Smt. Vatsalabai N Bhor, Pune V. ITO, Ward 3(2), Pune

ITA 697/PUN/2013

• Counselvise Citation: 69724514 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Valuation report; Reason to believe
• Section: 50C; 2(14); 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 697/PN/2013 (ASSESSMENT YEAR : 2004-05) SMT. VATSALABAI N. BHOR, 849, SADASHIV PETH, PUNE 411030 PAN NO.AXUPB 7364H .. APPELLANT VS. ITO, WARD-3(2), PUNE .. RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 16-04-2015 DATE OF PRONOUNCEMENT : 24-04-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 18-10-2012 OF THE CIT(A)-II, PUNE RELAT ING TO ASSESSMENT YEAR 2004-05. 2. THIS APPEAL WAS FIRST FIXED FOR HEARING ON 02-04 -2014. SINCE NOBODY APPEARED ON BEHALF OF THE ASSESSEE THE HEARING WAS ADJOURNED TO 26-06-2014 BY ISSUING NOTICE THROUGH R PAD. ON 26-06-2014 SINCE NOBODY APPEARED NOTICE WAS ISSUED AGAIN TO THE ASSESSEE FIXING THE HEARING ON 25-09-2014. ON THAT DATE ALSO, NONE APPEARED FOR WHICH THE CASE WAS ADJOURNED TO 1 9-01-2015. ON 19-01-2015 NONE APPEARED ON BEHALF OF THE ASSESS EE FOR WHICH NOTICE WAS AGAIN ISSUED THROUGH RPAD FIXING T HE HEARING 2 ON 16-04-2015. ON 16-04-2015 WHEN THE NAME OF THE ASSESSEE WAS CALLED, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY PETITION SEEKING ADJOURNMENT OF THE CASE WAS FILED. THEREFORE, THE APPEAL IS BEING DECIDED ON THE BASIS OF MATERI AL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRE SENTATIVE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND HAD NOT FILED ANY RETURN OF INCOME F OR THE A.Y. 2004-05. THE ASSESSING OFFICER WAS IN RECEIPT OF IN FORMATION IN RESPECT OF SALE TRANSACTIONS OF LAND AT SADESATRANA LI, HADAPSAR TO M/S CITI CORPORATION LTD. AND SINCE THE LAND UNDER CONSIDERATION WAS WITHIN THE LIMIT OF PUNE MUNICIPAL CORPORATION THE PROVISIONS OF SUB-SECTION (III)(A) TO SECTION 2(14) OF THE ACT WERE APPLICABLE TO PERSONS INVOLVED IN THIS TRANSACTION. THE ASSESSEE BEING A NON-FILER, THE A.O. HAD REASON TO BELIEVE T HAT THE CAPITAL GAINS TAX ON THE SALE TRANSACTION HAD ESCAPED ASSES SMENT FOR A.Y. 2004-05. AFTER TAKING APPROVAL FROM THE ADDL. CIT, THE AO ISSUED NOTICE U/S 148 TO THE ASSESSEE. HOWEVER, THE ASSESSEE DID NOT FILE THE RETURN OF INCOME. INSTEAD, THE A.R. O F THE ASSESSEE FILED DETAILS OF A COMPUTATION OF TOTAL INCOME AND WORKING OF LONG TERM CAPITAL GAIN AT RS. 5,74,200/-. THE ASSES SEE HAD ADOPTED THE ACTUAL CONSIDERATION RECEIVED AT RS.59, 45,000/- AND AFTER DEDUCTING THE INDEXED COST OF ACQUISITION AT RS.53,70,800/- HAD ARRIVED AT THE AFOREMENTIONED LONG TERM CAPITAL GAIN OF RS.5,74,200/-. 3 4. THE ASSESSEE DID NOT FILE ANY VALUATION REPORT A ND THE VALUE ADOPTED BY THE ASSESSEE WAS NOT FOUND ACCEPTA BLE BY THE A.O. THEREFORE, A REFERENCE WAS MADE TO THE VALUAT ION OFFICER. HOWEVER, AS THE SAME WAS NOT RECEIVED TILL COMPLETION OF THE ASSESSMENT THE A.O. RELIED ON A VALUATION RE PORT OF THE IT. DEPT. SOLAPUR, IN A SIMILAR CASE WHEREIN THE VA LUATION OF RS.101 PER SQ. METER AS ON 01-04-1981 WAS ADOPTED. THE ASSESSING OFFICER REWORKED THE LONG TERM CAPITAL GA IN IN ASSESSEES CASE AT RS.65,09,683/- BY ADOPTING THE V ALUATION AT RS.101 PER SQ.MT. AS ON 01-04-1981 AND CONSIDERING THE STAMP DUTY VALUATION AT RS.99,00,000/- U/S.50C OF THE I.T . ACT. 5. BEFORE CIT(A) THE ASSESSEE DID NOT APPEAR DESPIT E SERVICE OF NOTICE FIXING THE CASE FOR HEARING ON A NUMBER OF TIMES. THEREFORE, THE CIT(A) PROCEEDED TO DECIDE T HE ISSUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. HE OBSE RVED THAT THE ASSESSEE HAD SOLD LAND AT GUT NO.191, HISSA NO. 1B/ 1 AND GAT NO. 193, HISSA NO. 2/3, SADESATRANALI, HADAPSAR, PU NE TO CITI CORPORATION LTD. ON 02.12.2003 FOR A TOTAL CONSIDER ATION OF RS.1,18,90,000/-. THE STAMP DUTY VALUATION OR MARKE T VALUATION AS ON THE DATE OF SALE OF THE PROPERTY SOLD WAS RS. 1,98,00,000/-. THE SAID LAND WHICH WAS SOLD WAS HELD ALONG WITH A RELATED PERSON MRS. SUSHILABAI NANDKUMAR BHOR. THUS THE AS SESSEE'S SHARE IS 50% OF THE TOTAL VALUE OF THE SAID LAND. T HE ASSESSEE IN THE COMPUTATION OF THE VALUE OF SALE CONSIDERATION HAD NOT ADOPTED THE 50C VALUATION BEING THE STAMP DUTY VALU E OF RS.99,00,000/-BUT THE ACTUAL SALE CONSIDERATION REC EIVED OF 4 RS.59,45,000/-. THE ASSESSING OFFICER THUS ADOPTED THE SALE VALUE OF THE SAID LAND AT RS.99,00,000/- AS PER THE PROVISIONS OF SECTION 50C OF THE I.T. ACT. THE ASSESSEE HAD NOT O BJECTED TO THE VALUE ADOPTED BY THE A.O. DURING THE ASSESSMENT PROCEEDINGS. ONLY DURING THE APPELLATE PROCEEDINGS THE ASSESSEE HAS OBJECTED TO THE VALUATION ADOPTED BY T HE A.O. BASED ON THE STAMP DUTY VALUATION AS PER THE PROVIS IONS OF SECTION 50C. 6. HE OBSERVED THAT THE ASSESSING OFFICER IN THE RE LATED CASE OF SMT. SUSHILABAI N. BHOR HAD ACTUALLY REFERRED TH E MATTER FOR VALUATION TO THE VALUATION OFFICER. HOWEVER, THE R EQUISITE REPORT HAD NOT BEEN RECEIVED BY THE A.O. BY THE TIME THE A SSESSMENT WAS FINALIZED. THE ASSESSING OFFICER HAS FORWARDED THE COPY OF THE VALUATION REPORT IN A RELATED CASE VIZ. SUSHILA BAI N. BHOR AND HE NOTED THAT THE VALUE OF THE SAID LAND AS PER THE VALUER HAS BEEN TAKEN AT RS.2,00,10,000/- AS ON 02.12.2003 BY THE A PPROVED VALUER, WHICH IS VERY MUCH SIMILAR TO THE STAMP DUT Y VALUATION OF RS.1,98,00,000/-. HE OBSERVED THAT WHEN THE ASSESS EE HAS ANY OBJECTION TO THE ADOPTION OF THE STAMP DUTY VALUE A S AGAINST THE CONSIDERATION ADMITTED BY HIM, THE LAW PROVIDES A R EMEDY FOR HIM IN SUB-SECTION (2) OF SECTION 50C. WHERE HE DO ES NOT EXERCISE HIS RIGHT UNDER THE LAW, THE A.O. IS BOUND TO ADOPT THE STAMP VALUE. WHERE THE ASSESSING OFFICER REFERS THE MATTER TO VALUATION CELL ON ASSESSEES OBJECTION HE HAS TO AW AIT SUCH VALUATION SO THAT THE ADOPTION OF STAMP DUTY VALUE WITHOUT AWAITING THE VALUATION REPORT WOULD NOT BE VALID. H OWEVER, IN THE 5 PRESENT CASE THE FACTS ON RECORD DO NOT INDICATE OF ANY OBJECTION BY THE ASSESSEE WITH RESPECT TO THE VALUE ADOPTED B Y THE A.O. AS PER THE STAMP DUTY VALUATION AND, THEREFORE, THE AC TION OF THE ASSESSING OFFICER IN ADOPTING THE STAMP DUTY VALUAT ION WAS PERFECTLY IN ORDER. 7. SO FAR AS ISSUE REGARDING THE RATE OF THE SAID LAND AS ON 01- 04-1981 AT RS. 101/- PER SQ. MTR. TAKEN BY THE A.O. AS AGAINST RS.160/- PER SQ. MTR. IS CONCERNED, HE NOTED FROM P ARA NOS. 3 & 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAD ADOPT ED THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981 AT RS. 16 0 PER SQ. MTR. HOWEVER, THE BASIS FOR THE SAID VALUATION SUCH AS A NY VALUATION REPORT OR ANY SALE INSTANCE HAD NOT BEEN GIVEN SO A S TO JUSTIFY THE RATE TAKEN AT RS. 160/- PER SQ. MTR. HE OBSERVED TH AT THE AOS ACTION IN ADOPTING THE RATE AT RS.101/- PER SQ. MT. IS BASED ON COMPARABLE CASE AT THE SAME AREA WHERE THE ASSESSEE S LAND WAS LOCATED. HE OBSERVED THAT THE ASSESSEES FAIR MARK ET VALUE TAKEN AT RS.160/- SQ.MT. DID NOT HAVE ANY BASIS AND IN SU PPORT NO VALUATION REPORT HAD BEEN FILED BY THE ASSESSEE BEF ORE THE AO. THE VALUATION REPORT DATED 17-05-2012 NOW FORWARDED BY THE AO WITH RESPECT TO THE REFERENCE FOR WHICH VALUATION M ADE ON 17-11- 2011 IN THE CASE OF SMT. SUSHILABAI N. BHOR FOR THE SAME PIECE OF LAND INDICATES THE VALUE ADOPTED OF THE LAND AT RS. 7,25,000/- WHEREAS THE VALUE ADOPTED BY THE AO IS AT RS.7,32,2 50/- WHICH IS MORE OR LESS THE SAME AND WHICH INDICATES THAT THE VALUE ADOPTED BY THE AO WAS ON A SOUND BASIS. HE ACCORDINGLY HEL D THAT THE VALUE ADOPTED BY THE AO DOES NOT CALL FOR ANY INTER FERENCE. 6 8. AS REGARDS THE GRIEVANCE OF THE ASSESSEE THAT LO NG TERM CAPITAL GAINS INVESTED TO PURCHASE THE AGRICULTURAL LAND AND A FLAT NOT CONSIDERED BY THE AO U/S.54 AS ALLOWABLE E XEMPTION FROM THE LONG TERM CAPITAL GAIN IS CONCERNED, HE OB SERVED THAT DURING THE ASSESSMENT PROCEEDINGS THIS ISSUE WAS NE VER RAISED BY THE ASSESSEE BEFORE THE AO AND THE AO HAS ALSO N OT MADE ANY OBSERVATION REGARDING THE INVESTMENT MADE BY TH E ASSESSEE AND THE CAPITAL GAINS ARISING OUT OF THE SALE OF LA ND INTO PURCHASE OF AGRICULTURAL LAND AND A FLAT. NOTHING WAS FIELD DURING THE COURSE OF APPELLATE PROCEEDINGS TO SUBST ANTIATE THIS CLAIM OF THE ASSESSEE. HE THEREFORE REJECTED THIS GROUND BY THE ASSESSEE BEFORE HIM. IN SUM AND SUBSTANCE, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE BEFORE H IM. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. SALE VALUE AS PER SECTION 50C IS NOT ACCEPTABLE BY US. PLEASE CONSIDER ACTUAL SALE CONSIDERATION. 2. CONSIDER RATE OF ACQUISITION AS ON 01-04-1982 IS RS.1 6/- PER SQ.FT. VALUATION REPORT OF GOVT. VALUER IS ATTACH ED HEREWITH. 3. LTCG AMOUNT INVESTED TO PURCHASE OF AGRICULTURE LA ND & FLAT WHICH IS NOT CONSIDER U/S.54 AS AN ALLOWABLE DE DUCTION FROM LTCG AMOUNT. 10. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATI VE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE I NSTANT CASE, AS AGAINST THE TOTAL CONSIDERATION OF RS.1,18,90,000/- RECEIVED AGAINST THE SALE OF LAND, THE STAMP DUTY VALUATION OR MARKET VALUATION OF THE PROPERTY SOLD WAS RS.1,98,00,000/- . THE SHARE OF THE ASSESSEE IS 50%. WE FIND THE ASSESSEE IN HE R 7 COMPUTATION HAD NOT ADOPTED 50C VALUATION BEING THE STAMP DUTY VALUATION OF RS.99 LAKHS BUT HAS CONSIDERED TH E ACTUAL SALE CONSIDERATION RECEIVED AT RS.59,45,000/-. THE AO H AD ADOPTED THE SALE VALUE OF THE SAID LAND AT RS.99 LAKHS AS P ER THE PROVISIONS OF SECTION 50C. WE FIND IN THE INSTANT CASE THE AO IN THE CASE OF OTHER CO-OWNER SMT. SUSHILABAI N. BH OR HAD REFERRED THE MATTER FOR VALUATION TO THE VALUATION OFFICER. ALTHOUGH SUCH REPORT WAS NOT RECEIVED BY HIM TILL T HE COMPLETION OF THE ASSESSMENT, HOWEVER, WE FIND FROM THE ORDER OF THE CIT(A) THAT THE VALUE OF THE SAID LAND AS PE R THE DVO IS RS.2,00,10,000/- AS ON 02-12-2003 WHICH IS VERY NEA R TO THE STAMP DUTY VALUATION. 11. AS PER THE PROVISIONS OF SECTION 50C, IF THE SA LE CONSIDERATION RECEIVED AS A RESULT OF TRANSFER OF A NY LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY, THE VALUE SO ADOPTED OR ASSESS ED FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALU E OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. HOWEVER, THE ASSESSEE HAS AN OPTION TO CHALLENGE TH E VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORIT Y, IF IT EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY ON TH E DATE OF TRANSFER AND IN THAT CASE THE AO MAY REFER THE VALU ATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE SUCH REFERENCE IS MADE AND THE VALUE ASCERTAINED EXCEEDS THE VALUE AD OPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY, THE VALU E SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF 8 THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. IN THE INSTANT CASE, THE ASSESSEE HAS NOT EXERCISED THIS OPTION. HOWEVER, CONSIDERING THAT THE AO HAS REFER RED THE MATTER TO THE VALUATION OFFICER IN THE CASE OF THE CO-OWNER SMT. SUSHILABAI N. BHOR AND THE VALUATION OFFICER HAS TA KEN THE VALUE AT RS.2,00,10,000/-, THEREFORE, THE ADOPTION OF THE VALUE OF LAND AT RS.1,98,00,000/- BY THE AO IS JUSTIFIED. SINCE THE ASSESSEE HOLDS 50% SHARE IN THE SAID PROPERTY, THE SALE CONS IDERATION TO BE ADOPTED IN THE CASE OF THE ASSESSEE COMES TO RS. 99 LAKHS WHICH HAS BEEN RIGHTLY TAKEN BY THE AO AND UPHELD B Y THE CIT(A). WE THEREFORE FIND NO INFIRMITY IN THE ORDE R OF LD.CIT(A) ON THIS ISSUE SO FAR AS SALE CONSIDERATI ON OF THE SAID LAND AT RS.99 LAKHS IS CONCERNED. 12. NOW COMING TO THE VALUATION OF THE SAID LAND AS ON 01- 04-1981 AT RS.101/- PER SQ.MT BY THE AO, WE FIND TH E ASSESSEE HAD ADOPTED THE FAIR MARKET VALUE OF THE LAND AS ON 01-04-1981 AT RS.160/- SQ.MT. WITHOUT ANY BASIS. NO VALUATION REPORT OR ANY SALE INSTANCE WAS GIVEN SO AS TO JUSTIFY THE RA TE TAKEN AT RS.160/- PER SQ.MT. THE ADOPTION OF RS.101/- PER SQ .MT. IS ON THE BASIS OF SIMILAR SALE INSTANCE OF LAND IN THE S AME AREA. THEREFORE, IN ABSENCE OF ANY DISTINGUISHABLE FEATUR E BROUGHT OUT BEFORE CIT(A) OR BEFORE US, WE FIND NO INFIRMIT Y IN THE ORDER OF THE CIT(A) REJECTING THE ABOVE CONTENTION OF THE ASSESSEE. FURTHER, THE AO HAS OBTAINED THE VALUATI ON REPORT OF THE LAND IN THE CASE OF CO-OWNER WHERE THE VALUER H AS ADOPTED THE VALUE OF THE LAND AT RS.7,25,000/- AS ON 01-04- 1981 WHEREAS 9 THE AO HAS ADOPTED THE SAME AT RS.7,32,250/- WHICH IS RATHER FAVOURABLE TO THE ASSESSEE. SINCE NOTHING CONTRARY WAS BROUGHT BEFORE US TO TAKE A CONTRARY VIEW, THEREFORE, WE FI ND NO INFIRMITY IN THE ORDER OF THE CIT(A) UPHOLDING THE ACTION OF THE AO IN TAKING THE VALUE OF THE LAND AS ON 01-04-1981 AT RS.101/- PER SQ.MT. 13. SO FAR AS THE GROUND RELATING TO DEDUCTION U/S. 54 IS CONCERNED, WE FIND NOTHING IS THERE ON RECORD TO SH OW THAT ASSESSEE HAS MADE INVESTMENT IN SPECIFIED ASSETS SO AS TO ALLOW HER THE BENEFIT OF DEDUCTION U/S.54 OUT OF THE CAPI TAL GAIN. NEITHER ANY EVIDENCE WAS FILED BEFORE THE CIT(A) NO R ANYTHING WAS FILED BEFORE US SO AS TO ALLOW THE CLAIM OF TH E ASSESSEE ON THIS ISSUE. UNDER THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) REJECTING THE CLAIM OF DEDU CTION U/S.54. IN VIEW OF THE ABOVE DISCUSSION WE UPHOLD THE ORDER OF THE CIT(A). THE GROUNDS RAISED BY THE ASSESSEE ARE ACC ORDINGLY DISMISSED. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 24-04-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PA NDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 24 TH APRIL, 2015 SATISH 10 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE