DEEPAK PAREKH AS LEGAL HEIR OF LATE SHRI PUROSHOTTAM J PAREKH., MUMBAI V. ITO WD 22(1)(4), MUMBAI

ITA 759/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4105 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 759/MUM/2011 ASSESSMENT YEAR: 2007-08 DEEPAK PURSHOTTAM PAREKH, LEGAL HEIR OF LATE SHRI PURSHOTTAM PAREKH, 603, ADINATH TOWER, SUDHA PARK, VALLABH BAUG, EXT. LANE, GHATKOPAR (E), MUMBAI 400 077 PAN: AABPP 5844 Q VS. ITO WD 22(1)(4) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANANT N. PAI REVENUE BY : SHRI S.D. SRIVASTAVA DATE OF HEARING : 24.07.2013 DATE OF PRONOUNCEMENT : 31.07.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT (A)- 33, MUMBAI DATED 12.11.2010 FOR THE ASSESSMENT YEAR 2007-08. 2. GROUND NO.1 RAISED BY THE ASSESSEE RELATES TO TH E ASSESSMENT OF LONG TERM CAPITAL GAINS U/S 50C OF THE INCOME TAX ACT ON THE BASIS OF STAMP DUTY VALUATION OF RS.4,18,68,000/- BY THE AO AND THE SAME CONFIRMED B Y THE LD.CIT(A). 2.1 BRIEFLY STATED, THE ASSESSEE AN INDIVIDUAL WHIL E DECLARING A TOTAL INCOME AT RS.7,45,183/- HAD OFFERED A LONG TERM CAPITAL GAIN OF RS.3,19,340/- OUT OF THE SALE OF TWO IMMOVABLE PROPERTIES FOR WHICH A CONVEYANCE WAS MADE FOR A CONSIDERATION OF RS.1,70,00,000/-. THE SAID CAPITAL GAIN WAS OFFERED BY THE ASSESSEE AFTER DEDUCTING THE INDEXATION COST FROM THE CONSIDERATION OF RS.1,70,0 0,000/-. HOWEVER, IN THE ASSESSMENT FRAMED U/S 143(3), THE AO BASED ON THE A IR INFORMATION, COMPUTED THE LONG TERM CAPITAL GAIN BY TAKING INTO ACCOUNT OF TH E STAMP DUTY VALUATION OF ITA NO. 759/MUM/2011 DEEPAK PURSHOTTAM PAREKH ASSESSMENT YEAR: 2007-08 2 RS.4,18,68,000/- BY INVOKING SECTION 50C OF THE ACT AND THEREBY ENHANCED THE SAID LONG TERM CAPITAL GAIN AT RS.2,51,83,220/- AFTER AL LOWING AN INDEXATION COST OF RS.1,66,84,780/-. ON APPEAL, THE LD.CIT(A) WHILE RE JECTING THE CLAIM OF THE ASSESEE FOR CONSIDERING THE VALUATION ADOPTED BY THE DVO AS THE BASIS FOR COMPUTATION OF THE LONG TERM CAPITAL GAIN, HAD CONFIRMED THE ACTION OF THE AO ON THE BASIS THAT THE ASSESSEE, DURING THE ASSESSMENT PROCEEDINGS HAD NEVER CLAIMED U/S 50C (2) (A) OR (B) THAT THE VALUE TAKEN BY THE STAMP VALUATION AUTHORITY IS MOR E THAN ACCEPTED FAIR MARKET VALUE OF THE PROPERTY ON THE DATE OF TRANSFER. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE HAS RAISED THIS GROUND IN THE APPEAL BEFORE US. 2.2 HAVING HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD, IT IS OBSERVED THAT THE ASSESSEE, DURING THE SCRUTINY ASSESSMENT P ROCEEDINGS, VIDE COMMUNICATION DATED 25.11.2009 ADDRESSED TO THE ITO (AVAILABLE AT PAGE 19 OF THE PAPER BOOK) HAS STATED AT PARA 7 AS FOLLOWS: 7. THE ASSESSEE HAS SOLD THE PROPERTY IN F.Y. 2006 -07. THE VALUATION ADOPTED BY STAMP DUTY AUTHORITY IS VERY HIGH. WE HA VE SUBMITTED BEFORE YOUR GOOD SELF VALUATION REPORT OF A REGISTERED VALUER. WE REQUEST THE MATTER BE REFERRED TO DVO TO DETERMINE THE CORRECT VALUE OF T HE PROPERTY. THE PERUSAL OF THE PARA 13 OF THE ASSESSMENT ORDER ALSO INDICATES THAT THE AO HAS REFERRED THE ISSUE TO THE DVO VIDE HIS OFFICE LETTE R DATED 30.11.2009. THE ASSESSMENT ORDER FURTHER STATES THAT THE SAID ORDER WILL BE MO DIFIED ACCORDINGLY AS SOON AS THE VALUATION REPORT IS RECEIVED FROM THE DVO. THE AFOR EMENTIONED FACTS CLEARLY SUGGESTS THAT THE ASSESSEE HAS CLAIMED BEFORE THE AO, THE VA LUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET V ALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AND THEREBY SATISFIES THE CONDITION LAI D DOWN UNDER SECTION 50C (2) OF THE ACT. WHEN THE FACT BEING SO, WE DO NOT FIND ANY JUS TIFICATION ON THE PART OF THE LD.CIT(A) CONFIRMING THE ACTION OF THE AO ON THE GR OUND THAT THE ASSESSEE HAS NEVER CLAIMED THAT THE VALUE TAKEN BY THE STAMP VALUATION AUTHORITY IS MORE THAN ACCEPTED FAIR VALUE OF THE PROPERTY ON THE DATE OF TRANSFER U/S 50(C)(2)(A) OR (B) OF THE ACT. CONSIDERING THE FACTS IN TOTO, WE ARE OF THE CONSID ERED VIEW THAT IT IS JUST AND PROPER THAT THE FAIR MARKET VALUE OF RS.3,00,53,813/- AS D ETERMINED BY THE DVO IS TO BE TAKEN AS THE BASIS FOR COMPUTING THE LONG TERM CAPITAL GA IN OF THE ASSESSEE. WE DIRECT AND ORDER ACCORDINGLY, GROUND NO.1 IS ALLOWED. ITA NO. 759/MUM/2011 DEEPAK PURSHOTTAM PAREKH ASSESSMENT YEAR: 2007-08 3 3. GROUND NOS. 2, 3 & 4 ARE RESPECTIVELY NOT PRESSE D, GENERAL IN NATURE AND CONSEQUENTIAL, THE SAME DO NOT REQUIRE ADJUDICATION . 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JULY, 2013. SD/- SD/- (R. S. SYAL) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.07.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.