Sri.Syed Fazal Ahmed, Bangalore V. Income Tax Officer, Bangalore

ITA 662/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5341 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 23-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Assessee Lawyers: V SRINIVASAN
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.662/BANG/2017 ASSESSMENT YEAR : 2012-13 SHRI. SYED FAZAL AHMED, NO. 2/2, NEW BAMBOO BAZAAR, BENGALURU-560002. PAN: ADCPA 4700 E VS. THE INCOME TAX OFFICER, WARD 1[2][4], BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SMT. SWAPNA DAS, JCIT DATE OF HEARING : 18 . 0 5 .201 7 DATE OF PRONOUNCEMENT : 26.05.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(A), INTERALIA, ON FOLLOWING GROUNDS: 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. ITA NO. 662/BANG/2017 PAGE 2 OF 5 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN SUSTAININ G THE ADDITION OF A SUM OF RS.14,12,378/- AS INCOME FROM LONG TERM CAPI TAL GAINS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT 'S CASE. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN SUSTAININ G THE ASSESSMENT OF CAPITAL GAINS BY ADOPTING THE GUIDANCE VALUE ULS .50C OF THE ACT, WITHOUT NOTICING THAT THE LEARNED A.0. OUGHT TO HAV E REFERRED THE MATTER OF VALUATION OF THE PROPERTY TO A VALUATION OFFICER AND THUS, THE COMPUTATION OF CAPITAL GAINS TRANSGRESSED THE PROVI SIONS OF SECTION 50C[2] OF THE ACT, CONSEQUENTLY, THE ADDITION MADE REQUIRES TO BE DELETED. 4. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.3,00,567/- AND RS.81,362/- BEING THE INTEREST CLAIMED WHILE COMPUTING THE CAPITAL GAINS AS PART OF THE COST OF ACQUISITION UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S C ASE. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS.3,46,353/- BEING THE INTEREST PAID TO CITI FI NANCIAL CONSUMER FINANCE INDIA LTD., AND CLAIMED WHILE COMPUTING THE CAPITAL GAINS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT'S CASE. 6. THE LEARNED CIT[A] IS NOT JUSTIFIED IN ADDING A SUM OF RS.1,26,500/- AS INCOME FROM BUSINESS' UNDER THE F ACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE OUT APPRECIAT ING THE EXISTING OLD STOCK HAD TO BE SOLD FOR DISTRESS SALE BELOW THE CO ST TO FACILITATE THE SALE OF THE PROPERTY. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234A, 234B AND 234D OF ACT, WHICH UNDER THE FA CTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO B E CANCELLED. 8. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRA YS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 2. THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS B UT THEY ALL RELATE TO THE COMPUTATION OF CAPITAL GAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ITA NO. 662/BANG/2017 PAGE 3 OF 5 THE AO HAS NOTED THAT THE ASSESSEE HAS SOLD THE PRO PERTY FOR A SALE CONSIDERATION OF RS.36,00,000/-. FOR THE PURPOSE OF STAMP DUTY, THE VALUE OF THE PROPERTY WAS SHOWN AS RS.49,73,000/-. THE AO INVOKED THE PROVIS IONS OF SECTION 50C OF THE IT ACT (HEREAFTER CALLED AS AN ACT) AND ADOPTED THE VA LUE OF THE PROPERTY SHOWN FOR THE PURPOSE OF STAMP DUTY AS SALE CONSIDERATION AND COMPUTED CAPITAL GAIN AT RS.14,12,378/- IN THE ASSESSEES HANDS. THE ASSESS EE ASSAILED THE ORDER OF THE CIT(A) WITH THE SUBMISSION THAT IT WAS DISTRESS SAL E AND THERE ARE VARIOUS FACTORS ON ACCOUNT OF WHICH THE PROPERTY WAS SOLD AT RS.36, 00,000/-. BUT HE DID NOT FIND FAVOUR WITH THE CIT(A). 3. NOW THE ASSESSEE IS BEFORE US AND DURING THE COU RSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS GIVEN A NOTE BELOW THE COMPUTATION OF CAPITAL GAIN IN ANNEXURE ATTACHED WITH THE RETURN OF INCOME. IN THE NOTE, THE LOCATION AND OT HER FACTORS WERE DISCLOSED ON ACCOUNT OF WHICH THE PROPERTY WAS SOLD FOR RS.36,00 ,000/- LESSER THAN THE NOTIFIED RATES. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHE R CONTENDED THAT SINCE THE ASSESSEE HAS DISPUTED THE MARKET RATE TO BE ADOPTED FOR THE COMPUTATION OF CAPITAL GAIN, THE AO SHOULD HAVE MADE A REFERENCE TO THE DE PARTMENTAL VALUATION OFFICER FOR ESTIMATION OF THE VALUATION OF THE MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN BUT HE DID NOT DO SO AND THE AO ADOPTED THE VALUE OF PROPERTY SHOWN FOR THE PURPOSE OF STAMP DUTY AS SHOWN IN THE SALE DEED AS A SALE CONSIDERATION AND COMPUTED THE CAPITAL GAIN. ITA NO. 662/BANG/2017 PAGE 4 OF 5 4. THE LEARNED DR PLACED RELIANCE UPON THE ORDER OF THE CIT(A). 5. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITY, IN THE LIGHT OF THE RIVAL SUBMISSION, I FIND THAT AS PER PROVISION OF SECTION 50C[2] OF THE ACT, WHEREVER THE ASSESSEE DISPUTES THE FAIR MARKET VALU E OF THE PROPERTY, THE AO SHOULD HAVE MADE THE REFERENCE TO DVO. BUT IN THE INSTANT CASE THOUGH THE ASSESSEE HAS FURNISHED HIS REASONS FOR THE VALUATION OF THE PROP ERTY LESSER THAN THE MARKET VALUE FOR THE PURPOSE OF DETERMINING THE STAMP DUTY, BUT THE AO HAS NOT MADE A REFERENCE TO THE DVO. THE AO HIMSELF IS NOT AN EXP ERT IN THIS FIELD. THEREFORE, HE CANNOT TAKE A CORRECT VIEW WITH REGARD TO THE REASO NS ASSIGNED BY THE ASSESSEE FOR LESSER SALE CONSIDERATION. I AM THEREFORE OF THE V IEW THAT THIS MATTER SHOULD GO BACK TO THE FILE OF THE AO FOR READJUDICATION OF TH E ISSUE AFTER OBTAINING THE VALUATION REPORT FROM THE DVO IN THIS REGARD. ACCO RDINGLY, I SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF TH E AO WITH THE DIRECTION TO MAKE A REFERENCE TO DVO TO DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY AND THEREAFTER ADJUDICATE THE ISSUE AFRESH AFTER AFFORDING OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE. DATED: MAY, 2017. /NSHYLU/* ITA NO. 662/BANG/2017 PAGE 5 OF 5 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.