SANAM SALIM MEMON, MUMBAI V. ITO 10(2)(2), MUMBAI

ITA 5213/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8705 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Fair market value; Valuation report
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5213/MUM/2014 FOR (ASSESSMENT YEAR : 2009-10 ) MRS. SANAM SALIM MEMON 1502, ADONIS, RAHEJA ACROPOLIS II BEHIND TELECOM FACTORY, DEONAR, MUMBAI-400088 PAN: ABXPM9839P VS. ITO-10(2)(2), AAYAKAR BHAVAN, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL SATHE (AR) REVENUE BY : SHRI B. S. BIST (DR ) DATE OF HEARING : 17.01.2017 DATE OF PRONOUNCEMENT : 17 .01.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL BY ASSESSEE U/S 253 OF THE INCOME-TAX A CT (ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) [ FOR SHORT THE CIT(A)] 22, MUMBAI DATED 30.06.2014 FOR ASSESSMENT YEAR (AY) 20 09-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22, MUMBAI, IS BAD IN LAW AND CONTRARY TO THE FACTS OF THE CASE AN D EVIDENCE ON RECORD. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22 , ERRED IN UPHOLDING THE ADOPTION OF FSI AS 1, BY DEPARTMENTAL VALUATION OFF ICER (DVO) FOR DETERMINING FAIR MARKET VALUE OF PROPERTY SOLD BY THE APPELLANT , AS AGAINST PERMISSIBLE 0.75 FSI PER RECORD OF THE CO-OPERATIVE HOUSING SOCIETY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22 , ERRED IN IGNORING THE LETTER DATED 4TH JANUARY 2012 ISSUED BY SHRI DATTAGURU CO- OPERATIVE HOUSING SOCIETY LTD. CONFIRMING THAT THE SOCIETY HAS GOT SANCTION O F 0.75 FSI FROM MUNICIPAL CORPORATION OF GREATER MUMBAI DUE TO RESTRICTION FO R UTILIZATION OF FSI BY INDIVIDUAL MEMBERS, PURSUANT TO SOCIETY BYE-LAWS. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22 , ERRED IN IGNORING THE LETTER DATED 18TH AUGUST 2013 ISSUED BY SHRI DATTAGURU CO- OPERATIVE HOUSING SOCIETY LTD. CONFIRMING THAT THE PERMISSIBLE FSI FOR THE AR EA WAS 0.75 IN APRIL 2008, AT THE TIME THE BUNGLOW WAS SOLD AND THE FSI WAS INCREASED TO 1 WITH EFFECT FROM 1 ST MAY, 2013. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-22 ERRED IN IGNORING THE ERRORS/DEFECTS IN VALUATION REPORT ISSUED BY DVO AN D ALSO FAILED IN APPRECIATING 2 ITA NO. 5213/M/2014 MRS. SANAM SALIM MEMON THAT THE DVO HAS TAKEN THE HIGHEST RATE OF RS. 7526 PER SQ. FT. OUT OF 3 INSTANCES OF SALE IN THE VICINITY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS FI LED RETURN OF INCOME FOR RELEVANT AY ON 29.03.2010 DECLARING TOTAL INCOME AT RS. 75,921/ -. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 30.12.2011. THE ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT BESIDES OTHER ADDITION/DISALLOWANCE MADE THE ADDITION OF RS. 31,13,127/- ON ACCOUNT OF LONG TERM CAPITAL GAIN (LTCG) ON SALE OF IMMOVABLE PROPERTY BY ADOPTING THE STAMP DUTY, VALUE OF THE PROPERTY AT R S. 1.30 CRORE AS A FULL VALUE OF CONSIDERATION. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS CONFIRMED. THUS, FURTHER AGGRIEVED BY THE ORDER OF THE LD. CIT(A) TH E ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D PERUSED THE ORDER OF AUTHORITIES BELOW AND THE MATTER AVAILABLE ON RECOR D. THE LD. AR OF THE ASSESSEE ARGUED THAT ASSESSEE ALONG WITH HER HUSBAND SOLD TH E IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS. 80,00,000/- ON 29.04.2008. AS PER STAMP VALUATION, THE VALUE OF PROPERTY IS RS. 1.30 CRORE. THE AO REFERRED THE ISS UE OF VALUATION TO DISTRICT VALUATION OFFICER (DVO) TO DETERMINE THE FAIR MARKE T VALUE (FMV) OF THE PROPERTY. THE DVO CONVEYED THE ESTIMATE OF FMV AS ON 29.04.20 08 AS RS. 1,30,61,000/-. THE AO CALCULATED THE CAPITAL GAIN ON THE BASIS OF REPO RT OF STAMP VALUATION AUTHORITY. DURING THE APPELLATE PROCEEDING, THE ASSESSEE RAISE D OBJECTION ABOUT THE DEFICIENCY IN THE VALUATION REPORT. AS THE FINAL VALUATION REPORT WAS RECEIVED AFTER COMPLETION OF THE ASSESSMENT ORDER, FINAL VALUATION REPORT DATED 27.0 2.2012. IT WAS FURTHER ARGUED THAT DURING THE APPELLATE PROCEEDING, THE ASSESSEE RAISE D THE OBJECTION AND POINTED OUT THE DEFICIENCY IN THE VALUATION REPORT. THE ASSESSEE SP ECIFICALLY POINTED OUT THAT APPROVED FSI OF LAYOUT PLAN WAS 0.75, HOWEVER THE DVO CONSID ERED THE FSI AS 1. THE ASSESSEE ALSO OBJECTED THAT DVO HAS CHOSEN THE HIGHEST RATE FROM THE THREE COMPARABLE AVAILABLE FROM THE LOCALITY, WHERE THE PROPERTY SIT UATED. THE LD. CIT(A) NOT CONSIDERED THE OBJECTIONS OF THE ASSESSEE AND PRAYE D THAT ON THE BASIS OF GUIDELINES FOR VALUATION OF IMMOVABLE PROPERTY, AVERAGE RATE S HOULD BE ADOPTED. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUPPORTED THE FINDINGS OF AUTHORITIES BELOW. 3 ITA NO. 5213/M/2014 MRS. SANAM SALIM MEMON 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND FIND FORCE IN THE SUBMISSION OF LD. AR OF THE ASSESSEE THAT AS PER PA RAGRAPH NO. 5.2.1.2 OF THE GUIDELINES FOR VALUATION OF IMMOVABLE PROPERTY AVER AGE RATE SHOULD BE ADOPTED. FURTHER, THE ASSESSEE HAS CLAIMED THAT THE AUTHORIT IES BELOW ADOPTED THE FSI AS 1 INSTEAD OF 0.75, WHICH REQUIRE TO BE EXAMINED. THUS , WE RESTORE THE MATTER TO THE FILE OF CIT(A) TO CONSIDER THE CLAUSE 5.3.1.2 OF GUIDELI NES OF THE VALUATION AND CLAIM WITH REGARD TO FSI AND PASS THE ORDER AFRESH IN A CCORDANCE WITH LAW. NEEDLESS TO SAY THAT THE CIT(A) SHALL AFFORD A REASONABLE AND FAIR OPPORTUNITY TO THE ASSESSEE BEFORE PASSING THE ORDER. 5. WITH THESE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 7 TH JANUARY, 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 17 /01/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/