ACIT 16(2), MUMBAI V. MR. PRADEEP G. VORA, MUMBAI

ITA 5501/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2366 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 19-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADEEP K SINGH
• Assessee Lawyers: AMBRISH MEHTA
• Keywords: Value adopted by valuation officer; Valuation report
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.5501/MUM/2013 ASSESSMENT YEAR: 2006-07 AC IT ,1 6 ( 1 ) 2 ND FLOOR, MATRU MANDIR, TARDEO ROAD MUMBAI-400007. / VS. MR. PRADEEP G. VORA, RUNGTA HOUSE,68, NEPEAN SEA RAOD, MUMBAI-400006 (REVENUE) (RESPONDENT ) P.A. NO. AAAPV3259J REVENUE BY SHRI PRADEEP K. SINGH (DR) RESPONDENT BY SHRI AMBRISH MEHTA (AR) ! ' # / DATE OF HEARING : 5/11/2015 ' # / DATE OF ORDER: 20/11/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 5, MUMBAI {(IN SHORT LD. CIT(A)} DATED 31.05.2013 FOR THE ASS ESSMENT YEAR PRADEEP G. VORA 2 2006-07, DECIDED AGAINST THE ASSESSMENT ORDER PASSE D BY THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) OF THE ACT. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN ALLOWING ASSESSEE TO TAKE LONG TERM CAPITAL GAIN AT RS.53,34,360/- ON THE BASIS OF DVO REPORT INSTEAD OF RS.1,46,33,733/- AS MENTIONED IN THE RET URN OF INCOME BY THE ASSESSEE FOR A.Y. 2006-07. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING APPEAL IN FAVOUR OF AS SESSEE WITHOUT CONSIDERING THE FACT THAT ASSESSEE HIMSELF DID NOT ACCEPT THE DVO REPORT CALLED FOR BY THE AO FOR THE A.Y.2001-02 AND APPEAL IS PENDING BEFORE HONBLE IT AT ON THIS ISSUE. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2 . DURING THE COURSE OF HEARING, SHRI PRADEEP K. SIN GH DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE AND SHRI AMBRISH MEHTA AUTHORISED REPRESENTATIVE (L D COUNSEL) ON BEHALF OF THE RESPONDENT, ARGUED THE CA SE. 3. DURING THE COURSE OF HEARING IT WAS FAIRLY SUBMITTE D BY THE LD. COUNSEL OF THE ASSESSEE THAT IN THIS CASE THE I SSUE INVOLVED HAS GENESIS TO A.Y.2001-02, WHICH HAD REACHED UP TO THE TRIBUNAL, AND THE TRIBUNAL HAD PASSED AN ORDER DATE D 30.05.2014, ACCEPTING THE CLAIM OF THE ASSESSEE MAD E IN THAT PRADEEP G. VORA 3 YEAR, BY DIRECTING THAT VALUATION OF LAND SHOULD BE ADOPTED ON THE BASIS OF REPORT OF APPROVED VALUER SUBMITTED BY THE ASSESSEE AND NOT ON THE BASIS OF DVO REPORT AS WAS ADOPTED BY THE AO IN THE ASSESSMENT ORDER PASSED FOR THAT Y EAR. BUT, THE ASSESSEE, WHILE FILING THE RETURN OF THE IMPUGN ED YEAR UNDER APPEAL, COMPUTED THE AMOUNT OF CAPITAL GAIN T AKING THE VALUE BASED UPON THE DVOS REPORT, AS WAS DONE BY T HE AO IN A.Y. 2001-02. BUT, NOW SINCE THE TRIBUNAL HAS HELD THAT THE VALUE SHOULD BE ADOPTED BASED UPON THE APPROVED VAL UER OF THE ASSESSEE, AND THEREFORE, TRIBUNALS ORDER SHOUL D BE FOLLOWED IN THE IMPUGNED YEAR ALSO, AND THEREFORE, THE AOS ACTION OF COMPUTING THE CAPITAL GAIN ON THE BASIS O F APPROVED VALUERS REPORT WOULD STAND JUSTIFIED. CONSEQUENTLY, THE RELIEF ALLOWED BY THE LD. CIT(A), BECOMES UNSUSTAINABLE IN LAW, IN THE GIVEN FACTS. THEREFORE, IN THESE PECULIAR FACTS , THE APPEAL OF THE REVENUE MAY BE ALLOWED, RESTORING THE ORDER OF LD. AO, SO AS TO BRING THIS YEARS ASSESSMENT IN LINE WITH THE ORDER OF THE TRIBUNAL FOR AY 2001-02. 3.1. ON THE OTHER HAND, LD. DR ALSO, FOR A CHANGE, SUPP ORTED THE FAIR SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE, AND SUBMITTED THAT IN VIEW OF THE DECISION OF THE T RIBUNAL OF A.Y.2001-02, THE APPEAL OF THE REVENUE WAS TO BE AL LOWED. 3.2. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH THE SIDES, ORDERS OF LOWER AUTHORITIES AND ORDER OF THE HONBLE TRIBUNAL DATED 30.05.2014 FOR A.Y. 2001-02 (ITA NO.2187/MUM/2006). PRADEEP G. VORA 4 3.3. THE BRIEF FACTS AS CULLED OUT FROM THE ORDERS ARE THAT THE ASSESSEE HAS BEEN CARRYING ON THE BUSINESS OF DEVEL OPMENT OF PROPERTY AT PUNE UNDER THE TRADE NAME OF M/S. VORA ENTERPRISES. THE ASSESSEE OWNED A PLOT OF LAND SITU ATED AT BOAT CLUB ROAD, POONA CANTONMENT, POONA. THIS LAND WAS CONVERTED INTO STOCK-IN-TRADE AT A MARKET VALUE OF RS. 31,35,03,800/- ON THE BASIS OF VALUATION REPORT OF THE APPROVED VALUERS OF THE ASSESSEE IN A.Y. 2001-02. T HE AO DID NOT ACCEPT THE VALUATION REPORT ADOPTED BY THE ASSE SSEE AND SUBSTITUTED THE SAME WITH VALUE OF REPORT OF DVO AT RS.12,82,41,000/-. THE ASSESSEE CONTESTED THIS MATT ER BEFORE LD. CIT(A), WHEREIN ORDER OF AO WAS CONFIRMED. THER EAFTER AN APPEAL WAS FILED BY THE ASSESSEE BEFORE THE TRIBUNA L CONTESTING THE ORDER OF CIT(A) FOR A.Y. 2001-02. WHILE THE APP EAL FOR A.Y. 2001-02 WAS PENDING BEFORE THE TRIBUNAL, THE ASSESS EE FILED RETURN FOR IMPUGNED A.Y. 2006-07, BY TAKING THE VAL UE OF THE SAID LAND, PORTION OF WHICH WAS SOLD DURING THE YEA R UNDER CONSIDERATION, AS PER THE REPORT OF THE DVO FOR THE REASON THAT DVOS VALUE WAS ADOPTED BY THE AO IN A.Y. 2001-02, AND ACCORDINGLY COMPUTED THE AMOUNT OF CAPITAL GAIN O F RS. 53,34,360/-. BUT, THE AO DID NOT ACCEPT THE SAME IN THE ASSESSMENT ORDER, AND RE-COMPUTED THE AMOUNT OF LON G TERM CAPITAL GAIN ON THE SALE OF AFORESAID LAND (BEING P ART OF STOCK- IN-TRADE AT RS.1,46,33,733/-) BY TAKING THE VALUE O F LAND AS PER THE VALUE SUGGESTED BY THE APPROVED VALUER OF T HE ASSESSEE. THE ASSESSEE CONTESTED THIS MATTER BEFORE THE LD. CIT(A), WHEREIN APPEAL OF THE ASSESSEE WAS ALLOWED. LD. CIT(A) PRADEEP G. VORA 5 ACCEPTED THE RETURN OF THE ASSESSEE AND DIRECTED TH E AO TO ASSESS LONG TERM CAPITAL GAIN AT RS. 53,34,360/-. 3.4. BEING AGGRIEVED, THE REVENUE FILED THE APPEAL BEFO RE THE TRIBUNAL. 3.5. UNDER THE AFORESAID FACTS AND CIRCUMSTANCES, WE HA VE TO DECIDE THAT WHETHER, FOR THE PURPOSE OF COMPUTING L ONG TERM CAPITAL GAIN OF THE IMPUGNED ASSESSMENT YEAR, THE V ALUE OF LAND IS TO BE ADOPTED AS PER ASSESSEES APPROVED VA LUERS REPORT OR AS PER DVOS REPORT. IT IS NOTED BY US TH AT THE TRIBUNAL IN ITS ORDER DATED 30.05.2014 FOR A.Y.2001 -02 HAS PUT THIS CONTROVERSY TO REST BY HOLDING THAT THE AO HAS NO JURISDICTION TO MAKE REFERENCE TO THE DVO, AND THER EFORE THE VALUE SUGGESTED BY THE DVO COULD NOT HAVE BEEN ADOP TED, AND THEREFORE THE VALUE OF LAND ADOPTED BY THE ASSESSEE BASED UPON THE APPROVED VALUER WAS CORRECT IN LAW. IN THI S YEAR, WE ARE BOUND TO GIVE EFFECT TO THE ORDER OF THE TRIBUN AL, AS THE GENESIS OF THE ISSUE BEFORE US LIES IN THE ISSUE TH AT WAS INVOLVED IN A.Y.2001-02. THUS, RESPECTFULLY FOLLOWI NG THE ORDER OF THE TRIBUNAL, WE HOLD THAT THE AO WAS JUSTIFIED IN ADOPTING THE VALUE OF LAND AS PER THE REPORT OF THE APPROVED VALUER OF THE ASSESSEE, AS WAS TAKEN IN THE RETURN FILED BY T HE ASSESSEE FOR ASSESSMENT YEAR 2001-02. THEREFORE, GROUNDS RAI SED BY THE REVENUE ARE ALLOWED. PRADEEP G. VORA 6 4 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2015. SD/- (JOGINDER SINGH) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! MUMBAI; % DATED ; 20/11/2015 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. '() / THE APPELLANT 2. *+() / THE RESPONDENT. 3. , , - ( ' ) / THE CIT, MUMBAI. 4. , , - / CIT(A)- , MUMBAI 5. 01 *2 , , '# 2 3 , ! / DR, ITAT, MUMBAI 6. 45 6! / GUARD FILE. / BY ORDER, +0' * //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI