Archana Lal, Noida V. ACIT, circle-1, Noida

ITA 6713/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8874 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 22-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S THUNGALENG
• Assessee Lawyers: RAJESH GUPTA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE S H. R.K. PAND , ACCOUNTANT MEMBER ITA NO. 671 3 /DEL/201 8 ASSESSMENT YEAR: 20 1 3 - 1 4 ARCHANA LAL B - 107, RAM VIHAR, SECTOR - 30, NOIDA PAN : ABQPL0533Q VS ACIT CIRCLE - 1 NOIDA (APPELLANT) (RESPONDENT) APPELLANT BY S H . RAJESH GUPTA, FCA RESPONDENT BY SH. P.S. THUNGALENG, SR DR DATE OF HEARING: 1 0 / 1 2 /2018 DATE OF PRONOUNCEMENT: 26 /12/2018 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 2 9 . 0 6 .201 8 P A SSED BY THE CIT (A) - 1 , NEW DELHI RELATING TO A. Y. 20 1 3 - 1 4 . 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE , HOWEVER, T HESE ALL RELATE TO THE ORDER OF THE CIT(A) DIRECTING THE ASSESSING OFFICER TO AD OPT THE VALU E ADOPTED B Y THE STAMP VALUATION AUTHORITY AT RS.1,40,50,000/ - AS AGAINST THE VALUE OF RS.95,07,272/ - DETERMIN ED BY THE DVO AND ACTUAL SALE CONSIDERATION O F RS.90 LACS. 2 3. THIS IS THE SECOND ROUND OF LITIGATION BEFORE THE TRIBUNAL. FACTS OF T HE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED H ER RETURN OF INCOME ON 28.07.2013 DECLARING TOTAL INCOME OF RS. 13,20,030/ - . S UBSEQUENTLY THE RETURN WAS REVISED ON 31.07.2013 DECLARING THE SAME INCOME. T HE CASE OF THE ASSESSEE WAS SELE CTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD PURCHASED AN URBAN AGRICULTURAL LAND IN KANJHAWALA, DELHI ON 21.02.2007 F O R RS.2,80,000/ - AND THE SAME WAS SOLD ON 09.10.2012 FOR SALE CONSIDERATION OF RS.90 LACS. THE STAMP VALUATION A UTHORITY ADOPTED THE VALUATION OF RS.1,40,50,000/ - FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. THE ASSESSING OFFICER APPLYING THE PROVISION S OF SECTION 50 C OF THE INCOME TAX ACT ADOPTED THE VALUE OF RS.1,40,50,000/ - AS AD OPTED BY THE STAMP VALUATION AUTHORITY AS THE VALUE OF SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 90 LACS. 4. THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT(A) WHO DISMISS ED TH E APPEAL FILED BY THE ASSESSEE VIDE ORDER DATED 30.09.2017. ON FURTHER APPEAL BY THE ASSESSEE, THE TRIBUNAL VIDE ITA NO.5861/DEL/2016 ORDER DATED 10.01.2017 SET ASIDE THE MATTER TO THE ASSESSING OFFICER TO REFER THE MATTER TO THE VALUATION OFFICER FOR VAL UATION PURPOSE. PURSUANT TO REFERENCE BY THE ASSESSING OFFICER, THE VALUATION OFFICER VIDE HIS ORDER DATED 31.08.2017 DETERMINED THE FAIR MARKET VALUE AT RS.95,07,272/ - . ACCORDINGLY THE ASSESSING OFFICER PASS ED THE ORDER U/S 143 (3)/254 DATED 05.10.2017 W HEREIN HE CONSIDERED THE VALUE OF RS.95,07,272/ - AS THE SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAIN. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AGAINST THE ADDITION OF RS.5,07,272/ - MADE BY THE ASSESSING OFFICER ON THE GRO UND THAT THE ACTUAL SALE CONSIDERATION OF RS.90 LACS SHOULD BE A DOPTED SINCE THE VALUATION OFFICER HAS IGNORED THE VALUE OF THOSE PROPERTIES WHICH WERE LESS THAN THE SALE VALUE OF THE ASSESSEE. 3 5. HOWEVER, THE LD. CIT(A) INSTEAD OF GIVING ANY RELIEF TO TH E ASSESSEE ENHANCED THE ASSESSMENT BY DIRECTING THE ASSESSING OFFICER TO SUBST ITUTE THE VALUE OF RS.1,40,50,000/ - ADOPTED BY THE STAMP VALUATION AUTHORITY FOR STAMP DUTY AS THE DEEM ED SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE LONG TERM CAPITAL GAI N. 6 . AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 7 . THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET REFER RED TO THE CBDT CIRCULAR NO.8/2002 DATED 27.08.2002 AND DREW THE ATTENTION OF THE BENCH TO THE RELEVANT EXTRACTS WHICH READ AS UNDER : - COMPUTATION OF CAPITAL GAINS IN REAL ESTATE TRANSACTIONS. 37 . 1 THE FINANCE ACT. 2002, HAS INSERTED A NEW SECTION 50C IN THE INCOME TAX ACT TO MAKE A SPECIAL PROVISION FOR DETERMINING THE FULL VALUE OF CONSIDERATION IN CASES OF TRANSFER OF IMMOVABLE PROPERTY. 37 . 2 IT PROVIDES THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR TH E PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION, AND CAPITAL GAINS SHALL BE COMPUTED ACCORDINGLY UNDER SECTION 48 OF THE INCOME TAX ACT. 37 . 3 IT IS FURTH ER PROVIDED THAT WHERE THE ASSESSEE CLAIMS THAT THE VALUE ADOPTED OR ASSESSED FOR STAMP DUTY PURPOSES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, AND HE HAS NOT DISPUTED THE VALUE SO ADOPTED OR ASSESSED IN ANY APPEAL OR REVISI ON OR REFERENCE BEFORE ANY AUTHORITY OR COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE RELEVANT ASSET TO A VALUATION OFFICER IN ACCORDANCE WITH SECTION 55A OF THE INCOME, TAX ACT. IF THE FAIR MARKET VALUE DETERMINED BY THE VALUATION OFFICER IS 4 LESS THAN THE V ALUE ADOPTED FOR STAMP DUTY PURPOSES, THE ASSESSING OFFICER MAY TAKE SUCH FAIR MARKET V ALUE TO HE THE FULL VALUE OF CONSIDERATION (EMPHASIS SUPPLIED). HOWEVER, IF THE FAIR MARKET V ALUE DETERMINED IS MORE THAN THE VALUE ADOPTED OR ASSESSED F OR STAMP DUTY PURPOSES, THE ASSESSING OFFICER SHALL NOT ADOPT SUCH FAIR MARKET VALUE AND SHALL TAKE THE FULL VALUE OF CONSIDERATION TO BE THE VALUE OR ASSESSED FOR STAMP DUTY PURPOSE. 37 . 4 THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 2003 AND WILL, ACCOR DINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2003 04 AND SUBSEQUENT YEARS (EMPHASIS SUPPLIED. 8 . REFERRING TO THE ABOVE HE SUBMITTED THAT IN VIEW OF THE CBDT CIRCULAR WHICH IS BINDING AT THE DEPARTMENT , T HE LD. CIT (A) COULD NOT HAVE DIRECTED THE A SSESSING OFFICER TO ADOPT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF DETERMINING THE LONG TERM CAPITAL GAIN. SO FAR AS THE VALUE ADOPTED BY THE ASSESSING OFFICER IS CONCERNED HE SUBMITTED THAT THE DVO IN HIS ORDER HAS TAKEN THE LAND RATE AS PER SALE INSTANCE S OF NEARBY PROPERTIES SOLD VIDE SALE DEED S DATED 19.12.2013 AND 03.01.2013 WHICH VARIES FROM 9 0 44 . 50 TO 11,861 PER SQUARE METER . S INCE THE ASSESSEE HAS A DOPTED THE VALUE OF RS.10,000/ - PER SQUARE METER, THEREFORE, THE VALUE A DOPTED BY THE DVO BEING ON THE HIGHER SIDE SHOULD BE REJECTED AND THE VALUE ADOPTED BY THE ASSESSEE AS PER REGISTERED VALUER SHOULD BE ACCEPTED . HE SUBMITTED THAT IN LAND TRANSACTIONS OF HIGHER VALUE, THE PRICE VARIANCE BETWEEN THE TRANSACTIONS ARE A CERT AINTY AND THE VALUE ADOPTED BY TWO DIFFERENT VALUERS US U ALLY DIFFER S AND THERE IS NO EVIDENCE W ITH THE DEPARTMENT THAT THE ASSESSEE HAS RECEIVED MORE THAN WHAT HAS BEEN MENTIONED IN THE SALE DEED I.E. RS.90,000/ - . T HEREFORE, NO FURTHER ADDITION SHOULD BE M ADE. 9 . THE LD. D R ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 5 10 . I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT THE TRIBUNAL IN THE INSTANT CAS E HA D RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REFER THE MATTER TO THE DVO FOR THE PURPOSE OF DETERMINATION OF FAIR MARKET VALUE OF THE LAND. I FIND THE DVO IN HIS REPORT H A S DETERMINED THE FAIR MARKET VALUE OF THE PROP ERTY AT RS.95.07.272/ - WHICH HAS BEEN ADOPTED BY THE ASSESSING OFFICER AS THE SALE CONSIDERATION AS PER PROVISION OF SECTION 50 C OF THE IT ACT. THE CBDT CIRCULAR NO.8/2002 DATED 27.08.2002 MANDATES THE ASSESSING OFFICER TO ADOPT THE VALUE DETERMINED BY TH E DVO IF THE FMV SO DETERMINED IS MORE THAN THE ACTUAL SALE CONSIDERATION BUT LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AND THE ASSESSEE HAS CHALLENGED SUCH VALUATION BY STAMP VALUATION AUTHORITY BEFORE THE ASSESSING OFFICER. I, THEREFOR E, FIND MERIT IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(A) SHOULD NOT HAVE ENHANCED THE INCOME OF THE ASSESSEE BY DIRECTING THE ASSESSING OFFICER TO REPLACE THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AT RS. 1,40,50,000 / - FOR DETERMINING THE LONG TERM CAPITAL GAIN. SO FAR AS THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DVO HAS NOT CONSIDERED THE ACTUAL SALE CONSIDERATION RECEIVED IN CERTAIN OTHER PROPERT IES THE RATES OF WHICH ARE LESS THAN THE RATE ADOPTED BY THE ASSESSEE IN THE INSTANT CASE IS CONCERNED, THE SAME I N OUR OPINION IS WITHOUT ANY MERIT . T HE DVO IN THE I NSTANT CASE AFTER CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND DIFFERENT OTHER FAC TS AND CIRCUMSTANCES AS MENTIONED IN THE VALUATION REPORT H AS DETERMINED THE VALUE OF THE PROPERTY AT RS.95,07,272/ - . UNDER THESE CIRCUMSTANCES AND IN THE LIGHT OF OUR OBSERVATIONS ABOVE I AM OF THE OPINION THAT THE VALUE ADOPTED BY THE ASSESSING OFFICER O N THE BASIS OF THE REPORT OF THE DVO AT RS.95,07,272/ - AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS.90 LACS AND AS AGAINST VALUATION BY STAMP VALUATION AUTHORITY AT RS.1,40,50,000/ - IS CORRECT. A CCORDINGLY , T HE ORDER OF THE CIT(A) IS MODIFIED AND THE A CTION OF THE ASSESSING OFFICER IN ADOPT ING THE VALUE OF RS.95,07,272/ - AS THE SALE CONSIDERATION FOR THE PURPOSE OF 6 COMPUTATION OF CAPITAL GAIN U/S 50 C IS UPHELD. THE GROUNDS RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 .1 2 .2018 . SD/ - ( R. K. PANDA ) ACCOUNTANT MEMBER *NEHA* DATE: - 26 . 1 2 .2018 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 17.12.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DI CTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 26.12.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER