Faiza Begum, CHENNAI V. ITO, CHENNAI

ITA 756/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96324 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 20-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2014
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: B RAMAN KUMAR
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Valuation report
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.756 /MDS./2014 ( ! '! / ASSESSMENT YEAR :2006-07) SMT.FAIZA BEGUM , OLD NO.168,/NEW NO.74, 2 ND FLOOR, NORTH USMAN ROAD, T.NAGAR, CHENNAI-17. VS. THE INCOME TAX OFFICER, WARD I(1), CHENNAI -34. PAN AGFPT 2859 R ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.B.RAMAN KUMAR,ADVOCATE '(#$ % & /RESPONDENT BY : MR.A.V.SREEKANTH,JCIT, D.R ) * % +, / DATE OF HEARING : 20.08.2015 -' % +, /DATE OF PRONOUNCEMENT : 11.11.2015 ITA NO.756 /MDS/2014 2 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHENNA I DATED 17.12.2013 IN ITA NO.159/2013-14 PASSED UNDER SEC. 143(3) READ WITH SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N HER APPEAL. 1. THE ORDER OF THE CIT(A) IS CONTRARY TO LAW, FAC TS AND CIRCUMSTANCES OF THE CASE AND OPPOSED TO NATURAL JUSTICE AND LEG ITMATE EXPECTATION WHEN HE FAILED TO GIVE OPPORTUNITY TO CROSS EXAMINE THE PERSONS WHO FURNISHED STATEMENT TO THE DEPARTMENT WHICH IS CONT RARY TO THE FACTS AND HENCE THE ASSESSMENT DESERVES TO BE ANNULLED. 2. THE ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT THE SALE OF AGRICULTURAL LAND IS INCOME FROM AGRICULTURE LAND A ND IS NOT TAXABLE HAVING REGARD TO THE CONSTITUTIONAL PROVISIONS AND IS ALSO TAXABLE IN VIEW OF SECTION.2(14) OF THE ACT, SINCE THE LAND BEING AGRI CULTURAL LAND AND IS SITUATED OUTSIDE 8 KMS FROM MUNICIPAL LIMITS. 3. THE LEARNED CIT(A), WITHOUT PREJUDICE, ERRED IN ADOPTING SALE VALUE AS PER GUIDELINE WHICH HAS NO SANCTION OF LAW AND IN A NY EVENT THE CIT(A) ITA NO.756 /MDS/2014 3 OUGHT TO HAVE REFERRED THE MATER TO VALUATION OFFIC ER FOR PROPER VALUATION IN TERMS OF SECTION.50C OF THE ACT. 4. THE LD. ASSESSING OFFICER ERRED IN CHARGING INTE REST 234A, 234C & 234D OF THE ACT. 5. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL G ROUNDS. HOWEVER, AT THE TIME OF HEARING BEFORE US THE LD. A R ARGUED ONLY ONE GROUND IE., THE ASSESSEE WAS NOT PROVIDED WITH AN O PPORTUNITY BEFORE THE LD. A.O TO CONFRONT WITH THE DVOS REPORT AS PR OVIDED U/S. 50C(2) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, EARNING INCOME FROM HOUSE OF PROPERTY AND INTEREST INCOME, FILED HER INCOME-TAX RETURN ON 31.07.2008 ADMITTING TOTAL INC OME AS ` 8,29,116/-. SUBSEQUENTLY, THE CASE WAS SELECTED F OR SCRUTINY UNDER CASS AND THE ASSESSMENT U/S.143(3) OF THE ACT WAS C OMPLETED ON 06.11.2008 WHEREIN THE LD. A.O ADOPTED THE GUIDELI NE VALUE OF THE PROPERTY SOLD BY THE ASSESSEE INVOKING THE PROVISIO NS OF SECTION 50C OF THE ACT AS AGAINST ACTUAL SALE CONSIDERATION REC EIVED BY THE ASSESSEE AND MADE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAINS. ITA NO.756 /MDS/2014 4 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD. ASSESSING OFFICER FROM THE INDIVIDUAL TR ANSACTION STATEMENT (ITS) THAT THE ASSESSEE HAD TRANSFERRED A N IMMOVABLE PROPERTY FOR A CONSIDERATION OF ` 41,64,623/- ON 04.04.2005 VIDE SALE DEED DOCUMENT NO.817. THE LD. ASSESSING OFFICER SOU GHT CLARIFICATION FROM THE ASSESSEE AS TO WHY CAPITAL G AIN WAS NOT DECLARED IN HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IN RESPONSE, THE ASSESSEES REPRESENTATIVE FILED DETAI LS OF COPY OF SALE/PURCHASE DEED OF THE PROPERTY TRANSFERRED BY T HE ASSESSEE AND EXPLAINED THAT THE ASSESSEE DID NOT OFFER ANY CAPIT AL GAIN IN HER RETURN OF INCOME AS SHE BELIEVED THAT THE TRANSFERRED LAND S WERE AGRICULTURAL LANDS. THEREAFTER, THE LD. ASSESSING OFFICER DIRECT ED THE ASSESSEES REPRESENTATIVE TO PRODUCE DETAILS OF AGRICULTURAL A CTIVITIES CARRIED ON BY THE ASSESSEE IN THE ASSESSEES AGRICULTURAL LAND WITH NECESSARY DOCUMENTS. IN RESPONSE, THE ASSESSEE FILED COPIES O F CHITTA AND ADANGAL. LD. ASSESSING OFFICER NOTICED THAT THE RE CORDS PRODUCED BY THE ASSESSEE DID NOT INDICATE ANY CROPS CULTIVATED IN THE SAID LANDS. FURTHER, IT WAS NOTICED THAT THE CHITTA AND ADANGA L WAS OBTAINED DURING THE YEAR 1992. FOR VERIFYING THE CLAIM MADE BY THE ASSESSEE ITA NO.756 /MDS/2014 5 REGARDING AGRICULTURAL LAND, THE LD. ASSESSING OFFI CER DIRECTED THE INSPECTOR TO CONDUCT A SPOT INQUIRY IN THE SAID LAN D. AFTER EXAMINING THE SITE AND ENQUIRING THE LOCAL PEOPLE, THE INSPEC TOR SUBMITTED A REPORT STATING THAT THE SAID IMMOVABLE PROPERTY IS SITUATED WITHIN 2 KMS FROM THE THIRIVANMIYUR CITY CORPORATION LIMIT A ND THE IMMOVABLE PROPERTY IS NOT AGRICULTURAL LAND. THEREFORE, THE L D. ASSESSING OFFICER CAME TO A CONCLUSION THAT THE CAPITAL GAIN ARISING OUT OF THE LAND SOLD BY THE ASSESSEE IS TAXABLE UNDER THE HEAD LONG TER M CAPITAL GAIN AND SINCE THE GUIDE LINE VALUE OF THE PROPERTY SOLD WAS MORE THAN THE SALE CONSIDERATION DECLARED IN THE SALE DEED HE INV OKED THE PROVISIONS OF SECTION 50C OF THE ACT. 3.2 ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER AFTER REFERRING THE MATTER TO THE LD. DVO AND TAKING INTO CONSIDERATION OF THE VALUATION REPORT OF THE L D. DVO DATED 19.04.2010. 4. AT THE OUTSET, THE LD. A.R., SUBMITTED BEFORE U S THAT THE ASSESSEE WAS NOT PROVIDED WITH AN OPPORTUNITY TO CO NFRONT WITH THE ITA NO.756 /MDS/2014 6 DVOS REPORT BEFORE THE LD. A.O AND THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE LD. A.O FOR THE LI MITED PURPOSE OF JUSTIFYING THE ASSESSEES STAND ON THE VALUE OF THE PROPERTY BEFORE THE LD. AO AS AGAINST THE VALUATION REPORT OF THE LD. D VO. THE LD. DR STRONGLY OPPOSED TO THE SUBMISSION OF THE LD. AR AN D ARGUED BY STATING THAT THE ASSESSEE HAS NOT CO-OPERATED WITH THE LD. AO DURING THE ASSESSMENT STAGE AND THEREFORE, ONE MORE OPPORT UNITY IS NOT WARRANTED. 5. AFTER HEARING BOTH SIDES AND PERUSING THE ORDERS OF THE REVENUE, IT IS APPARENT THAT THE PROVISIONS OF SECT ION 50C(2) OF THE ACT HAS BEEN OVERLOOKED AT THE TIME OF ASSESSMENT P ROCEEDINGS BY THE LD. AO, PROBABLY DUE TO THE NON-CO-OPERATION AN D PROPER REPRESENTATION BY THE ASSESSEE OR HER COUNSEL. AT THE TIME OF APPELLATE PROCEEDINGS, THE LD. CIT(A) HAD OBTAINED THE VALUATION REPORT OF THE DVO DATED 19.04.2010 WHILE DECIDING T HE ISSUE. HOWEVER, WHILE DOING SO, HE HAD NOT PROVIDED AN OPP ORTUNITY TO THE ASSESSEE TO CONFRONT WITH THE VALUATION REPORT BEFO RE THE LD. AO BY OBTAINING A REMAND REPORT FROM THE LD. A.O. THEREF ORE, IN THE INTEREST ITA NO.756 /MDS/2014 7 OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF THE LD. A.O FOR THE LIMITED PURPOSE OF PROVIDING AN OPPORTUNITY TO THE ASSESSEE/ ASSESSEES COUNSEL TO JUSTIFY THEIR STAND IN REGARD TO THE VALUE OF THE PROPERTY SOLD BEFORE THE LD. A.O AS AGAINST THE VAL UATION REPORT OF THE LD.DVO. THE LD. A.O. SHALL GRANT SUFFICIENT OPPORTU NITY TO THE ASSESSEE OF BEING HEARD ON THIS ISSUE AND PASS APPR OPRIATE ORDER THEREAFTER ON MERIT AND LAW. AT THE SAME TIME, THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE LD. A.O IN ORDER TO EXPEDITE HIS PROCEEDINGS FAILING WHICH THE LD. A.O SHALL PASS AP PROPRIATE ORDER ON MERITS AND AS PER LAW. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE AS INDICATED HEREINABOVE. ORDER PRONOUNCED ON 11 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 11 TH NOVEMBER, 2015. ITA NO.756 /MDS/2014 8 K S SUNDARAM. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF