LAXMI NARAYAN MALAV, Kota V. ITO, Kota

ITA 73/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1961 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA CIT DHK
• Assessee Lawyers: DEVENDRA KUMAR; DINESH KUMAR S
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 143(3); 50C; 54F; 68; 148; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 73/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. LAXMI NARAYAN MALAV S/O SHRI RAMI KISHAN VILLAGE DEVALI ARAB, TEHSIL LADPURA, KOTA. CUKE VS. INCOME TAX OFFICER, WARD 2(1), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. BHWPM 3064 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI DEVENDRA KUMAR & SHRI DINESH KUMAR (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.S NEHRA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02/11/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE PERTAINING TO ASSESSMEN T YEAR 2011-12 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), KOTA, DAT ED 21.10.2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) KOTA ERRED IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 52,13,37 6/- IN AN ORDER PASSED U/S 143(3)/148 OF THE INCOME TAX ACT 1961 BY TAKING THE SALES CONSIDERATION OF THE AGRICULTURAL LAND SOLD AT RS. 89,51,250/- INSTEAD OF NET SALES CONSIDERATION OF RS. 23,73,473/- (SHOWN B Y THE ASSESSEE IN THE RETURN OF INCOME FILED ON 07.05.2012) FOR THE P URPOSE OF COMPUTING DEDUCTION UNDER SECTION 54F OF THE IT ACT, 1961, 19 61 [GOA NO. 1.1 /CIT (A)]. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) KOTA ERRED IN CONFIRMING THE 2 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. ACTION OF THE AO TAKING THE COST OF CONSTRUCTION OF THE HOUSE IN THE NAME OF THE ASSESSEE AT RS 16,64,000/- INSTEAD OF R S 16,75,200/- FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 54 F OF THE IT ACT 1961, [GOA NO. 1.2 /CIT (A)]. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) KOTA ERRED IN CONFIRMING THE ACTION OF THE AO BY NOT TAKING THE COST OF CONSTRUC TION OF THE HOUSE ON THE PLOT IN THE NAME OF THE SON OF THE ASSESSEE AMO UNTING TO RS 909,500/- FOR THE PURPOSE OF COMPUTING DEDUCTION UN DER SECTION 54F OF THE ACT ARBITR7RILY. [GOA NO. 1.3 /CIT (A)]. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) KOTA ERRED IN CONFIRMING THE ACTION OF THE AO MAKING ADDITION OF RS. 90,000/- AS UNDISCLOSED SHORT TERM CAPITAL GAIN WITHOUT APPLICATION OF MIND AND W ITHOUT CONSIDERING THE SUBMISSION MADE ON 24.02.2014 ARBITRARILY. [GOA NO. 1.3 /CIT (A)]. 5. THAT THE APPELLANT CRAVES TO ADD, DELETE, ALTER AND AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT TH E TIME OF HEARING. 1.1 DURING THE COURSE OF HEARING, LD. COUNSEL FOR T HE ASSESSEE HAD ALSO TAKEN AN ADDITIONAL GROUND THAT READS AS UNDER:- GROUND:- THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE B OTH ASSESSING OFFICER AND APPELLATE AUTHORITY GROSSLY E RRED IN LAW AND FACTS IN NOT REFERRING THE VALUATION TO THE VALUATION OFF ICER. 2. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSMEN T WAS REOPENED BY ISSUING NOTICE U/S 148 DATED 24/01/2013 ON THE BASIS THAT I &CI, JAIPUR INTIMATED THE AO ABOUT SALE OF AGRICULTURAL LAND BY THE ASSESSEE. IT WAS ALSO INTIMATED THAT THE DLC RATE AS PER THE SUB-REGISTRAR WAS AT RS. 1,79,02,50 0/- AND IN RESPECT OF THE SHARES OF THE ASSESSEE IT WAS RS. 89,51,250/-. SUBSEQUENT LY, THE ASSESSMENT WAS FRAMED U/S 143(3) READ WITH SECTION 148 THEREBY THE ASSESS ING OFFICER COMPUTED TOTAL INCOME OF RS. 53,05,484/- AFTER COMPUTING THE CAPIT AL GAIN ON THE BASIS OF THE DLC 3 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. VALUE OF THE PROPERTY. AGGRIEVED BY THIS, ASSESSE E HAS PREFERRED THE APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL. 3. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE TH IS TRIBUNAL. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITIONAL GROUND MAY BE DECIDED FIRST. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS AGAINST NOT REFERRING THE VALUATION OF PROPERTY TO THE DVO DESPITE THE AS SESSEE HAD DISPUTED THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. LD. COUN SEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGE NO. 3 OF THE ASSESSMENT ORDER WHE REIN THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED BY THE ASSESSING OFFICER. IN SUPPORT OF THE CONTENTION, THE ASSESSEE HAD DISPUTED VALUE OF PROPERTY ADOPTED BY THE ASSESSING OFFICER. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSION. THE WRITTEN SUBMISSIONS OF THE ASSESSE E ARE REPRODUCED AS UNDER:- 1. THAT APPELLANT BEFORE A.O. ASSERTED THAT FAIR MARKE T VALUE IN THE PRESENT CASE WAS SUBSTANTIALLY LOWER THAN THE DLC R ATE ON THE VARIOUS REASONS AS RECORDED IN THE ASSESSMENT ORDER (PAGE 2 AND 3 OF ASSESSMENT ORDER). 2. BEFORE CIT APPEAL ALSO HUMBLE APPELLANT SUBMITTE D THAT THE TRANSACTION OF SALE WAS DISTRESS SALE UNDER DISPUTE AS IS EVIDENT FROM AGREEMENT, REVENUE BOARD ORDER AND LATER COMPROMISE (REFER PAGES 29 TO 43 OF PAPER BOOK). APPELLANT BEFORE CIT APPEA L ALSO REQUESTED FOR GETTING THE VALUATION REPORT OF VALUER. (REFER PAGE 12 OF APPEAL ORDER). IT HAS BEEN SUBMITTED AS UNDER: 'WITHOUT PREJUDICE IT IS SUBMITTED THAT NOW BEFORE YOUR HONOUR THE ASSESSEE WANTS TO CHALLENGE THE VALUATION ADOPTED B Y THE SUB REGISTRAR AND A DETAILED VALUATION FROM THE REGISTE RED VALUER MAY KINDLY BE CALLED FOR. IT IS TRITE LAW THAT THE POWE RS OF THE CIT (APPEAL) ARE COTERMINOUS WITH THE POWERS OF THE A.O. AS SUCH THE CHALLENGE / 4 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. CLAIM AS CONTEMPLATED UNDER SECTION 50C(2)(A) OF TH E ACT REQUIRED TO BE MADE BEFORE THE AO IS NOW BEING MADE BEFORE YOUR HONOUR, WHICH MAY KINDLY BE ACCEPTED AND THE AO MAY KINDLY BE ASK ED TO GET THE VALUATION REPORT FROM THE VALUER.' HUMBLE APPELLANT SUBMITS THAT IN LAW ONLY ASSERTION OR DISPUTE TO VALUATION IS SUFFICIENT FOR ACTION UNDER SECTION 50 C(2)(A) OF THE ACT. REFERENCE IN THIS REGARD MAY BE MADE TO THE FOLLOWI NG : S. MUTHURAJA VS. COMMISSIONER OF INCOME TAX (2014) 369 ITR 483 (MAD.) APPADURAI VIJAYARAGHAVAN VS. JOINT COMMISSIONER OF INCOME TAX (2014) 369 ITR 486 (MAD) SUNIL KUMAR AGARWAL VS. COMMISSIONER OF INCOME TAX (2015) 372 ITR 83 (CAL.) 4.1 LD. D/R OPPOSED THE SUBMISSIONS AND SUPPORTED T HE ORDER OF THE AUTHORITIES BELOW. 4.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSING OFFICER HAS I NVOKED PROVISIONS OF SECTION 50C OF THE ACT IN RESPECT OF THE VALUE OF THE PROPERTY. AS PER SECTION 50C(1) , IN CASE WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS L ESS THAN THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY ANY AUTHORITY OF A STAT E GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSEE (OR ASSESSABLE) SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT O F SUCH TRANSFER AND AS PER SECTION 50C(2)(A)- WHERE THE ASSESSEE CLAIMS BEFORE ANY ASS ESSING OFFICER THAT THE VALUE 5 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. ADOPTED FOR ASSESSED (OR ASSESSABLE) BY THE STAMP VALUATION AUTHORITY UNDER SUB- SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PR OPERTY ON DATE OF TRANSFER. FURTHER, AS PER SECTION 50C(2)(B) THE VALUE SO AD OPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT. THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER. 4.3 THERE IS NO AMBIGUITY IN THE ABOVE PROVISIONS. THEREFORE, IN OUR CONSIDERED VIEW, WHEN THE ASSESSING OFFICER ADOPTS FULL VALUE OF CONSIDERATION U/S 48 OF ANY PROPERTY IN TERMS OF SECTION 50C(1) OF THE ACT AND THE ASSESSEE MAKES A CLAIM BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY U/S 50C(2)(A) EXCEED THE FAIR MARKET VALU E OF THE PROPERTY AS ON THE DATE OF TRANSFER. THE AO IS REQUIRED TO REFER THE VALUA TION OF THE CAPITAL ASSET TO VALUATION OFFICER. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSING OFFICER HAS ADOPTED THE FULL VALUE OF THE CONSIDERATION OF THE PROPERTY IN TERMS AND SECTION 50C(1) OF THE ACT I.E. THE VALUE ADOPTED BY THE STAMP VALUATION A UTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY QUA THE TRANSFER OF THE CAPIT AL ASSET. WE THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE OF VALUATION OF PROPERTY TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRE SH. THE AO WOULD REFER THE ISSUE OF VALUATION OF PROPERTY TO THE VALUATION OFFICER AS P ROVIDED UNDER SECTION 50C(2) OF THE ACT. THUS, THIS ADDITIONAL GROUND IS ALLOWED F OR STATISTICAL PURPOSE. 5. NOW, COMING TO OTHER GROUNDS OF THE ASSESSEES A PPEAL. 6. GROUND NOS. 1 TO 4 ARE AGAINST ADOPTING THE VALUE OF PROPERTY OF RS. 89,51,250/- AND DISALLOWING THE CLAIM OF DEDUCTION 54F OF THE ACT. 6 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. 6.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSION. 6.2 ON THE CONTRARY, LD. D/R OPPOSED THE SUBMISSION S. 6.3 WE HAVE HEARD THE RIVAL CONTENTIONS. AS WE ALL OWED THE ADDITIONAL GROUND OF THE ASSESSEES APPEAL BY OBSERVING AS UNDER:- 4.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIE S BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSING OFFICER HAS INVOKED PROVISIONS OF SECTION 50C OF THE ACT IN RESPECT OF THE VALUE OF THE PROPERTY. AS PER SECTION 50C(1) , IN CASE WHERE THE CONSIDERATIO N RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR A SSESSEE (OR ASSESSABLE) SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER AND AS PER SECTION 50C(2)(A)- WHERE THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED FOR ASSESSED (OR ASSESSABLE ) BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY ON DATE OF TRANSFER. FURTHER, AS PER SECTION 50C(2 )(B) THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAMP VALUATION AUTHORITY UNDER SUB- SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT. THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE CA PITAL ASSET TO A VALUATION OFFICER. 4.3 THERE IS NO AMBIGUITY IN THE ABOVE PROVISIONS. THEREFORE, IN OUR CONSIDERED VIEW, WHEN THE ASSESSING OFFICER ADOPTS FULL VALUE OF CONSIDERATION U/S 68 OF ANY PROPERTY IN TERMS OF SECTION 50C(1) O F THE ACT AND THE ASSESSEE MAKES A CLAIM BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY U/S 50C(2)(A) EXCEED THE FAIR MARKET VALUE OF THE 7 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA. PROPERTY AS ON THE DATE OF TRANSFER. THE AO IS REQ UIRED TO REFER THE VALUATION OF THE CAPITAL ASSET TO VALUATION OFFICER. IN THE P RESENT CASE, ADMITTEDLY, THE ASSESSING OFFICER HAS ADOPTED THE FULL VALUE OF THE CONSIDERATION OF THE PROPERTY IN TERMS AND SECTION 50C(1) OF THE ACT I.E . THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMEN T OF STAMP DUTY QUA THE TRANSFER OF THE CAPITAL ASSET. WE THEREFORE, SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE OF VALUATIO N OF PROPERTY TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. THE AO WOULD REFER THE ISSUE OF VALUATION OF PROPERTY TO THE VALUATION OFFICER AS P ROVIDED UNDER SECTION 50C(2) OF THE ACT. THUS, THIS ADDITIONAL GROUND IS ALLOWED FOR STATISTICAL PURPOSE. THEREFORE, WE DEEM IT PROPER TO RESTORE THESE GROUN DS AS WELL TO THE ASSESSING OFFICER FOR DECIDING AFRESH. THUS, THESE GROUNDS A RE ALLOWED FOR STATISTICAL PURPOSE. 7. GROUND NO. 5 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 2ND DAY OF NOVEMBER 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 02/11/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI LAXMI NAARAYAN MALAV, KOTA. 2. THE RESPONDENT- THE ITO, WARD- 2(1), KOTA. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 73/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 8 ITA NO. 73/JP/2017. SHRI LAXMI NARAYAN MALAV, KOTA.