Shri Somesh Bhatnagar, Bhopal V. The ACIT 1(2), Bhopal

ITA 655/IND/2013

• Counselvise Citation: 65522714 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

SOMESH BHATNAGAR ITA NO. 655/IND/2013 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. 655/IND/2013 A.Y.2009-10 SOMESH BHATNAGAR BHOPAL PAN AEMPB-0662H ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 1(2) BHOPAL ::: RESPONDENT APPELLANT BY SHRI ANIL KHABYA AND SHRI SUMIT KHABYA RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 8.10.2015 DATE OF PRONOUNCEMENT 1 9 . 10.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A)- BILASPUR, HAVING CONCURRENT JURISDICTION OVER CIT(A0, BHOPAL, DATED 29.7.2013. SOMESH BHATNAGAR ITA NO. 655/IND/2013 2 2. THE ASSESSEE IS A CIVIL CONTRACTOR DERIVING INCOME FROM CIVIL CONTRACTORSHIP. THE RETURN OF INCOME DECLARING INCOME AT RS.51,18,410/- WAS FILED. THE ASSESSEE HAS SOLD LAND LOCATED AT KHAJURI KALAN, BHOPAL, FOR RS. 30 LACS IN JULY , 2008. THE STAMP DUTY OFFICER VALUED THE LAND AT RS.66,06,000/-. THE LAND WAS PURCHASED DURING THE FINANCIAL YEAR 2005-06 FOR RS. 8,48,680/-. THE ASSESSE E SUBMITTED AN APPLICATION TO AMEND THE GROUNDS OF APPEAL AND AFTER HEARING WE ALLOWED THE SAME WHICH READ AS UNDER :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND LAW, THE LD. LOWER AUTHORITIES HAVE ERRED IN INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOM E TAX ACT WITHOUT REFERRING THE MATTER FOR VALUATION OF F AIR MARKET VALUE IN TERMS OF PROVISIONS OF SUB-SECTION (2) OF SECTION 50C OF THE INCOME TAX ACT. SOMESH BHATNAGAR ITA NO. 655/IND/2013 3 3. BY THIS GROUND THE ASSESSEE HAS CHALLENGED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT WITHOUT REFERR ING THE MATTER FOR FAIR MARKET VALUE IN TERMS OF SUB-SECTION (2 ) OF SECTION 50C OF THE ACT AND FOR THIS PROPOSITION, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF T HE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT; 372 ITR 83 (CAL) WHEREIN IT WAS HELD AS UNDER :- THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE SOMESH BHATNAGAR ITA NO. 655/IND/2013 4 A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. THE ASSESSEE SOLD A PIECE OF LAND AT A SUM OF RS.10 LAKHS UNDER TWO SEVERAL DEEDS OF CONVEYANCE AND INVESTED THE SALE PROCEEDS IN BONDS AND ON THAT BASIS CLAIMED DEDUCTION UNDER SECTION 54EC. THE MARKET VALUE OF THE LAND WAS, HOWEVER, ASSESSED BY THE DISTRICT SUB REGISTRAR AT SOMESH BHATNAGAR ITA NO. 655/IND/2013 5 A SUM OF RS.35 LAKHS, WHICH STAMP DUTY WAS DULY PAID. THE ASSESSING OFFICER, IN THE CIRCUMSTANCES, ADOPTED THE VALUATION MADE BY THE DISTRICT SUB REGISTRAR AND COMPUTED THE LONG TERM CAPITAL GAIN ON THAT BASIS. THE COMMISSIONER (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER. AN APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT : HELD, THAT PRESUMABLY, THE CASE OF THE ASSESSEE WAS THAT PRICE OFFERED BY THE BUYER WAS THE HIGHEST PREVAILING PRICE IN THE MARKET. IF THIS IS HIS CASE THEN IT IS DIFFICULT TO ACCEPT THE PROPOSI TION THAT THE ASSESSEE HAD ACCEPTED THAT THE PRICE FIXED BY THE DISTRICT SUB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. NO SUCH INFERENCE CAN BE MADE AS AGAINST THE ASSESSEE BECAUSE HE HAD NOTHING TO DO IN THE MATTER. STAMP DUTY WAS SOMESH BHATNAGAR ITA NO. 655/IND/2013 6 PAYABLE BY THE PURCHASER. IT WAS FOR THE PURCHASER TO EITHER ACCEPT IT OR DISPUTE IT. THE ASSESSEE COU LD NOT, ON THE BASIS OF THE PRICE FIXED BY THE SUB- REGISTRAR, HAVE CLAIMED ANYTHING MORE THAN THE AGREED CONSIDERATION OF A SUM OF RS.10 LAKHS WHICH, ACCORDING TO THE ASSESSEE, WAS THE HIGHEST PREVAILING MARKET PRICE. IN A CASE OF THIS NATURE, THE ASSESSING OFFICER SHOULD, IN FAIRNESS, HAVE GIVEN AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTMENTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C (MATTER REMANDED TO THE ASSESSING OFFICER). 4. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE FACTS OF THE CASE, IN OUR CONSIDERED VIEW, THIS ISSUE REQUI RES RE- EXAMINATION BY THE ASSESSING OFFICER. WE, THEREFORE, REMAND THE MATTER TO THE ASSESSING OFFICER. HE WILL REFER SOMESH BHATNAGAR ITA NO. 655/IND/2013 7 THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER AS CONTEMPLATED U/S 50C OF THE ACT. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSESS. PRONOUNCED IN OPEN COURT ON 19 TH OCTOBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 19 TH OCTOBER, 2015 DN/-