MURLIDHAR T. CHUGH, MUMBAI V. ITO 20(2)(2), MUMBAI

ITA 5280/MUM/2010

• Counselvise Citation: 528019914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-10-2011
• Assessment Year: misc
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: MURLIDHAR T CHUGH
• Keywords: Principle of natural justice; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE SHIRI B.R. MITTAL, JM AND SHRI R.K. PANDA, AM ITA NO. : 5280/MUM/2010 ASSESSMENT YEAR : 2006-07 SHRI MURLIDHAR T. CHUGH 1205 STELLER TOWER, 2 ND CROSS LANE, LOKHANDWALA COMPLEX, ANDHERI(W), MUMBAI-400 053 PAN NO: AAEPC 8790 M VS. ITO 20(2)(2) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MURLIDHAR T. CHUGH RESPONDENT BY : SHRI G. P. TRIVEDI DATE OF HEARING : 20.10.2011 DATE OF PRONOUNCEMENT : 20.10.2011 ORDER PER R. K. PANDA (AM) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 29.03.2010 PASSED BY THE LD. CIT(A)-31, MUMBAI RELA TING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE AOS ACT ION OF TAKING THE SALE VALUE OF THE FLAT AT `. 22,44,260/- AS AGAINST `. 17,50,000/- RECEIVED BY THE APPELLANT BY APPLYING T HE PROVISIONS OF SEC. 50 C(1) OF THE INCOME TAX ACT, 1 961 AND WITHOUT REFERRING THE MATTER TO THE VALUATION OFFIC ER AS PER THE PROVISIONS OF SEC 50 C(2) OF THE INCOME TAX ACT, 19 61. ITA NO :5280/MUM/2010 SHRI MURLIDHAR T. CHUGH 2 2. REASONS GIVEN BY THE LEARNED CIT(A) CONFIRMING T HE AOS ACTION OF TAKING THE SALE VALUE OF THE FLAT AT `. 22,44,260/- AS AGAINST `. 17,50,000/- RECEIVED BY THE APPELLANT BY APPLYING THE PROVISIONS OF SEC. 50 C ( 1) OF THE INCOME TAX ACT, 1961 AND WITHOUT REFERRING THE MATT ER TO THE VALUATION OFFICER AS PER THE PROVISIONS OF SEC 50 C (2) OF THE INCOME TAX ACT, 1961, ARE WRONG, INSUFFICIENT AND C ONTRARY TO THE FACTS AND EVIDENCE ON RECORD. 2.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN INDIVIDUAL. IN HIS RETURN OF INCOME FILED FOR THE RELEVANT ASSESSM ENT YEAR HE HAS SHOWN LONG TERM CAPITAL GAIN OF `. 34,054/- ON SALE OF A RESIDENTIAL HOUSE PROPERTY AT KANDIVLI (E), MUMBAI. HOWEVER, IN ASSES SMENT, THE AO HAS OBSERVED THAT THE FAIR MARKET VALUE SHOWN BY THE AS SESSEE AS PER THE STAMP DUTY VALUATION AUTHORITY IS MORE THAN THE VAL UE SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME FILED. THEREFORE, THE AO APPLYING THE PROVISIONS OF SECTION 50 C OF THE ACT REWORKED THE LONG TERM CAPITAL GAIN ON THE SALE OF THE SAID HOUSE PROPERTY AT `. 5,43,178/- AS AGAINST `. 34,054/- DISCLOSED BY THE ASSESSEE IN HIS RETURN O F INCOME. THE AO HAS ALSO OBSERVED THAT THE AR OF THE ASSESSEE SHRI D. B. DIXIT HAS DULY ACCEPTED AND ADMITTED THE ADOPTION OF FAIR MARKET V ALUE OF THE PROPERTY BASED ON THE STAMP DUTY VALUATION AUTHORITY FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN BY INVOKING T HE PROVISIONS OF SECTION 50 C OF THE ACT. THE AO FURTHER RECORDED TH AT THE AR HAS ACCORDINGLY REVISED THE COMPUTATION OF LONG TERM CA PITAL GAIN AND TOTAL INCOME AS PER HIS LETTER DATED 27.08.2008 FILED BEF ORE HIM, WHEREIN, IT WAS REQUESTED THAT THE COST INFLATION INDEX MAY BE CONSIDERED AT 281 INSTEAD OF 259 WHICH WAS WRONGLY TAKEN BY THE ASSES SEE WHILE COMPUTING THE LONG TERM CAPITAL GAIN OF THE ASSESSEE IN ITS R ETURN OF INCOME FILED. THEREFORE, ON ACCOUNT OF THESE FACTS AND FINDINGS B ROUGHT ON RECORD, THE AO RECOMPUTED THE LONG TERM CAPITAL GAIN ON SALE OF THE HOUSE PROPERTY AS DISCUSSED IN DETAIL IN PARA 3 OF THE ASSESSMENT ORDER. ITA NO :5280/MUM/2010 SHRI MURLIDHAR T. CHUGH 3 3. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO SINCE NOBODY APPEARED BEFORE HIM DESPITE NOTICE WAS ISSUE D TO THE ASSESSEE AND THE CASE WAS GETTING ADJOURNED FROM TIME TO TIM E. 3.1 THE ASSESSEE PERSONALLY APPEARED BEFORE THE BEN CH AT THE TIME OF HEARING AND SUBMITTED THAT HE HAS APPOINTED AN ADVO CATE TO REPRESENT HIM BEFORE THE LD. CIT(A). HOWEVER, NEITHER HE APPE ARED BEFORE THE LD. CIT(A) ON THE APPOINTED DATE NOR INFORMED THE ASSES SEE. THEREFORE, HE SHOULD NOT BE PENALISED FOR NON APPEARANCE OF HIS A DVOCATE. HE SUBMITTED THAT ALTHOUGH THE CASE WAS FIXED FOR HEAR ING ON 19.10.2011, THE SAID ADVOCATE RETURNED THE BRIEF TO HIM JUST TW O-THREE DAYS PRIOR TO THE DATE OF HEARING BEFORE THE TRIBUNAL THROUGH THI RD PARTY. IN VIEW OF THE ABOVE SEQUENCE OF EVENTS WHICH INDICATE THE LAPSE O N THE PART OF THE ADVOCATE, THE ASSESSEEE SUBMITTED THAT IN THE INTER EST OF JUSTICE HE SHOULD BE GIVEN AN OPPORTUNITY TO REPRESENT HIS CAS E ON MERIT BEFORE THE LD. CIT(A). HE ACCORDINGLY, SUBMITTED THAT THE MATT ER SHOULD BE RESTORED TO THE FILE OF THE LD. CIT(A). 4. THE LD. DR ON THE OTHER HAND, WHILE SUPPORTING T HE ORDER OF THE LD. CIT(A), WHO HAS DECIDED THE ISSUE ON MERIT, SUB MITTED THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AS EXPLAINED BY THE ASSESSEE HIMSELF, HE HAS NO OBJECTION IF THE MATTER IS SET ASIDE TO T HE FILE OF THE LD. CIT(A) FOR DECIDING THE ISSUE AFRESH AFTER HEARING THE ASS ESSEE. 5. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AO AND THE LD. CIT(A) . IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS NOT REPRESENTED BEFORE T HE LD. CIT(A) EITHER BY HIMSELF OR THROUGH HIS ADVOCATE. IT IS THE SUBMI SSION OF THE ASSESSEE, WHO PERSONALLY APPEARED BEFORE US, THAT HIS ADVOCAT E NEITHER APPEARED BEFORE THE LD. CIT(A) NOR INFORMED HIM AND FINALLY JUST BEFORE THE HEARING ITA NO :5280/MUM/2010 SHRI MURLIDHAR T. CHUGH 4 OF THE APPEAL BEFORE THE TRIBUNAL, RETURNED THE BRI EF THROUGH THIRD PARTY. UNDER THESE CIRCUMSTANCES AND KEEPING IN MIND THE P RINCIPLES OF NATURAL JUSTICE WE DEEM IT PROPER TO RESTORE THE ISSUE TO T HE FILE OF THE LD. CIT(A) WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO TH E ASSESSEE TO REPRESENT HIS CASE. THE LD. CIT(A) SHALL DECIDE THE ISSUE AFR ESH AND IN ACCORDANCE WITH LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROUN DS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ITSELF I.E. ON 20 TH OCTOBER, 2011. SD/- -SD/- (B.R. MITTAL ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 20.10.2011 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI