DR. CHANDIDAS GUPTA, MUMBAI V. ITO 11(2)(2), MUMBAI

ITA 818/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100774 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R N VASANI AJESH SHAH
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 50C

Judgement Text

MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . . , , BEFORE SHRI B R BASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , J UDICIAL MEMBER ITA NO. : 8 18 /MUM/20 1 3 ( ASSESSMENT YEAR: 200 4 - 0 5 ) MRS. KUSUM CHANDIDAS GUPTA , (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA), 23, GREEN PARK, 11 ST. PAUL ROAD, BANDRA, MUMBAI - 400 050 .: PAN: AA F P G 3871 J VS INCOME TAX OFFICER 11(2) (2 ), AAYAKAR BHAVAN, NEW MARINE LINES, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R . N. VASANI AJESH SHAH RESPONDENT BY : SHRI D URGA DUTT /DATE OF HEARI NG : 23 - 0 6 - 201 5 / DATE OF PRONOUNCEMENT : 19 - 08 - 201 5 ORDER , . . : PER AMIT SHUKLA, AM : THE A FORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 26.11.2012 PASSED BY CIT(A) - III , MUMBAI FOR QUANTUM OF ASSESSMENT PASSED U/S 143(3) IN PURSUANCE OF DIRECTION GIVEN BY THE TRIBUNAL U/S 254 FOR THE ASSESSMENT YEAR 2004 - 05. 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE TAXING OF CAPITAL GAIN BY INVOKING THE PROVISIONS OF SECTION 50C ON THE SALES OF PROPERTY. 3. BRIEF BACKGROUND OF THE CASE IS THAT ORIGINAL ASSESSMENT WAS MADE U/S 143(3) ON 22.11.2006 , WHEREIN THE LONG - TERM - CAPITAL - GAINS ON SALE OF PROPERTY WAS DETERMINED AT RS. 5,99,000/ - BY ADOPTING FAIR MARKET VA LUE AS PER STAMP VALUATION U/S 50C AT MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 2 RS. 20,06,500/ - AS AGAINST THE SALE AMOUNT MENTIONED IN THE SALE DEED AT RS. 13 LAKHS. IN THE FIRST APPEAL, THE LD CIT(A) HAS UPHELD THE FINDING OF THE ASSESSING OFFICER. HOWEVER, THE TRIBUNAL SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (DVO) IN TERMS OF SECTION 50C(2)(A) AND COMPUTE THE CAPITAL GAINS IN ACCORDANCE WITH THE LAW. THE RELEVANT OBSERVATION AND THE DIRECTION OF THE TRIBUNAL READS AS UNDER: - 5. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO GONE THROUGH THE RELEVANT STATUTORY PROVISIONS. UNDER SUB - SECTION (1) OF SECTION 50C, IF THE SALE CONSIDERATION FOR THE PROPERTY IS LESS THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES, THE CAPITAL GAINS CAN BE COMPUTED BY THE ASSESSING OFFICER BY TAKING THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES AS THE FULL VALUATION OF THE CONSIDERATION. HOWEVER, UNDER CLAUSE (A) OF SUB - SECTION (2), IF THE ASSESSEE CLAIMS THAT THE VALUATION FOR STAMP DUTY PURPOSES EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY, THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF THE PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER. IN THE CASE BEFORE US THE ASSESSING O FFICER HIMSELF HAS ACCEPTED IN THE ASSESSMENT ORDER THAT A CLAIM HAD BEEN MADE BY THE ASSESSEE UNDER THE AFORESAID PROVISIONS ON THE BASIS OF THE APPROVED VALUERS REPORT, ACCORDING TO WHICH THE FAIR MARKET VALUE OF THE PROPERTY WAS RS.11,28,000/ - WHICH IS LESS THAN THE STAMP DUTY VALUE OF RS.20,06,500/ - . HE HAS NOT DISPUTED THE ASSESSEES CLAIM THAT THE AFORESAID PROVISION IS APPLICABLE AND THAT A REFERENCE HAS TO BE MADE TO THE DEPARTMENTAL VALUATION OFFICER. ALL THAT HE HAS STATED IN THE ASSESSMENT ORDER IS THAT THERE IS NO TIME LEFT TO CARRY OUT THE EXERCISE OF REFERRING THE VALUATION TO THE DEPARTMENTAL VALUATION OFFICER AS THE ASSESSMENT WAS GETTING BARRED BY TIME ON 31.12.2006. WE ARE UNABLE TO UPHOLD THE STAND TAKEN BY THE ASSESSING OFFICER. THE ASSE SSMENT ORDER MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 3 ITSELF WAS PASSED ON 22.11.2006 AND FIVE WEEKS TIME WAS AVAILABLE TO THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT WHICH WAS GETTING BARRED BY TIME ONLY ON 31.12.2006. THE ASSESSEE HAD MADE THE CLAIM BY LETTER DATED 6.11.2006 WHICH WAS IN R ESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER ON 26.10.2006. IT CANNOT THEREFORE BE STATED THAT THE DELAY WAS ENTIRELY ON THE PART OF THE ASSESSEE. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDERS OF THE DEPARTMENTAL AUTHORITIES ON THIS P OINT HAVE TO BE SET ASIDE. WE DO SO AND DIRECT THE ASSESSING OFFICER TO PROCESS THE ASSESSEES CLAIM MADE UNDER SECTION 50C(2)(A) AND REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER AS CONTEMPLATED BY THE STATUTORY PROVISIONS AND COMPUTE THE CAPITAL GAINS IN ACCORDANCE WITH LAW. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY. THE APPEAL IS ACCORDINGLY ALLOWED IN THE ABOVE TERMS, FOR STATISTICAL PURPOSES . 4. IN PURSUANCE THEREOF, THE MATTER WAS REFERRED TO THE DISTRICT VALUATION O FFICER BY THE ASSESSING OFFICER IN TERM OF SECTION 50C(2), TO VALUE THE PROPERTY IN QUESTION AS ON THE DATE OF SALE I.E. 06.03.2004. IN THE REFERENCE , THE ASST. VALUATION OFFICER, LUCKNOW VIDE HIS REPORT DATED 16.11.2011 VALUED THE FAIR MARKET VALUE OF THE PROPERTY AT RS. 23,27,000/ - , WHICH WAS HIGHER THAN THE STAMP VALUE. T HE SAID REPORT WAS FORWARDED TO THE ASSESSEE AS TO WHY THE FMV VALUED BY THE AVO SHOULD NOT BE TAKEN AS SALE CONSIDERATION. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ONLY REC EIVED THE AMOUNT OF CONSIDERATION AT RS. 13 LAKHS AND THE VALUATION DONE BY THE DVO CANNOT BE ACCEPTED AS THE SAME WAS DONE ON NOVEMBER, 2011 WHEREAS, THE PROPERTY WAS ALREADY SOLD IN MARCH, 2004. AT THE TIME OF INSPECTION, THE STRUCTURE / PROPERTY WAS ALR EADY SOLD ON 11 TH MARCH, 2004 AND WAS NOT IN EXISTENCE ON THE DATE OF VALUATION. NOTHING HAS BEEN BROUGHT ON RECORD THAT ASSESSEE HAS RECEIVED MORE THAN 13 LAKHS. RELIANCE WAS PLACED ON THE DECISION OF P&H HIGH COURT IN THE CASE OF CIT VS CHANDNI MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 4 BHUCHAR, REPORTED IN 323 ITR 0520. HOWEVER, THE ASSESSING OFFICER HELD THAT THE VALUATION HAS BEEN DONE AS PER THE DIRECTION OF T HE TRIBUNAL, WHICH WAS MADE AT THE REQUEST OF THE ASSESSEE ONLY AND THEREFORE, THE VALUE OF VALUATION OFFICER OR AS PER THE STAMP DUTY V ALUATION HAS TO BE ADOPTED AS THE ASSESSING OFFICER IS BOUN D BY THE DEC ISION O F THE TRIBUNAL . NOW THAT THE VALUATION BY THE DVO IS MORE THAN VALUATION OF THE PROPERTY BY S TA M P VALUATION AUTHORITY, THEREFORE, THE MARKET VALUE AS PER THE STAMP DUTY WOULD BE ADOPTED. THUS HE TOOK FMV AT RS. 20,06,500/ - . 5. THE LD. CIT(A), TOO CONFIRMED THE SAID ADDITION ON THE GROUND THAT ASSESSING OFFICER HAS BOUND TO FOLLOW THE DIRECTION OF THE TRIBUNAL . 6. BEFORE US THE LD. COUNSEL, STRONGLY RELYING UPON THE DECISION OF P&H HIGH COURT IN THE CASE OF CIT VS CHANDNI BHUCHAR ( SUPRA ), SUBMITTED THAT IN ABSENCE OF ANY POSITIVE EVIDENCE, S T AM P DUTY VALUE CANNOT BE ADOPTED , IF THE ASSESSEE PROVE S THAT SALE CONSIDERATION MENTIONED IN THE SALE DEED IS A CT UAL . 7. ON THE OTHER HA ND, LD. DR STRONGLY RELIED UPON THE ORDER OF THE CTI(A) . 8. WE HAVE CONSIDERED THE RIVAL SUBMISSION S AND PERUSED THE RELEVANT MATERIAL ON RECORD. THIS IS THE SECOND ROUND OF PROCEEDINGS PASSED IN PURSUANCE OF DIRECTION GIVEN BY THE TRIBUNAL , WHEREIN IT WAS DIRECTED THAT THE ASSESSING OFFICER WILL PROCESS THE ASSESSE E S CLAIM U/S 50C(2)(A) AND REFERRED THE MATTER TO THE DVO FOR ASCERTAINING THE FAIR MARKET VALUE . I N PURSUANCE THEREOF, THE ASSESSING OFFICER HAD MADE THE REFERENCE TO THE DVO WHO HA S VALUED TH E PROPERTY AT A HIGHER VALUE AT RS. 23,27,000/ - AS AGAINST THE STAMP DUTY VALUATION OF RS. 20,06,500/ - . SECTION 50C IS A DEEMING PROVISION WHERE FAIR MARKET VALUE HAS TO BE DEEMED AT THE VALUE ADOPTED B Y THE STAMP VALUATION AUTHORITY. HOWEVER, SUCH A DEEMI NG PROVISION WILL NOT APPL Y, IF THE ASSESSEE MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 5 CLAIMS THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. IN CASE OF SUCH A CLAIM, ASSESSING OFFICER HAS TO REFER THE MA TTER TO THE VALUATION CELL AND IN SUCH CASES, THE ASSESSING OFFICER IS BOUND BY SUCH A VALUATION. HERE IN THIS CASE, SINCE VALUE ADOPTED BY THE DVO IS MORE THAN THE STAMP VALUATION , THEREFORE , THE ASSESSING OFFICER HAD RIGHTLY ADOPTED THE FMV AS PER THE ST AMP VALUATION AUTHORITY. T O WRIGGLE OUT FROM SUCH A SITUATION HERE IN THIS CASE, THE ASSESSEE SHOULD HAVE REBUTTED THE ENTIRE DVOS REPORT BEFORE THE CIT(A) BY EVIDENCE AND PROPER MATERIAL AS TO HOW AND WHY THE DVOS REPORT CANNOT BE RELIED UPON AND THE AS SESSEES SALE VALUE IS ACTUALLY THE FAIR MARKET VALUE . H ERE SUCH AN EXERCISE HAS NOT BEEN DONE BY THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE CIT(A) CONFIRMING THE FAIR MARKET VALUE AS PER SECTION 50C IS AFFIRMED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST , 2015. SD/ - SD/ - ( . . ) ( ) ( B R BASKARAN ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 19 TH AUGUST , 2015 / COPY TO: - 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT (A) - 3 , MUMBAI. 4) THE CIT 11 , MUMBAI. 5) , , / THE D.R. C B ENCH, MUMBAI. MRS. KUSUM CHANDIDAS GUPTA, (LEGAL HEIR OF LATE DR. CHANDIDAS GUPTA) ITA NO. 8 18 /MUM/20 1 3 6 6) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS