KALPANA SHETTY, MUMBAI V. ITO 17(1)(1), MUMBAI

ITA 5223/MUM/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3745 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 11-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAHUA SARKARDR
• Assessee Lawyers: PRAVINCHANDRA N SHAH
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value
• Section: 50C

Judgement Text

1 ITA NO.5223/MUM/2009 IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH SMC SMC SMC SMC MUMBAI MUMBAI MUMBAI MUMBAI BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, A BEFORE SHRI R K PANDA, ACCOUNTANT MEMBER CCOUNTANT MEMBER CCOUNTANT MEMBER CCOUNTANT MEMBER ITA NO. ITA NO. ITA NO. ITA NO. 5223/MUM/2009 5223/MUM/2009 5223/MUM/2009 5223/MUM/2009 (ASSESSMENT YEAR 2006-07) KALPANA SHETTY SHATRUNJAY TOWER BLOCK NO.72 MMGS ROAD DADAR (E),MUMBAI VS THE INCOME TAX OFFICER WARD 17(1)(1) MUMBAI (APPELLANT) (RESPONDENT) PAN PAN PAN PAN AAZPS8016K AAZPS8016K AAZPS8016K AAZPS8016K ASSESSEE BY: SHRI PRAVINCHANDRA N SHAH REVENUE BY: MS MAHUA SARKAR/DR O R D E R O R D E R O R D E R O R D E R PER R K PANDA: PER R K PANDA: PER R K PANDA: PER R K PANDA: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 22.7.2009 OF THE CIT(A)-XVII MUMBAI RELATING TO ASS ESSMENT YEAR 2006-07. 2 THOUGH A NUMBER OF GROUNDS HAVE BEEN TAKEN BY TH E ASSESSEE THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO ` 3,70,151/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF IMMOVEABLE PROPERTY. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE HAD SHOWN SHORT TERM CAPITAL LOSS OF ` 1,17,792/- ON SALE OF IMMOVABLE PROPERTY. THE ASSE SSEE SOLD THE IMMOVABLE PROPERTY ON 20.7.2005 FOR A CONSIDERATIO N OF ` . 20 LACS. THE SHARE OF THE ASSESSEE BEING 37.88% IN THE PROPERTY, THE A MOUNT CALCULATED BY HIM WAS ` 7,57,600/-. THE ASSESSING OFFICER NOTED THAT THE VALUE DETERMINED BY THE STAMP DUTY AUTHORITIES FOR REGISTRATION PURPOSE WAS ` 32,87,892/-. ADOPTING THE PROVISIONS OF SEC. 50C OF THE I T ACT, THE ASSESSIN G OFFICER WHILE CONSIDERING THE VALUE AT ` 32,87,892/- DETERMINED THE SHARES OF THE ASSESSEE AT ` 12,45,543/-. 2 ITA NO.5223/MUM/2009 ACCORDINGLY, THE ASSESSING OFFICER DETERMINED THE C APITAL GAIN AT ` 3,70,151/- AS AGAINST CAPITAL LOSS AT `. 1,17,792/-. 2.2 IN APPEAL, THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT FOR THE PURPOSE OF CAPITAL GAINS, VALUE ADOPTED BY STAMP DUTY AUTHORITIES HAS TO BE TAKEN. AGGRIEVED WITH SUCH OR DER OF THE CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 3 THE LD COUNSEL FOR THE ASSESSEE REFERRING TO THE DECISION OF THE JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF MEGHRAJ BAID V S ITO REPORTED IN 114 TTJ (JODH) 841 SUBMITTED THAT IN CASE THE ASSESSING OF FICER DOES NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE WITH REGARD TO LOWER C ONSIDERATION DISCLOSED BY HIM THEN HE SHOULD REFER THE MATTER TO THE DVO FOR GETT ING ITS MARKET RATE ESTABLISHED AS ON THE DATE OF SALE TO ARRIVE AT T HE CORRECT SALE CONSIDERATION. HE SUBMITTED THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO REFER THE MATTER TO THE DVO F OR DETERMINING THE MARKET RATE. HE ALSO RELIED ON THE DECISIONS REPORTED IN 249 ITR 24 AND THE DECISION REPORTED IN 110 TTJ 293. 3.1 THE LD DR, ON THE OTHER HAND SUBMITTED THAT SH E HAS NO OBJECTION, IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR REFERRING THE MATTER TO THE DVO FOR DETERMINING THE MARKET VALUE. 4 I HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY B OTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER B OOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOUS DECIS IONS CITED BEFORE ME. THERE IS NO DISPUTE TO THE FACT THAT THE VALUE ADOPTED BY TH E STAMP DUTY AUTHORITIES IS MORE THAN THE ACTUAL SALE CONSIDERATION DISCLOSED B Y THE ASSESSEE. HOWEVER, AS PER THE PROVISIONS OF SEC. 50C (2), IF THE CLAIM B EFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP DUTY AU THORITIES ARE MORE THAN THE 3 ITA NO.5223/MUM/2009 FAIR MARKET VALUE OF THE PROPERTY THEN THE ASSESSIN G OFFICER MAY REFER THE MATTER TO THE VALUATION AUTHORITIES FOR DETERMININ G THE FAIR MARKET VALUE. IT IS THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE T HAT DUE TO SOME PROBLEM IN THE AREA, THE MARKET VALUE OF THE PROPERTY IS LESS THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES. FURTHER, THE DETAILED WRITT EN SUBMISSIONS FURNISHED BEFORE THE CIT(A) HAS NOT BEEN PROPERLY CONSIDERED. SINCE THE ASSESSEE HAS OBJECTED TO THE ADOPTION OF THE VALUE ADOPTED BY TH E STAMP DUTY AUTHORITIES, THEREFORE, IN VIEW OF THE SPECIFIC PROVISIONS OF SE C. 50C(2), I DEEM IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH THE DIRECTION TO REFER THE MATTER TO THE DVO FOR DETERMINING THE FAI RE MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. THE GROUND RAIS ED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 10 TH , DAY OF NOV 2010. SD/- ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ( R K PANDA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 10 TH , NOV 2010 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI