T.RADHAKRISHNAN, CHENNAI V. ITO NON CORPORATE WARD-15(3), CHENNAI

ITA 481/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0293 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 26-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 263; 143(3); 142(1); 143(2)

Judgement Text

आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. मंजुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No.481/Chny/2020 िनधाŊरण वषŊ/Assessment Year: 2015-16 Shri T. Radhakrishnan, 31, Second Street, Karpagambal Nagar, Kottivakkam, Chennai 600 041. [PAN:AABPR8027K] Vs. The Income Tax Officer, Non Corporate Wad 15(3), Chennai – 34. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri M. Karunakaran, Advocate ŮȑथŎ की ओर से/Respondent by : Shri R.N. Siddappaji, CIT सुनवाई की तारीख/ Date of hearing : 06.01.2022 घोषणा की तारीख /Date of Pronouncement : 11.01.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax-6, Chennai dated 10.02.2020 relevant to the assessment year 2015-16. 2. The short issue involved in this appeal is whether the assessment order passed by the Assessing Officer is erroneous or prejudicial to the interest of the Revenue or not. In this case, the assessment order was passed by the Assessing Officer under section 143(3) of the Income Tax I.T.A. No. 481/Chny/20 2 Act, 1961 [“Act” in short] on 26.12.2017. Before completing the assessment, the Assessing Officer has issued notice under section 143(2) of the Act dated 02.08.2017. Subsequently, notice under section 142(1) of the Act dated 16.08.2017 was issued to the assessee in connection with the scrutiny proceedings calling for details. Thereafter, vide letter dated 16.08.2017, the assessee was show-caused to explain as to why the amount of ₹.10,00,000/- should not be taxed under income from other sources as the assessee had purchased the property at a cost of ₹.1,00,00,000/-, which is less than the market value of the property of ₹.1.10 crores and the property was received for inadequate consideration. Accordingly, vide letter dated 18.12.2017, the assessee has gave a detailed reply that the assessee has purchased a flat in Adyar for a consideration of ₹.1,00,00,000/-. It was stated that the above amount represents the market value of the property and the assessee has not paid any amount more than the said consideration stated in the document. The Sub-Registrar, while valuing the property, has taken the current rate for the building and the land. The building was aged more than 29 years and the cost of such building would be very much less. The value adopted by the Sub-Registrar is on the higher side and requested the Assessing Officer to refer the matter to the Valuation Officer under section 50C(2) of the Act. The assessee has submitted that the State Government having considered the guideline value fixed for the land earlier would not I.T.A. No. 481/Chny/20 3 represent the market value, which has reduced the guideline value of the land by 1/3 rd . It was further submission that if the correct value is adopted, there would not be any difference in the cost of purchase of the property and its fair market value. Alternatively, it was further submitted that the difference between the guideline value and market value is less than 10%. The Assessing Officer, by considering the alternative submissions of the assessee, completed the assessment under section 143(3) of the Act. 3. Subsequently, by exercising the power conferred under section 263 of the Act, the ld. PCIT has issued a notice to the assessee and passed revision order under section 263 of the Act dated 10.02.2020 on the ground that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue for the reason that the Assessing Officer ought to have been referred the matter to the Valuation Officer as per the request of the assessee and directed to re-do the assessment after referring the case to the Valuation Officer. 4. Against the revision order, the assessee has preferred further appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the assessee has raised only an alternate plea of referring the matter to the Valuation Officer, which was absolutely not required as, while computing, the difference between the values is less than 10% and prayed for quashing the revision order passed under section 263 of the Act I.T.A. No. 481/Chny/20 4 5. On the other hand, the ld. DR dutifully relied on the order passed by the ld. PCIT. 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. We find that the Assessing Officer has examined the entire issue during the course of assessment proceedings. It is very clear from the assessment order itself. That apart, the Assessing Officer has issued a show-cause notice to the assessee and called for explanation. By considering the detailed explanation of the assessee, the Assessing Officer was of the opinion that where the difference between the actual value and market value is less than 10%, the same is ignorable and does not warrant any taxation. 6.1 In this case, the Assessing Officer has passed the assessment order after due verification and consideration of detailed written submissions filed by the assessee against the show-cause notice and therefore, we are of the considered opinion that invoking the provisions of section 263 of the Act does not warrant for the reason that the assessment order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue. Accordingly, I.T.A. No. 481/Chny/20 5 we quash the revision order passed under section 263 of the Act by the ld. PCIT and allow the appeal of the assessee. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 11 th January, 2022 at Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 11.01.2022 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.