VEDHAPURI RENUKA, CHENNAI V. ITO NON CORPORATE WARD-22(5), CHENNAI

ITA 543/CHNY/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9155 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 12-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Set aside; Capital Gains
• Section: 143(3); 50C

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ (एस एम सी) ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ (SMC) BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 543/CHNY/2020 िनधाᭅरण वषᭅ /Assessment Year: 2016-17 Smt. Vedhapuri Renuka, G1, Sri Sai Meera GK Homes, Plot No.10, 6 th Cross Street, Vinobaji Nagar, Hastinapuram, Chennai – 600 045. PAN : BWBPR 9402D v. The ITO, Non-Corporate Ward-22(5) Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri D. Anand, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri B. Sajive, JCIT स ु नवाई कȧ तारȣख/Date of Hearing : 08.11.2021 घोषणा कȧ तारȣख/Date of Pronouncement : 08.11.2021 आदेश /O R D E R 1. This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-10, Chennai, in ITA No.36/CIT(A)-10/2019-20, order dated 27.01.2020. The Assessment was framed by Income Tax Officer, Non-Corporate Ward - 22(5), Chennai for the assessment year 2016-17 vide order dated 05.12.2018 U/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’). 2 I.T.A. No.543/Chny/2020 2. At the outset, the ld. counsel for the assessee stated the facts that the assessee sold property for a consideration of Rs.60 lakhs, whereas the market value of the property as per Stamp Duty rate was, land value - Rs.82,80,000/- and building value - Rs.6,00,000/-. The AO computed the long term capital gain by taking the fair market value determined by Stamp Duty Valuation Authority at Rs.88,80,000/- and thereby computing long term capital gain at Rs.43,36,190/- and also reducing deduction u/s.54 of the Act amounting to Rs.42,68,040/-. Aggrieved, the assessee preferred an appeal before the CIT(A). The CIT(A) also confirmed the action of the AO and now, the assessee is in appeal before the Tribunal. 3. The ld.counsel for the assessee before me, only requested that the State Government has reduced the guideline value of the property subsequently and for this, he filed copy of notification issued by Inspector General of Registration, Tamil Nadu wherein the guideline value fixed is given. According to him, once the guideline value of the property is reduced subsequently, the benefit of the same should be allowed to the assessee. Even, he requested for referring the property to the Valuation Officer before adopting the value estimated by Stamp Duty Valuation 3 I.T.A. No.543/Chny/2020 Authority and for this, he referred to Ground No.2 to 4, which reads as under:- “2. The learned CIT(A)- 10 ought to have seen that what is assessable for the purpose of computation of capital gains is the fair market value and where there is discrepancy between the value declared by the appellant and the guideline the learned authorities ought to have referred it to the valuation officer for the purpose of obtaining the FMV. 3. The learned assessing officer ought to have ascertained the real value of the property by refereeing the same to the valuation officer before adopting section 50C especially when the appellant had declared value less than the guideline value as the sale consideration. 4. The learned CIT(A) ought to have referred the matter to the valuation officer especially when the appellant submitted that guideline value of the property was subsequently reduced and that the erstwhile GLV does not reflect the FMV. The learned CIT(A) miserably failed to follow the decision of the jurisdiction tribunal in the case of M/ s. Shivamani and Company Pvt Ltd( ITA NO.2925/Chny/ 2018).” 4. When these facts were confronted to ld. senior Department Representative, he relied on the order of CIT(A) and stated that the assessee’s contention is not acceptable as the provisions of Section 50C of the Act are deeming provisions and the value adopted by Stamp Duty Valuation Authority at the relevant point of time only ought to be considered and not thereafter. 5. Having heard the rival contentions and going through the case records, admitted position is that the Tamil Nadu Government i.e., Inspector General of Registration, has reduced the circle rates of the property i.e., guideline value but the issue is the property for 4 I.T.A. No.543/Chny/2020 adopting fair market value, as requested by assessee, should be referred to DVO for ascertaining the fair market value of the property in term of Section 50C of the Act. Hence, I set aside the orders of the AO and that of the CIT(A) and remand the matter back to the file of the AO with a specific direction that the property may be referred to DVO for ascertaining the fair market value of the property in term of Section 50C of the Act and the DVO will also consider the downward revision of the property rate by Inspector General of Registration, Tamil Nadu. In term of the above, the matter is restored back to the file of the AO. 6. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 8 th November, 2021 at Chennai. Sd/- (महावीर ͧसंह ) (Mahavir Singh) उपाÚय¢ /Vice President चे᳖ई/Chennai, ᳰदनांक/Dated, the 8 th November, 2021 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.