SMT. DEPTI WAGH, Indore V. The ITO 2(3), Indore

ITA 630/IND/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99125 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MEENA
• Assessee Lawyers: C P RAWKA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C

Judgement Text

SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO. 629/IND/2014 A.Y.2009-10 SMT. LALITA WAGH INDORE ::: APPELLANT VS INCOME TAX OFFICER 2(3) INDORE ::: RESPONDENT ITA NO. 630/IND/2014 A.Y.2009-10 SMT. DEEPTI WAGH INDORE ::: APPELLANT VS INCOME TAX OFFICER 2(3) INDORE ::: RESPONDENT APPELLANTS BY SHRI C.P. RAWKA RESPONDENT BY SHRI R.R. MEENA DATE OF HEARING 5.11.2015 DATE OF PRONOUNCEMENT 8 .12.2015 SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 2 O R D E R PER SHRI B.C. MEENA, AM BOTH THESE APPEALS BY DIFFERENT ASSESSEES EMANATE FROM TWO ORDERS OF THE LEARNED CIT(A)-I, INDOR E, BOTH DATED 30.7.2014. THE COMMON ISSUE INVOLVED IN T HESE APPEALS IS REGARDING CONFIRMATION OF THE ACTION OF THE ASSESSING OFFICER IN RESPECT OF LONG TERM CAPITAL GAI NS IN THE HANDS OF THESE ASSESSEES. 2. IN THE CASE OF SMT. LLITA WAGH IT WAS PLEADED THAT TH E ASSESSING OFFICER TREATED THE SHARE OF THE ASSESSEE AS 5/6 TH AS AGAINST 1/3 RD SHAREOF THE ASSESSEE. IN THE CASE OF DEEPTI WAGH THE COMPUTATION OF CAPITAL GAIN AT RS. 4,27,487/- HA S BEEN CHALLENGED. 3. BEFORE US, IT WAS SUBMITTED THAT A PROPERTY LOCATED AT 71, SWAMI VIVEKANAND NAGAR, INDORE, WAS PURCHASED BY THE HUSBAND OF SMT. LALITA WAGH, ONE OF THE ASSESSEES IN HIS NAME AS WELL AS IN THE NAME OF LALITA WAGH. IT WAS SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 3 SUBMITTED THAT THE ENTIRE INVESTMENT WAS MADE BY THE HUSBAND OF SMT. LALITA WAGH AND HER NAME WAS JUST ADDED OUT OF LOVE AND AFFECTION. THE HOUSE WAS PURCHASED BY TAKING THE LOAN. ON THE DEATH OF HER HUSBAND, THE OUTSTANDING LOAN WAS RS.5,75,987/- WHICH IS REQUIRED TO BE INCLUDED IN THE COST OF ACQUISITION. IT WAS SUBMIT TED THAT THE ASSESSEES HUSBAND EXPIRED INTESTAT WITHOUT BEQUEATHING THE PROPERTY TO THE ASSESSEE AND HIS TWO DAUGHTERS. IT WAS CLAIMED THAT THE PROPERTY WAS VESTED WITH THE ASSESSEE AND TWO DAUGHTERS IN EQUAL RATIO. ONE OF THE DAUGHTERS WAS MINOR, THEREFORE, HER SHARE WAS TOO INCLUDED IN THE HANDS OF SMT. LALITA WAGH ONE OF THE ASSESSEES IN VIEW OF PROVISIONS OF THE INCOME TAX AC T. THIS PROPERTY WAS SOLD ON 15.10.2008 AND THE CAPITAL GAINS WERE OFFERED IN THE HANDS OF THE ASSESSEE AND HER ELDE R DAUGHTER. THE ASSESSING OFFICER ASSESSED 5/6 TH SHARE IN THE HANDS OF SMT. LALITA WAGH INSTEAD OF 2/3 RD SHARE. IT SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 4 WAS ALSO PLEADED THAT THERE WAS ENCROACHMENT ON THE LAND. THE VALUATION OFFICER HAS NOT CONSIDERED THIS ASPECT WH ILE VALUING THE PROPERTY. THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE VALUATION OFFICER HAS BRUSHED ASIDE THESE OBJECTIONS OF THE ASSESSEE WITHOUT GOING INTO MERITS OF THE ISSUES. HE FURTHER SUBMITTED THAT THE VALUER H AS NOTED THAT 15 FT. SPACE HAS BEEN LEFT FOR DRAINAGE, WATER SUPPLY ON THE SOUTH SIDE OF THE PLOT. THE VALUATION O FFICER HAS ALSO REFERRED TO 9.96 SQ. MTS. FENCING AND STRUCTUR E. THERE WAS ENCROACHMENT, THE ASSESSEE COULD NOT ENJOY T HE BENEFIT OF THE PROPERTY FULLY DUE TO ADVERSE POSSESS ION. THEREFORE, THE VALUATION SHOULD NOT HAVE BEEN MADE FOR THAT PART OF THE LAND WHICH WAS UNDER ENCROACHMENT. HE SUBMITTED THAT THE DEEMING PROVISION OF SECTION 50C OF THE ACT SHOULD BE APPLIED WITH A PRAGMATIC APPROACH AND IT SHOULD HAVE BEEN APPLIED ON PRO RATA BASIS IN RESPECT O F THE PROPERTY WHICH HAS ACTUALLY CHANGED HANDS AND NOT I N SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 5 RESPECT OF THE PROPERTY WHICH WAS IN ADVERSE POSSESSI ON. THE ASSESSEE ALSO GOT VALUATION DONE AND THE REGISTERED VALUER HAS VALUED THE PROPERTY AT RS.40,37,175/- WHEREAS THE VALUATION OFFICER HAS VALUED THE SAME AT RS.56,19,253/-. THE ASSESSING OFFICER HAS NOT ANALYSED THE DIFFERENCE IN THE TWO VALUATION REPORTS AND THE ASSESS ING OFFICER ALSO DID NOT PROVIDE AN OPPORTUNITY TO THE ASS ESSEE TO CROSS-EXAMINE THE VALUATION OFFICER. HE ALSO SUBMIT TED THAT THE FAIR MARKET VALUE ADOPTED BY THE VALUATION OFFICE R IS TOTALLY UNSCIENTIFIC AND IT HAS NOTHING TO DO WITH THE FAIR MARKET VALUE AS IN THE YEAR 1992. 4. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW T HAT THE CLEAR FINDING IN RESPECT OF THE SHARE OF THE ASSES SEE SMT. LALITA WAGH IS REQUIRED TO BE GIVEN. FURTHER, THE OBJECTIONS RAISED BEFORE THE VALUATION OFFICER ALSO NEE D SMT. LALITA WAGH & SMT. DEEPTIWAGH ITA NOS.629 & 620/IBND/2014 6 CONSIDERATION WHERE THERE IS AN ADVERSE POSSESSION ON A PART OF THE LAND. WE, THEREFORE, IN THE INTEREST OF J USTICE, FIND IT APPROPRIATE TO SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING DE NOVO AS PER THE LA W. 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 8 TH DECEMBER, 2015 SD/- SD/- (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 8 TH DECEMBER, 2015 DN/-