SHRI MANOJ KUMAR, JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 54/JPR/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3294 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 15-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Cost of acquisition; Fair market value; Valuation report; Capital Gains
• Section: 143(3); 50C; 13

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 54/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2012-13 SH. MANOJ KUMAR, 332, VIVEK VIHAR, NEW SANGANER ROAD, JAIPUR CUKE VS. ITO, WARD -7(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AJEPK8799H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. RAJEEV SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 21/12/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 01/03/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-1, JODHPUR DATED 21.09.2017 WHEREIN THE ASSE SSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN APPLYING THE PROVISIONS OF SECTION 50C OF THE IT AC T 1961, AND ADOPTING THE SALE CONSIDERATION AT RS. 67,36,715 (1 /8 OF RS. 5,38,93,718) AGAINST THE DECLARED SALE CONSIDERATIO N OF RS. 25,00,000/- (1/8 OF RS. 2,00,00,000/-). THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAIN ST THE FACTS OF ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 2 THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE SALE CONSIDERATION AT RS. 25,00,000/- AS DECLARED BY THE ASSESSEE, FOR COMPUTING THE LONG TERM CAPITAL GAIN. 2. (A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE LD. AO IN NOT CONSIDERING THE DISPUTE INVOLVED IN THE PROPERT Y FOR FURTHER REDUCTION OF THE VALUE AS DETERMINED BY THE LD. DVO . THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRAR Y AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE SALE CONSIDERATION AT RS. 25,00,000/- (1/8 OF RS. 2 ,00,00,000/-), AS DECLARED BY THE ASSESSEE, FOR COMPUTING THE LONG TERM CAPITAL GAIN. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. DVO IN NOT CONSIDERING THE DISPUTE INVOLVED IN THE PROPERT Y FOR ESTIMATING THE FAIR MARKET VALUE. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE SALE CONSIDERATION AT RS. 25,00,000/- (1/8 OF RS. 2,00,0 0,000/-), AS DECLARED BY THE ASSESSEE, FOR COMPUTING THE LONG TE RM CAPITAL GAIN. 3(A). IN THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN ESTIMATING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AT RS. 80,728/- (1/8 OF 6,45,830/-) AGAINST THE DEC LARED VALUE OF RS. 1,54,285/- FOR COMPUTING THE LONG TERM CAPIT AL GAIN. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIE D, ARBITRARY AND ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 3 AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AT RS. 1,54,285/- AS DECLARED BY THE ASSESSEE, FOR COMPUTING THE LONG TERM CAPITAL GAIN. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD . DVO IN ESTIMATING THE FAIR MARKET VALUE OF THE LAND AS ON 1.4.1981 AT RS. 10,510/- (1/8 OF 84,078/-). THE ACTION OF THE L D. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1.4.1981 AT RS. 1,54,28 5/- AS DECLARED BY THE ASSESSEE, FOR COMPUTING THE LONG TE RM CAPITAL GAIN. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN DISALLOWING A SUM OF RS. 11,500/- OF EXPENSES CLAIM ED AGAINST THE PROFESSIONAL RECEIPTS OF THE ASSESSEE. THE ACTI ON OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAIN ST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE SAID DISALLOWANCE OF RS.11,500/-. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE EARNED CAPITAL GAIN FROM SALE OF INHERITED PROPERTIES ON 1 9-1-2012. THE ASSESSEE E-FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEA R 2012-13 ON 28.07.2012 DECLARING THE TOTAL INCOME OF RS. 13,98, 900. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 11.03.2015 AT A TOTAL INCOME OF RS. 67,72,120/- WHICH ON APPEAL HAS BEEN CONFIRMED BY ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 4 THE LD CIT(A) AND AGAINST THE SAID FINDINGS, THE AS SESSEE IS IN APPEAL BEFORE US. 3. REGARDING GROUND NOS. 1 & 2, THE LD AR SUBMITTED THAT DURING THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR, THE APPELLANT SOLD INHERITED RESIDENTIAL PROPERTIES SITUATED AT PLOT N O. 9 TO 16 (ORIGINAL PLOT NO. 105), CHUNE KI BHATI, 1A ROAD, SARDARPURA, JODH PUR TO M/S DHANLAXMI REAL MART PVT. LTD FOR A TOTAL SALE CONSIDERATION O F RS. 2.00 CRORES ON 19-1- 2012 AND EARNED INCOME FROM CAPITAL GAIN ON SUCH SA LE OF PROPERTIES. THE PLOTS WERE INSPECTED BY THE LD DVO ON 17-2-2015. TH E SUBJECT PROPERTIES WERE INHERITED PROPERTIES IN WHICH THE APPELLANT HA D 1/8 TH SHARE. THE ABOVE MENTIONED PROPERTIES BEING LOCATED IN JODHPUR WERE NOT LOOKED AFTER REGULARLY AND, THEREFORE, WERE OCCUPIED BY SO ME ILLEGAL OCCUPANTS. THEREFORE, THE MARKET VALUE OF THE PROPERTY GOT SUB STANTIALLY REDUCED AND, THUS, WAS SOLD AT A PRICE LOWER THAN THE VALUE ADOP TED BY THE STAMP VALUATION AUTHORITY. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE PROPERTY WAS REFERRED FOR VALUATION TO DVO U/S 50C( 2). LD. AO WHILE COMPUTING THE CAPITAL GAIN ON SALE OF ABOVE INHERIT ED RESIDENTIAL PROPERTIES, SUBSTITUTED THE TRANSACTION VALUE WITH THE VALUATION DONE BY STAMP VALUATION AUTHORITY, BEING LOWER THAN THE VAL UATION MADE BY DVO. LD. AO AS WELL AS LD DVO HAS NOT GIVEN ANY COGNIZAN CE TO THE FACT THAT PROPERTY WAS OCCUPIED BY UNAUTHORIZED PERSONS AND, THEREFORE, THE MARKET VALUE OF THE PROPERTY HAS BEEN SUBSTANTIALLY REDUCED. LD. CIT(A) RESTRICTED THE DEEMED SALE CONSIDERATION UNDER SECT ION 50C AGAINST THE PROPERTY NO. 9 TO 14, TO THE VALUE ADOPTED BY DVO O F RS. 3,27,52,913 AND, THUS, REDUCED THE VALUE OF THE SAID PROPERTY BY RS. 43,80,712 AS PER THE PROVISIONS OF SECTION 50C. FURTHER, LD. CIT(A) UPHE LD THE VALUATION OF THE PROPERTY NO. 15 & 16 AS ASSESSED BY THE STAMP VALUA TION AUTHORITY. ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 5 DETAILS OF TRANSACTION VALUE AND VALUE COMPUTED BY LD AO/LD CIT(A) ARE AS UNDER: PARTICULARS PLOT NO. 9 TO 14 AMOUNT (IN RS.) PLOT NO. 15 & 16 AMOUNT (IN RS.) TOTAL AMOUNT (IN RS.) SHARE OF APPELLANT (1/8 TH ) TRANSACTION VALUE 1,23,00,000/- 77,00,000/- 2,00,00,000/- 25,00,000/ - DLC VALUE 3,71,33,625/- 2,11,40,805/- 5,82,74,430/- VALUED BY LD DVO 3,72,03,037/- (3,27,52,913/- + 44,50,124/- ADDED BY LD AO) 2,19,34,836/- 5,91,37,873/- 73,92,234/ - ADOPTED BY LD AO 3,71,33,625/- 2,11,40,805/- 5,82,74,430/- 72,84,304/ - CONFIRMED LD CIT(A) 3,27,52,913/- 2,11,40,805/- 5,38,93,718/- 67,36,715/ - 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE SUBMISSIONS MADE BEFORE LD. CIT(A) APPEARING AT PAG ES 9-13 OF LD. CIT(A) ORDER MAY PLEASE BE CONSIDERED IN CORRECT PERSPECTI VE. LD. CIT(A) HAS OBSERVED IN HER ASSESSMENT ORDER AT PAGE 15 THAT THE APPELLANT HAS NOT OFFERED ANY SPECIFIC COMMENTS REGARDING THE VALUATI ON DONE BY THE DVO. IT WAS SUBMITTED THAT THE ASSESSEE APPELLANT HAD SP ECIFICALLY SUBMITTED (PARA 1.13 REPRODUCED IN LD CIT ORDER AT PAGE NO. 1 1) THAT THE VALUATION OFICER HAS NOT GIVEN ANY DISCOUNT FROM THE VALUE OF PROPERTY ON ACCOUNT OF ILLEGAL OCCPATION OF PROPERTY BY TRESPASSERS AS IS EVIDENT FROM THE VALUATION REPORT WHEREIN THERE IS NO REFERENCE TO A BOVE MENTIONED FACTS AND THAT LD DVO SIMPLY RELIED ON DLC RATE. 5. IT WAS SUBMITTED THAT THE LD CIT(A) HAS MISPLAC ED HER RELIANCE ON JUDGMENTS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR. CIT VS RAJABHAI LUMBHABHAI HADIYA [2016] 65 TAXMANN.COM 18 (GUJRAT) AND PR. CIT VS RAVJIBHAI NAGJIBHAI THESIA [2016] 76 TAXMANN.COM 76 (GUJRAT). IN BOTH ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 6 CASES, THE DVO ESTIMATED THE VALUE OF PROPERTY AT A LOWER THAN THE DLC VALUE. IT WAS HELD THAT FOR THE PURPOSE OF COMPUTIN G CAPITAL GAIN ON TRANSFER OF LAND OR BUILDING, IF VALUATION ASCERTAI NED BY VALUATION OFFICER DOES NOT EXCEED VALUE ADOPTED BY STAMP DUTY AUTHORI TY, THEN VALUE ASCERTAINED BY VALUATION OFFICER WOULD PREVAIL. IT IS SUBMITTED THAT THE CASES RELIED UPON BY LD. CIT(A) ARE NOT EVEN REMOTE LY CONNECTED WITH THE ISSUE UNDER CONSIDERATION BEFORE HER. THE ISSUE RAI SED IN APPEAL BEFORE HER WAS WHETHER LD. DVO WAS JUSTIFIED IN COMPLETING THE VALUATION ON THE BASIS OF DLC RATE AS SHE WAS DUTY BOUND UNDER THE LAW TO CONSIDER THE VARIOUS DEFICIENCIES/ DISADVANTAGES ASSOCIATED WITH THE SOL D PROPERTY WHICH HAD SIGNIFICANTLY REDUCED THE SALE CONSIDERATION. THUS, THE CASES RELIED UPON BY LD. CIT(A) WERE NOT AT ALL RELEVANT FOR ISSUE BEFOR E HER. DURING THE COURSE OF APPELLATE PROCEEDINGS FOR THE PROPOSITION THAT L D. DVO WAS DUTY BOUND TO CONSIDER THE DEFICIENCY/DISADVANTAGES FOR ARRIVI NG AT A PROPER VALUATION, RELIANCE WAS PLACED ON THE FOLLOWING TWO JUDICIAL P RONOUNCEMENTS: CHANDRA BHAN VS. ACIT [2012] 21 TAXMANN.COM 133 (KO L.) RAVI KANT VS.ITO [2007] 110 TTJ 297(DELHI) 6. THE LD. CIT(A) HAS NEITHER DISTINGUISHED THE ABO VE CASE LAWS NOR FOLLOWED THE SAME. LD. CIT(A) HAS REJECTED THE CLAI M OF THE APPELLANT, CONTENDING THAT THE APPELLANT DID NOT RESPOND TO THE DVOS LETTER NO. 9 3 DATED 19.01.2015 AND WAS NOT PRESENT ON THE DATE OF INSPECTION OF THE PROPERTY ON 17.02.2015.. 7. IT WAS SUBMITTED THAT THE APPELLANT GAVE HIS REP LY TO THE SAID LETTER WITHIN TIME (COPY OF REPLY IS PLACED IN PAPER BOOK PAGE 99-104). IT IS FURTHER SUBMITTED THAT AFTER GIVING THE WRITTEN REP LY ON THE MATTER, THERE WAS NO NECESSITY OF APPELLANT TO BE PHYSICALLY PRES ENT AT THE TIME OF ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 7 INSPECTION OF THE PROPERTY SINCE BY THAT TIME, PROP ERTY WAS DEMOLISHED AND MORE PARTICULARLY APPELLANT WAS LIVING IN JAIPU R. PURELY, ON THIS FACT, THAT THE APPELLANT WAS NOT PRESENT AT THE TIME OF I NSPECTION OF THE PROPERTY IS NOT A SUFFICIENT REASON TO REJECT THE C LAIM OF THE APPELLANT THAT THE MARKET VALUE OF THE LAND WAS LESS AS COMPARED T O THE STAMP VALUATION AUTHORITY. 8. IT WAS SUBMITTED THAT BOTH THE LOWER AUTHORITIES FA ILED TO CONSIDER THE MAIN ISSUE INVOLVED WITH THE PROPERTY DUE TO WH ICH ITS MARKET VALUE HAS BEEN REDUCED AS COMPARED TO THE DLC RATE OF THA T AREA. NOT GIVING DUE CONSIDERATION TO THE DISPUTES INVOLVED WITH THE PROPERTY CAN NEVER GIVE A CORRECT VALUATION OF SUCH PROPERTY. LD. CIT(A) HAS HERSELF ACCEPTED THAT NECESSARY SAFEGUARDS HAVE BEEN PROVIDED UNDER INCOME TAX ACT UNDER SECTION 50C(2) TO REFER THE CASE TO VALUATION OFFICER. IN THIS REGARD, IT IS SUBMITTED THAT IN THE INSTANT CASE, THE SAFEG UARD PROVIDED TO THE ASSESSEE HAVE BEEN RENDERED INFRUCTUOUS BY THE ACTI ON OF THE LOWER AUTHORITIES OF VALUING THE PROPERTY AT THE SAME DLC RATE DISREGARDING DISPUTE FOR WHICH VALUATION WAS REQUESTED. THE LD. DVO WAS DUTY BOUND TO ASCERTAIN THE FAIR MARKET VALUE AND NOT THE DLC RATE. IT IS ESTABLISHED POSITION THAT UNAUTHORIZED OCCUPANCY OF THE PROPERT Y REDUCES THE VALUE WHICH, BASIC FACT, IS IGNORED BY THE LOWER AUTHORIT IES LD. CIT(A) HAS ALSO ACCEPTED THAT THE PROVISIONS OF SECTION 50C HAVE BE EN INTRODUCED ONLY TO CHECK THE UNDERVALUATION THEREBY EVADING TAX PAYABL E TO THE GOVERNMENT AND ALSO CURTAIL BLACK MONEY. IT IS SUBMITTED THAT, FROM THE PERUSAL OF THE ABOVE SITUATION, IT NOWHERE APPEARS THAT THE APPELL ANT ASSESSEE HAS TRIED TO EVADE THE TAX AS THE FACT OF OCCUPANCY HAS BEEN PROVED BY THE APPELLANT. IN VIEW OF THE ABOVE, THE CAPITAL GAIN MAY PLEASE BE DIRECTED TO BE COMPUTED BY TAKING ACTUAL SALES CONSIDERATION , DISREGARDING THE STAMP DUTY VALUATION AS WELL AS THE VALUATION DONE BY DVO. ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 8 9. PER CONTRA, THE LD DR RELIED ON THE FINDINGS OF THE AO AND THAT OF THE LD CIT(A) AND OUR REFERENCE WAS DRAWN TO THE FINDIN GS OF THE LD. CIT(A) WHICH READS AS UNDER: CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND AUTHORITATIVE JUDICIAL PRECEDENTS AS DISCUSSED IN PARA NOS.5.2, 5 .3 & 5.4 (SUPRA), IT IS HELD THAT THE AO IS PERFECTLY JUSTIFIED IN APPLY ING THE PROVISIONS OF SEC. 50C OF THE ACT TO THE APPELLANT. HOWEVER, AS P ER SUB-SECTION (3) OF SECTION 50C, IF THE VALUE ASCERTAINED AS MENTION ED IN SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED, ASSESSED OR ASSESSAB LE BY THE STAMP VALUATION AUTHORITY, SUCH VALUATION OF THE AUTHORIT Y WOULD PREVAIL, IN OTHER WORDS, FOR THE PURPOSE OF CAPITAL GAINS IT WO ULD BE THE LESSER OF THE TWO VALUATIONS, THAT ADOPTED BY THE STATE VALUA TION AUTHORITY OR ONE SUGGESTED BY THE DEPARTMENT VALUATION OFFICER, WHICH WOULD PREVAIL. IN THE INSTANT CASE, IT IS NOTICED THAT TH E VALUE OF THE FIRST PROPERTY BEING PLOT NO.9 TO 14 IS DETERMINED BY THE DVO AT RS.3,27,52,913/- AS AGAINST RS.3,71,33,625/- ADOPTE D BY THE STAMP VALUATION AUTHORITY WHICH IS LESSER BY RS. 43,80,71 2/-, HOWEVER, THE AO HAS ADOPTED THE HIGHER VALUE OF RS. 3,71,33,625/- O NLY. THEREFORE, AS PER PROVISIONS OF SEC. 50C(3), THE VALUE OF PLOT NO. 9 TO 14 ADOPTED BY THE AO AT RS. 3,71,33,625/- IS REDUCED BY RS. 43,80,712/- AS PER VALUATION DONE BY THE DVO. THE APPELLANT GETS PARTIAL RELIEF. THE DEEMED SALE CONSIDERATION OF THE SECOND PROPERTY, BEING PLOT NO S. 15 & 16, TAKEN BY THE AO AT RS. 2,11,40,805/- AS PER THE VALUE ASSESS ED BY THE STAMP VALUATION AUTHORITIES IS UPHELD. THE GROUND NOS. 1 & 2 RAISED BY THE APPELLANT REGARDING THESE ISSUES ARE PARTLY ALLOWED . 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS WHICH AR E EMERGING FROM THE RECORDS ARE THAT THE APPELLANT, ALONGWITH OTHER PER SONS, SOLD TWO ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 9 PROPERTIES FOR A TOTAL SALE CONSIDERATION OF RS.2,0 0,00,000/- DURING THE FY 2011-12 VIDE TWO SEPARATE REGISTERED SALE DE EDS AND OFFERED HIS 1/8 TH SHARE OF SALE CONSIDERATION OF RS.25,00,000/- TO T AX UNDER THE HEAD LONG TERM CAPITAL GAINS IN HIS RETURN OF INCOME. THE AO FOUND THAT THE STAMP VALUATION AUTHORITY VALUED THE PROPERTIES AT RS.3,71,33,625/- AND RS.2,11,40,805/- INSTEAD OF RS .1,23,00,000/- AND RS.77,00,000/- RESPECTIVELY AS DECLARED BY THE APPELLANT AND A SHOW-CAUSE WAS ISSUED TO THE APPELLANT AS TO WHY TH E VALUE SO DETERMINED BY THE STAMP DUTY AUTHORITY BE NOT ADOPT ED FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS AS PER SEC TION 50C(1) OF THE ACT. THE APPELLANT VIDE ITS LETTER DATED 9.12.2 012 HAS CONTESTED THE ADOPTION OF STAMP DUTY VALUATION AND SUBMITTED THAT THE PROPERTY WAS SOLD AT A PRICE LOWER THAN THE MAR KET VALUE AS THE PROPERTY WAS OCCUPIED BY SOME ILLEGAL OCCUPANTS . THE AO THEREAFTER REFERRED THE VALUATION OF THE PROPERTIES TO THE DVO AS PER SECTION 50C(2) OF THE ACT. THE DVO VIDE HIS VA LUATION REPORT DATED 25.02.2015 ESTIMATED THE FAIR MARKET VALUE OF THE SAID PROPERTIES AT RS.3,27,52,913/- AND RS.2,19,34,836/- RESPECTIVELY BY TAKING THE VALUE OF LAND @ RS 2,944/SQ FT IN RESPEC T OF FIRST PROPERTY AND RS 4,454/SQ.FT IN RESPECT OF SECOND PROPERTY AS AGAINST RS.3,71,33,625/-AND RS.2,11,40,805/- ADOPTED BY THE STAMP VALUATION AUTHORITIES. IN RESPECT OF THE FIRST PROP ERTY BEING PLOT NOS. 9 TO 14 WHICH WAS VALUED BY THE DVO AT RS. 3,27,52, 913/- TAKING INTO CONSIDERATION ONLY THE VALUE OF LAND AS THE BU ILDING CONSTRUCTED THEREON WAS DEMOLISHED BY THE BUYER AT THE TIME OF INSPECTION, THE AO NOTED THAT THE FAIR MARKET VALUE OF THE BUILDING CONSTRUCTED ON THIS LAND WAS NOT INCLUDED IN THE DVO'S VALUATION, THE AO ESTIMATED THE FAIR MARKET VALUE OF THE BUILDING AT RS.44,50,1 24/- @ RS.400/- PER SQ. FT. ON CONSTRUCTED AREA OF 11125.31 SQ. FT. THE AO ADDED ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 10 THIS AMOUNT OF RS.44,50,124/- TO THE VALUE OF RS.3, 27,52.913/- ESTIMATED BY THE DVO AND HELD THAT THE TOTAL VALUE OF RS.3,72,03,0374/- (RS.3,27,52,913/- +RS.44,50,124/- ) IS MORE THAN THE VALUE ASSESSED BY THE STAMP VALUATION AUTHORITY . IN RESPECT OF THE SECOND PROPERTY BEING PLOT NOS.15 & 16, THE VAL UE DETERMINED BY THE DVO AT RS.2,19,34,836/- BEING MORE THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITIES AT RS.2,11,40,80 5/-, THE AO HELD THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHO RITY IS CORRECT AND SHOULD BE TAKEN FOR COMPUTATION OF CAPITAL GAIN S. THE AO ACCORDINGLY COMPUTED THE LONG TERM CAPITAL GAIN BY TAKING THE DEEMED SALES CONSIDERATION AS PER SECTION 50C OF TH E ACT AT RS.5,82,74,430/- (RS.3,71,33,625/- + RS. 2,11,40,80 5/-) AS PER VALUES ASSESSED BY THE STAMP VALUATION AUTHORITIES. 11. REGARDING THE CONTENTION ADVANCED BY THE ASSES SEE THAT THE PROPERTY WAS SOLD AT A PRICE LOWER THAN THE MARKET VALUE AS THE PROPERTY WAS OCCUPIED BY SOME ILLEGAL PERSONS AND W HICH IS A PRECISE REASON FOR REFERRING THE MATTER TO THE DVO, WE FIND THAT THERE IS NO FINDING RECORDED BY THE DVO IN HIS REPO RT. HOWEVER, THE AO IN THE ASSESSMENT ORDER HAS TAKEN COGNIZANCE OF THE SAID CONTENTION AND HELD THAT THE EXPLANATION GIVEN BY T HE ASSESSEE IS NOT ENOUGH TO SUBSTANTIATE THAT HE HAD TO ACTUALLY SELL THE PROPERTY AT A PRICE LOWER THAN THE MARKET VALUE DUE TO OCCUP ATION OF THESE PROPERTIES BY THE ALLEGED ILLEGAL OCCUPANTS AND EXC EPT FOR COPIES OF SOME CIVIL SUITS BETWEEN THE PURCHASER AND SOME PER SONS, THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH ANY DOCUMENTS WHICH COULD PROVE THAT THE ASSESSEE WAS UNDER COMPULSION TO DIS POSE OF HIS PROPERTIES AT A LOWER PRICE THAN THE MARKET PRICE A ND ALSO, THERE IS NO MENTION OF ANY CONDITION FOR GETTING THE PROPERT IES VACATED BY ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 11 THE ASSESSEE. FURTHER, REFERRING TO THE PROVISIONS OF SECTION 50C, THE AO HELD THAT THE REPORT OF THE DVO IS BINDING O N HIM AND THUS, THE CONTENTIONS SO ADVANCED BY THE ASSESSEE WAS HEL D NOT MAINTAINABLE AND WAS THUS NOT ACCEPTED. ON APPEAL, THE ASSESSEE HAS AGAIN RAISED THE SAID CONTENTIONS AND FILED HIS WRITTEN SUBMISSIONS ALONG WITH EVIDENCES WHICH ARE REPRODUC ED AT PARA 5.1 PAGES 9 TO 13 OF LD CIT(A)S ORDER. WE THEREFORE FI ND THAT VARIOUS EVIDENCES WERE FILED BEFORE THE LD CIT(A) IN THE FO RM OF COPIES OF CIVIL SUITS, COPIES OF ELECTRICITY BILLS, COPIES OF SALE DEED, POWER OF ATTORNEY ETC IN SUPPORT OF HIS CONTENTION THAT THE PROPERTY WAS SOLD ALONG WITH OCCUPANCY OF CERTAIN PERSONS AND IT WAS SUBMITTED THAT SAID EVIDENCES WERE ALSO FILED BEFORE DVO WHICH HAV E NOT BEEN CONSIDERED BY HIM WHILE DETERMINING THE FAIR MARKET VALUE. IT HAS ALSO BEEN CONTENDED BY THE ASSESSEE THAT THE DVO HA S ADOPTED TWO DIFFERENT RATES FOR TWO PROPERTIES WHICH ARE AD JOINING PLOTS AND THAT TOO, APPLYING THE AVERAGE CIRCLE RATE OF RESID ENTIAL AND COMMERCIAL AREA INSTEAD OF BRINGING ON RECORD COMPA RABLE CASES AND TAKING INTO CONSIDERATION OTHER FACTORS EFFECTI NG THE IMPUGNED TRANSACTIONS MAKING THE WHOLE REFERENCE AS A FUTILE EXERCISE. THE LD CIT(A) HAS HOWEVER NOT ACCEPTED THE SAID CONTENT ION OF THE APPELLANT STATING THAT THE APPELLANT HAS NOT OFFERE D ANY SPECIFIC COMMENTS REGARDING VALUATION DONE BY THE DVO. THE SAID FINDING OF THE LD CIT(A) IS CLEARLY NOT BORNE OUT OF RECORD S, AS WE HAVE NOTED ABOVE THAT THE ASSESSEE HAS SUBMITTED SPECIFI C COMMENTS CHALLENGING THE VALUATION SO ADOPTED BY THE DVO. F URTHER, THE LD CIT(A) HAS STATED THAT THE APPELLANT DID NOT RESPON D TO THE DVO'S LETTER NO.93 DATED 19.01.2015 AND WAS NOT PRESENT O N THE DATE OF INSPECTION OF THE PROPERTY ON 17.02.2015, THESE FAC TS ARE CLEARLY RECORDED IN COLUMN-2 REGARDING 'COLLECTION OF DOCUM ENTS' ON ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 12 PAGE-2 OF THE DVO'S VALUATION REPORT DATED 25.02.20 15. TO OUR MIND, THE DVO HAS RECORDED A FINDING THAT AT THE TI ME OF INSPECTION, THE BUILDING STOOD DEMOLISHED BY THE BU YER AND THUS, HE IS UNABLE TO DETERMINE THE VALUE OF THE BUILDING . THEREFORE, THE FACT THAT THE BUILDING WAS DEMOLISHED AT THE TIME O F INSPECTION IS A FINDING OF FACT WHICH IS NOT DISPUTED BY EITHER AUT HORITIES AND IN FACT, THE AO HAS THEREAFTER CARRIED OUT THE VALUATI ON OF THE BUILDING ON HIS OWN WHICH GOES TO SHOW THAT AS FAR AS PHYSIC AL PRESENCE OF THE ASSESSEE AT THE TIME OF INSPECTION IS CONCERNED , THE SAME SHOULD NOT HAVE COME IN THE WAY OF THE DVO IN DETER MINING THE VALUE OF THE BUILDING AS PER THE BUILT UP AREA AND OTHER SPECIFICATION SO GIVEN IN THE SALE DEED. SECONDLY, REGARDING THE RESPONSE TO THE DVO'S LETTER NO.93 DATED 19.01.2015 , WE FIND THAT THE ASSESSEE DID RESPOND TO THE SAID NOTICE VIDE IT S SUBMISSION DATED NIL SENT VIDE SPEED POST ON 31.01.2015. WE T HEREFORE FIND THAT VARIOUS CONTENTIONS ADVANCED BY THE ASSESSEE R EGARDING DETERMINATION OF FAIR MARKET VALUE AND EVIDENCES AL READY BROUGHT ON RECORD HAVE NOT BEEN PROPERLY ADDRESSED BY THE D VO AND EVEN THOUGH, THE DVO REPORT IS BINDING ON THE AO AND WHE N THE MATTER WAS BROUGHT TO THE NOTICE OF LD CIT(A), THE LATER I S WELL WITHIN HER JURISDICTION TO CONSIDER THOSE CONTENTIONS AND WHER E SO REQUIRED, THE MATTER COULD HAVE BEEN REFERRED TO THE DVO TO S EEK HIS COMMENTS. THEREFORE, CONSIDERING THE ENTIRETY OF F ACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT BEING A MATTER INVOLVING TECHNICAL EXPERTISE AND WH ERE THE ASSESSEE HAS CONTESTED THE VALUATION ON MULTIPLE GR OUNDS AND HAS BROUGHT ON RECORD VARIOUS EVIDENCES IN SUPPORT OF H IS CONTENTION, THE MATTER DESERVE TO BE SET-ASIDE TO THE FILE OF T HE AO TO CALL FOR FRESH REPORT FROM THE DVO AND DECIDES THE SAME A FR ESH AS PER ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 13 LAW. IN THE RESULT, THE GROUNDS OF APPEAL ARE ALLO WED FOR STATISTICAL PURPOSES. 12. REGARDING GROUND NO. 3, THE LD AR SUBMITTED THA T THE APPELLANT ESTIMATED THE FAIR MARKET VALUE OF THE PROPERTY SOL D AS ON 01.04.1981 AT RS. 1,54,285/- (1/8 TH OF RS. 12,34,280/- ) BASED ON INFORMATION GATHERED BY HIM. THE LD DVO ESTIMATED THE FAIR MARKET VALUE OF THE PROPERTY BEING LAND AS ON 01-04-1981 AT RS. 84,078/- (RS. 49,063/- + RS. 35,015/-) ON THE BASIS OF COMPARABLE SALE INSTANCE OF THE AREA. THE LD. AO HAS COMPLETED HIS ASSESSMENT BY CONSIDERING THE FAIR MA RKET VALUE OF THE PROPERTY BEING LAND AS ESTIMATED BY THE DVO. THE L D AO FURTHER ESTIMATED THE VALUE OF BUILDING AT RS. 5,61,750/-. LD. CIT(A) CONFIRMED THE VALUE ADOPTED BY LD. AO FOR THE PURPOSE OF CALCULAT ION OF CAPITAL GAINS UNDER SECTION 50C. 13. IN THE AFORESAID BACKGROUND, THE LD. AR SUBMITT ED THAT THE SUBMISSIONS MADE BEFORE LD. CIT(A), ALSO APPEARING AT PAGE 22-23 OF CIT(A) ORDER, MAY PLEASE BE CONSIDERED IN CORRECT P ERSPECTIVE. LD. CIT(A) HAS REJECTED THE CLAIM OF THE APPELLANT, HOLDING TH AT THE APPELLANT DID NOT RESPOND TO THE DVOS LETTER NO. 93 DATED 19.01.2015 . IT IS SUBMITTED THAT THE APPELLANT ASSESSEE, GAVE HIS REPLY FOR THE SAID LETTER WITHIN TIME (COPY OF REPLY IS PLACED IN PAPER BOOK PAGE 99-104). LD C IT(A) OBSERVED THAT SINCE AO HAS ALREADY COMPUTED THE VALUE OF BUILDING CONSTRUCTION AT RS. 5,61,750, THE CONTENTION OF THE APPELLANT HAVE NO M ERIT THAT IN THE VALUATION REPORT, ONLY LAND VALUE WAS TAKEN. IT IS HUMBLY SUBMITTED THAT THE VALUATION IS A TECHNICAL MATTER. IT IS SPECIFIC ALLY PROVIDED IN SECTION 142A THAT FOR THE PURPOSE OF ASSESSMENT, THE AO CAN REFER THE VALUATION TO THE VALUATION OFFICER, WHO IS TECHNICALLY COMPET ENT TO VALUE THE PROPERTY. IN NO CASE, HE CAN HIMSELF CARRY OUT THE VALUATION EXERCISE. THEREFORE, THE VALUATION OF BUILDING DONE BY LD AO CANNOT BE TAKEN FOR ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 14 COMPUTATION OF CAPITAL GAIN. IN VIEW OF THE ABOVE, THE CAPITAL GAIN MAY PLEASE BE DIRECTED TO BE COMPUTED BY TAKING FAIR MA RKET VALUE AS ON 01- 04-1981 AS DECLARED BY APPELLANT DISREGARDING THE V ALUATION DONE BY DVO/AO. 14. PER CONTRA, THE LD DR RELIED ON THE FINDINGS OF THE AO AND THAT OF THE LD CIT(A) AND OUR REFERENCE WAS DRAWN TO THE FINDIN GS OF THE LD. CIT(A) WHICH ARE CONTAINED AT PARA 6.2 OF HER ORDER WHICH ARE REPRODUCED AS UNDER: 6.2. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT O RDER AND APPELLANT'S SUBMISSIONS. THE APPELLANT ESTIMATED THE VALUE OF T HE PROPERTY SOLD AS ON 01.04.1981 ON ESTIMATE BASIS BASED ON INFORMATIO N GATHERED BY HIM. THE DVO ESTIMATED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01-04-1981 ON THE BASIS OF COMPARABLE SALE INSTANCE OF THE AREA. THE AO COMPLETED HIS ASSESSMENT BY CONSIDERING THE FAIR MARKET VALUE OF THE PROPERTY AS ESTIMATED BY THE DVO. COMPARATIVE P OSITION OF THE VALUE ESTIMATED BY THE APPELLANT AND BY THE DVO IS AS UNDER: PROPERTY DESCRIPTION VALUATION BY THE DVO VALUE ADOPTED BY THE APPELLANT PLOT NO. 9 & 14 (ORIGINAL PLOT NO. 105), CHUNE KI BHARI, 1A ROAD, SARDARPURA, JODHPUR 49,063/- 1,54,285/-*8= 12,34,280/- PLOT NO. 15 & 16 (ORIGINAL PLOT NO. 105), CHUNE KI BHARI, 1A ROAD, SARDARPURA, JODHPUR 35,015/- TOTAL 84,078/- 12,34,280/- THE APPELLANT HAS OBJECTED TO THE DVO'S ESTIMATION OF THE COST OF ACQUISITION ON TWO COUNTS- FIRST, THAT THE DETAILS OF COMPARABLE SALE ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 15 INSTANCES WERE NOT PROVIDED TO THE APPELLANT AND SE COND, THAT THE DVO HAS ONLY TAKEN THE LAND VALUE, THE VALUE OF CONSTRU CTION IS NOT TAKEN THEREFORE THE VALUATION IS NOT CORRECT. I FIND THAT THE DVO SPECIFICALLY ASKED THE APPELLANT TO FURNISH THE COMPARABLE SALE INSTANCES OF THE AREA VIDE HIS OFFICE LETTER NO.93 DATED 19.01.2015 BUT THE APPELLANT DID NOT FURNISH THE INFORMATION CALLED FOR AS IS RECORD ED CLEARLY IN COLUMN-2 REGARDING 'COLLECTION OF DOCUMENTS' ON PAGE-2 OF TH E DVO'S REPORT. THUS, IT IS CLEAR THAT THE APPELLANT FAILED TO AVAI L THE OPPORTUNITY PROVIDED BY THE DVO AND IS THEREFORE PRECLUDED FROM RAISING ANY OBJECTION NOW. AS REGARDS THE SECOND OBJECTION REGA RDING NOT INCLUDING THE VALUE OF CONSTRUCTED BUILDING IN THE FAIR MARKE T VALUE AS ON 01.04.1981, THE AO HAS ALREADY COMPUTED THE VALUE O F THE BUILDING AT RS.5,61,750/- (@ RS.35/- PER SQ. FT. FOR 16,050.06 SQ. FT. OF CONSTRUCTED AREA) AND INCLUDED THE SAME IN THE COST OF ACQUISITION ARRIVING AT THE FAIR MARKET VALUE AS ON 01.04.1981 AT RS.6,45,830/- (RS.84,078/- + RS.5,61,750/-). THESE FIGURES HAVE N OT BEEN DISPUTED BY THE APPELLANT. CONSIDERING THE FACTS AND CIRCUMS TANCES OF THE CASE AS DISCUSSED ABOVE, I FIND NO MERITS IN THE OBJECTI ON RAISED BY THE APPELLANT REGARDING THE COST OF ACQUISITION AS ON 0 1.04.1981, THE SAME ARE REJECTED. THE GROUND NO.3 RAISED BY THE APPELLA NT REGARDING THIS ISSUE IS DISMISSED. 15. GIVEN THAT WE HAVE SET-ASIDE THE MATTER TO THE FILE OF AO FOR DETERMINATION OF FAIR MARKET VALUE AS ON THE DATE O F TRANSFER, THE MATTER RELATING TO COST OF ACQUISITION IS ALSO REMITTED TO THE FILE OF THE AO TO CALL FOR A REPORT FROM THE DVO SEEKING VALUATION OF LAND AND BUILDING BOTH AND DECIDE THE SAME AFRESH AS PER LAW. IN THE RESULT, THE GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 54/JP/2018 MANOJ KUMAR, JAIPUR VS. ITO, WARD 7(1), JAIPUR 16 16. GROUND NO. 4 RELATES TO DISALLOWANCE OF A SUM OF RS. 11,500/- OF EXPENSES CLAIMED AGAINST THE PROFESSIONAL RECEIPTS OF THE ASSESSEE. WE HAVE GONE THROUGH THE ORDER OF THE LOWER AUTHORI TIES AND DONOT FIND ANY INFIRMITY THEREIN AND HENCE, THE SAID GROU ND OF APPEAL IS DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/03/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/03/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. MANOJ KUMAR, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD -7(1), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 54/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR