T Vijaya Saradhi, Secunderabad V. Addl.CIT, Range-8, Hyderabad

ITA 708/HYD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6553 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 31-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Fair market value
• Section: 143(3); 50C; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.708/HYD/2014 ASSESSMENT YEAR 2008-2009 MR. T. VIJAYASARADHI HYDERABAD. PAN AETPT4782K VS. ADDL. CIT, RANGE - 8, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. M.V. ANIL KUMAR FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 3 1 .0 3 .2016 DATE OF PRONOUNCEMENT : 13 .05.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2008- 2009. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ASSESSMENT OR DER IN NOT MAKING A REFERENCE TO THE DEPARTMENT VALUATION OFFICER (DVO) FOR VALUATION OF THE PROPERTY AND A PPLYING THE PROVISIONS OF SECTION 50C OF THE I.T. ACT AND COMPUTING THE CAPITAL GAINS THEREAFTER. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 359 DAYS IN FILING OF THE APPEAL BEFORE THE TRIBUNA L. THE LD. COUNSEL FOR THE ASSESSEE MR. M.V.ANIL KUMAR, S/ O. M.V. SUBBA RAO HAS FILED AN AFFIDAVIT EXPLAINING TH E 2 ITA.NO.708/HYD/2014 MR. T. VIJAYA SARADHI, HYDERABAD. REASONS FOR THE DELAY. IN THE SAID AFFIDAVIT, IT IS SUBMITTED THAT THE ORDER OF THE CIT(A) DATED 18 TH FEBRUARY, 2013 WAS SERVED ON THE ASSESSEE ON 22 ND FEBRUARY, 2013 AND THE SAME WAS HANDED-OVER TO HIM FOR FURTHER APPEAL BY T HE ASSESSEE. IT WAS SUBMITTED THAT AS THE LD. COUNSEL WAS BUSY WITH TIME BARRING ASSESSMENTS, HE FORGOT TO IN FORM HIS CLIENT REGARDING THE DUE DATE FOR FILING OF THE APPEAL BEFORE THE TRIBUNAL AND IT WAS ONLY ON RECEIPT OF T HE ORDER UNDER SECTION 154 DATED 20 TH MARCH, 2014 FROM THE DEPARTMENT THAT HE REALIZED THAT FURTHER APPEAL TO THE ITAT WAS NOT FILED. IT WAS SUBMITTED THAT THE ORDER OF THE CIT(A) WAS MISPLACED AND THEN AFTER SEARCH AND TRAC ING THE SAME, THE APPEAL WAS PREPARED AND FILED ON 16.04.2014 RESULTING IN DELAY OF 359 DAYS. IT WAS, THEREFORE, PRAYED THAT THE DELAY MAY BE CONDONED AN D THE APPEAL BE ADMITTED AND ADJUDICATED. THE LD. COUNSEL REITERATED THE SUBMISSIONS MADE IN THE AFFIDAVIT WH ILE THE LD. D.R. STRONGLY OPPOSED THE CONDONATION OF DELAY. 3. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT IT IS THE ADVOCATE OF THE ASSESSEE WHO HAS FILED THE AFFIDAVIT STATING THE RE ASONS FOR FILING OF APPEAL BELATEDLY. TAKING THE SAME INTO CONSIDERATION, WE FIND THAT THE ASSESSEE IS NOT AT FAULT FOR NOT FILING THE APPEAL IN TIME. IT IS THE ADVOCATE W HO HAS MISPLACED THE ORDER AND HAS FAILED TO INFORM THE AS SESSEE OF THE DUE DATE OF FILING OF THE APPEAL. IN VIEW OF THE SAME, WE ARE INCLINED TO CONDONE THE DELAY OF 359 DAYS AN D ADMIT THE APPEAL AND ADJUDICATE AS UNDER. 3 ITA.NO.708/HYD/2014 MR. T. VIJAYA SARADHI, HYDERABAD. 4. THE FACTS LEADING TO THE ABOVE APPEAL ARE THAT THE ASSESSEE, AN INDIVIDUAL, HAD FILED HIS RETURN O F INCOME FOR THE A.Y. 2008-09 ON 29.09.2008, DECLARING TOTAL INCOME OF RS.31,67,855. THE ASSESSEE HAD DECLARED INCOME FROM HOUSE PROPERTY, CONSULTANCY BUSINESS AND CAPITAL GAINS. DURING THE ASSESSMENT PROCEEDI NGS UNDER SECTION 143(3) OF THE I.T. ACT, THE A.O. OBSE RVED THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN ON SALE OF LAND AT RS.29,50,938. THE A.O. OBSERVED THAT THE AS SESSEE HAD ENTERED INTO AN AGREEMENT OF SALE CUM- GPA DAT ED 16.06.2007 AT RS.1 CRORE WHEREAS THE SRO VALUE FOR THE PROPERTY WAS AT RS.3 CRORES. HE THEREFORE, ADOPTED THE VALUE OF RS.3 CRORES FOR COMPUTATION OF CAPITAL GAI NS. IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE A.O, A SSESSEE SUBMITTED THAT PROVISIONS OF SECTION 50C ARE NOT APPLICABLE TO THE FACTS OF THE ASSESSEE BECAUSE THE CONSIDERATION WAS FIXED KEEPING IN VIEW DISPUTES TH AT WERE THERE IN RESPECT OF THE PROPERTY TRANSFERRED. IT WAS ALSO SUBMITTED THAT THE SAME WAS BROUGHT TO THE NOT ICE OF THE A.O. THROUGH LETTER DATED 14.12.2007 REQUESTING THE A.O. TO REFER THE MATTER TO THE DVO. THE A.O. HOWEV ER, WAS NOT CONVINCED WITH THE ASSESSEES CONTENTIONS A ND HELD THAT PROVISIONS OF SECTION 50C ARE CLEARLY APP LICABLE TO THE CASE BEFORE HIM. HE FURTHER OBSERVED THAT TH E ASSESSEE HAS NEVER CHALLENGED THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY AND THEREFORE, THERE WAS NO NEED FOR REFERENCE TO THE DVO. HE THEREFORE, ADMITT ED RS.3 CRORE AS SALE CONSIDERATION AND COMPUTED THE LONG T ERM CAPITAL GAIN ACCORDINGLY. AGGRIEVED, ASSESSEE PREFE RRED AN 4 ITA.NO.708/HYD/2014 MR. T. VIJAYA SARADHI, HYDERABAD. APPEAL BEFORE THE CIT(A) CHALLENGING THE VALUE AND ALSO SEEKING A REFERENCE TO THE DVO. THE CIT(A), HOWEVE R, CONFIRMED THE ASSESSMENT ORDER AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS CHALLENGED THE VALUA TION OF RS.3 CRORES AS AGAINST ACTUAL VALUE RECEIVED BY THE ASSESSEE OF RS.1 CRORE BEFORE THE A.O. AND HAD REQU ESTED THE A.O. FOR REFERENCE TO THE DVO. IT IS THE CASE O F THE REVENUE THAT THE ASSESSEE HAD NEVER CHALLENGED THE SRO VALUE AND THEREFORE, THERE WAS NO NEED FOR ANY REFE RENCE TO THE DVO. WE FIND THAT AT PAGE 24 OF THE PAPER BO OK, ASSESSEE HAS FILED A COPY OF THE LETTER DATED 14.12 .2007 FOR REFERENCE TO THE DVO. THE CONTENTS OF THE SAID LETTER ARE REPRODUCED HEREUNDER FOR READY REFERENCE : TO THE INCOME TAX OFFICER, WARD-6(1), HYDERABAD. SUB : VIJAY SARADHI - PAN NO- AETPT4782K, REGARDING FAIR MARKET VALUE OF OPEN LAND SITUATED A T ALWAL. THE SAID LAND IS UNDER ENCROACHMENT INCLUDIN G DISPUTES AND THERE ARE NO BUYERS. I COULD NEITHER U SE IT NOR DISPOSE IT OFF DUE TO THESE COMPLICATIONS. A T LAST A BUYER HAD COME FORWARD AND HAD TO BE SOLD AT A PRICE HE AGREED UPON IN AN 'AS IS CONDITION'. THE T OTAL SALE CONSIDERATION RECEIVED IS RS.1 CRORE. THE DOCUMENT IS REGISTERED WITH THE DETAILS OF THE SAID SALE CONSIDERATION. HOWEVER THE REGISTRAR OF STAMP VALUED THE PROPERTY AS PER THEIR VALUATION. IN LIGH T OF THE ABOVE, 'WE REQUEST YOU TO KINDLY REFER THE SAID 5 ITA.NO.708/HYD/2014 MR. T. VIJAYA SARADHI, HYDERABAD. PROPERTY FOR VALUATION BY YOUR VALUATION CELL OR SU CH OTHER AUTHORITY DEEMED FIT TO DETERMINE THE MARKET VALUE IN THE SAID CIRCUMSTANCE OF THE CASE. I DO NOT AGREE WITH THE VALUE DETERMINED BY THE SUB - REGISTRAR FOR THE PURPOSE OF COLLECTION OF STAMP DU TY. THE ACTUAL SALE CONSIDERATION RECEIVED IS ONLY RS. 1 CRORE. HENCE THE PROVISIONS OF SECTION 50C FOR DETERMINATION OF SALE CONSIDERATION DO NOT APPLY. ACCORDING TO THE PROVISIONS OF SECTION 50C SUB-SECT ION 2 THE MATTER MAY BE REFERRED TO THE VALUATION CELL. I REQUEST YOU TO KINDLY REFER THE MATTER TO THE VALUATION CELL FOR ASCERTAINING THE FAIR MARKET VAL UE OF THE PROPERTY IT WOULD FETCH IN LIGHT OF THE ENCROACHMENTS, LEGAL DISPUTES AND MY INABILITY TO FIND A BUYER. 5.1. FURTHER, WE FIND THAT SUB-SECTION (2) OF SECT ION 50C PROVIDES THAT WHERE THE ASSESSEE CHALLENGES THE VALUATION ADOPTED BY THE SRO TO BE EXCESSIVE, THEN THE A.O. IS BOUND TO MAKE REFERENCE TO THE DVO FOR THE VALUATION OF THE FAIR MARKET VALUE OF THE PROPERTY. ADMITTEDLY, IN THE CASE BEFORE US, THERE WERE DISPU TES WITH REGARD TO THE PROPERTY AND ASSESSEE HAD ALSO F ILED COPIES OF THE ORDERS OF THE COURT TO DEMONSTRATE TH AT THERE WERE DISPUTES WITH REGARD TO THE PROPERTY. IN SUCH CIRCUMSTANCES, THE SRO VALUE OF THE PROPERTY CANNOT BE ADOPTED. FURTHER, THE A.O. HIMSELF HAS RECORDED THA T THE ASSESSEE HAD REQUESTED FOR A REFERENCE TO THE DVO F OR VALUATION OF THE PROPERTY. SUCH BEING THE CASE, THE A.O. OUGHT TO HAVE REFERRED THE MATTER TO THE DVO. IN VI EW OF THE SAME, WE SET ASIDE THE ORDERS OF BOTH THE AUTHO RITIES BELOW AND REMIT THE ISSUE TO THE FILE OF THE A.O. W ITH A DIRECTION TO REFER THE MATTER TO THE DVO FOR THE VA LUATION 6 ITA.NO.708/HYD/2014 MR. T. VIJAYA SARADHI, HYDERABAD. OF THE PROPERTY. NEEDLESS TO MENTION THAT THE ASSES SEE SHALL BE GIVEN A FAIR OPPORTUNITY OF BEING HEARD BO TH BEFORE THE A.O. AND DVO. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13.05.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH MAY, 2016 VBP/- COPY TO : 1. MR. T. VIJAYA SARADHI, HYDERABAD. C/O. MR. M. ANANDAM & CO., CHARTERED ACCOUNTANTS, 7 - A, SURYA TOWERS, S.P. ROAD, SECUNDERABAD. 2. THE ADDL. CIT, RANGE - 8, HYDERABAD. 3. CIT(A) - III , HYDERABAD. 4. CIT - II , HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE