SHAKUNTALA V. JHAMB, MUMBAI V. ASST CIT CEN CIR 32, MUMBAI

ITA 55/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71461 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K SHIVARAM; RAHUL K HAKANI
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Reasonable cause; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO. 55/M/2011 ( / ASSESSMENT YEAR : 2007 - 20 08 ) MRS. SHAKUNTALA V. JHAMB , YOGI SAMRUTI, 10 TH ROAD, JVPD SCHEME, MUMBAI 400 049. / VS. ACIT, CENTRAL CIRCLE - 32, AAYAKAR BHAVAN, GR. FLOOR, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAKPJ 7840 D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI K. SHIVARAM & MR. RAHUL K. HAKANI / RESPONDENT BY : SMT. JOTHILAKSHMI NAYAK, DR / DATE OF HEARING : 1.10 .2013 / DATE OF PRONOUNCEMENT : 11 .10 .2013 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.01.2011 IS AGAINST THE ORDER OF CIT (A) - 41, MUMBAI DATED 4.8.2010 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ A S UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT (A) HAS ERRED IN CONFIRMING THE ORDER PASSED BY THE AO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT (A) FURTHER ERRED IN NOT DIRECTING THE AO TO REFER THE MATTER TO THE VAL UATION CELL FOR FRESH VALUATION TO ARRIVE AT THE CORRECT VALUATION OF THE PROPERTY U/S 50C OF THE ACT. 3. DURING THE PROCEEDINGS BEFORE AND AT THE OUTSET, SHRI K. SHIVARAM, LD COUNSEL FOR THE ASSESSEE SUBMITTED THA T THERE IS A DELAY OF 63 DAYS IN FILING THIS APPEAL AND PRAYS FOR CONDONING THE SAME . IN THIS REGARD, HE BROUGHT OUR ATTENTION TO THE AFFIDAVIT FILED BY THE ASSESSEE DATED 30 TH MAY, 2013 AND READ OUT THE REASON FOR DELAY IN FILING THE APPEAL WHICH IS AS UNDER: 2 1. I FILED APPEAL ON 5.1.2011 AGA INST THE ORDER OF CIT (A) DATED 4.8.2010. 2. I, SAY THAT THE CIT (A) ORDER WAS RECEIVED BY POST ON 4.9.2010 AND THE LAST DAY FOR FILING THE APPEAL WAS 4.11.2010. HOWEVER, THE APPEAL WAS FILED ON 5.1.2011. THUS, THERE IS A DELAY OF 63 DAYS. 3. I, SAY THAT THE CI T (A) ORDER WAS RECEIVED BY POST ON 4.9.2010. 4. I, SAY THAT THE SAID ORDER WAS COLLECTED BY MY WATCHMAN DEPUTED AT THE TIME AND THE WATCHMAN HANDED OVER THE SAME TO MY HUSBAND MR. V.K. JHAMB. 5. 1, SAY THAT MR. V.K. JHAMB WHO IS 81 YEARS OLD KEPT THAT ORDER IN HIS CUPBOARDS DRAWER AND FORGOT TO INFORM ME ABOUT THE SAME IMMEDIATELY. 6. I, SAY THAT MR. V.K. JHAMB WAS NOT KEEPING GOOD HEALTH AND THE OTHER OF THE CIT (A) CAME TO HIS NOTICE ONLY DURING THE FIRST WEEK OF DEC EM BER AND HE BROUGHT THE SAID ORDER TO MY ATTE NTION. 7. I, SAY THAT AFTER GOING THROUGH THE CIT (A) ORDER, I SENT THE SAME TO MY CHARTERED ACCOUNTANT WHO ADVISED ME TO FILE A APPEAL BEFORE THE HONBLE ITAT. 8. I, SAY THAT I INSTRUCTED MY CHARTERED ACCOUNT TO DRAFT THE APPEAL AND FILE THE SAME WHICH ULTIMATE LY CAME TO THE FILE ON 5.01.2011. 9. I, SAY THAT DUE TO THE ABOVE REASON, APPEAL WAS DELAYED BY 63 DAYS. I SAY THAT DELAY WAS NOT INTENTIONAL AND THE SAME WAS DUE TO CIRCUMSTANCES BEYOND MY CONTROL. 10. I, SAY THAT WHATEVER IS STATED IN THE CONDONATION APPLICATI ON IS TRUE AND CORRECT. 3.1. FROM THE ABOVE IT IS EVIDENT THAT THERE IS CONFUSION IN TRANSMISSION OF THE ORDER OF THE CIT (A) TO RELEVANT PERSON FOR FINALLY DECIDING TO FILE THE APPEAL. IN THE PROCESS, THERE IS INVOLVEMENT OF A SENIOR CITIZEN TOO. CONSID ERING THE REASONABLE CAUSE GIVEN BY THE ASSESSEE IN FILING THE APPEAL WITH A DELAY OF 63 DAYS, WE CONDONE THE DELAY OF 63 DAYS AND AD MIT THE APPEAL FOR ADJUDICATION ON MERITS. 4. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVI DUAL AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,84,27,383/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS. 3,19,95,271/ - . DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED THA T THE ASSESSEE SOLD 2 PLOTS OF LAND SITUATED AT BHAYANDAR. THE VALUE OF THE SAID 2 PLOTS AS PER THE STAMP DUTY VALUATION IS RS. 1,92,08,500/ - AND RS. 76,45,400/ - RESPECTIVELY. HOWEVER, THE AGREEMENT VALUE S OF THESE PLOTS OF LAND WERE TAKEN AT RS. 85 LACS TO ONE PLOT AND RS. 30 LACS TO THE OTHER RESPECTIVELY . ACCORDINGLY, AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE WHY THE STAMP DUTY VALUE SHOULD NOT BE ADOPTED U/S 50C OF THE ACT. IN RESPONSE, ASSESSEE VIDE LETTER DATED 30.11.2009 SUBMITTED THAT THE SAL E PROCEEDS U/S 50C OF THE ACT WAS ALREADY DECLARED BEFORE THE REVENUE TO AVOID PENAL ACTION U/S 271(1)(C) OF THE ACT AND ALSO FILED A REVISED COMPUTATION SHOWING THE LONG TERM CAPITAL GAINS AT RS. 1,37,47,884/ - . AFTER CONSIDERING THE SUBMISSIONS MADE BY T HE ASSESSEE, AO ASSESSED THE TOTAL 3 INCOME AT RS. 3,19,95,271/ - . AGGRIEVED WITH THE ABOVE DECISION OF THE AO, ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CIT (A) DISMISSED THE APPEAL. AGGRIEVED WITH THE DECISION OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 6. DURING THE PROCEEDINGS BEFORE US, SHRI K. SHIVARAM, APPEARED ON BEHALF OF THE ASSESSEE AND READ OUT THE CONTENTS OF LETTERS DATED 26 & 30.11.2009 FILED BEFORE THE AO AND ALSO THE LETTER DATED 8 TH FEBRUARY, 1010 FILED BEFORE THE CIT(A) AND MENTIONED THAT THE SAME CONTAINS THE REQUEST FOR REFERRAL OF THE IM PUGNED PROPERTIES TO THE DVO FOR VALUATION . AO DID NOT DO THE SAME AND CONCLUDED THE ASSESSMENT BASED ON THE ASSESSEES SAME LETTER DT 26.11.2009 AND THE INFORMATION MADE WITHOUT PREJUDICE VIDE PARA 5 AND THE SAME READ AS UNDER: 3. WE THEREFORE, REQUES T YOU TO KINDLY REFER THE ABOVE MATTER TO THE VALUATION CELL FOR FRESH VALUATION. 4. 5. WE ARE ALSO ENCLOSING HEREWITH REVISED COMPUTATION OF TOTAL CHARGEABLE LONG TERM CAPITAL GAINS WHICH WORKS OUT AT RS. 1,37,47,884/ - . THE SAME MAY BE CONSIDERED WHILE P ASSING THE ORDER U/S 143(3) OF THE INCOME TAX ACT. 7. LD COUNSEL ALSO BROUGHT OUR ATTENTION TO PAGE 8 OF THE PAPER BOOK, WHICH IS A LETTER DATED 8 TH FEBRUARY, 2010 ADDRESSED TO THE CIT (A ), WHEREIN A REFERENCE IS MADE TO THE ABOVE CITED LETTER 26.11.2009 AND REITERATED THE REQUEST FOR REFERRAL TO THE VALUATION CELL AND THE SAID RELEVANT PORTION READS AS UNDER: DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT, TO AVOID PENAL ACTION, DECLARED THE VALUATION OF THE ABOVE PROPERTY U/S 50C VIDE THEIR LETTER DA TED 26.11.2009. IN THE SAID LETTER THEY HAVE ALSO REQUESTED THAT THE VALUATION OF THE ABOVE PROPERTY MAY BE REFERRED TO THE VALUATION CELL FOR FRESH VALUATION. WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER ACCEPTED OUT VALUATION OF RS. 2,68,53 ,900/ - U/S 50C OF THE INCOME TAX ACT BUT FAILED TO REFER THE ABOVE MATER TO THE VALUATION CELL AS REQUESTED BY THE APPELLANT VIDE ABOVE LETTER DATED 26.11.2009. WE, THEREFORE, NOW REQUEST YOUR HONOUR TO KINDLY DIRECT THE AO TO REFER THE ABOVE MATTER TO TH E VALUATION CELL FOR FRESH VALUATION. 4 8. LATER, REFERRING TO THE ORDER OF THE TRIBUNAL IN THE CASE OF A.T.E. ENTERPRISES VS. DCIT [2013] 55 SOT 175 (MUMBAI), LD COUNSEL MENTIONED THAT IT IS THE DUTY OF THE ASSESSING OFFICER TO MAKE REFERENCE TO THE VALUA TION CELL IN TERMS OF SECTION 50C(2) OF THE ACT, WHEN ASSESSEE OBJECTED TO THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY. HE ALSO REFERRED TO VARIOUS OTHER DECISIONS TO REITERATE THE ABOVE PROPOSITION. BASED ON THE WRITTEN SUBMISSION, ASSESSEES AR REQUESTED FOR REMANDING AND RELIED ON VARIOUS SUBMISSIONS. RELEVANT WRITTEN SUBMISSIONS OF THE ASSESSEE IN THIS REGARD ARE AS UNDER: LEGAL SUBMISSIONS: 1. ASSESSE E VIDE HER LETTER DATED 26/11/2009 SUBMITTED THAT, SALE CONSIDERATION UNDER SECTION 50 C W AS NOT CONSIDERED DUE TO THE DISPUTE IN LAND AND THE VALUATION OF THE STAMP AUTHORITY WAS VERY HIGH. FURTHER, ASSESSEE REQUESTED A.O. TO REFER THE MATTER TO THE VALUATION CELL FOR FRESH VALUATION. ASSESSEE HAD ALSO FURNISHED COPIES OF THE AGREEMENTS AND PR OOF OF DISPUTES. 2. IN THE SAME LETTER, ASSESSEE REQUESTED TO THE A.O. TO ADOPT STAMP VALUE FOR SECTION 50 C SUBJECT TO FINAL VALUATION BY THE DEPARTMENT VALUE. HENCE, THE REQUEST TO ADOPT SECTION 50 C VALUE AS STAMP VALUE WAS NOT ACCEPTANCE OF STAMP VAL UE FOR SECTION 50 C BUT ONLY AN ALTERNATIVE SUBMISSION IN CASE VALUATION BY VALUATION CELL WAS SAME AS STAMP VALUE. 3. A.O. WRONGLY TOOK ALTERNATIVE SUBMISSION OF ASSESSEE AS ASSESSEE AGREEING TO STAMP VALUE AND THEREBY DID NOT REFER THE MATTER TO VALUATIO N CELL. 4. HENCE, A.O. HAS WRONGLY INVOKED THE PROVISION OF SECTION 50C WITHOUT REFERRING THE VALUATION TO A VALUATION OFFICER. 5. UNDER SECTION 50C(2) IT IS MANDATORY FOR A.O. TO REFER MATTER TO VALUATION CELL. IN THE FACTS OF THE PRESENT CASE A.O. HAS NO T EVEN DEALT WITHIN THE OBJECTIONS RAISED BY ASSESSEE. HENCE, MATTER MAY BE SENT TO THE A.O. FOR CONSIDERING THE REQUEST OF THE ASSESSEE TO REFER MATTER TO VALUATION CELL. 6. CASE LAWS: 1.S.50C:REFERENCE TO DVO - REFERENCE TO VALUATION IS MANDATORY WHEN ASSE SSEE OBJECTS FOR VALUATIONS TRIBUNAL HELD THAT WHERE ASSESSEE OBJECTED TO VALUATION ADOPTED BY STAMP VALUATION AUTHORITY AND ALSO FILED COPY OF VALUATION REPORT BY AN APPROVED VALUER, ASSESSING OFFICER WAS REQUIRED TO MAKE A REFERENCE TO VALUATION OFFICER IN TERMS OF SECTION 50C(2) TO ASCERTAIN CORRECT FAIR MARKET VALUE OF PROPERTY. (A.Y. 2005 - 06) A.T.E. ENTERPRISES (P.) LTD. V.DY. CIT (2013) 55 SOT 175 (MUM.) (TRIB.) 2..MANJULA SINGHAL V. ITO (2011) 46 SOT 149/141 TTJ 511 (JODH.)(TRIB.) IF STAMP VALUATION ADOPTED BY STAMP AUTHORITY IS DISPUTED BEFORE ASSESSINGOFFICER, THEN ASSESSING OFFICER IS BOUND TO REFER MATTER TO DVO FOR DETERMINING FAIR MARKET VALUE OF PROPERTY. THE TERM MAY USED IN SUBSECTION (2) OF SECTION 50C IS TO BE READ AS SHALL. 3. KALPATARU INDUSTRIES V. ITO (ITA NO. 5540/MUM/2007) 4. OASIS SECURITIES LTD. V. ITO (ITA NO. 7109/M/2008) 5. ANIL KUMAR JAM V. ITO (2013) 143 LTD 659 (DELHI)(TRIB.) 5 9. AT THE END, LD COUNSEL REQUESTED FOR SETTING ASIDE THE ISSUES RAISED IN THE GROUNDS TO THE FILE S OF THE AO FOR COMPLYING THE ABOVE CITED DECISIONS. 10. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO AND THE CIT (A). 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE DECISIONS CITED BY THE LD COUNSEL. WE HAVE ALSO PERUSED THE CITED JUDGMENTS AND THE COPIES OF THE REQUEST LETTERS FILED BY THE ASSESSEE BEFORE THE AO AND ALSO THE CIT(A). THE CONTENTS OF THE SAID LETTERS CITED ABOVE ADEQUATELY SUGGEST THAT THE ASSESSEES REQUEST FOR REFERRAL STANDS UNATTENDED AND THE ASSESSEES OFFER OF ADDITIONAL CAPITAL GAINS REMAINS CONDITIONAL. IT IS A FACT THAT THE LOWER AUTHORITIES OF THE REVENUE HAVE NOT ACCEDED OR REJECTED THE ASSESSEES REQUEST FOR REFERRAL TO THE DVO. THE CITED DECISIONS ARE IN FAVOUR OF T HE ASSESSEE AND THE AO IS UNDER OBLIGATION MAKE A REFERENCE WHEN THE AGREEMENT VALUE IS DISPUTED BY THE ASSESSEE. AFTER CONSIDERING THE ABOVE DECISION OF THE COORDINATE BENCH IN THE CASE OF A.T.E. ENTERPRISES (SUPRA), WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) SHOULD BE SET ASIDE AND THE ISSUES RAISED IN THE GROUNDS SHOULD BE REMANDED TO THE FILES OF THE AO TO REDO THE ASSESSMENT AFTER REFERRING THE IMPUGNED PROPERTIES TO THE VALUATION CELL AS PER THE PROVISIONS OF SECTION 50C(2) OF THE ACT. ACCO RDINGLY, GROUNDS RAISED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N THE 11 TH DAY OF OCTOBER, 2013. SD/ - SD/ - ( AMIT SHUKLA ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 11 .10 .2013 . . ./ OKK , SR. P S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 6 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI