N.Mohammed Fahim, CHENNAI V. ITO, Chengalput

ITA 757/CHNY/2014

• Counselvise Citation: 75721714 RSA 2014
• 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 SREEKANTH
• Assessee Lawyers: B RAMA 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.757 /MDS./2014 ( ! '! / ASSESSMENT YEAR :2006-07) SHRI N. MOHAMMED FAHIM, OLD NO.168/NEW NO.74, 2 ND FLOOR, NORTH USMAN ROAD, T. NAGAR, CHENNAI 600 017. VS. THE INCOME TAX OFFICER, WARD I(1), CHENNAI 600 034. PAN AGPRM 5739 P ( / APPELLANT ) ( / RESPONDENT ) #$ % & / APPELLANT BY : MR.B. RAMA KUMAR, ADVOCATE '(#$ % & / RESPONDENT BY : MR.A.V. SREEKANTH, JCIT ) * % +, / DATE OF HEARING : 20.08.2015 -' % +, /DATE OF PRONOUNCEMENT : 11.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: ITA NO.757/MDS/2014 2 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.154/2013-14 PASSED UNDER SEC. 143(3) READ WITH SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N HIS 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 SACTION OF LAW AND IN AN Y EVENT THE CIT(A) OUGHT TO HAVE REFEERED 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 IN TEREST 234A, 234C & 234D OF THE ACT. ITA NO.757/MDS/2014 3 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 HIS INCOME-TAX RETURN ON 31.07.2006 ADMITTING TOTAL INC OME AS ` 1,49,821/-. 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. 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 T WO IMMOVABLE ITA NO.757/MDS/2014 4 PROPERTIES FOR A CONSIDERATION OF ` 49,57,950/- AND RS.53,96,611/- ON 04.04.2005 VIDE SALE DEED DOCUMENTS NO.818 AND 820 RESPECTIVELY. THE LD. ASSESSING OFFICER SOUGHT CLARIFICATION FROM THE ASSESSEE AS TO WHY CAPITAL GAIN WAS NOT DECLARED IN HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IN RESPONSE, THE ASSESSE ES REPRESENTATIVE FILED DETAILS OF COPIES OF SALE/PURCHASE DEEDS OF T HE PROPERTIES TRANSFERRED BY THE ASSESSEE AND EXPLAINED THAT THE ASSESSEE DID NOT OFFER ANY CAPITAL GAIN IN HIS RETURN OF INCOME AS H E BELIEVED THAT THE TRANSFERRED LANDS WERE AGRICULTURAL LANDS. THEREAFT ER, THE LD. ASSESSING OFFICER DIRECTED THE ASSESSEES REPRESENT ATIVE TO PRODUCE DETAILS OF AGRICULTURAL ACTIVITIES CARRIED ON BY TH E ASSESSEE IN THE ASSESSEES AGRICULTURAL LAND WITH NECESSARY DOCUMEN TS. IN RESPONSE, THE ASSESSEE FILED COPIES OF CHITTA AND ADANGAL. L D. ASSESSING OFFICER NOTICED THAT THE RECORDS PRODUCED BY THE AS SESSEE DID NOT INDICATE ANY CROPS CULTIVATED IN THE SAID LANDS. FU RTHER, IT WAS NOTICED THAT THE CHITTA AND ADANGAL WERE OBTAINED DURING TH E YEAR 1992. FOR VERIFYING THE CLAIM MADE BY THE ASSESSEE REGARDING AGRICULTURAL LAND, THE LD. ASSESSING OFFICER DIRECTED THE INSPECTOR TO CONDUCT A SPOT INQUIRY IN THE SAID LAND. AFTER EXAMINING THE SITE AND ENQUIRING THE ITA NO.757/MDS/2014 5 LOCAL PEOPLE, THE INSPECTOR SUBMITTED A REPORT STAT ING THAT THE SAID IMMOVABLE PROPERTIES ARE SITUATED WITHIN 2 KMS FROM THE THIRIVANMIYUR CITY CORPORATION LIMIT AND THE IMMOVA BLE PROPERTIES ARE NOT AGRICULTURAL LANDS. THEREFORE, THE LD. ASSE SSING OFFICER CAME TO A CONCLUSION THAT THE CAPITAL GAIN ARISING OUT O F THE LAND SOLD BY THE ASSESSEE IS TAXABLE UNDER THE HEAD LONG TERM CAPIT AL GAIN AND SINCE THE GUIDE LINE VALUE OF THE PROPERTY SOLD WAS MORE THAN THE SALE CONSIDERATION DECLARED IN THE SALE DEED HE INVOKED 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 DVO AND TAKING INTO ACCOUNT OF THE VALUATION REPORT 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 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 L IMITED PURPOSE OF JUSTIFYING THE ASSESSEES STAND ON THE VALUE OF THE PROPERTY BEFORE THE ITA NO.757/MDS/2014 6 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 HIS 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 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/THE ASSESSEES COUNSEL TO JUSTIFY THEIR ST AND IN REGARD TO THE ITA NO.757/MDS/2014 7 VALUE OF THE PROPERTY BEFORE THE LD. A.O. AS AGAINS T THE VALUATION REPORT OF THE LD.DVO. THE LD. A.O. SHALL GRANT SUFF ICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD ON THIS ISSUE AND PA SS APPROPRIATE ORDER THEREAFTER ON MERIT AND LAW. AT THE SAME TIM E, THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE LD. A.O. IN OR DER TO EXPEDITE HIS PROCEEDINGS FAILING WHICH THE LD. A.O. SHALL PASS A PPROPRIATE 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. ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 11 TH NOVEMBER, 2015. KRI. % '+./ 0 /'+ /COPY TO: 1. #$ /APPELLANT 2. '(#$ /RESPONDENT 3. ) 1+ () /CIT(A) 4. ) 1+ /CIT 5. /4 '+5 /DR 6. 6! 7* /GF