Manoj Kumar, Delhi V. ITO, Ward-28(4), New Delhi

ITA 4904/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2874 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Assessee Lawyers: B L GUPTA MS MANJU GOEL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 54F

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 4904/DEL/2017 (ASSESSMENT YEA R: 2011-12) SH. MANOJ KUMAR, 835, GALI BERI WALI, KUCHA PATI RAM, AJMERI GATE, DELHI-110006. PAN-AIKPK0895K VS ITO, WARD-28(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. B.L.GUPTA, MS. MANJU GOEL, CA RESPONDENT BY SH. V.K.JIWANI, SR. DR DATE OF HEARING 08.03.2018 DATE OF PRONOUNCEMENT 16.03.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD.CIT(A)-16, NEW DELHI DATED 01.05.2017 FOR AY 201 1-12. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE RE TURN OF INCOME WAS FILED AT RS.1,70,064/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT WITH THE REMARKS THAT THE AO TO EXAMINE TAXABILITY OF SALE OF PROPERTY AS REPORTED IN AIR. DURING THE YEAR UNDER CONSIDERATION, THE ASSE SSEE WAS DEALING IN SALE/PURCHASE OF ELECTRICAL ITEMS AND RUNNING A SHO P UNDER THE NAME OF M/S. EXPERT ELECTRICALS & RADIO, CHANDNI CHOWK, DELHI. THE ASSESSEE WAS ASKED TO FILE DETAILS OF PROPERTIES PURCHASED/SOLD DURING TH E YEAR UNDER CONSIDERATION WITH THE COPY OF SALE DEED AND BANKING STATEMENT. PERUSAL OF THE SALE DEED SHOWS THAT THE PROPERTY IN QUESTION WAS SOLD FOR A CONSIDERATION OF RS.15,50,000/- WHEREAS THE CIRCLE RATE OF PROPERTY WAS RS.66,90,000/-. AS ITA NO. 4904/DEL/2017 PAGE | 2 SUCH THE PROVISIONS OF SECTION 50C OF THE INCOME T AX ACT, 1961 (IN SHORT ACT) WERE ATTRACTED IN THIS CASE. THE ASSESSEE DID NOT RESPOND TO THE SHOW CAUSE NOTICE ISSUED BY THE AO. IT WAS ALSO FOUND THAT TH E ASSESSEE HAS SOLD ANOTHER PROPERTY NO.3402 FOR A TOTAL CONSIDERATION OF RS.4, 50,000/-, THE CIRCLE RATE OF WHICH IS RS.7,60,000/-. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE PROVISIONS OF SECTION 50C SHOULD NOT BE INVOKED IN THIS CASE. THE ASSESSEE FILED REPLY ON 12.02.2014 WHICH IS REPRODUCED IN TH E ASSESSMENT ORDER CLAIMING LONG TERM CAPITAL LOSS. IT WAS ALSO REPLI ED THAT THE ASSESSEE HAS TAKEN THE FAIR MARKET VALUE PROPERTY AS ON 01.04.1981 TO BE ON VERY LOWER SIDE. IN CASE THE AO HAS ANY DOUBT IN ACCEPTING THE FAIR MA RKET VALUE OF BOTH THE PROPERTIES AS ON 01.04.1981, THE AO MAY REFER TO TH E SAME TO THE VALUATION OFFICER BOTH FOR ESTIMATING THE FAIR MARKET VALUE AS ON 01.04.1981 AND ON THE DATE OF SALE AND THE ASSESSEE WILL NOT BE TAXED AGA INST LONG TERM CAPITAL GAIN. IT WAS ALSO SUBMITTED THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 54F OF THE ACT AS HE HAS PURCHASED /BOOKED A FLAT IN CLOUD 9 TOWERS FOR RS.16,92,400/-. THE AO IN ORDER TO VERIFY VERACITY OF THE ASSESSEES CLAIM REFERRED THE MATTER TO DISTRICT VALUATION OFFICER ( IN SHORT DVO) FOR FAIR MARKET VALUATION OF THESE PROPERTIES. IN REPLY TO THIS, THE VALUATION REPORT WAS RECEIVED ON 28.03.2014 GIVING THE VALUATION OF PROP ERTIES AS UNDER:- (I) PROPERTY NO.3403, SITA RAM BAZAR, DELHI-06 AS O N 01.04.1981 AT RS.3,61,934/-; (II) PROPERTY NO.3402, SITA RAM BAZAR, DELHI-06, SH OP ON GROUND FLOOR AT RS.72,864/- AS ON 01.04.1981. ITA NO. 4904/DEL/2017 PAGE | 3 3. THE AO CALCULATED THE INDEXED COST AND GIVING BE NEFIT THERETO CALCULATED THE LONG TERM CAPITAL GAINS BY APPLYING RATES OF BO TH THE PROPERTIES AT RS.43,58,587/- AND BY GIVING EXEMPTION U/S 54F OF T HE ACT OF RS.16,92,400/- CALCULATED THE CAPITAL GAINS AT RS.26,66,187/- AND MADE THE ADDITION ACCORDINGLY. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD.C IT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE IS REPRODUCED IN THE AP PELLATE ORDER IN WHICH THE ASSESSEE SUBMITTED THAT THE AO HAS NOT ASKED FOR VA LUATION OF PROPERTY AS ON 01.04.1981 ALTHOUGH REQUESTED BY THE ASSESSEE. THE ORDER WAS PASSED BY THE AO WITHOUT CONFRONTING THE VALUATION REPORT. THE PR OPERTIES WERE LET OUT AT A VERY NOMINAL AMOUNT WHICH FACTS ARE NOT VERIFIED. THE MATTER WAS, THEREFORE, REFERRED TO AO TO PROVIDE COPY OF VALUATION REPORT TO THE ASSESSEE AND INVITE HIS OBJECTIONS. THE AO FILED A REMAND REPORT BEFORE LD .CIT(A). THE AO STATED IN THE REMAND REPORT THAT THE ASSESSEE HAS POINTED OUT CERTAIN DEFICIENCIES IN THE DVOS REPORT. THE ASSESSEE WAS PROVIDED COPY OF COVERING LETTER OF THE VALUATION REPORT AND WAS AGAIN REQUESTED TO RE-SUBM IT OBJECTIONS IF ANY, HOWEVER, NO REPLY HAS BEEN FILED BY THE ASSESSEE. THE ASSESSEE ALSO FILED RE- JOINDER. 5. LD.CIT(A) CONSIDERING THE MATERIAL NOTED THAT DV O IS NOT BARRED FROM ADOPTING ANY METHOD WHICH MAY HELP IN TO ARRIVE AT FAIR MARKET VALUE FAIRLY AND LOGICALLY. IT IS FURTHER NOTED BY LD.CIT(A) THAT T HE ASSESSEE APPEARS TO BE AGGRIEVED BY DETERMINATION OF COST OF ACQUISITION. THE ASSESSEE HIMSELF ADOPTED THE VALUE AS ON 01.04.1981 AND THE SAME MET HOD WAS ADOPTED BY THE VALUATION OFFICER. THE ASSESSEE IS OBJECTING FOR N O RHYME OR REASONS. IT IS ALSO ITA NO. 4904/DEL/2017 PAGE | 4 NOTED THAT THE AO HAS MADE VALID REFERENCE TO VALUA TION OFFICER AND ON BASIS OF DVOS REPORT, THE VALUATION MADE BY AO. 6. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGING T HE ADDITION OF RS.26,66,187/-. LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS SUBMITTED THA T THE AO NEVER ASKED FOR VALUATION REPORT ON 01.04.1981, COPY OF THE REFEREN CE IS FILED IN THE PAPER BOOK. HE HAS SUBMITTED THAT LD.CIT(A) HAS NOT CONSIDERED THE ASSESSEES SUBMISSIONS AND RE-JOINDER WHICH HAVE NOT BEEN APPR ECIATED BY LD.CIT(A) IN PROPER PROSPECTIVE. THE ASSESSEE SOUGHT ADJOURNME NT BEFORE LD.CIT(A) BUT WITHOUT REJECTING THE SAME, HE HAS PASSED THE IMPUG NED ORDER, THEREFORE, NO PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE T O REPRESENT BEFORE LD.CIT(A). 7. LD. DR, HOWEVER, REFERRED TO PAGE 7 OF THE APPEL LATE ORDER IN WHICH REFERENCE U/S 142A/55A HAVE BEEN REPRODUCED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND MATE RIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT THE MATTER REQUIRES RECONSIDE RATION AT THE LEVEL OF LD.CIT(A). THE ASSESSEE RAISED THE ISSUE BEFORE LD .CIT(A) THAT THE AO NEVER ASKED FOR VALUATION OF PROPERTIES AS ON 01.04.1981, ALTHOUGH REQUESTED BY THE ASSESSEE. FURTHER, NO VALUATION REPORT HAS BEEN PR OVIDED TO THE ASSESSEE. NO OPPORTUNITY HAS BEEN GIVEN BY THE AO. THE ASSESSEE NOW CONTENDED THAT NO FAIR OPPORTUNITY HAS BEEN GIVEN BY LD.CIT(A) AND TH E OBJECTIONS OF THE ASSESSEE HAVE NOT BEEN DECIDED IN PROPER PROSPECTIVE. IT IS ALSO CLAIMED THAT ON THE LAST DATE OF HEARING, LD.CIT(A) WITHOUT REJECTING THE AP PLICATION FOR ADJOURNMENT PASSED THE IMPUGNED ORDER. THESE FACTS SHOW THAT O NE MORE OPPORTUNITY ITA NO. 4904/DEL/2017 PAGE | 5 SHOULD BE GIVEN TO THE ASSESSEE TO REPRESENT ITS CA SE BEFORE LD.CIT(A). THE CONTENTIONS AND OBJECTIONS OF THE ASSESSEE HAVE NOT BEEN DECIDED IN PROPER PROSPECTIVE AND IT APPEARS THAT LD.CIT(A) ON THE LA ST DATE OF HEARING WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE PASSED TH E IMPUGNED ORDER. I ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER AND RESTO RE THE APPEAL OF THE ASSESSEE TO THE FILE OF LD.CIT(A) WITH DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSESSEE IN ACCORDANCE WITH LAW BY GIVING REASONABL E AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. LD.CIT( A) SHALL DECIDE ALL THE OBJECTIONS OF THE ASSESSEE BY GIVING OPPORTUNITY OF BEING HEARD TO THE AO AS WELL. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 16.03.2018. SD/- (BHAVNESH SAINI) JUDI CIAL MEMBER DATE:-16 TH MARCH, 2018 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI