Nitin Promotors Ltd., New Delhi V. ITO, New Delhi

ITA 5574/DEL/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8863 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 27-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 15-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: P K JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5574/DEL./2013 (ASSESSMENT YEAR : 2010-11) M/S. NITIN PROMOTORS LTD., VS. ITO, WARD 13 (3), 2633-36, 2 ND FLOOR, BALAJI BUILDING, NEW DELHI. NAYA BAZAAR, DELHI 110 006. (PAN : AACCN0920F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.K. JAIN, FCA REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 27.02.2015 DATE OF PRONOUNCEMENT : 27.02.2015 ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT (APPEALS)-XVI, DELHI DATED 08.08.2013 FOR THE ASSES SMENT YEAR 2010-11. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. THE RETURN OF INCOME FOR ASSESSMENT YE AR 2010-11 WAS FILED ON 29.09.2010 DECLARING INCOME OF RS.6,15,040/-. D URING THE YEAR, THE ASSESSEE COMPANY SOLD AGRICULTURAL LAND AMOUNTING T O RS.90 LACS AND EARNED LONG TERM CAPITAL GAINS AND CLAIMED EXEMPTIO N U/S 54EC OF THE ITA NO.5574/DEL./2013 2 INCOME-TAX ACT, 1961. THE ASSESSING OFFICER TOOK T HE CIRCLE RATE OF RS.1,57,89,583/- AS THE SALE CONSIDERATION BY INVOK ING THE PROVISIONS OF SECTION 50C OF THE ACT. THE CIT (A) HAS CONFIRMED THIS ADDITION. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TAKING THE F OLLOWING GROUNDS :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE LD. CIT (A) ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.67,89,583/-, THE DIFFE RENCE OF SALES PRICE AND CIRCLES RATES ON SALE OF AGRICULTUR E LAND AFTER ADOPTING FULL VALUE OF CONSIDERATION AS PER STAMP V ALUATION AUTHORITY IN ACCORDANCE WITH SECTION 50C(1). 2. THE LD CIT (A) UPHELD THE ACTION OF THE AO WHICH IS IN VIOLATION OF SECTION 50C (2), WITHOUT REFERRING THE VALUATION OF THE RELEVANT ASSET TO THE DEPARTMENTAL VALUATION OFFICER INSPITE OF THE OBJECTION FILED BY THE APPELLANT STA TING THAT THE RATE OF STAMP VALUATION WERE HIGHER AND THE ACTUAL SALES PRICE OF AGRICULTURAL LAND WERE LOWER AS COMPARED TO THE PRICE OF AGRICULTURE LAND AS PER CIRCLE RATE. 3. THEREFORE THE ADDITION MADE BY THE LD AO AND UPH ELD BY THE LD CIT CA) SHOULD BE QUASHED. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJU DICE TO EACH OTHER. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, LD. AR SUBMITTED THAT WHEN THE ASSESSING OFFICER QUERIED ABOUT THE COST O F LAND TAKEN FOR THE PURPOSE OF STAMP DUTY VALUATION, THE ASSESSEE HAS S UBMITTED THAT THE AGRICULTURAL LAND WAS SOLD AT RS.90,00,000/- INSTEA D OF RS.1,57,89,583/- DUE TO THE ADVERSE MARKET CONDITION IN THE REAL EST ATE INDUSTRY IN THE YEAR 2009 AND THE MARKET PRICE OF THE AGRICULTURAL LAND WAS VERY MUCH BELOW AS ITA NO.5574/DEL./2013 3 COMPARED TO PRICE OF AGRICULTURAL LAND AS PER CIRCL E RATE. THUS, THE ASSESSEE OBJECTED BEFORE ASSESSING OFFICER THE RATE OF VALUA TION BY STAMP VALUATION AUTHORITY AND INVOKING THE PROVISIONS OF SECTION 50 C OF THE ACT. AS PER THE ASSESSEE, THE VALUATION BY STAMP VALUATION AUTH ORITY WAS HIGHER THAN THE FAIR MARKET VALUE OF THE AGRICULTURAL LAND. HE PLEADED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING O FFICER FOR MAKING A REFERENCE TO THE VALUATION CELL TO ASCERTAIN THE MA RKET VALUE AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. 4. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ADO PTED VALUE OF THE AGRICULTURAL LAND BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE LAND. THE ASSESSING OFFICER HAS NOT M ADE REFERENCE TO THE VALUATION OFFICER. WE FIND THAT SUCH ISSUE HAS BEE N CONSIDERED BY THE ITAT, COORDINATE BENCH, NEW DELHI IN THE CASE OF MR S. TRISHLA JAIN & ANR. VS. ITO REPORTED IN [2011] 11 ITR (TRIB) 579 ( ITAT[DEL]) AND THE RELEVANT PARA 4 IS REPRODUCED AS UNDER :- 4. WE HAVE HEARD BOTH PARTIES AND HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FI RST AND FOREMOST POINT THAT ARISES FOR OUR CONSIDERATION IS AS TO WH ETHER THE ASSESSING OFFICER SHOULD HAVE REFERRED TO THE MATTER TO THE V ALUATION OFFICER UNDER SECTION 50C(2) OF THE ACT TO DETERMINE THE FA IR MARKET VALUE BEFORE APPLYING THE PROVISIONS OF SECTION 50C(1) OF THE ACT. IN THIS CONNECTION, WE HAVE CAREFULLY PERUSED THE ASSESSING OFFICER'S ORDER AND FIND THAT IN PARAGRAPH 3.4 OF HIS ORDER THE ASS ESSING OFFICER HAS CLEARLY STATED THAT, IN THE REPLY, THE ASSESSEE HAS EMPHASISED THAT THE CIRCLE RATE IN RESPECT OF PROPERTY IS MUCH HIGHER T HAN ACTUAL MARKET ITA NO.5574/DEL./2013 4 VALUE AND THE SHOPS/PROPERTY SOLD WAS UNDER OLD TEN ANCY AND OCCUPANTS. FROM THIS FINDING RECORDED BY THE ASSESS ING OFFICER, IT IS CLEAR THAT THE ASSESSEE MADE A CLAIM BEFORE THE ASSESSING OFFICER THAT THE CIRCLE RATE WAS MUCH HIGHER THAN THE ACTUA L MARKET VALUE OF THE PROPERTY. SECTION 50C(2) PROVIDES THAT WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTION (1), WHERE THE ASSESSEE C LAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSE D BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE O F THE PROPERTY AS ON THE DATE OF TRANSFER, AND THE VALUE SO ADOPTED O R ASSESSED BY THE STAMP VALUATION AUTHORITY HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY O THER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFIC ER AND IN THAT EVENT, RELEVANT AND CORRESPONDING PROVISIONS OF THE WEALTH-TAX ACT SHALL, WITH NECESSARY MODIFICATIONS, WILL APPLY. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS MADE A C LAIM BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSE D BY THE STAMP VALUATION AUTHORITY WAS HIGHER THAN THE FAIR MARKET VALUE. IT IS ALSO NOT THE CASE WHETHER THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY HAS EVER BEEN DISPUTED BY THE ASSESSEE IN ANY APPEAL OR REVISION OR OTHERWISE AS REFERRED TO IN SECTION 50C (2) OF THE ACT. IN THESE CIRCUMSTANCES, IT WAS THUS INCUMBENT UPON THE ASSESSING OFFICER TO REFER THE MATTER FOR VALUATION TO A VALU ATION OFFICER AS PROVIDED IN SECTION 50C(2) OF THE ACT. IN THIS RESP ECT, THE VIEW TAKEN BY THE ASSESSING OFFICER AS WELL AS BY THE CO MMISSIONER OF INCOME-TAX (APPEALS) IS NOT CORRECT. SINCE THE ASSE SSING OFFICER FAILED TO REFER THE MATTER TO THE VALUATION OFFICER UNDER SECTION 50C(2) OF THE ACT AS REQUIRES, WE FIND IT FIT AND P ROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FO R HIS FRESH ADJUDICATION AFTER REFERRING THE MATTER TO THE VALU ATION OFFICER UNDER SECTION 50C(2) OF THE ACT AND THEN TO DECIDE THE ISSUE ACCORDINGLY, AS PER LAW. THE ASSESSING OFFICER SHAL L PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE MATTER WITH REGARD TO THE DETERMINATION OF SALE CONSIDERAT ION AND CAPITAL GAIN SHALL REMAIN OPEN BEFORE THE ASSESSING OFFICER , AND BOTH PARTIES SHALL BE AT LIBERTY TO RAISE ANY OTHER CONT ENTION/CONTENTIONS SUPPORTED BY ANY OTHER DOCUMENT/DOCUMENTS AS THEY M AY THINK FIT AND PROPER UNDER THE LAW. THE ASSESSEE SHALL BE AT LIBERTY TO RAISE ALL OTHER ALTERNATIVE CONTENTIONS BEFORE THE ASSESSING OFFICER AND TO PRODUCE ANY OTHER FURTHER EVIDENCE OR EVIDENCES, AS HE MAY BE ADVISED, WHICH SHALL BE DULY DELIBERATED UPON, CONS IDERED AND DECIDED BY THE ASSESSING OFFICER BY PASSING A SPEAK ING ORDER AND REASONED ORDER. ITA NO.5574/DEL./2013 5 IN THIS CASE ALSO, THE ASSESSEE HAS CLAIMED BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATIO N AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AND THE MATTER WITH REGARD TO THE DETERMINATION OF THE SALE CONSID ERATION AND CAPITAL GAINS WERE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER REFERRED THE MATTER TO THE VALUATION OFFICER U/S 50C(2) OF THE ACT AND THEN DECIDE THE ISSUE. SINCE THE FACTS IN THE ASSE SSEES CASE ARE SIMILAR TO THE AFORESAID CASE OF THE COORDINATE BENCH OF ITAT, CITED SUPRA, IN THE INTEREST OF JUSTICE AND EQUITY, WE HOLD THAT THIS I SSUE NEEDS TO BE REMANDED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJ UDICATION AFTER REFERRING THE MATTER TO THE VALUATION OFFICER U/S 50C(2) OF T HE ACT AND THEN DECIDE THE ISSUE ACCORDINGLY, AS PER LAW, OF COURSE AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 27 TH DAY OF FEBRUARY, 2015 AFTER CONCLUSION OF THE HEARING. SD/- SD/- (GEORGE GEORGE K) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 27 TH DAY OF FEBRUARY, 2015 TS ITA NO.5574/DEL./2013 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.