Dy. Commissioner of Income Tax-II , Kanpur V. Smt. Dhanwanti Devi , Kanpur

ITA 562/LKW/2012

• Counselvise Citation: 56223714 RSA 2012
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: S S GUPTA; A JAISWAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.562/LKW/2012 ASSESSMENT YEAR:2009-10 DY. CIT-II KANPUR V. SMT. DHANWANTI DEVI 117/H-2/195, PANDU NAGAR KANPUR PAN/PAN:AAKPD5588J (APPELLANT) (RESPONDENT) C.O. NO.01/LKW/2013 [ARISING OUT OF ITA NO.562/LKW/2012] ASSESSMENT YEAR:2009-10 SMT. DHANWANTI DEVI 117/H-2/195, PANDU NAGAR KANPUR V. DY. CIT-II KANPUR PAN/PAN:AAKPD5588J (CROSS-OBJECTOR) (RESPONDENT) DEPARTMENT BY: SHRI. R. K. RAM, D.R. RESPONDENT BY: SHRI. A. JAISWAL, ADVOCATE & SHRI. S. S. GUPTA, C.A. DATE OF HEARING: 20 11 2014 DATE OF PRONOUNCEMENT: 03 12 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 22,64,000/- ON ACCOUNT OF ACCOUNT OF LONG TERM CAPITAL GAIN U/S 50C BY IGNORING THE FACT :- 2 -: THAT THE ASSESSEE HAS TAKEN SALE CONSIDERATION OF RS.53,00,000/- INSTEAD OF RS.75,64,000/- BEING THE MARKET VALUE OF THE PROPERTY ADOPTED FOR STAMP DUTY PURPOSES BY THE STAMP DUTY AUTHORITY. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-LL, KANPUR, HAS ERRED IN IGNORING THE FACT THAT UNDER PROVISIONS OF SECTION 50C IT IS NOT MANDATORY FOR THE A.O. TO REFER THE MATTER TO THE VALUATION CELL FOR DETERMINING THE MARKET VALUE OF THE PROPERTY. 3. WITHOUT PREJUDICE TO THIS ABOVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, KANPUR WHO HAS POWERS COTERMINOUS WITH THAT OF THE A.O., HAS ERRECI IN NOT DIRECTING, DURING APPEAL PROCEEDINGS, THAT THE MATTER SHOULD BE REFERRED TO THE VALUATION CELL, SO THAT THE FARE MARKET VALUE OF THE PROPERTY COULD BE DETERMINED. 4. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-LL, KANPUR BEING ERRONEOUS IN LAW AND ON FACTS, BE VACATED AND THE ORDER DATED 31.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 BY THE ASSESSING OFFICER BE RESTORED. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN SUPPORT OF THE ORDER OF THE LD. CIT(A). 3. SINCE THE APPEAL AND CROSS OBJECTION WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4. THE SOLE ISSUE INVOLVED IN THE APPEAL OF THE REVENUE IS WITH REGARD TO THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN, HAVING INVOKED THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). ON PERUSAL OF THE SALE DEED, THE ASSESSING OFFICER HAS NOTICED THAT THE SALE CONSIDERATION OF THE IMMOVEABLE PROPERTY WAS :- 3 -: DECLARED AT RS.53 LAKHS; WHEREAS IN THE SAID SALE DEED THE MARKET VALUE OF THE PROPERTY WAS SHOWN AT RS.75.64 LAKHS AND THE SAME VALUE HAS BEEN TAKEN FOR THE STAMP DUTY PURPOSES BY THE STAMP DUTY AUTHORITY. THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND MADE ADDITION OF THE DIFFERENCE OF RS.22.64 LAKHS AS LONG TERM CAPITAL GAIN, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE PROPERTY HAS LESSER VALUE AND IN SUPPORT OF THAT CONTENTION THE REGISTERED VALUERS REPORT WAS ALSO FILED. THE ASSESSEE HAS ALSO CITED INSTANCES WHERE THE PROPERTY WAS SOLD AT LESSER RATE THAN THE MARKET VALUE ADOPTED BY THE STAMP DUTY AUTHORITY. BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION. 5. NOW THE REVENUE IS IN APPEAL BEFORE US WITH THE SUBMISSION THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS NOT FILED VALUERS REPORT AND THE LD. CIT(A) HAS ACCEPTED THE VALUERS REPORT WITHOUT MAKING REFERENCE TO THE DVO TO ASCERTAIN THE MARKET VALUE OF THE PROPERTY. THEREFORE, THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE LD. CIT(A) HAS CALLED REMAND REPORT FROM THE ASSESSING OFFICER WITH REGARD TO THE REGISTERED VALUERS REPORT, BUT THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY SPECIFIC EVIDENCE IN SUPPORT OF THE MARKET VALUE OF THE PROPERTY FOR THE ADDITIONS TO BE SUSTAINED UNDER SECTION 50C OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT THE DISPUTE WITH REGARD TO THE MARKET VALUE WAS ALSO RAISED BEFORE THE ASSESSING OFFICER AND IN THAT SITUATION REFERENCE SHOULD HAVE BEEN MADE BY THE ASSESSING OFFICER TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY. SINCE HE DID NOT MAKE REFERENCE TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY, THE LD. CIT(A) IS JUSTIFIED IN ACCEPTING THE VALUATION REPORT AND DELETING THE ADDITION. :- 4 -: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WE FIND THAT BEFORE THE ASSESSING OFFICER THOUGH ASSESSEE HAS ASSERTED THE CORRECTNESS OF THE RECEIPT OF SALE CONSIDERATION DISCLOSED IN THE SALE DEED, BUT HE HAS NOT FILED ANY REGISTERED VALUERS REPORT BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CONTENTION WITH REGARD TO THE MARKET VALUE OF THE PROPERTY. THE REGISTERED VALUERS REPORT WAS FILED BEFORE THE LD. CIT(A). THOUGH THE LD. CIT(A) HAS CALLED A REMAND REPORT FROM THE ASSESSING OFFICER, BUT HE HAS NOT MADE ANY REFERENCE TO THE DVO TO ASCERTAIN THE MARKET VALUE OF THE PROPERTY. THERE IS NO INDICATION IN THE ASSESSMENT ORDER WITH REGARD TO THE FILING OF ANY EVIDENCE IN SUPPORT OF MARKET VALUE OF THE PROPERTY. NO DOUBT, THE ASSESSEE HAS QUOTED CERTAIN INSTANCES IN SUPPORT OF HER CONTENTION THAT THE MARKET VALUE OF THE PROPERTY IS LESSER THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES. BUT IN THIS SITUATION, THE LD. CIT(A) SHOULD HAVE REFERRED THE MATTER TO THE DVO TO ASCERTAIN THE FAIR MARKET VALUE OF THE PROPERTY AND THE LD. CIT(A) IS NOT EXPERT IN DETERMINING THE VALUATION OF THE PROPERTY. SINCE HE IS ARMED WITH CO-TERMINUS POWER OF THAT OF THE ASSESSING OFFICER, HE IS COMPETENT TO MAKE REFERENCE TO THE DVO TO ASCERTAIN THE MARKET VALUE OF THE PROPERTY AND TO ADJUDICATE THE ISSUE OF LONG TERM CAPITAL GAIN RAISED BEFORE HIM IN APPEAL. INSTEAD OF MAKING REFERENCE TO THE DVO, THE LD. CIT(A) HAS ACCEPTED THE VALUATION DECLARED BY THE ASSESSEE ON THE BASIS OF THE VALUATION REPORT AND THIS ACTION OF THE LD. CIT(A) IS NOT ACCEPTABLE AS THE LD. CIT(A) HAS NOT CALLED ANY COMMENTS OR THE VALUATION REPORT FROM THE DVO. 8. OUR ATTENTION WAS ALSO INVITED TO THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CIT VS. CHANDRA NARAIN CHAUDHRI [2013] 219 TAXMAN 60 (ALLD), BUT IT IS DISTINGUISHABLE ON FACTS, AS IN THAT CASE THE VALUERS REPORT WAS FILED BEFORE THE ASSESSING OFFICER DISPUTING THE FAIR MARKET VALUE OF THE PROPERTY ADOPTED BY THE STAMP DUTY AUTHORITY. IN THAT :- 5 -: CASE, THE OPTION WITH THE ASSESSING OFFICER WAS EITHER TO ACCEPT THE REGISTERED VALUERS REPORT OR TO MAKE REFERENCE TO THE DVO TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY. BUT IN THE INSTANT CASE NEITHER THE REGISTERED VALUERS REPORT NOR ANY OTHER EVIDENCE WAS FILED IN SUPPORT OF THE FAIR MARKET VALUE AS ADOPTED BY THE ASSESSEE FOR DETERMINING THE LONG TERM CAPITAL GAIN. THEREFORE, NO ASSISTANCE CAN BE DRAWN IN FAVOUR OF THE ASSESSEE FROM THIS JUDGMENT. 9. WE HAVE ALSO CAREFULLY EXAMINED THE OTHER JUDGMENT IN THE CASE OF CIT VS. KHOOBSURAT RESORTS PVT. LTD. IN I.T.A. NO. 776 OF 2011, BUT IT IS ALSO DISTINGUISHABLE ON FACTS. 10. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE TO THE ASSESSING OFFICER WITH A DIRECTION TO MAKE REFERENCE TO THE DVO TO DETERMINE THE MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAIN UNDER SECTION 50C OF THE ACT AND THEREAFTER TO ADJUDICATE THE ISSUE OF LONG TERM CAPITAL GAIN IN THE LIGHT OF THE REGISTERED VALUERS REPORT SUBMITTED BY THE ASSESSEE AND THE DVOS REPORT AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY THE APPEAL OF THE REVENUE IS DISPOSED OF. 11. SINCE THE REVENUES APPEAL HAS BEEN ALLOWED FOR STATISTICAL PURPOSES, THE CROSS OBJECTION OF THE ASSESSEE FILED IN SUPPORT OF THE ORDER OF THE LD. CIT(A) IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:3 RD DECEMBER, 2014 :- 6 -: JJ:2511 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR