT OF AN INCOME WHICH NEVER ACCRUED TO THE ASSESSEE, NOR RECEIVED BY THE ASSESSEE. THEREFORE, THE ACTION OF LD. AO IS CLEARLY BAD IN LAW AND THE ASSESSMENT ORDER SO PASS ED, DESERVES TO BE QUASHED. 19. IT WAS SUBMITTED THAT THE ACTION OF THE LD. AO AMOUNTS TO ILLEGALITY AND A SUBSTANTIVE ERROR AND CANNOT BE SAID TO BE MERE CLE RICAL AND THEREFORE IS NOT ABLE TO BE CURED U/S 292B OF THE ACT. IT MUST BE NO TED THAT NOT JUST IN THE SUBJECT MATTER OF ASSESSMENT ORDER, BUT ALSO IN THE ENTIRE BODY OF THE ASSESSMENT ORDER, THE LD. AO HAS NOT MENTIONED THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO , RATHER HAS ASSESSED HIM AS INDIVIDUAL ONLY. 20. AT THIS JUNCTURE, PROVISIONS OF SECTION 292BB O F THE ACT ARE REPRODUCED HEREWITH FOR THE SAKE OF CONVENIENCE: 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEE DING OR CO-OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSME NT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVE D UPON HIM IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND S UCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDI NG OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 8 (A ) NOT SERVED UPON HIM; OR (B ) NOT SERVED UPON HIM IN TIME; OR (C ) SERVED UPON HIM IN AN IMPROPER MAN NER: PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHA LL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPL ETION OF SUCH ASSESSMENT OR REASSESSMENT.] 21. IT WAS SUBMITTED THAT SECTION 292BB IS AN EXCLU SIVE DEFINITION AND SPECIFICALLY PROVIDES THAT A NOTICE SHALL BE DEEMED TO BE SERVED IN A SITUATION THAT ASSESSEE HAS COOPERATED/ ATTENDED / PARTICIPAT ED IN ASSESSMENT/ RE ASSESSMENT PROCEEDINGS AND NO OBJECTION REGARDING N ON RECEIPT OF NOTICE WAS FILED DURING ASSESSMENT STAGE. IN OTHER WORDS, SECT ION 292BB CURES ONLY PROCEDURAL INFIRMITIES THAT TOO SPECIFICALLY RELATI NG TO SERVICE OF NOTICE. IN FACT, THERE ARE VARIOUS JUDICIAL PRONOUNCEMENTS WHICH HOL D THAT IF A VALIDLY ISSUED NOTICE IS SERVED TO UNAUTHORIZED PERSON OR AT A WRO NG ADDRESS, SUCH DEFECTS ARE NOT CURABLE AND RENDER ENTIRE PROCEEDINGS NULL AND VOID EVEN THOUGH THE INTENTION OF AO MAY NOT BE THAT. SIMILARLY, NOTICE U/S 148 ISSUED IN THE NAME OF DEAD PERSON, EVEN THOUGH SERVED ON LEGAL REPRESENTA TIVE (EVEN IF ALL SUBSEQUENT NOTICES ISSUED IN THE NAME OF LEGAL REPR ESENTATIVE) OF SUCH DECEASED RENDERS ENTIRE PROCEEDINGS BAD IN LAW EVEN THOUGH INTENTION OF ASSESSING OFFICER MAY BE TO ASSESS LEGAL REPRESENTA TIVE OF DECEASED. YOUR HONOURS WOULD APPRECIATE THAT PASSING ASSESSMENT OR DER IN THE INDIVIDUAL CAPACITY AS AGAINST IN REPRESENTATIVE CAPACITY O F NON RESIDENT IS AS GOOD AS PASSING ASSESSMENT ORDER IN THE NAME OF SOME OTHER PERSON WHICH IS A SERIOUS ERROR AND NOT CURABLE. IT WAS ACCORDINGLY SUBMITTED THAT THE ORDER OF LD. AO MAY PLEASE BE DECLARED ILLEGAL /VOID AND BE QUASHED ACCORDINGLY. 22. IN HER SUBMISSIONS, THE LD DR VEHEMENTLY OPPOS ED THE CONTENTIONS ADVANCED BY THE LD AR AND SUBMITTED THAT THE ORDER PASSED BY THE AO IN THE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 9 SET-ASIDE PROCEEDINGS WAS TO GIVE EFFECT TO THE DIR ECTIONS OF THE TRIBUNAL IN THE ORIGINAL PROCEEDINGS AND THUS, HAS TO BE READ IN CO NTINUATION OF EARLIER PROCEEDINGS AND THE ORDER HAS BEEN PASSED IN THE CA PACITY OF REPRESENTATIVE CAPACITY ONLY. IT WAS FURTHER SUBMITTED THAT THE F ACT THAT THE AO MENTIONING THE STATUS OF THE ASSESSEE AS INDIVIDUAL IS MERELY A NOMENCLATURE ISSUE AND IS A CURABLE DEFECT U/S 292B. IT DOESNT CHANGE THE SUBS TANCE OF THE ORDER AND CLEARLY DOESNT RENDER THE ORDER SO PASSED AS NULL AND VOID AS SO CONTENDED BY THE ASSESSEE. FURTHER, SHE HAS RELIED ON THE FINDI NGS OF THE LD CIT(A) WHICH READ AS UNDER: ON A PERUSAL OF A SERIES OF EARLIER ORDERS IN THE MATTER, IT IS APPARENT THAT IN ITS ORDER DT. 05.03.2014, THE ITAT JAIPUR P ARTLY ALLOWED THE APPEAL OF THE ASSESSEE SETTING ASIDE THE SAME TO TH E A.O. WITH A DIRECTION TO REFER THE MATTER TO APPROPRIATE AUTHOR ITY FOR DETERMINATION OF THE FMV OF THE PROPERTY ON THE DATE OF SALE. IT WAS ALSO SETTLED THAT THE ASSESSEE BEING A REPRESENTATIVE OR AGENT AS A P OA HOLDER OF MS PAMELA COLLECO, THE CAPITAL GAIN WAS TO BE ASSESSED SUBSTANTIVELY IN HIS HANDS. THE A.O. IN THE 'SET ASIDE' PROCEEDINGS REFE RRED THE MATTER TO THE VALUATION OFFICER U/S 55A & PASSED THE ORDER U/ S 147/ 143(3) BASED ON THE REPORT BY MAKING AN ADDITION OF RS.2,83,94,6 00/- ON ACCOUNT OF CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AS AN IN DIVIDUAL BY TAKING THE FULL VALUE OF CONSIDERATION U/S 50C OF RS.6 CRORES IN RESPECT OF BOTH THE PLOTS. THE APPEAL OF THE I.T. DEPARTMENT AGAINST THE ORDER OF THE ITAT WAS DISMISSED BY THE HON'BLE RAJASTHAN HIGH COURT STATI NG THAT THE TRIBUNAL HOLDING S. BANWARI LAL SHARMA TO BE REPRESENTATIVE AGENT OF LAND OWNER MS. PAMELLA COLLECO WAS NOT REQUIRED TO BE INTERFER ED & THE TWO BUYERS WERE NOT TO BE TREATED AS REPRESENTATIVE ASSESSEES. ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 10 FROM THE ORDERS OF THE HIGHER AUTHORITIES, IT IS CL EAR THAT THE ADDITION UNDER CAPITAL GAINS WAS REQUIRED TO BE MADE ON A 'S UBSTANTIVE BASIS' IN THE HANDS OF THE ASSESSEE BEING AN AGENT OR REPRESE NTATIVE. THE LIABILITY TOWARDS TAX WAS TO BE MET BY HIM. THE A/R HAS RAISE D AN ADDITIONAL LEGAL GROUND NO. 5 & 5.1 IN THIS REGARD. IN MY OPINION, O NCE THE LIABILITY OF ASSESSEE WAS CRYSTALLIZED TOWARDS CAPITAL GAINS ON THE LAND SOLD, THE ONLY ISSUE WAS TOWARDS THE VALUATION OF THE LAND & ASSES SMENT OF THE CAPITAL GAINS THEREON INSTEAD OF THE CAPACITY IN WHICH THE LIABILITY WAS TO BE PAID BEING A REPRESENTATIVE OR AN INDIVIDUAL. THERE IS NO INHERENT PREFERENCE FOR ASSESSMENT DIRE CTLY ON THE PRINCIPAL AND THE ONLY LIMITATION ON THE ASSESSMENT VIS-A-VIS THESE TWO PARTIES, I.E., AGENT AND THE PRINCIPAL, ARE CONCERNED, THAT ONCE AN ASSESSMENT IS MADE ON ONE OF THEM, THE ASSESSMENT FOR THE SAME IN COME THEREAFTER CANNOT BE MADE ON THE OTHER. THE FACT THAT THERE WAS NO EVIDENCE OF THE ASSESSEE HAVING TRANSFERRED ANY AMOUNT OF THE SALE CONSIDERATION TO HIS ALLEGED 'PRINCIPAL' PAMELLA COLLECO, MADE HIM LIABLE FOR CAPITAL GAINS IN HIS C APACITY AS AN INDIVIDUAL & I SEE NOTHING WRONG IN THE SAID ASSESS MENT ACCORDINGLY ONCE THE DIRECTION OF THE SUPERIOR COURT WAS CLEAR THAT THE LIABILITY OF CAPITAL GAINS WAS ASSESSABLE ON 'SUBSTANTIVE' BASIS IN HANDS OF THE ASSESSEE. THE INITIAL DISPUTE WAS ONLY IN REGARD TO THE ASSESSEE'S DENIAL THAT AS POWER OF ATTORNEY HOLDER OF PAMELLA COLLECO HE SHOULD BE LIABLE FOR CAPITAL GAINS TAX & SHOULD ONLY BE A REPRESENTA TIVE ASSESSEE U/S 163 OF THE I.T. ACT. NOW THE A.O. ASSESSING THE SAI D AMOUNT IN HIS HANDS SUBSTANTIVELY CANNOT CAUSE ANY PREJUDICE TOWA RDS THE DIRECTIONS GIVEN BY ITAT IN MY OPINION BECAUSE THE IMPORTANT A SPECT OF THOSE DIRECTIONS IN THE SET ASIDE ORDER WAS GETTING FMV A SSESSED OF THE SOLD ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 11 PROPERTY FOR CAPITAL GAINS TAX RECOVERY PURPOSES WH ICH HAD BEEN THE OTHER MAIN GRIEVANCE OF THE ASSESSEE. THIS WAS THER EFORE PURELY A 'NOMENCLATURE' ISSUE & DID NOT HAVE ANY EFFECT ON T HE ASSESSMENT OF CAPITAL GAINS RELATED INCOME. AS PER SECTION 292B- NO RETURN OF INCOME, ASSESSMEN T, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN I N PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR S HALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN. SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OT HER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. HIGH COURT OF ALLAHABAD IN COMMISSIONER OF INCOME-T AX V. VINOD KUMAR 38 TAXMANN.COM 172 (ALLAHABAD) OPINED THAT- WHETHER NON-MENTIONING OF STATUS OF ASSESSEE WOULD NOT INVALIDATE NOTICE UNDER SECTION 158BC, AS IT IS ONLY A MISTAKE , WHICH IS CURABLE- HELD, YES. THUS, I AM NOT CONVINCED IN FAVOUR OF THE ASSESSEE ON THIS GROUND BECAUSE THE PRIMARY INTENT OF THE A.O WAS TO BRING THE INCOME FROM CAPITAL GAINS TO TAX AND MERELY MENTIONING THE ASSE SSEE'S STATUS AS INDIVIDUAL INSTEAD OF REPRESENTATIVE OF THE ASSESSE E WAS A CURABLE MISTAKE AND DID NOT CHANGE THE TAXABILITY OF THE CA PITAL GAINS INCOME IN HIS HANDS. THE ORDER DOES NOT REQUIRE ANY INTERFERENCE ON THIS GROUND & THIS GROUND IS THEREFORE BEING DISMISSED. ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 12 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS GROUND OF APPEAL, THE ASSESSEE H AS CHALLENGED THE ACTION OF THE AO IN PASSING THE IMPUGNED ASSESSMENT ORDER IN THE INDIVIDUAL CAPACITY OF THE ASSESSEE AS AGAINST IN THE CAPACITY OF REPRESEN TATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO, A NON-RESIDENT. IN THIS REGAR D, IT IS NOTED THAT THE PRESENT ASSESSMENT PROCEEDINGS HAVE ITS ORIGIN WAY BACK IN YEAR 2011 WHERE THE ASSESSEE WAS HELD AS AN AGENT U/S 163(1)(C) OF SMT. PAMELA JEAN COLLECO IN RESPECT OF CAPITAL GAINS ON SALE OF TWO IMMOVEAB LE PROPERTIES BY VIRTUE OF ORDER U/S 163 DATED 24.03.2011 PASSED BY THE AO AN D THUS A REPRESENTATIVE ASSESSEE U/S 160(1)(I) OF THE ACT. THE ASSESSEE UN SUCCESSFULLY CONTESTED THE MATTER BEFORE THE LD CIT(A) AND THEREAFTER, BEFORE THE TRIBUNAL WHERE THE TRIBUNAL VIDE ITS ORDER DATED 5.03.2014 CONFIRMED T HE ACTION OF THE AO IN TREATING THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO. ADMITTEDLY, THIS MATTER HAS ATTAINED FINALITY IN AB SENCE OF ANY FURTHER APPEAL BY THE ASSESSEE AND THE ACTION OF THE AO IN TREATING T HE ASSESSEE AS REPRESENTATIVE ASSESSEE THEREFORE CARRIES ALL THE N ECESSARY CONSEQUENCES AND IMPLICATIONS IN TERMS OF SECTION 160, 161 AND 162 O F THE ACT. AS PART OF THE SAME, THE AO INITIATED THE PROCEEDINGS U/S 147 BY I SSUE OF NOTICE U/S 148 DATED 25.03.2011 TO THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO AND THE PROCEEDINGS WERE THEREAFTER CO MPLETED BY PASSING OF THE ASSESSMENT ORDER U/S 147/144 DATED 29.12.2011 WHERE LONG TERM CAPITAL GAINS ON SALE OF THE TWO PROPERTIES WAS ASSESSED IN THE H ANDS OF THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO ON PROTECTIVE BASIS WHICH ON APPEAL BY THE ASSESSEE, WAS CONVERTED INTO SUBST ANTIVE BASIS BY THE LD CIT(A). THE ASSESSEE AS WELL AS REVENUE CARRIED TH E MATTER IN FURTHER APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ITS ORDER DA TED 5.03.2014, FOLLOWING ITS ORDER OF EVEN DATE 5.03.2014, HELD THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO, AND DIDNT FIND ANY MERIT AND REJECTED THE GROUND OF APPEAL TAKEN BY THE ASSESSEE WHEREIN HE HAS AGAIN C HALLENGED THAT THERE HAS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 13 BEEN NO ACTION TAKEN BY THE AO IN ISSUING ANY NOTIC E TO SMT. PAMELA JEAN COLLECO AND MAKING ANY EFFORTS TO TAX THE INCOME IN HER HANDS. THE TRIBUNAL ALSO REJECTED THE GROUND OF APPEAL TAKEN BY THE REV ENUE WHEREIN IT HAS CHALLENGED THE ACTION OF THE LD CIT(A) IN HOLDING T HE ASSESSEE AS SOLE REPRESENTATIVE OF SMT. PAMELA JEAN COLLECO AND IN C ONVERTING THE ASSESSMENT FROM PROTECTIVE TO SUBSTANTIVE BASIS. THE RELEVANT FINDINGS OF THE TRIBUNAL READ AS UNDER: 2.6 THE GROUNDS NO. 1 AND 2 OF THE ASSESSEES APPE AL AND GROUND NO. 1 & 2 OF REVENUES APPEAL PERTAIN TO THE ISSUE OF A DDITION OF RS. 6,34,62,356/- MADE AS LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE BY TREATING THE ASSESSEE AS A REPRESENTATIVE ASSESS EE FOR SMT. PAMELA COLLECO, THE REAL AND ACTUAL OWNER OF THE PROPERTY ON SUBSTANTIVE BASIS. WHILE DECIDING THE APPEAL OF THE ASSESSEE IN ITA NO . 890/JP/12 WE HAVE ALREADY HELD THAT SHRI BANWARI LAL SHARMA, THE ASSE SSEE, AS THE AGENT U/S 163(1)(C) OF THE ACT AND A REPRESENTATIVE ASSESSEE OF SMT. PAMELA COLLECO, WITHIN THE MEANING OF SECTION 160 OF THE A CT. THUS, BY FOLLOWING THE REASONS GIVEN THEREIN, WE FIND NO MERIT IN THE GROUNDS RAISED BY BOTH THE PARTIES. ACCORDINGLY, THE GROUND NOS. 1 AND 2 O F THE ASSESSEES APPEAL AND GROUND NOS. 1 AND 2 OF THE REVENUES APPEAL ARE DISMISSED. 24. THEREAFTER, THE APPEAL FILED BY THE REVENUE AGA INST THE ORDER OF THE TRIBUNAL WAS REJECTED BY THE HONBLE RAJASTHAN HIGH COURT AND AS NOTED FROM THE ORDER OF THE LD CIT(A), THE HONBLE HIGH COURT VIDE ITS ORDER 18.09.2017 HELD THAT THE FINDINGS OF THE TRIBUNAL THAT SHRI. B ANWARI LAL SHARMA TO BE REPRESENTATIVE AGENT OF LAND OWNER SMT. PAMELA JEAN COLLECO WAS NOT REQUIRED TO BE INTERFERED & THE TWO BUYERS WERE NOT TO BE TR EATED AS REPRESENTATIVE ASSESSEES AND HAS ALSO TAKEN NOTE OF ORDER PASSED B Y THE AO ON REMAND BY THE TRIBUNAL FOR DETERMINATION OF THE FAIR MARKET V ALUE. THERE IS APPARENTLY NO FURTHER APPEAL AGAINST THE ORDER OF THE HONBLE HIG H COURT AND THEREFORE, AS FAR ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 14 AS THE MATTER TREATING THE ASSESSEE AS REPRESENTATI VE ASSESSEE OF SMT. PAMELA JEAN COLLECO IS CONCERNED, IT HAS ATTAINED FINALITY WITH PASSING OF THE ORDER OF HONBLE HIGH COURT AND THE ORDER OF THE AO PASSED U /S 147/144 HAS SINCE MERGED WITH THE ORDER OF THE HONBLE HIGH COURT IN SO FAR AS TREATING THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO IS CONCERNED AND THE SAME CARRIES THE NECESSARY CONSEQUENCES AND IMPLICATION IN TERMS OF SECTION 160, 161 AND 162 OF THE ACT. 25. NOW, COMING TO THE IMPUGNED ORDER PASSED BY THE AO U/S 147/144/SET- ASIDE DATED 9.03.2016, WE FIND THAT THE SAME IS PUR SUANT TO DIRECTIONS OF THE TRIBUNAL VIDE THE AFORESAID ORDER DATED 5.03.2014 W HEREIN THE MATTER WAS RESTORED TO THE FILE OF THE AO WITH THE FOLLOWING D IRECTIONS: 3.3 THE LD. DR ALSO SUPPORTED THE ARGUMENTS ADVANC ED BY THE AR OF THE ASSESSEE AND SUBMITTED THAT THE MATTER SHOULD H AVE BEEN REFERRED TO THE VALUATION OFFICER TO DETERMINE THE FAIR MARKET VALUE OF THE SUBJECT PROPERTY SINCE THE ASSESSEE HAS NOT ACCEPTED THE VA LUE ADOPTED BY THE STAMP AUTHORITIES AND HAS CHALLENGED IT BEFORE THE COMPETENT AUTHORITY. 3.4 AFTER CAREFULLY CONSIDERING THE RIVAL SUBMISSIO NS ON THIS ISSUE AND AFTER RELYING ON THE RELEVANT DECISIONS RELATING TO THE ISSUE, WE ARE OF THE CONSIDERED OPINION THAT THE ACTION OF THE AO IS NOT LEGAL AND FOR COMPUTING THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, HE SHOULD HAVE REFERRED THE MATTER TO THE VALUATION OFFICER AS PROVIDED IN SECTION 50C(2)(A) OF THE ACT WHEN THE ASSESSEE HAS OBJECTED AND CLAIMED THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VAL UATION AUTHORITIES EXCEEDED THE REAL TIME FAIR MARKET VALUE OF THE PRO PERTY AS ON THE DATE OF TRANSFER. IT IS A WELL ESTABLISHED LAW THAT WHERE T HE ASSESSEE OBJECTS TO THE VALUE ADOPTED OR ASSESSED BY STAMP AUTHORITIES FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE AO IS REQUIRED AND AS A MATTER OF LAW BOUND TO REFER THE MATTER TO VAL UATION OFFICER FOR ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 15 DETERMINATION OF FAIR MARKET VALUE OF SUCH PROPERTY AS ON THE DATE OF TRANSFER. THE JODHPUR BENCH OF ITAT IN THE CASE OF MEGHRAJ BAID V. ITO, (2008) 114 TTJ JODH 841, WHERE ONE OF US WAS CONSTI TUTED IN THAT BENCH, HAS EXPRESSED SIMILAR VIEW. THUS, BY RESPECTFULLY F OLLOWING THE DECISIONS OF VARIOUS BENCHES OF ITAT, IN OUR CONSIDERED OPINION THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO WITH THE DIRECT ION THAT THE VALUATION ISSUE SHOULD BE REFERRED FOR VALUATION TO THE DEPAR TMENTAL VALUER IN TERMS OF SUB-SECTION (2) OF SECTION 50C FOR THE DETERMINA TION OF THE FAIR MARKET VALUE OF THIS PROPERTY SOLD. THEREFORE, THE MATTER IS SET ASIDE TO THE FILE OF THE AO WITH THE DIRECTIONS AS STATED ABOVE. ACCORDI NGLY THE GROUND NO. 3 IS DISPOSED OFF FOR STATISTICAL PURPOSES. 26. WE FIND THAT THE MATTER WAS RESTORED BY THE TRI BUNAL TO THE FILE OF THE AO FOR THE LIMITED PURPOSES OF DETERMINATION OF FAIR M ARKET VALUE OF THE PROPERTIES SO SOLD BY REFERRING THE MATTER TO THE DVO IN TERMS OF SECTION 50C(2) OF THE ACT. BESIDES THE FACT THAT THE TRIBUNAL HAS CONFIRM ED THE TAXABILITY OF THE ASSESSEE IN THE STATUS OF REPRESENTATIVE ASSESSEE A S WE HAVE NOTED ABOVE, THERE WAS NO OTHER DIRECTION OR FINDINGS OF THE TRI BUNAL AS FAR AS ANY REMAINING MATTER EMANATING FROM THE ORDER ORIGINALLY PASSED B Y THE AO U/S 144/147 OF THE ACT IS CONCERNED. THEREFORE, THE IMPUGNED ORDE R SO PASSED BY THE AO IS CLEARLY NOT AN INDEPENDENT AND STANDALONE OR DENOVO ORDER RATHER IT IS AN ORDER IN CONTINUATION OF EARLIER ORDER PASSED U/S 147/144 , PROCEEDINGS IN RESPECT OF WHICH WERE INITIATED BY ISSUANCE OF NOTICE U/S 148 AND ALSO PURSUANT TO DIRECTIONS OF THE TRIBUNAL, IN ORDER TO GIVE EFFECT TO SUCH DIRECTIONS, SUCH AN ORDER HAS BEEN PASSED AND NOT ON ACCOUNT OF ANY FRE SH JURISDICTION ACQUIRED BY THE AO. THE ORDER SO PASSED THEREFORE HAVE TO BE R EAD AND UNDERSTOOD ACCORDINGLY AND NOT OTHERWISE AND WHAT NEEDS TO BE SEEN IS AS TO WHETHER THE DIRECTIONS SO GIVEN BY THE TRIBUNAL HAS BEEN COMPLI ED WITH OR NOT BY THE AO WHILE PASSING THE IMPUGNED ORDER AND WHICH WE FIND HAS BEEN DULY FOLLOWED BY ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 16 THE AO BY REFERRING THE MATTER TO THE DVO AND TAKIN G INTO CONSIDERATION THE VALUATION REPORT SO SUBMITTED BY HIM, DETERMINATION OF FAIR MARKET VALUE. IN FACT, IF WE LOOK AT THE BODY OF THE ORDER SO PASSED IN THE SET-ASIDE PROCEEDINGS, IT REFERS TO THE ORDER OF THE TRIBUNAL AND DIRECTIO NS SO GIVEN AND ALSO THE PAST HISTORY OF THE CASE AND INFACT, TOWARDS THE END, IT DOES PROVIDE THAT SINCE THE ASSESSEE HAS FAILED TO MAKE PAYMENT OF LONG TERM CA PITAL GAIN TAX ON ACCOUNT OF TRANSFER OF CAPITAL ASSETS WHICH WERE SOLD BY TH E ASSESSEE AS REPRESENTATIVE ASSESSEE OF THE FOREIGNER, WHEREON TAX @ 20% ON 2,8 3,94,600/- AS CAPITAL GAIN WAS REQUIRED TO BE PAID BY THE SELLER AND SINCE SEL LER DID NOT PAY THE CAPITAL GAIN TAX, IT WAS DUTY OF THE ASSESSEE AS AN AGENT A ND REPRESENTATIVE ASSESSEE OF THE SELLER WHICH ASSESSEE FAILED TO MAKE PAYMENT OF TAX. WHICH IN EFFECT, DEMONSTRATE CONSISTENT APPLICATION OF AND IN CONTIN UATION OF THE EARLIER ORDERS PASSED IN THE CAPACITY OF THE REPRESENTATIVE ASSESS EE. FURTHER, AS RIGHTLY POINTED OUT BY THE LD CIT(A), MERE MENTIONING THE A SSESSEE'S STATUS AS INDIVIDUAL INSTEAD OF REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO IS A CURABLE DEFECT IN TERMS OF SECTION 292B OF THE AC T AS THE ASSESSMENT ORDER SO PASSED IS IN SUBSTANCE AND EFFECT HAS BEEN PASSED I N THE STATUS OF REPRESENTATIVE ASSESSEE IN CONFORMITY WITH AND TO G IVE EFFECT TO THE DIRECTIONS OF THE TRIBUNAL AND THUS, ACCORDING TO THE INTENT A ND PURPOSE OF THIS ACT. IN LIGHT OF AFORESAID DISCUSSIONS, WE ARE OF THE CONSI DERED VIEW THAT THE ORDER SO PASSED BY THE AO IN THE IMPUGNED SET-ASIDE PROCEEDI NGS U/S 147/144/SET-ASIDE HAS BEEN PASSED IN THE CAPACITY OF THE ASSESSEE AS REPRESENTATIVE ASSESSEE OF SMT. PAMELA JEAN COLLECO AND CONTINUES TO CARRY THE SAME CONSEQUENCES AND IMPLICATION IN TERMS OF SECTION 160, 161 AND 162 OF THE ACT AS THE ORIGINAL ORDER PASSED U/S 147/144 EXCEPT FOR THE VARIATION OF THE FAIR MARKET VALUE WHICH THE ASSESSEE HAS CHALLENGED AND WE SHALL BE DEALING WHI LE ADJUDICATING THE SUBSEQUENT GROUND OF APPEAL. IN THE RESULT, WE DON OT FIND ANY MERIT IN THE GROUND SO TAKEN BY THE ASSESSEE AND THE SAME IS HER EBY DISMISSED. ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 17 27. NOW, COMING TO THE MERITS OF THE CASE, WE REFER TO ASSESSEES GROUND OF APPEAL NO. 2 AND DEPARTMENTS GROUND OF APPEAL WHER EIN THE ASSESSEE HAS CHALLENGED PART ADDITION OF RS.29,51,572/- SUSTAINE D BY LD.CIT(A) OUT OF ADDITION OF RS. 2,83,94,596/- MADE BY AO, WHEREAS D EPARTMENT HAS CHALLENGED THE RELIEF OF RS 2,54,43,024/- GRANTED BY LD.CIT(A) . 28. IT WAS SUBMITTED BY THE LD AR THAT IN THE ORIGI NAL PROCEEDINGS, ON APPEAL BY THE ASSESSEE, THE TRIBUNAL HAD SET-ASIDE THE MAT TER RELATING TO DETERMINATION OF THE FAIR MARKET VALUE OF THE TWO P ROPERTIES TO THE FILE OF THE AO. IT WAS SUBMITTED THAT DURING THE COURSE OF SET -ASIDE ASSESSMENT PROCEEDINGS, THE LD. AO ISSUED A LETTER DATED 27.08 .2014 TO THE VALUATION OFFICER, REQUESTING HIM TO PROVIDE VALUATION REPORT IN RESPECT OF THE AFORESAID TWO PLOTS. THE VALUATION OFFICER ISSUED NOTICES TO THE ASSESSEE SEEKING HIS SUBMISSIONS AND IN RESPONSE TO THE SAME, THE ASSESS EE SUBMITTED DETAILED SUBMISSIONS/OBJECTIONS BEFORE THE VALUATION OFFICER VIDE LETTER DATED 21.05.2015 AND COMPLETE DETAILS AS REQUIRED BY THE VALUATION OFFICER WERE ALSO SUPPLIED BY THE ASSESSEE. HOWEVER WITHOUT CONSIDERI NG THE OBJECTIONS RAISED BY ASSESSEE AGAINST THE PROPOSED VALUATION, THE VALUAT ION OFFICER PROVIDED HIS VALUATION REPORT VIDE LETTER DATED 28.08.2015 WHERE IN THE VALUE OF EACH OF THE PLOTS WAS WRONGLY ASSESSED AT RS. 3.00 CRORES. 29. IT WAS SUBMITTED THAT BEFORE THE VALUATION OFFI CER AS WELL AS THE AO, IT WAS SUBMITTED BY THE ASSESSEE THAT THE PLOTS IN QUE STION ARE ABSOLUTELY OF RESIDENTIAL NATURE AND USE AND THEREFORE, CANNOT BE VALUED ON THE BASIS OF COMMERCIAL RATES. HOWEVER, LD. VALUATION OFFICER VA LUED THE SUBJECT PROPERTIES BY HOLDING 40% COMMERCIAL AND 60% RESIDENTIAL. MORE OVER, A COMPLETELY HYPOTHETICAL RATE OF 82,500/- PER SQ MTR WAS ADOPTE D FOR VALUING SUCH ALLEGED COMMERCIAL COMPONENT (EVEN WHEN VALUATION OFFICER H IMSELF HAD COMPUTED PER SQ. MTR. RATE OF COMMERCIAL PROPERTY AT RS.41,214/- PER SQ MTR) AND THUS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 18 VALUATION WAS MADE AT RS.3,00,00,000/- FOR EACH PRO PERTY AND CONSEQUENTLY ADDITION WAS MADE BY LD.AO TO THE TUNE OF RS 2,83,9 4,596/- 30. IT WAS SUBMITTED THAT AGGRIEVED OF THE ADDITION SO MADE BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A), WHO TH OUGH CONFIRMED THE PROPERTY AS 40% COMMERCIAL AND 60% RESIDENTIAL, HOW EVER, RATE PER SQ. MTR. WAS CONFIRMED AT RS.41,214/-. ACCORDINGLY, VALUATIO N OF EACH PROPERTY WAS RESTRICTED TO RS. 1,72,78,488/- AS AGAINST RS. 3,00 ,00,000/- AS DETERMINED BY VALUATION OFFICER. THUS, IN PRESENT APPEAL, ASSESSE E HAS CHALLENGED THE PART ADDITION OF RS. 29,51,572/- CONFIRMED BY LD. CIT(A) . 31. IN THIS REGARD, IT WAS SUBMITTED THAT IT WOULD BE USEFUL TO REFER TO THE DETAIL HISTORY OF THE SUBJECT PLOTS AS SUBMITTED BE FORE LD. VALUATION OFFICER VIDE LETTER DATED 03.11.2014 IS REPRODUCED AS UNDER: THAT A PIECE OF LAND TOTALING TO 11005 SQ. YDS. WA S ORIGINALLY ALLOTTED BY THE JAIPUR STATE (AS HAD EXISTED BEFORE INDEPENDENCE) TO CAPTAIN JAMES ALEXANDER IN TERMS OF THE LETTER O F ALLOTMENT DATED 21.01.1933, COPY ENCLOSED. FURTHER THE EXECUT IVE OFFICER OF MUNICIPAL BOARD OF JAIPUR STATE GRANTED PERMISSION FOR CONSTRUCTION OF HOUSE ON THE SAID PIECE OF LAND. THEREAFTER CAPT AIN JAMES ALEXANDER CONSTRUCTED HOUSE AND USED THE SAME FOR H IS OWN RESIDENCE. AFTER THE DEATH OF CAPTAIN JAMES ALEXAND ER, THE SUBJECT PROPERTY WAS DISTRIBUTED AMONGST HIS HEIRS AS PER H IS WILL AND THE PROPERTY UNDER REFERENCE BEING PART OF THE TOTAL PI ECE OF LAND COMES IN THE OWNERSHIP OF MR. T.H. ALEXANDER, SON O F CAPTAIN JAMES ALEXANDER WHO ENJOYED THE SAID PROPERTY FOR H IS OWN USE. MR. T.H. ALEXANDER IN TERMS OF LEASE DEED DATED 8 TH DECEMBER, 1958 HAD GIVEN THE FRONT PORTION OF THE SAID LAND T O ONE SHRI RAMDITTA MAL SETHI, PROP. OF M/S SETHI TRANSPORT CO ., COPY OF RENT DEED AND RENT RECEIPTS ISSUED FROM TIME TO TIME ARE ENCLOSED FOR READY REFERENCE. THEREAFTER MR. T.H. ALEXANDER FURT HER ALLOWED SHRI RAMDITTA MAL SETHI TO OPEN SHOWROOM FOR TYRES, OILS ETC. ON THE LEASED PREMISES AND ACCORDINGLY SHRI SETHI REMAINED OCCUPANT OF THE FRONT PORTION OF THE LAND. AFTER THE DEATH OF T .H. ALEXANDER HIS DAUGHTER PAMELA COLLECO BECAME THE OWNER OF THE SUB JECT PROPERTY ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 19 AND THE POSSESSION OF THE LEASE PREMISES REMAINED W ITH THE SETHI FAMILY, WHO REGULARLY OCCUPIED THE SAME FOR THEIR O WN USAGE AND PURPOSES. BECAUSE OF THE NON-CO-OPERATIVE ATTITUDE OF SETHI FAMILY WHO WAS HAVING PHYSICAL POSSESSION OF NOT ONLY THE LEASED PREMISES BUT ALSO SPREAD THEIR POSSESSION TO THE PR EMISES NOT UNDER LEASE. REPEATED REQUESTS WERE MADE TO SETHI F AMILY TO VACATE THE PREMISES, HOWEVER, THEY WERE NOT READY T O VACATE THEIR OCCUPANCY. AS SUBMITTED ABOVE, THE MAIN FRONT OF THE SUBJECT P ROPERTY WAS IN THE POSSESSION OF SETHI FAMILY, THEREFORE, THE APPR OACH TO THE REMAINING PORTION OF THE PLOT WAS ALMOST IMPOSSIBLE AS THE ONLY ENTRANCE WAS UNDER THE POSSESSION OF THE TENANT. FU RTHER DUE TO THE REASON THAT THE ACTUAL OWNER OF THE PROPERTY I. E. PAMELA COLLECO WAS NOT RESIDING NOR IN THE POSITION TO LOO K AFTER THE SAID PREMISES SOME ANTI-SOCIAL ELEMENTS HAD TAKEN ILLEGA L AND UNAUTHORIZED POSSESSION ON THE REMAINING PORTION AS A RESULT OF WHICH EVEN THE SALE OF THE SUBJECT PROPERTY BECAME ALMOST IMPOSSIBLE. IT IS FURTHER SUBMITTED THAT DUE TO THE EXISTENCE O F THE CENTRAL JAIL JUST OPPOSITE TO THE SUBJECT PROPERTY, CONSTRUCTION COULD NOT BE PERMITTED FOR MORE THAN TWO FLOORS ABOVE THE GROUND FLOOR AND THEREFORE ANY COMMERCIAL ESTABLISHMENT IN THE SHAPE OF COMMERCIAL COMPLEX IS NOT VIABLE ON THE PROPERTY. FURTHER ONE SIDE OF THE SUBJECT PROPERTY IS OCCUPIED BY GOVERNMENT QUARTERS OF JAIL EMPLOYEES WHO USE TO DUMP THEIR GARBAGE IN THE PROP ERTY, THEREFORE IT HAS BECOME ALMOST A DUMP YARD. THAT AT THE BACK SIDE OF THE PROPERTY THE HERITAGE WALL OF JAIPUR CITY EXISTS AND AS PER GOVERNMENT NORMS THE SAME CA NNOT BE ALTERED / MODIFIED NOR ANY GATE COULD BE OPENED. AS SUBMITTED ABOVE, ONE SIDE IS COVERED BY THE GOVERNMENT QUARTE RS AND OTHER SIDE IS SURROUNDED BY THE NEIGHBOURING OCCUPANTS, T HUS THE PROPERTY UNDER REFERENCE DID NOT REMAINED ATTRACTIV E FOR ANY KIND OF BUYERS. THE PREVIOUS OWNER I.E. SMT. POMELA COLLECO WAS IN THE NEED OF FUNDS AND DUE TO THE ADVERSE CIRCUMSTANCES AS NARRA TED ABOVE, IT WAS ALSO IMPOSSIBLE FOR HER TO SELL THE PROPERTY AT A GOOD PRICE AND THE OCCUPANTS I.E. THE TENANT AND THE OTHER ILLEGAL AND UNAUTHORIZED TRESPASSERS WERE DISSUADING THE PROSPECTIVE BUYERS, THEREFORE SMT. COLLECO HAD DECIDED TO SALE THE PROPERTY UNDER DIST RESS. AFTER ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 20 SERIOUS EFFORTS MADE BY SHRI BANWARI LAL SHARMA I.E . THE POWER OF ATTORNEY HOLDER AND ASSESSEE BEFORE YOUR GOODSELF I N THE CAPACITY OF REPRESENTATIVE ASSESSEE OF SMT. POMELA COLLECO A RRANGED THE BUYERS I.E. SHRI VIVEK GUPTA AND SHRI ASHISH GUPTA WHO AGREED TO BUY THE PROPERTY FOR A TOTAL CONSIDERATION OF RS. 1 .50 CRORE EACH. LOOKING TO THE DISADVANTAGES ATTACHED TO THE PROPER TY THE BUYERS DECIDED TO USE IT FOR RESIDENTIAL PURPOSES AND HAD PAID THE PRICE WHICH COULD BE FAIRLY POSSIBLE FOR A RESIDENTIAL PI ECE OF LAND AS THE DLC RATE FOR RESIDENTIAL PROPERTY IN THE AREA WAS I N PARITY WITH THE CONSIDERATION AGREED BETWEEN THE PARTIES. THAT ON BEING INQUIRED UPON, IT CAME TO THE KNOWLED GE THAT THE BUYERS HAD MOVED AN APPLICATION BEFORE THE JAIPUR M UNICIPAL CORPORATION FOR GRANTING PERMISSION TO CONSTRUCT A RESIDENTIAL HOUSE, NECESSARY COPY OF APPLICATION AND COPY OF MA P SUBMITTED IN THIS REGARD ARE ENCLOSED HEREWITH FOR READY REFEREN CE AND IN SUPPORT OF THE CONTENTION THAT THE LAND UNDER QUEST ION WAS IN USE FOR RESIDENTIAL PURPOSE AND WOULD BE USED BY THE BU YERS FOR THEIR OWN RESIDENTIAL PURPOSES. UNDER THE CIRCUMSTANCES, IT IS SUBMITTED THAT THE F AIR MARKET VALUE OF THE SUBJECT PROPERTY AS ON THE DATE OF SALE WAS IN PARITY WITH THE CONSIDERATION ON WHICH THE SALE TRANSACTION WAS ACT UALLY EXECUTED AND THEREFORE THE SAME BE CONSIDERED AS THE FAIR MA RKET VALUE. AN AFFIDAVIT OF SHRI BANWARI LAL SHARMA IS ENCLOSED IN CONFIRMATION TO THE FACTS NARRATED HEREIN ABOVE. 32. IT WAS SUBMITTED THAT IN LIGHT OF ABOVE, FOLLOW ING FACTS WERE APPARENT AND WERE SUBMITTED BEFORE THE LD. VALUATION OFFICER FOR THE PURPOSE OF DETERMINATION OF FMV OF THE SUBJECT PROPERTIES: 1. THAT, THE ASSESSEE HAS ALREADY DISPUTED THE VALUATI ON ADOPTED BY THE STAMP VALUATION AUTHORITIES BEFORE THE APPROPRIATE APPELLATE AUTHORITIES. COPY OF RELEVANT PAPERS OF SUCH LITIGATION AS SUBMITTED BEFORE VALUATION OFFICER . ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 21 2. THAT, THE SUBJECT PROPERTIES ARE PURELY RESIDENTIAL PRIOR TO SALE AS WELL AS POST SALE PERIOD AND THE LAND USE HAS NOT BEEN CONV ERTED BY THE PROSPECTIVE BUYERS OF THE LAND. 3. THE MUNICIPAL CORPORATION, JAIPUR HAS ALREADY CERTI FIED THE SAID PROPERTIES AS RESIDENTIAL AND A CERTIFICATE ISSUE D BY THE MUNICIPAL CORPORATION TO SUCH EFFECT HAS ALREADY BEEN SUBMITTED BEFORE TH E LD. VALUATION OFFICER, WHICH IS PLACED ON RECORD. 4. THAT, THE BUYERS NAMELY, SH. VIVEK GUPTA AND SH. AS HISH GUPTA HAD APPLIED FOR OBTAINING APPROVAL OF CONSTRUCTION OF R ESIDENTIAL HOUSE ON THE SAID LAND WHICH FURTHER PROVES THE FACT THAT THE LAND IN NO CASE COULD BE CHARACTERIZED AS COMMERCIAL LAND AND THEREFORE, THE SAME SHOULD BE VALUED BY TAKING THE LAND USE AS RESIDENTIAL AND NOT A COMME RCIAL AS HAS BEEN DONE IN THE VALUATION REPORT. A COPY OF APPLICATION MADE BY THE BUYERS I.E. SHRI ASHISH GUPTA AND SHRI VIVEK GUPTA BEFORE THE COMPETENT AUT HORITIES I.E. MUNICIPAL CORPORATION, JAIPUR FOR THE APPROVAL OF MAPS FOR TH E CONSTRUCTION SUBMITTED BEFORE VALUATION OFFICER ARE PLACED ON RECORD. 5. THAT, FOR THE PURPOSE OF DETERMINING FAIR MARKET VA LUE, COMPARABLE INSTANCES / SALES OF THE ADJOINING / SAME AREA ARE NECESSARY TO BE TAKEN INTO CONSIDERATION. BEFORE THE LD. VALUATION OFFICER, AL L THE POSSIBLE COMPARABLE INSTANCES / SALES FOR THE PERIOD FROM 2004 TO 2008 OF THE LANDS IN THE NEIGHBORHOOD OR ADJOINING LOCALITIES WERE SUBMITTED , COPIES OF REGISTERED DOCUMENTS AS WERE SUBMITTED BEFORE LD. VALUATION OF FICER ARE PLACED ON RECORD. ALSO, THE GUIDELINES RATES ISSUED BY LOCAL AUTHORITIES WERE SUBMITTED. ALL THOSE INSTANCES ARE RELATED TO THE M.I. ROAD WHICH IS THE AREA ADJOINING TO THE AREA WHERE THE PROPERTY UNDER REFERENCE IS SITUATED AND THEREFORE, ARE FULLY COMPARABLE. THE DETAILS OF THE PROPERTIES ARE AS UN DER : ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 22 DESCRIPTION DATE OF REGISTRY AGREED CONSIDERATION VALUATION BY STAMP AUTHORITY DIFFERENCE IN TERMS OF % PETROL PUMP, NEAR HOTEL JAYESH, M.I. ROAD, JAIPUR 19.04.2005 3,50,00,000.00 10,29,56,980.00 294% HIGHER H-19, KALA BHAWAN, M.I. ROAD, JAIPUR 06.08.2005 26,99,999.00 66,35,442.00 245.75% HIGHER H-1/32, M.I. ROAD, JAIPUR [PART PORTION] 12.12.2006 75,00,000.00 1,75,88,384.00 235% HIGHER H-1/32, M.I. ROAD, JAIPUR [PART PORTION] 12.12.2006 75,00,000.00 1,80,31,364.00 240% HIGHER BAR KI BAGICHI, OPP. LAXMI MOTOR CO., M.I. ROAD, JAIPUR 31.07.2008 2,04,00,000.00 5,86,37,636.00 287% HIGHER FROM PERUSAL OF THE CHART ABOVE, YOU WOULD OBSERVE THAT IN THE NEIGHBORING LOCALITIES, THE VALUATION DONE BY THE STAMP AUTHORI TIES IS HIGHER BY MORE THAN 235% TO 294% OF THE AGREED CONSIDERATION AND THE SI TUATION IS VERY MUCH SIMILAR WITH THE CASE OF THE ASSESSEE WHERE AGAINST THE AGREED CONSIDERATION OF RS. 1,50,00,000/- THE VALUATION HAS BEEN TAKEN BY S TAMP AUTHORITIES AT RS. 4,75,26,460/-, THUS THE CLAIM OF THE ASSESSEE THAT THE FAIR MARKET VALUE IN THE SAME LOCALITY IS SIMILAR TO THE VALUE AT WHICH THE ASSESSEE HAS SOLD THE PROPERTY UNDER REFERENCE DESERVES TO BE ACCEPTED. 6. THAT, IN ADDITION TO THE AFORESAID SALE INSTANCES, THE ASSESSEE HAS ALSO SUBMITTED SOME MORE SALE INSTANCES WHICH ARE OF THE COMMERCIAL SHOPS AUCTIONED BY JAIPUR DEVELOPMENT AUTHORITY IN NEARBY / ADJOINING AREA OF ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 23 COMMERCIAL PROPERTY WHICH WERE REQUIRED TO BE CONSI DERED FOR DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY UNDER REFERENCE. THOSE SALE INSTANCES ARE AS UNDER: S.NO ADDRESS OF PROPERTY DATE OF SALE AREA (IN SQ. MTRS) MINIMUM SELLING PRICE AUCTI ON RATE AUCTIONED AMOUNT ESTIMATED RATE PER SQ. METR) 1. PLOT NO. 02, SUBHASH CHOWK, NALA PANNIGRAN 24.08.2006 42.82 10,00,000 - 10,21,000 23,844 2. PLOT NO. 01, FATEH SINGH KI DHARMSHALA 03.10.2006 145.82 12,000 24,250 35,36,135 24,250 3. PLOT NO. 5, SUBHASH CHOWK, NALA PANNIGRAN 29.09.2006 42.82 10,00,000 - 10,31,000 24,077 4. PLOT NO. 6, SUBHASH CHOWK, NALA PANNIGRAN 29.09.2006 42.82 10,00,000 - 10,30,000 24,054 5. PLOT NO. 8, SUBHASH CHOWK, NALA PANNIGRAN 29.09.2006 42.82 10,00,000 - 10,81,000 25,245 6. FATEHSINGH KI DHARMSHALA 20.01.2007 1672 25,000 37,000 6,18,64,00 0 37,000 AVERAGE RATE 26,411.66 THE DETAILS OF ABOVEMENTIONED AUCTIONS AND THE RESP ECTIVE RATES HAVE BEEN OBTAINED FROM THE OFFICIAL WEBSITE OF THE JAIPUR DE VELOPMENT AUTHORITY AND A COPY OF THE RELEVANT SNAPSHOTS HAS BEEN SUBMITTED B EFORE THE LD. VALUATION OFFICER AND ARE PLACED ON RECORD. 7. THAT, ALL THE ABOVE MENTIONED PROPERTIES ARE SITUAT ED IN THE SAME LOCALITY AS THAT OF SUBJECT PROPERTY AND THEREFORE AMOUNT TO COMPARABLE CASES FOR THE PURPOSE OF VALUATION OF THE SUBJECT PROPERTY. FROM THE ABOVE TABLE, IT CAN BE SEEN THAT THE AVERAGE RATE ON WHICH THE PROPERTIES IN VICINITY HAVE BEEN SOLD IS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 24 RS. 26,411.66. THE VALUE OF SUBJECT PROPERTY IF CAL CULATED AT THIS RATE COMES AT RS. 1,92,54,100/- WHICH IS QUITE CLOSE TO THE VALUE DECLARED BY ASSESSEE. 33. IT WAS FURTHER SUBMITTED THAT THE LD. VALUATION OFFICER IN ANNEXURE III OF HIS VALUATION REPORT HAS MADE FOLLOWING OBSERVATION S: AS PER THE ACTUAL STATUS AT THE SITE, FOLLOWING OB SERVATIONS ARE MADE: 1. THE ADJACENT LAND HAS RESIDENTIAL QUARTERS FOR T HE JAIL STAFF. 2. THE OTHER SIDE HAS INDUSTRIAL SHED/WORKSHOPS, AN D MOST STRUCTURES ON THE ROAD STRETCH ADJACENT TO JAIL BOUNDARY ARE T EMPORARY IN NATURE, WITH HEIGHT NOT EXCEEDING SINGLE STOREY. ONLY THE T ELEPHONE EXCHANGE IS THE PROPER BUILDING ON THE STRETCH. 3. WHILE ON ONE PROPERTY UNDER CONSIDERATION HAS 30 % AREA UNDER THE INDUSTRIAL SHED, THE OTHER 70% WAS STILL BEING USED AS OPEN AREA AND FOR RESIDENTIAL HOUSES. 4. THE PROPERTY UNDER CONSIDERATION HAS 50% AREA UN DER THE INDUSTRIAL SHED, THE OTHER 50% WAS STILL BEING USED AS RESIDENTIAL. FROM THE ABOVE OBSERVATIONS OF THE VALUATION OFFICE R, IT IS CLEAR THAT HE HAS CLEARLY ADMITTED THE FACT THAT A MAJOR PORTION OF T HE SUBJECT PROPERTY IS BEING USED FOR RESIDENTIAL PURPOSES. ALSO, HE HAS NOT AL LEGED THAT THE REMAINING SMALL PORTION IS BEING USED FOR COMMERCIAL PURPOSES , RATHER HE HAS MERELY MENTIONED THAT THE REMAINING AREA IS UNDER INDUSTRI AL SHED. HERE, IT IS SUBMITTED THAT THE VALUATION OF THE PROPERTY IS REQ UIRED TO BE DONE IN ACCORDANCE WITH THE ACTUAL USE TO WHICH A PARTICULA R PROPERTY IS PUT. ALSO, THE VALUATION OFFICER HAS ADMITTED THAT THE LOCALITY/AD JOINING AREAS ARE ALSO NOT COMMERCIAL. 34. THE LD. VALUATION OFFICER HAS ASSESSED THE VALU E OF THE SUBJECT PROPERTY AT RS. 3.00 CRORES FOR EACH PLOT. FOR THE PURPOSE O F THIS VALUATION, THE LD. AO ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 25 HAS TREATED THE PROPERTY AS BEING IN USE PARTLY FOR RESIDENCE AND PARTLY FOR COMMERCIAL I.E. 40% - COMMERCIAL (FRONT PORTION) AN D 60% - RESIDENTIAL (BACK PORTION). IN THIS REGARD IT IS SUBMITTED THAT THE L D. AO HAS IGNORED A VERY VITAL FACT THAT THE ENTIRE PROPERTY WAS BEING USED SOLELY FOR RESIDENTIAL PURPOSE AND NO PART OF IT WAS BEING USED FOR COMMERCIAL PURPOSE S. THE LD. VALUATION OFFICER HAS RECORDED A WRONG FINDING OF FACT THAT THE FACTU AL USE OF 40% PROPERTY WAS COMMERCIAL. IT MUST BE NOTED THAT HE HAS NOT SUPPOR TED THIS OBSERVATION WITH ANY SINGLE EVIDENCE WHICH COULD SHOW THAT THE PROPE RTY WAS BEING USED FOR COMMERCIAL PURPOSES. ON THE OTHER HAND, THE LD. VAL UATION OFFICER HIMSELF HAS ADMITTED THAT CERTAIN PORTION OF THE PROPERTY IS ON LY FALLING UNDER INDUSTRIAL SHED, AND THERE IS NO OBSERVATION TO THE EFFECT THA T THE SAID PART WAS BEING PUT TO USE AS COMMERCIAL PROPERTY. FURTHER, THE LD. VAL UATION OFFICER HIMSELF HAS ACCEPTED THAT THE ADJACENT LAND HAS RESIDENTIAL QUA RTERS FOR THE JAIL STAFF, AND THAT THE MOST STRUCTURES ON THE ROAD STRETCH ADJACE NT TO JAIL BOUNDARY ARE TEMPORARY IN NATURE. ALL THESE FACTS SHOW THAT THE LD. VALUATION OFFICER HAS ON ONE HAND ADMITTED THAT THE ADACENT AREAS WERE RESID ENTIAL, WHILE ON THE OTHER HAND HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT ANY PART OF THE PROPERTY WAS BEING PUT TO COMMERCIAL USE IN WHATEVE R MANNER. 35. IT WAS SUBMITTED THAT A BARE PERUSAL OF THE VAL UATION REPORT (ANNEXURE III) SHOW THAT THE VALUATION OF THE PROPERTY, IF DO NE AS RESIDENTIAL, THEN THE VALUATION WOULD COME AT RS. 1.21 CRORES ONLY, WHICH IS IN FACT LESS THAN THE CONSIDERATION SHOW IN THE SALE DEEDS AT RS. 1.5 CRO RES. IN VIEW OF ABOVE, IT WAS SUBMITTED THAT, SINCE THE ENTIRE PROPERTY IS RESIDE NTIAL, THE FAIR MARKET VALUE THEREOF, AS ASSESSED BY THE VALUATION OFFICER, SHOU LD BE ACCEPTED AT RS. 1.21 CRORES ONLY. IT IS REQUESTED BEFORE YOUR HONOURS TH AT THE VALUE DECLARED IN THE SALE DEEDS IS THE ACTUAL CONSIDERATION AND THE SAME HAS BEEN SHOWN AT A VALUE MUCH HIGHER THAN THE FAIR MARKET VALUE SO DETERMINE D AND THEREFORE VALUE DECLARED BY ASSESSEE DESERVE TO BE ACCEPTED AS SUCH . ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 26 36. IN HER SUBMISSIONS, THE LD DR SUBMITTED THAT DU RING THE COURSE OF SET ASIDE/RE-ASSESSMENT PROCEEDING, AS PER DIRECTION OF THE HON'BLE ITAT & ALSO TO FOLLOW THE TERMS OF THE PROVISIONS OF SECTION 50C(2 )(A) OF THE INCOME TAX ACT, 1961, THE AO HAS CALLED FOR THE VALUATION REPORT AN D IN COMPLIANCE THERETO, THE VALUATION OFFICER HAS SENT HIS VALUATION REPORT WHE REIN FMV OF THE PROPERTY SITUATED AT PLOT NO. 55A & 55B, NEAR CENTRAL JAIL, AGRA ROAD, JAIPUR AS ON MAY, 2007 HAS BEEN DETERMINED AT RS. 3,00,00,000/- PER P LOT AND THUS DETERMINING THE TOTAL VALUE OF TWO PLOTS AT RS. 6,00,00,000/-. SUBSEQUENTLY, COPY OF VALUATION REPORT ALONGWITH NOTICE U/S 142(1) OF THE INCOME TAX ACT, 1961 WAS SHARED WITH THE ASSESSEE AND BASIS THE REPORT OF TH E VALUATION OFFICER WHO HAS CARRIED OUT PHYSICAL INSPECTION OF THE PROPERTIES A ND HIS REPORT BEING BINDING ON THE AO, THE LATTER CONSIDERED THE FAIR MARKET VA LUE OF THE PROPERTY AS ON 30.5.2007 AS RS. 3 CRORE FOR EACH PLOT OF LAND. 37. IT WAS FURTHER SUBMITTED BY THE LD DR THAT THE VALUATION OFFICER HAS CLEARLY HELD THE WHOLE OF PROPERTY AS COMMERCIAL AN D HAS APPLIED THE COMMERCIAL RATES ON THE BASIS OF THE RATES PROVIDED BY THE ASSESSEE THOUGH AFTER CARRYING OUT CERTAIN ADJUSTMENTS ON ACCOUNT O F SIZE, LOCATION, ETC. AND THERE IS THUS NO BASIS FOR THE LD CIT(A) TO CONSIDE RING PART OF THE PROPERTY AS RESIDENTIAL AND PART COMMERCIAL AND APPLY DIFFERENT IAL RATES AND PROVIDE RELIEF TO THE ASSESSEE. IT WAS ACCORDINGLY SUBMITTED THAT TH E FINDINGS OF THE LD CIT(A) SHOULD BE SET-ASIDE AND THAT OF THE AO/DVO SHOULD B E UPHELD. 38. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS CHALLENGING THE FINDINGS OF THE LD CIT(A) FOR CONSIDERING PART OF PROPERTY AS RESIDENTIAL AND PAR T COMMERCIAL, AND SUBMITTED THAT ENTIRE PROPERTY IS RESIDENTIAL AND SHOULD THER EFORE BE VALUED AT RS 1.21 CRORES EACH AS ALTERNATIVELY DETERMINED BY THE DVO IN HIS VALUATION REPORT. THE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 27 REVENUE IS EQUALLY CHALLENGING THE FINDINGS OF THE LD CIT(A) FOR CONSIDERING PART OF PROPERTY AS RESIDENTIAL AND PART COMMERCIAL AND AT THE SAME TIME, SUBMITTED THAT ENTIRE PROPERTY BE TREATED AND VALUED AS COMME RCIAL PROPERTY AS DONE BY THE DVO AND SHOULD THEREFORE BE VALUED AT RS 3.00 C RORES EACH AS DETERMINED BY THE DVO IN HIS VALUATION REPORT. 39. ON PERUSAL OF THE DVO REPORT, IT IS NOTED THAT THE DVO HAS VALUED BOTH THE PROPERTIES AFTER MODIFYING/ADJUSTING THE VALUE OF OTHER SALE INSTANCES OF THE PROPERTIES SITUATED ON MI ROAD AND OTHER ADJOINING AREAS WHICH HAVE SIMILAR OR HIGHER CIRCLE RATES OF COMMERCIAL PROPERTIES. IN O THER WORDS, THE TWO PROPERTIES HAVE BEEN TREATED AND VALUED AS COMMERCIAL PROPERTI ES BY THE DVO APPARENTLY GUIDED BY THE FACT THAT THESE TWO PROPERTIES ALSO L IE ON THE MAIN AGRA ROAD IN FRONT OF CENTRAL JAIL, JAIPUR AND THE FACT THAT THE STAMP DUTY AUTHORITIES HAVE ALSO ADOPTED THE COMMERCIAL RATES. FURTHER, BY MAK ING CERTAIN ADJUSTMENTS TO THESE COMPARABLE CASES, THE DVO HAS WORKED OUT AND APPLIED THE ADJUSTED RATE OF RS 41,214 PER SQ. MTR TO THE TWO PROPERTIES MEAS URING 729 SQ. MTRS EACH, AND HAS ARRIVED AT THE VALUE OF RS 3,00,00,000/- FO R EACH OF THE TWO PROPERTIES. 40. FURTHER, IT IS NOTED THAT ON APPEAL BY THE ASSE SSEE, THE LD CIT(A) AGAIN EXAMINED THE REPORT OF THE DVO AND HAS RECORDED HIS FINDINGS WHEREIN HE HAS STATED THAT THERE WERE CERTAIN ENCUMBRANCES ON THE PROPERTY AND CONSTRUCTION FOR COMMERCIAL EXPLOITATION BEYOND A CERTAIN HEIGHT WAS NOT POSSIBLE DUE TO NEARNESS TO THE CENTRAL JAIL AND OTHER HERITAGE CON CERNS WHICH WERE NOT CONSIDERED BY THE DVO. FURTHER, THE LD CIT(A) HAS S TATED THAT THE LAND USE OF THE TWO PROPERTIES HAVE NOT BEEN OFFICIALLY CHANGED IN THE MUNICIPAL RECORDS & THESE PROPERTIES CONTINUED AS RESIDENTIAL PROPERTIE S AND THE BUYERS HAD ALSO APPLIED FOR OBTAINING PERMISSION FOR CONSTRUCTION O F RESIDENTIAL HOUSE ON THE LAND SO THERE WAS NO 'COMMERCIAL' INTENTION IN THE PURCHASE AS WELL. IT WAS ACCORDINGLY HELD BY THE LD CIT(A) THAT THE DVO HAS IGNORED ALL THE SUPPORTING ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 28 EVIDENCES WHICH CATEGORIZED THE PROPERTY TOWARDS 'R ESIDENTIAL USAGE LIKE JDA CHECKLIST FOR PURCHASER TO CONSTRUCT RESIDENTIAL HO USE UPTO 2 STOREYS, MUNICIPALITY LETTER CERTIFYING ITS RESIDENTIAL USE, BILLS OF ELECTRICITY SHOWING RESIDENTIAL CONSUMPTION, HOUSE TAX RECEIPTS SHOWING RESIDENTIAL VALUATION & SUBSEQUENT PAYMENT, AND THE FACT THAT IN ALL THE AD JACENT CONSTRUCTED AREA, THE DVO HIMSELF HAS NOTED RESIDENTIAL USAGE LIKE QUARTE RS CONSTRUCTED FOR JAIL STAFF, 70% RESIDENTIAL & OPEN SPACE IN ONE ADJACENT PROPER TY & 50% IN ANOTHER ONE. THE LD CIT(A) ACCORDINGLY HELD THAT THE VALUATION S O DONE BY THE DVO IS IN COMPLETE DISREGARD TO THE AVAILABLE EVIDENCES AND I T WOULD BE FAIR AND REASONABLE WHERE THE PROPERTY IS CONSIDERED AS OF M IXED USE TAKING 40% LAND AS COMMERCIAL AND 60% AS RESIDENTIAL AND THEN, APPL YING THE RATE OF RS 41,214 PER SQ. MTR FOR COMMERCIAL PROPERTY AND RS 12,000 P ER SQ MTR FOR RESIDENTIAL PROPERTY, HAS ARRIVED AT THE VALUE OF RS 172,78,488 /- FOR EACH OF THE TWO PROPERTIES. 41. AS FAR AS THE FINDINGS OF THE LD CIT(A) THAT VA RIOUS DOCUMENTARY EVIDENCES IN SUPPORT OF PROPERTY BEING RESIDENTIAL IN NATURE HAVE NOT BEEN CONSIDERED BY THE DVO WHILE DETERMINING THE FAIR MA RKET VALUE OF THE PROPERTY, THE REVENUE HAS FAILED TO DEMONSTRATE AS TO HOW THE SAID FINDINGS OF THE LD CIT(A) ARE PERVERSE AND NOT BORNE OUT OF MATERIAL A VAILABLE ON RECORD. AS WE HAVE OBSERVED EARLIER, THE TWO PROPERTIES HAVE BEEN TREATED AND VALUED AS COMMERCIAL PROPERTIES BY THE DVO APPARENTLY GUIDED BY THE FACT THAT THESE TWO PROPERTIES ALSO LIE ON THE MAIN AGRA ROAD IN FRONT OF CENTRAL JAIL, JAIPUR AND THE FACT THAT THE STAMP DUTY AUTHORITIES HAVE ALSO ADOP TED THE COMMERCIAL RATES. THE SAME BECOME MORE CLEAR IF WE READ THE FINDINGS OF THE DVO WHERE HE HAS STATED IN PARA 10 OF HIS VALUATION REPORT THAT THE ASSESSEE WAS INFORMED THAT THE CIRCLE RATES ARE FOR COMMERCIAL USE AND THIS OF FICE HAS NO JURISDICTION REGARDING THE LAND USE AND THE CALCULATION DONE IN ANNEXURE III. IN OUR VIEW, THE DETERMINATION OF CIRCLE RATE IS CLEARLY NOT WIT HIN THE JURISDICTION OF THE DVO, ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 29 AT THE SAME TIME, WHILE DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY, THE DVO IS EXPECTED TO EXAMINE FACTORS IMPACTING THE VA LUE OF THE PROPERTY AND WHICH CLEARLY INCLUDES THE USAGE OF SUCH PROPERTY W HETHER FOR RESIDENTIAL OR COMMERCIAL PURPOSES. 42. HAVING SAID THAT, WE FIND THAT THE LD CIT(A) HA S GONE AHEAD AND CONSIDERED THE TWO PROPERTIES AS PART RESIDENTIAL A ND PART COMMERCIAL AND APPARENTLY GUIDED BY THE PHYSICAL INSPECTION OF THE TWO PROPERTIES AS CARRIED OUT BY THE DVO AND THE FINDINGS OF THE DVO AT ANNEX URE III OF HIS REPORT WHEREIN HE HAS STATED THAT HE HAS PHYSICALLY INSPEC TED THE PROPERTY ON 30.09.2014 AND BASIS SUCH INSPECTION, HE HAS RECORD ED HIS FINDINGS WHICH READ AS UNDER: AS PER THE ACTUAL STATUS AT THE SITE, FOLLOWING OB SERVATIONS ARE MADE: 1. THE ADJACENT LAND HAS RESIDENTIAL QUARTERS FOR T HE JAIL STAFF. 2. THE OTHER SIDE HAS INDUSTRIAL SHED/WORKSHOPS, AN D MOST STRUCTURES ON THE ROAD STRETCH ADJACENT TO JAIL BOUNDARY ARE T EMPORARY IN NATURE, WITH HEIGHT NOT EXCEEDING SINGLE STOREY. ONLY THE T ELEPHONE EXCHANGE IS THE PROPER BUILDING ON THE STRETCH. 3. WHILE ON ONE PROPERTY UNDER CONSIDERATION HAS 30 % AREA UNDER THE INDUSTRIAL SHED, THE OTHER 70% WAS STILL BEING USED AS OPEN AREA AND FOR RESIDENTIAL HOUSES. 4. THE PROPERTY UNDER CONSIDERATION HAS 50% AREA UN DER THE INDUSTRIAL SHED, THE OTHER 50% WAS STILL BEING USED AS RESIDENTIAL. 43. THE DVO THEREFORE IN HIS REPORT HAS STATED CLEA RLY THAT IN RESPECT OF ONE OF THE PROPERTY, 70% IS STILL USED FOR RESIDENTIAL PURPOSES AND REMAINING 30% IS UNDER INDUSTRIAL SHED (COMMERCIAL) AND IN RESPECT O F SECOND PROPERTY, RATIO BETWEEN RESIDENTIAL AND COMMERCIAL IS 50:50. TO OU R MIND, BOTH THE DOCUMENTARY EVIDENCES AND THE ACTUAL USAGE OF THE P ROPERTY HAVE THEIR OWN ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 30 RELEVANCE AND IMPORTANCE AND NEED TO BE CONSIDERED WHILE DETERMINING THE FAIR MARKET VALUE OF THE PROPERTY. AT THE SAME TIME, WHERE THERE ARE VISIBLE AND DEMONSTRABLE VARIATIONS IN THE ACTUAL USAGE OR PART USAGE OF THE PROPERTY, THE SAME HAVE TO BE NECESSARILY CONSIDERED AND CANNOT B E IGNORED FOR THE PURPOSES OF VALUATION. THEREFORE, ON FACE OF SUCH FINDINGS, WE FAIL TO APPRECIATE WHY THE DVO HAS NOT CONSIDERED THE PROPERTY PART RESIDENTIA L AND PART COMMERCIAL AND HAS APPLIED PURELY COMMERCIAL RATES. THEREFORE, TH E FINDINGS OF THE LD CIT(A) TO THIS EXTENT THAT THE LAND IS UNDER MIXED LAND USE A ND NOT ENTIRELY RESIDENTIAL OR COMMERCIAL IS HEREBY CONFIRMED. THE SAID FACT IS AL SO CORROBORATED BY TWO SALE DEEDS WHERE THERE IS A CLEAR ASSERTION, AT PAGES 12 AND 23 OF ASSESSEES PAPERBOOK, THAT A PART OF THE PROPERTY HAS BEEN GIV EN ON RENT TO M/S SETHI TRANSPORT AND ALSO AS PER ASSESSEES OWN SUBMISSION S BEFORE US WHEREIN IT HAS BEEN STATED AS UNDER: MR. T.H. ALEXANDER IN TERMS OF LEASE DEED DATED 8 TH DECEMBER, 1958 HAD GIVEN THE FRONT PORTION OF THE SAID LAND TO ONE SHR I RAMDITTA MAL SETHI, PROP. OF M/S SETHI TRANSPORT CO., COPY OF RENT DEED AND RENT RECEIPTS ISSUED FROM TIME TO TIME ARE ENCLOSED FOR READY REF ERENCE. THEREAFTER MR. T.H. ALEXANDER FURTHER ALLOWED SHRI RAMDITTA MAL SE THI TO OPEN SHOWROOM FOR TYRES, OILS ETC. ON THE LEASED PREMISE S AND ACCORDINGLY SHRI SETHI REMAINED OCCUPANT OF THE FRONT PORTION OF THE LAND. 44. THEREFORE, THE FACT THAT A PART OF THE PROPERTY AT THE TIME OF EXECUTION OF SALE DEED WAS UNDER COMMERCIAL USAGE CANNOT BE DENI ED ESPECIALLY WHERE THERE IS A CLEAR ASSERTION AND ACKNOWLEDGMENT BY BO TH THE PARTIES EXECUTING THE SALE DEEDS. INFACT, IT IS THE ASSESSEES CLAIM THAT THERE WERE DISPUTES RELATING SUCH POSSESSION BY SETHI FAMILY AND THE BU YERS OF THE PROPERTIES HAVE WRITTEN TO THE COMPETENT AUTHORITIES. THEREFORE, I N THE ENTIRETY OF FACTS AND CIRCUMSTANCES, TAKING INTO CONSIDERATION THE CONTEN TS OF THE SALE DEED AS WELL ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 31 AS PHYSICAL INSPECTION OF THE PROPERTY, WE ARE OF T HE CONSIDERED VIEW THAT BOTH THE PROPERTIES ARE UNDER USAGE FOR RESIDENTIAL AS W ELL AS COMMERCIAL PURPOSES AND THEREFORE, THE FAIR MARKET VALUE SHOULD REFLECT SUCH USAGE AS PART RESIDENTIAL AND PART COMMERCIAL AT THE TIME OF EXEC UTION OF THE SALE DEED. 45. NOW, TO WHAT EXTENT THE TWO PROPERTIES WERE UND ER COMMERCIAL AND RESIDENTIAL USAGE, IT IS NOTED THAT IN RESPECT OF F IRST PROPERTY, THE DVO HAS ESTIMATED 70% FOR RESIDENTIAL PURPOSES AND REMAININ G 30% UNDER COMMERCIAL PURPOSES AND IN RESPECT OF SECOND PROPERTY, RATIO B ETWEEN RESIDENTIAL AND COMMERCIAL IS ESTIMATED AT 50:50 AND BASIS SUCH EST IMATION, AN OVERALL RATIO HAS BEEN ARRIVED AT AS 60% TOWARDS RESIDENTIAL PURPOSES AND 40% TOWARDS COMMERCIAL PURPOSES. HOWEVER, WE DONT FIND ANY EV IDENCE ON RECORD TO SUPPORT SUCH ESTIMATION AND ALLOCATION. TO OUR MIN D, A BETTER METHODOLOGY OF DETERMINING THE SAME IS THE ACTUAL MEASUREMENT OF T HE PROPERTY TOWARDS RESIDENTIAL AND COMMERCIAL USAGE RATHER THAN PERCEN TAGE AND THAT TOO, AT THE EXECUTION OF THE SALE DEED AND WE FIND THE SAME IS CLEARLY APPARENT FROM THE TWO SALE DEEDS WHERE THERE IS CLEAR DESCRIPTION AND MEASUREMENT OF PROPERTY UNDER INDUSTRIAL SHED (COMMERCIAL) AND OTHER RESIDE NTIAL BUILT UP AREA. THEREFORE, TAKING THE ACTUAL MEASUREMENT INTO CONSI DERATION, AND RATE OF RS 41,214 PER SQ MTR TOWARDS COMMERCIAL PROPERTY AND R S 12,000 PER SQ MTR TOWARDS RESIDENTIAL PROPERTY AS DETERMINED BY THE D VO, THE VALUATION OF THE TWO PROPERTIES IS ARRIVED AT AS UNDER: FIRST PROPERTY: COMMERCIAL: 244.10 SQ.MTR. X 41,214/- = RS. 1,00,60,337/- RESIDENTIAL: 484.93 SQ.MTR. X 12000/- = RS. 58,19,160/- TOTAL VALUE RS. 1,58,79,497/- ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 32 SECOND PROPERTY: COMMERCIAL: 254.00 SQ.MTR. X 41,214/- = RS. 1,04,68,356/- RESIDENTIAL: 475.03 SQ.MTR. X 12000/- = RS. 57,00,360/- TOTAL VALUE RS. 1,61,68,716/- 46. THE NEXT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER VALUE OF THE FIRST PROPERTY SO ARRIVED AT RS 1,58,79,497 WHICH I S MERELY HIGHER BY 5.86% AS COMPARED TO DECLARED SALE CONSIDERATION OF RS 1,50, 00,000/- AS PER THE SALE DEED SHOULD BE SUBSTITUTED AND CONSIDERED AS FAIR M ARKET VALUE OR CAN SUCH DIFFERENCE BEING LESS THAN 10% OF THE DECLARED SALE CONSIDERATION BE IGNORED AND DECLARED SALE CONSIDERATION BE ACCEPTED. SIMILA R IS THE POSITION IN RESPECT OF THE OTHER PROPERTY WHERE DIFFERENCE COMES TO 7.7 9% OF THE DECLARED SALES CONSIDERATION. THE ASSESSEE HAS RAISED THE CONTENT ION TO THIS EFFECT THOUGH IN CONTEXT OF VALUE OF RS 1,92,54,100/- WHERE HE SAYS THAT THE SAME BEING QUITE CLOSE TO THE DECLARED SALE CONSIDERATION OF RS 150, 00,000/- AND THE SAME THUS MAY BE IGNORED AND ACTUAL SALE CONSIDERATION MAY BE CONSIDERED FOR THE PURPOSES OF ARRIVING AT THE FAIR MARKET VALUE. GIV EN THAT THERE IS A DOWNWARD REVISION IN THE VALUE SO ARRIVED AT RS 1,58,79,497/ - AND RS 1,61,68,716/- AS AGAINST THE DECLARED SALE CONSIDERATION AND DIFFERE NCE HAS FURTHER NARROWED DOWN, WE DEEM IT NECESSARY TO EXAMINE THE SAID CONT ENTION. 47. IN THIS REGARD, IT IS NOTED THAT THE LEGISLATUR E HAS INSERTED THIRD PROVISO TO SECTION 50C(1) OF THE ACT, AS PER WHICH, WHERE THE DIFFERENCE BETWEEN STAMP VALUE AND THE ACTUAL CONSIDERATION IS 5% OR LESS, T HE SAME SHALL BE IGNORED W.E.F. 1.4.2019. THE LIMIT OF 5% HAS SINCE BEEN INC REASED TO 10% W.E.F. 1.4.2021. THE VARIOUS BENCHES OF THE TRIBUNAL ARE T AKING A CONSISTENT VIEW THAT ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 33 THE THIRD PROVISO TO SECTION 50C SHOULD BE TREATED AS CURATIVE IN NATURE AND WILL APPLY RETROSPECTIVELY FROM 1.4.2003 I.E. FROM THE D ATE OF INSERTION OF SECTION 50C IN THE STATUTE AND THEREFORE, THE LIMIT OF 10% SHOULD ALSO BE READ RETROSPECTIVELY. IN THIS REGARD, WE REFER TO A DECI SION OF THE MUMBAI BENCHES OF THE TRIBUNAL IN CASE OF MARIA FERNANDES CHERYL VS. INCOME TAX OFFICER INTERNATIONAL TAXATION 2(3)(1), MUMBAI (ITA NO. 4850/MUM/2019 DATED 15.01.2021) WHEREIN IT WAS HELD AS UNDER: 7. .AS NOTED BY THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR # 8 OF 2018, EXPLAINING THE REASON FOR THE INSERTION OF THE THIR D PROVISO TO SECTION 50C(1), HAS OBSERVED THAT 'IT HAS BEEN POINTED OUT THAT THE VARIATION BETWEEN STAMP DUTY VALUE AND ACTUAL CONSIDERATION R ECEIVED CAN OCCUR IN RESPECT OF SIMILAR PROPERTIES IN THE SAME AREA BECA USE OF A VARIETY OF FACTORS, INCLUDING THE SHAPE OF THE PLOT OR LOCATIO N'. ONCE THE CBDT ITSELF ACCEPTS THAT THESE VARIATIONS COULD BE ON ACCOUNT O F A VARIETY OF FACTORS, ESSENTIALLY BONAFIDE FACTORS, AND, FOR THIS REASON, SECTION 50C(1) SHOULD NOT COME INTO PLAY, IT WAS AN 'UNINTENDED CONSEQUEN CE' OF SECTION 50(1) THAT EVEN IN SUCH BONAFIDE SITUATIONS, THIS PROVISI ON, WHICH IS INHERENTLY IN THE NATURE OF AN ANTI-AVOIDANCE PROVISION, IS IN VOKED. ONCE THIS SITUATION IS SOUGHT TO BE ADDRESSED, AS IS THE SETT LED LEGAL POSITION- AS WE WILL SEE A LITTLE LATER IN OUR ANALYSIS, THIS SITUA TION NEEDS TO BE ADDRESSED IN ENTIRETY FOR THE ENTIRE PERIOD IN WHICH SUCH LEG AL PROVISIONS HAD EFFECT, AND NOT FOR A SPECIFIC TIME PERIOD ONLY. THERE IS N O GOOD REASON FOR HOLDING THE CURATIVE AMENDMENT TO BE ONLY AS PROSPE CTIVE IN EFFECT. DEALING WITH A SOMEWHAT MATERIALLY IDENTICAL SITUAT ION IN THE CASE OF RAJEEV KUMAR AGARWAL VS ACIT [(2014) 45 TAXMNANN.CO M 555 (AGRA)] WHEREIN A COORDINATE BENCH WAS DEALING WITH THE QUE STION WHETHER INSERTION OF A PROVISO TO SECTION 40(A)(I) TO CURE INTENDED CONSEQUENCE COULD HAVE RETROSPECTIVE EFFECT, EVEN THOUGH NOT SP ECIFICALLY PROVIDED FOR, AND SPEAKING THROUGH ONE OF US (I.E. THE VICE PRESI DENT), THE COORDINATE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 34 BENCH HAD, AFTER A DETAILED ANALYSIS OF THE LEGAL P OSITION, OBSERVED THAT, 'NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE EN OUGH TO CURE THESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNI NTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTL ED LEGAL POSITION TO THE EFFECT THAT A CURATIVE AMENDMENT TO AVOID UNINT ENDED CONSEQUENCES IS TO BE TREATED AS RETROSPECTIVE IN NATURE EVEN TH OUGH IT MAY NOT STATE SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MU ST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME WHEN TH E RELATED LEGAL PROVISION WAS INTRODUCED'. REFERRING TO THIS DECISI ON, AND EXTENSIVELY REPRODUCING FROM THE SAME, INCLUDING THE PORTION EX TRACTED ABOVE, HON'BLE DELHI HIGH COURT, IN THE CASE OF CIT VS ANS AL LANDMARK TOWNSHIP PVT LTD [(2015) 61 TAXMANN.COM 45 (DEL)], HAS APPROVED THIS APPROACH AND OBSERVED THAT '(T)HE COURT IS OF THE V IEW THAT THE ABOVE REASONING OF THE AGRA BENCH OF ITAT AS REGARDS THE RATIONALE BEHIND THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A)(IA ) OF THE ACT AND ITS CONCLUSION THAT THE SAID PROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFECT FROM 1ST APRIL 2005, MERITS AC CEPTANCE'. THE SAME WAS THE PATH FOLLOWED BY ANOTHER BENCH OF THIS TRIB UNAL IN THE CASE OF DHARMASHIBHAI SONANI VS ACIT [(2016) 161 ITD 627 (A HD)] WHICH HAS BEEN APPROVED BY HON'BLE MADRAS HIGH COURT IN THE J UDGMENT REPORTED AS CIT VS VUMMUDI AMARENDRAN [(2020) 429 ITR 97 (MA D)]. THE QUESTION THAT WE MUST TAKE A CALL ON, THEREFORE, IS AS TO WHAT IS THE RATIONALE BEHIND THE INSERTION OF THE THIRD PROVISO TO SECTION 50C(1), AND IF THAT RATIONALE IS TO PROVIDE A REMEDY FOR UNINTE NDED CONSEQUENCES OF THE MAIN PROVISION, WE MUST HOLD THAT THE THIRD PRO VISO TO SECTION 50C(1) COMES INTO FORCE WITH EFFECT FROM THE SAME DATE ON WHICH THE MAIN PROVISION, UNINTENDED PROVISIONS OF WHICH ARE SOUGH T TO BE NULLIFIED, ITSELF WAS BROUGHT INTO EFFECT. LET US UNDERSTAND WHAT THE NATURE OF THE PROVISIONS OF SECTION 50C IS. IN TERMS OF THIS PROV ISION, IF THE PROPERTY IS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 35 SOLD BELOW THE STAMP DUTY VALUATION RATE, WHICH IS OFTEN CALLED CIRCLE RATE, THIS STAMP DUTY VALUATION REPORT IS ASSUMED A S SALE CONSIDERATION FOR THE PROPERTY IN QUESTION, AND, ACCORDINGLY, CAP ITAL GAINS TAX IS LEVIED. THIS DEEMING FICTION TO SUBSTITUTE APPARENT SALE CO NSIDERATIONS BY NOTIONAL CONSIDERATION COMPUTED ON THE BASIS OF A S TAMP DUTY VALUATION RATE, WAS THUS TO ADDRESS THE ISSUE WITH RESPECT TO POTENTIAL EVASION OF TAXES BY UNDERSTATING THE SALE CONSIDERATION AMOUNT IN A SALE DEED. AS NOTED BY THE CBDT, WHILE EXPLAINING THE JUSTIFICATI ON FOR INSERTION OF SECTION 50C, '(T)HE FINANCE ACT, 2002, HAS INSERTED A NEW SECTION 50C IN THE INCOME-TAX ACT TO MAKE A SPECIAL PROVISION FOR DETERMINING THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMO VABLE PROPERTY'. SECTION 50C, THUS, ON A CONCEPTUAL NOTE, IS A PROVI SION TO ADDRESS CAPITAL GAINS TAX EVASION ON ACCOUNT OF UNDERSTATEMENT OF T HE CONSIDERATION. OF COURSE, THE LAW PROVIDES, UNDER SECTION 50C(2), THA T WHEREVER AN ASSESSEE CLAIMS THAT THE ACTUAL MARKET RATE IS LESS THAN THE STAMP DUTY VALUATION, HE CAN HAVE THE MATTER REFERRED TO A DEP ARTMENTAL VALUATION OFFICER FOR THE ASCERTAINMENT OF THE MARKET VALUE, BUT THEN IT IS A CUMBERSOME PROCEDURE AND, AT THE END OF THE DAY, EV ERY VALUATION, WHETHER BY THE DEPARTMENTAL VALUATION OFFICER OR UN DER THE STAMP DUTY VALUATION NOTIFICATION, IS AN ESTIMATE, AND THERE C AN ALWAYS BE BONAFIDE VARIATIONS, THOUGH TO A CERTAIN LIMITED EXTENT, IN THESE ESTIMATIONS. UNLESS, THEREFORE, SOME KIND OF A TOLERANCE BAND OR A SAFE HARBOUR PROVISION, IN RESPECT OF SUCH BONAFIDE VARIATIONS, IS IMPLICIT IN THE SCHEME OF LAW, THE ASSESSEES ARE BOUND TO FACE UNDUE HARDS HIPS. THE MECHANISM UNDER SECTION 50C PROCEEDS ON THE ASSUMPT ION THAT WHEN THE SALE CONSIDERATION IS LESS THAN THE STAMP DUTY VALUATION, THE SALE CONSIDERATION IS TO BE TREATED AS UNDERSTATED. THIS ASSUMPTION IS, HOWEVER, LAID TO REST WHEN THE VARIATIONS BETWEEN T HE STATED CONSIDERATION AND THE STAMP DUTY VALUATION FIGURE A RE TREATED AS ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 36 EXPLAINED. THE INSERTION OF THE THIRD PROVISO TO SE CTION 50C(1) PROVIDES FOR THIS TOLERANCE BAND WITH RESPECT TO A CERTAIN D EGREE OF VARIATIONS BETWEEN THE STAMP DUTY VALUATION AND THE STATED CON SIDERATION OF AN IMMOVABLE PROPERTY. IN OTHER WORDS, AS LONG AS THE VARIATIONS ARE WITHIN THE PERMISSIBLE LIMITS, THE ANTI-AVOIDANCE PROVISIO NS OF SECTION 50C DO NOT COME INTO PLAY. AS WE HAVE NOTED EARLIER, THE C BDT ITSELF ACCEPTS THAT THERE COULD BE VARIOUS BONAFIDE REASONS EXPLAI NING THE SMALL VARIATIONS BETWEEN THE SALE CONSIDERATION OF IMMOVA BLE PROPERTY AS DISCLOSED BY THE ASSESSEE VIS--VIS THE STAMP DUTY VALUATION FOR THE SAID IMMOVABLE PROPERTY. OBVIOUSLY, THEREFORE, DISTURBIN G THE ACTUAL SALE CONSIDERATION, FOR THE PURPOSE OF COMPUTING CAPITAL GAINS, AND ADOPTING A NOTIONAL FIGURE, FOR THAT PURPOSE, WILL NOT BE JUST IFIED IN SUCH CASES. ON A CONCEPTUAL NOTE, AN ESTIMATION OF MARKET PRICE IS A N ESTIMATION NEVERTHELESS, EVEN IF BY A STATUTORY AUTHORITY LIKE THE STAMP DUTY VALUATION AUTHORITY, AND SUCH A VALUATION CAN NEVER BE ELEVATED TO THE STATUS OF SUCH A PRECISE COMPUTATION WHICH ADMITS N O VARIATIONS. THE RIGOUR OF SECTION 50C(1) WAS THUS RELAXED, AND VERY THOUGHTFULLY SO, TO TAKE THESE BONAFIDE CASES OF SMALL VARIATIONS BETWE EN THE STATED SALE CONSIDERATION VIS--VIS STAMP DUTY VALUATION, OUT O F THE SCOPE OF ADJUSTMENTS CONTEMPLATED IN THE COMPUTATION OF CAPI TAL GAINS UNDER THIS ANTI-AVOIDANCE PROVISION. IN OUR HUMBLE UNDERSTANDI NG, IT IS A CASE OF A CURATIVE AMENDMENT TO TAKE CARE OF UNINTENDED CONSE QUENCES OF THE SCHEME OF SECTION 50C. IT MAKES PERFECT SENSE, AND TRULY REFLECTS A VERY PRAGMATIC APPROACH FULL OF COMPASSION AND FAIRNESS, THAT JUST BECAUSE THERE IS A SMALL VARIATION BETWEEN THE STATED SALE CONSIDERATION OF A PROPERTY AND STAMP DUTY VALUATION OF THE SAME PROPE RTY, ONE CANNOT PROCEED TO DRAW AN INFERENCE AGAINST THE ASSESSEE, AND SUBJECT THE ASSESSEE TO PRACTICALLY PROVE HIS BEING TRUTHFUL IN STATING THE SALE CONSIDERATION. CLEARLY, THEREFORE, THIS INSERTION O F THE THIRD PROVISO TO ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 37 SECTION 50C(1) IS IN THE NATURE OF A REMEDIAL MEASU RE TO ADDRESS A BONAFIDE SITUATION WHERE THERE IS LITTLE JUSTIFICAT ION FOR INVOKING AN ANTI- AVOIDANCE PROVISION. SIMILARLY, SO FAR AS ENHANCEME NT OF TOLERANCE BAND TO 10% BY THE FINANCE ACT 2020, IS CONCERNED, AS NO TED IN THE CBDT CIRCULAR ITSELF, IT WAS DONE IN RESPONSE TO THE REP RESENTATIONS OF THE STAKEHOLDERS FOR ENHANCEMENT IN THE TOLERANCE BAND. ONCE THE GOVERNMENT ACKNOWLEDGED THIS GENUINE HARDSHIP TO TH E TAXPAYER AND ADDRESSED THE ISSUE BY A SUITABLE AMENDMENT IN LAW, THE NEXT QUESTION WAS WHAT SHOULD BE A FAIR TOLERANCE BAND FOR VARIAT IONS IN THESE VALUES. AS A RESPONSIVE GOVERNMENT, WHICH IS TRULY THE HALL MARK OF THE PRESENT GOVERNMENT, EVEN THOUGH THE INITIAL TOLERANCE BAND LEVEL WAS TAKEN AT 5%, IN RESPONSE TO THE REPRESENTATIONS BY THE STAKE HOLDERS, THIS TOLERANCE BAND, OR SAFE HARBOUR PROVISION, WAS INCR EASED TO 10%. THERE IS NO PARTICULAR REASON TO JUSTIFY ANY PARTICULAR T IME FRAME FOR IMPLEMENTING THIS ENHANCEMENT OF TOLERANCE BAND OR SAFE HARBOUR PROVISION. THE REASONS ASSIGNED BY THE CBDT, I.E., 'THE VARIATION BETWEEN STAMP DUTY VALUE AND ACTUAL CONSIDERATION R ECEIVED CAN OCCUR IN RESPECT OF SIMILAR PROPERTIES IN THE SAME AREA BECA USE OF A VARIETY OF FACTORS, INCLUDING THE SHAPE OF THE PLOT OR LOCATIO N,' WAS AS MUCH VALID IN 2003 AS IT IS IN 2021. THERE IS NO VARIATION IN THE MATERIAL FACTS IN THIS RESPECT IN 2021 VIS--VIS THE MATERIAL FACTS IN 200 3. WHAT HOLDS GOOD IN 2021 WAS ALSO GOOD IN 2003. IF VARIATIONS UP TO 10% NEED TO BE TOLERATED AND NEED NOT BE PROBED FURTHER, UNDER SEC TION 50C, IN 2021, THERE WERE NO GOOD REASONS TO PROBE SUCH VARIATIONS , UNDER SECTION 50C, IN THE EARLIER PERIODS AS WELL. WE ARE, THEREFORE, SATISFIED THAT THE AMENDMENT IN THE SCHEME OF SECTION 50 C(1), BY INSE RTING THE THIRD PROVISO THERETO AND BY ENHANCING THE TOLERANCE BAND FOR VARIATIONS BETWEEN THE STATED SALE CONSIDERATION VIS--VIS STA MP DUTY VALUATION TO 10%, ARE CURATIVE IN NATURE, AND, THEREFORE, THESE PROVISIONS, EVEN ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 38 THOUGH STATED TO BE PROSPECTIVE, MUST BE HELD TO RE LATE BACK TO THE DATE WHEN THE RELATED STATUTORY PROVISION OF SECTION 50C , I.E. 1ST APRIL 2003. IN PLAIN WORDS, WHAT IS MEANS IS THAT EVEN IF THE V ALUATION OF A PROPERTY, FOR THE PURPOSE OF STAMP DUTY VALUATION, IS 10% MOR E THAN THE STATED SALE CONSIDERATION, THE STATED SALE CONSIDERATION W ILL BE ACCEPTED AT THE FACE VALUE AND THE ANTI-AVOIDANCE PROVISIONS UNDER SECTION 50C WILL NOT BE INVOKED. 8. ONCE LEGISLATURE VERY GRACIOUSLY ACCEPTS, BY INT RODUCING THE LEGAL AMENDMENTS IN QUESTION, THAT THERE WERE LACUNAS IN THE PROVISIONS OF SECTION 50C IN THE SENSE THAT EVEN IN THE CASES OF GENUINE VARIATIONS BETWEEN THE STATED CONSIDERATION AND THE STAMP DUTY VALUATION, ANTI- AVOIDANCE PROVISIONS UNDER SECTION 50C COULD BE PRE SSED INTO SERVICE, AND THUS REMEDIED THE LAW, THERE IS NO ESCAPE FROM HOLDING THAT THESE AMENDMENTS ARE EFFECTIVE WITH EFFECT FROM THE DATE ON WHICH THE RELATED PROVISION, I.E., SECTION 50C, ITSELF WAS INTRODUCED . THESE AMENDMENTS ARE THUS HELD TO BE RETROSPECTIVE IN EFFECT. IN OUR CON SIDERED VIEW, THEREFORE, THE PROVISIONS OF THE THIRD PROVISO TO SECTION 50C (1), AS THEY STAND NOW, MUST BE HELD TO BE EFFECTIVE WITH EFFECT FROM 1ST A PRIL 2003. WE ORDER ACCORDINGLY. LEARNED DEPARTMENTAL REPRESENTATIVE, H OWEVER, DOES NOT GIVE UP. LEARNED DEPARTMENTAL REPRESENTATIVE HAS SU GGESTED THAT WE MAY MENTION IN OUR ORDER THAT 'RELIEF IS BEING PROV IDED AS A SPECIAL CASE AND THIS DECISION MAY NOT BE CONSIDERED AS A PRECED ENT'. NOTHING CAN BE FARTHER FROM A JUDICIOUS APPROACH TO THE PROCESS OF DISPENSATION OF JUSTICE, AND SUCH AN APPROACH, AS IS PRAYED FOR, IS AN ANTITHESIS OF THE PRINCIPLE OF 'EQUALITY BEFORE THE LAW,' WHICH IS ON E OF OUR MOST CHERISHED CONSTITUTIONAL VALUES. OUR JUDICIAL FUNCTIONING HAS TO BE EVEN-HANDED, TRANSPARENT, AND PREDICTABLE, AND WHAT WE DECIDE FO R ONE LITIGANT MUST ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 39 HOLD GOOD FOR ALL OTHER SIMILARLY PLACED LITIGANTS AS WELL. WE, THEREFORE, DECLINE TO ENTERTAIN THIS PLEA OF THE ASSESSEE(REVE NUE). 9. WE HAVE NOTED THAT AS AGAINST THE STATED CONSIDE RATION OF RS 75,00,000, THE STAMP DUTY VALUATION OF THE PROPERTY IS RS 79,91,500. THE DIFFERENCE IS JUST RS 4,91,500, WHICH IS ABOUT 6.55 % OF THE STATED SALE CONSIDERATION. AS THE DIFFERENCE BETWEEN THE STATED CONSIDERATION VIS-- VIS THE STAMP DUTY VALUATION IS ADMITTEDLY LESS THA N 10% OF THE STATED CONSIDERATION IN THIS CASE, AND IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT SECTION 50C WILL HA VE NO APPLICATION IN THE MATTER. THE ENHANCEMENT IN CAPITAL GAIN COMPUTA TION, AS MADE BY THE ASSESSING OFFICER, THUS STANDS DISAPPROVED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 48. EVEN IF WE LOOK AT THE SITUATION PRIOR TO THE I NTRODUCTION OF THIRD PROVISO TO SECTION 50C(1) OF THE ACT, VARIOUS COORDINATE BE NCHES HAVE HELD THAT WHERE THERE IS DIFFERENCE OF LESS THAN 10%, THE SAME SHAL L BE IGNORED. IN THIS REGARD, WE REFER TO DECISION OF THE JAIPUR BENCHES OF THE T RIBUNAL IN CASE OF SMT. SITA BAI KHETAN VS. ITO (ITA NO.823/JP/2013 DATED 27.7.2016) WHEREIN IT WAS HELD AS UNDER: 4.2 WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE HONBLE COORDINATE BENC H IN ITA NO. 1.543/PN/2007 IN THE CASE OF RAHUL CONSTRUCTIONS VS . DCIT (SUPRA) HAS HELD AS UNDER:- WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASSTT. VS. HARPREET HOTELS (P) LTD. VIDE ITA NO. 1156-1160 /PN/2007 AND RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE H AD DISMISSED THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HA D DELETED THE UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION ON THE GROUND THAT ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 40 THE DIFFERENCE BETWEEN THE FIGURE SHOWN BY THE ASSE SSEE AND THE FIGURE OF THE DVO IS HARDLY 10 PER CENT. SIMILARLY, WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. K AADDU JAYGHOSH APPASAHEBH, FOLLOWING THE DECISION OF THE J&K HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P) LTD . VS, UT (2002) 177 CTR (J&K) 232 HAD HELD THAT WHEN THE MARGIN BET WEEN THE VALUE AS GIVEN BY THE ASSESSEE AND THE DEPARTMENTAL VALUER WAS LESS THAN 10 PER CENT, THE DIFFERENCE IS LIABLE TO BE IGNORED AND THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. SINCE IN THE INSTANT CASE SUCH DIFFERENCE IS LESS T HAN 10 PER CENT AND CONSIDERING THE FACT THAT VALUATION IS ALWAYS A MATTER OF ESTIMATION WHERE SOME DEGREE OF DIFFERENCE IS BOUND TO OCCUR, WE ARE OF THE CONSIDERED OPINION THAT THE AO IN THE IN STANT CASE IS NOT JUSTIFIED IN SUBSTITUTING THE SALE CONSIDERATION AT RS. 20,55,000/- AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 19,00, 000 DISCLOSED BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO TAKE RS. 19,00,000/- ONLY AS THE S ALE CONSIDERATION OF THE PROPERTY. THE GROUNDS RAISED B Y THE ASSESSEE ARE ACCORDINGLY ALLOWED IN THE INSTANT CASE, THE DIFFERENCE BETWEEN THE VAL UATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND DECLARED BY THE ASSES SEE IS LESS THAN 10%. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE COORDINATE BENCH, WE HEREBY DIRECT THE AO TO ADOPT THE VALUE AS DECLARED BY THE ASSESSEE. THIS GROUND OF THE ASSESS ED IS ALLOWED. 49. IN VIEW OF THE AFORESAID DISCUSSIONS, IN THE IN STANT CASE, WE NOTE THAT THE REVISED VALUATION AS SO DETERMINED IN RESPECT OF BO TH THE PROPERTIES WORKS OUT TO LESS THAN 10% OF THE ACTUAL SALE CONSIDERATION A S DECLARED BY THE ASSESSEE AND CONSIDERING THE FACT THAT VALUATION IS ALWAYS A MATTER OF ESTIMATION WHERE ITA NOS. 475 & 558/JP/2019 SHRI BANWARI LAL SHA RMA, JAIPUR VS. ITO, JAIPUR 41 SOME DEGREE OF DIFFERENCE IS BOUND TO OCCUR WHICH E VEN THE LEGISLATURE HAS LATELY RECOGNIZED AND HAS INTRODUCED THE TOLERANCE LIMIT OF 10% WHICH HAVE CONSISTENTLY BEEN HELD BY VARIOUS BENCHES AS CURATI VE IN NATURE, SUCH A DIFFERENCE NEEDS TO BE IGNORED AND DECLARED SALE CO NSIDERATION BE ACCEPTED. WE ACCORDINGLY DIRECT THE AO TO ACCEPT THE SALE CON SIDERATION AS DECLARED BY THE ASSESSEE AS PER THE TWO REGISTERED SALE DEEDS. FOR THE REASONS STATED ABOVE, THE GROUND OF APPEAL TAKEN BY THE ASSESSEE I S ALLOWED AND THE GROUND OF APPEAL TAKEN BY THE REVENUE IS DISMISSED. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE AND REVENUE ARE DISPOSED OFF IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 14/06/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/06/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BANWARI LAL SHARMA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 1(5), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NOS. 475 & 558/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR