Gouri Sankar Paul, Kolkata V. ITO, WD-42(3), KOLKATA, Kolkata

ITA 551/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4600 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 22-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2014
• Court: TRIBUNAL
• Department Lawyers: UDAY KUMAR SARDAR
• Assessee Lawyers: G BANERJEE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Principle of natural justice; Fair market value
• Section: 50C; 37

Judgement Text

ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BE NCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM ] I.T.A NO.551/KOL/2014 ASSESSMENT YEAR : 2009- 10 GOURI SHANKAR PAUL -VS.- I.T.O., WARD-42 (3) KOLKATA KOLKATA (PAN:AFXPP 4452 R) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI G.BANERJEE, FCA FOR THE RESPONDENT : SHRI UDAY KUMAR SAR DAR, JCIT DATE OF HEARING : 22.08.2016. DATE OF PRONOUNCEMENT : 02.09.2016. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 3.1.2014 OF CIT(A)- XII, KOLKATA, RELATING TO AY 2009-10. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE ADS AS FOLLOW: 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE DETERMINATION OF FULL VALUE OF CONSIDERATION FOR SALE OF LAND AT RS. 36,05,000 INS TEAD OF ACTUAL CONSIDERATION RECEIVED OF RS. 12,50,000 IS WRONG, ERRONEOUS , ARBITRARY, E XCESSIVE BEYOND JURISDICTION AND DESERVES TO BE CANCELLED/REDUCED, 2. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, REFERENCE TO DVO SHOULD HAVE BEEN MADE FOR PROPER VALUATION OF IMPUGNED PROPERLY TOR THE SAKE OF NATURAL JUSTICE AND TRANSPARENCY. 3. FOR THAT THE ASSESSEE CRAVES LEAVE TO AMEND, ALT ER, RESCIND, SUBSTITUTE AND/OR SUBMIT ADDITIONAL GROUND/GROUNDS OF REVISION AT THE TIME O F HEARING OF REVISION. 3. THE ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE OW NED LAND MEASURING ABOUT 35 SATAK SITUATE AT MOUZA-KALINAGAR, J.L.NO.10, R.S.NO .815, KHATIAN NO.3182, HEREINAFTER REFERRED TO AS THE PROPERTY. DURING THE PREVIOUS YEAR RELEVANT TO AY 2009-10, HE SOLD 20 SATAK OF THE PROPERTY TO SHRI S UKUMAR ROY AND 15 CENTS TO SHRI SUNIL ROY, FOR A TOTAL SALE CONSIDERATION OF RS.12, 50,000/-. THE VALUATION OF THE ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 2 PROPERTY FOR THE PURPOSE OF STAMP DUTY AND REGISTRA TION WAS ADOPTED BY THE REGISTRAR OF ASSURANCES AT A SUM OF RS.36,05,000/-. (VALUE O F LAND SOLD TO SUKUMAR ROY AND SUNIL ROY WAS VALUED FOR STAMP DUTY AND REGISTRATIO N AT RS.20,60,000 AND RS.15,45,000 RESPECTIVELY, THUS TOTALLING RS.36,05, 000). 4. IN THE RETURN OF INCOME FILED BY THE ASSESSEE , THE ASSESSEE COMPUTED LONG TERM CAPITAL GAIN (LTCG) ON SALE OF THE PROPERTY AT RS.1 1,27,922, ADOPTING THE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFER AT A SUM OF R S.12,50,000/- WHICH IS THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE. THE A O HOWEVER ADOPTED THE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFER AT RS.36,05,0 00 AND COMPUTED LTCG AT RS.34,82,922 AND ADDED THE DIFFERENCE OF RS.23,55,0 00/- (RS.34,82,922 RS.11,27,922) TO THE TOTAL INCOME OF THE ASSESSEE. THE AO ADOPTED FULL VALUE OF CONSIDERATION RECEIVED BY THE ASSESSEE ON TRANSFER AT RS.36,05,000/- BECAUSE OF THE PROVISIONS OF SEC.50C OF THE INCOME TAX ACT, 1961 ( ACT), WHICH PROVIDES AS FOLLOWS: SEC. 50C OF THE ACT READS AS UNDER: SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES.-(1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS L ESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORI TY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF S ECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHO RITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTH ORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE P ROVISIONS OF SUB-SECTIONS ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 3 (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE ( I) OF SUB-SECTION (1) AND SUB- SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5 ) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX A CT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELAT ION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB- SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION. : 1 FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF T HE WEALTH-TAX ACT, 1957 (27 OF 1957). EXPLANATION 2 : FOR THE PURPOSES OF THIS SECTION, T HE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WER E REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY. (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SECT ION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY REFERRE D TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF THE TRANSFER. 5. AS CAN BE SEEN FROM THE ABOVE PROVISIONS OF SEC .50C OF THE ACT, SUB-SECTION (1) OF S. 50C OF THE ACT SEEKS TO PROVIDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAP ITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. AS CAN ALSO BE SEEN FROM THE PROVISIONS OF SEC.50C(2) OF THE ACT, THE AO CAN MAK E A REFERENCE REGARDING VALUATION OF THE PROPERTY BY THE DEPARTMENTAL VALUATION OFFIC ER(DVO). 6. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED APPEAL BEFORE CIT(A). IN THE GROUNDS OF APPEAL FILED BEFORE CIT(A), THE ASSESSEE SPECIFICALLY SOUGHT A REFERENCE TO THE DVO. THE CIT(A) HOWEVER UPHELD THE ORDER OF TH E AO OBSERVING THAT THE ASSESSEE HAS CHALLENGED BEFORE THE AO THE VALUATION ADOPTED FOR THE PURPOSE OF STAMP DUTY AND REGISTRATION BY THE REGISTRAR OF ASSURANCE S AND HAD NOT SOUGHT REFERENCE TO ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 4 THE DVO BEFORE THE AO AND THEREFORE AT THE STAGE OF APPEAL, SUCH A REFERENCE CANNOT BE MADE. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. I HAVE HEARD THE SUBMISSION OF THE LEARN ED COUNSEL FOR THE ASSESSEE AND THE LEARNED DR. MY ATTENTION WAS DRAWN TO THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT 37 2 ITR 83 (CAL) WHEREIN THE HONBLE CALCUTTA HIGH COURT ON IDENTICAL FACTS FOUN D THAT ASSESSEE HAD CLAIMED THAT PRICE OFFERED BY THE PURCHASER WAS THE HIGHEST PREV AILING PRICE IN THE MARKET AND VALUATION MADE BY THE DISTRICT SUB REGISTRAR WAS FO R THE PURPOSE OF STAMP DUTY, THEREFORE, WAS NOT THE PREVAILING PRICE OF THE LAND IN QUESTION. ASSESSEE HAD ALSO CLAIMED THAT VALUATION MADE BY THE DISTRICT SUB REG ISTRAR FOR THE PURPOSE OF STAMP DUTY WAS FAR IN EXCESS THAN THE MARKET VALUE OF THE PROPERTY. THE REVENUE AUTHORITIES AS WELL AS THE TRIBUNAL REJECTED THE STAND TAKEN BY THE ASSESSEE AND DID NOT PREFER TO REFER THE QUESTION OF VALUATION TO DVO. THE HONBL E CALCUTTA HIGH COURT HELD THAT VALUATION BY DEPARTMENTAL VALUATION OFFICER, CONTEM PLATED U/S. 50C, WAS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. LEGISLATURE DID NOT INTEND THAT CAPITAL GAIN SHOULD BE FIXED MERELY ON BASIS OF VALUATION TO BE MADE BY DI STRICT SUB REGISTRAR FOR PURPOSE OF STAMP DUTY. LEGISLATURE HAD TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE FAIR TREATMENT TO CITIZEN/TAXPAYER. NO INFERENCE COULD BE MADE AS AGAINST THE ASSESSEE THAT HE HAD ACCEPTED THAT THE PRICE FIXED BY THE DISTRIC T SUB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. OPTION OUGHT TO BE GIVEN TO ASSESSEE TO HAVE VALUATION MADE BY DEPARTMENTAL VALUATION OFFICER CONTEMPLATED U/S. 50C. IT WAS FURTHER HELD THAT THE A.O, DISCHARGING A QUASI JUDICIAL FUNCTION, HAD THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FO LLOW THE COURSE PROVIDED BY LAW. THE ORDERS OF THE REVENUE AUTHORITIES AND TRIBUNAL WAS AND THE MATTER WAS REMANDED TO AO. THE AO WAS DIRECTED TO REFER MATTER TO DEPA RTMENTAL VALUATION OFFICER IN ACCORDANCE WITH LAW AND AFTER SUCH VALUATION WAS MA DE, ASSESSMENT WAS TO BE MADE DE NOVO IN ACCORDANCE WITH LAW ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 5 8. IN VIEW OF THE DECISION OF THE HONBLE CALCUTTA HIGH COURT, I AM OF THE VIEW THAT THE IMPUGNED ORDER OF THE CIT(A) AND THE ASSESSING OFFICER ARE SET ASIDE. THE MATTER IS REMANDED TO THE ASSESSING OFFICER. HE SHALL REFE R THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN ACCORDANCE WITH LAW. AFTER SUC H VALUATION IS MADE, THE ASSESSMENT SHALL BE MADE DE NOVO IN ACCORDANCE WITH LAW, AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE INCLUDING THE RIGHT OF THE ASSESSEE TO ALSO CHALLENGE THE VALUE ADOPTED BY THE DVO. 9. FOR STATISTICAL PURPOSE THE APPEAL OF THE ASSES SEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 02.09.2016. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 02.09.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.GOURI SHANKAR PAUL, 11C, DUM DUM ROAD, KOLKATA-30 . 2. I.T.O., WARD-42(3), KOLKATA. 3. CIT(A)-XII, KOLKATA. 4. CIT-XIV, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER A SSTT.REGISTRAR, ITAT, KOLKATA BENCHES ITA NO.551/KOL/2014-GOURI SHANKAR PAUL A.Y.2009-10 6