SHRI SHANKAR DAS MANWANI, Jaipur V. ADIT, Jaipur

ITA 819/JPR/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7827 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA , ACCOUNTANT MEMBER . ITA.NO. 81 9 /JP /20 1 2 (ASSESSMENT YEAR: 200 9 - 1 0 ) SH. SHANKAR DAS MANWANI 756, ASHOK CHOWK, ADARSH NAGAR, JAIPUR APPELLANT VS. ADIT (INTL. TAX), JAIPUR RESPONDENT PAN: A BMPM2508G / BY APPELLANT : SHRI P. C. PARWAL , A.R. / BY RESPONDENT : SHRI KAILASH MANGAL , D.R. / DATE OF HEARING : 01 .1 2 .2014 / DATE OF PRONOUNCEMENT : 5 .1 2 .2014 ORDER PER SHAILENDRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - II, JAIPUR , DATED 27 . 0 9 .201 2 FOR A.Y. 200 9 - 1 0 ON THE FOLLOWING GROUND: I.T .A. NO. 819 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( SH . SHANKAR DAS MANWANI VS. ADIT (INT. TAX) ) PAGE 2 1 . T HE L D. C OMMISSIONER OF I NCOME T AX ( A PPEALS ) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE AO IN ASSESSING THE LONG TERM CAPITAL GAIN ON SALE OF FLAT AT RS.38,14,247/ - AS AGAINST LOSS OF RS.5,54,314/ - CLAIMED BY THE ASSESSEE. 1 . 1 THE L D. C OMMISSIONER OF I NCOME T AX (A PPEALS ) H AS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF AO IN ADOPTING THE SALE CONSIDERATION OF FLAT U/S 50C(1) AT RS. 1,20,90,915/ - AS AGAINST ACTUAL CONSIDERATION OF RS.80,00,000/ - . 1 . 2 SHE HAS FURTHER ERRED IN NOT REFERRING THE MATTER TO DVO U/S 50C(2) EVEN WHEN ASSESSEE HAS CLAIMED BEFORE THE AO THAT VALUE ADOPTED BY STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY. 2. ASSESSEE IS NRI RESIDENT DURING YEAR UNDER CONSIDERATION AND DECLARED INCOME FROM OTHER SOURCES AND CAPITAL GA IN IN INDIA AND FILED RETURN ON 29.03.2010 AT RS.55,500/ - . IN ASSESSMENT ORDER, SALE CONSIDERATION OF IMMOVABLE PROPERTY LOCATED AT MUMBAI SOLD BY ASSESSEE WAS TAKEN AT VALUE (SALE CONSIDERATION) OF RS.1,20,90,915/ - U/S 50C AS AGAINST SALE VALUE DECLARED AT RS.80,00,000/ - BY ASSESSEE. THIS RESULTED IN LONG TERM CAPITAL GAIN OF RS.38,14,247/ - AS AGAINST CAPITAL LOSS SHOWN OF RS.5,54,314/ - BY ASSESSEE. 3. MATTER WAS CARRIED BEFORE FIRST APPEL LATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHAL F OF ASSESSEE. HAVING CONSIDERED THE SAME CIT(A) APPROVED THE ORDER OF ASSESSING OFFICER BY OBSERVING THAT PROVISIONS OF SECTION 50C ARE CLEAR THAT VALUE OF CONSIDERATION OF PROPERTY TRANSFERRED IF FOUND LESS THAN VALUE TAKEN BY STAMP VALUATION AUTHORITY VALUE WILL BE TAKEN AS THE FULL VALUE OF CONSIDERATION RECEIVED OR I.T .A. NO. 819 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( SH . SHANKAR DAS MANWANI VS. ADIT (INT. TAX) ) PAGE 3 ACCRUING AS A RESULT OF SUCH TRANSFER. ACCORDINGLY, LONG TERM CAPITAL GAIN OF RS.38,14,247/ - COMPUTED BY ASSESSING OFFICER WAS UPHOLD. BEFORE US, LD. AUTHORIZED REPRESENTATIVE RAISED VAR IOUS LEGAL AND FACTUAL CONTENTIONS TO OPPOSE THE ORDERS OF AUTHORITIES BELOW. ON OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF AUTHORIZED BELOW. 4 . AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT SECTION 5 0C(1) IS A DEEMING FICTION ACCORDING TO WHICH VALUE ADOPTED OR ASSESS BY STAMP VALUATION AUTHORITY OF CAPITAL ASSET IS MORE THAN ACTUAL CONSIDERATION, VALUE SO ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY IS DEEMED TO BE FULL VALUE OF CONSIDERATION. AS A MEASURE OF SAFEGUARD, SUB - SECTION 2 OF THIS SECTION PROVIDED THAT WHERE ASSESSEE CLAIMS BEFORE ASSESSING OFFICER THAT VALUE ADOPTED OR ASSESSED BY STAMP VALUATION AUTHORITY EXCEEDS FAIR MARKET VALUE OF PROPERTY, ASSESSING OFFICER HAS TO REFER THE MATT ER TO DEPARTMENTAL VALUATION OFFICER. ITAT, JODHPUR BENCH IN CASE OF SHRI MEGHRAJ BAID VS. ITO, 114 TTJ 841 AS IN SIMILAR SET HAS OBSERVED AS UNDER: AFTER EXAMINING THE PROVISION EXTRACTED HEREINABOVE IN ITS LETTERS AND SPIRIT, WE ARE OF THE OPINION THAT IN CASE THE AO DOES NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE WITH REGARD TO LOWER CONSIDERATION DISCLOSED BY HIM THEN HE SHOULD REFER THE MATTER TO THE DVO FOR GETTING ITS MARKET RATE ESTABLISHED AS ON DATE OF THE SALE TO ARRIVE AT THE CORRECT SALE CONSIDERATION. IF THIS PROVISION IS READ IN THE SENSE THAT IF THE AO IS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE THEN HE MAY OR MAY NOT SEND THE MATTER FOR VALUATION TO THE DVO THEN IN THAT CASE THIS PROVISION WOULD BE RENDERED REDUNDANT. T HE WORD I.T .A. NO. 819 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( SH . SHANKAR DAS MANWANI VS. ADIT (INT. TAX) ) PAGE 4 MAY USED IN THIS SUB - SECTION SIGNIFIES THAT IN CASE THE LEARNED AO IS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, HE SHOULD REFER THE MATTER TO THE DVO FOR THE MENTIONED PURPOSE. THE LEARNED AUTHORIZED REPRESENTATIVE HAS RELIED ON THE D ECISION OF THE HON BLE SUPREME COURT RENDERED IN THE CASE OF ASHOK LEYLAND LTD. VS. UNION OF INDIA(1997) 105 STC 152 WHEREIN IT HAS BEEN HELD THAT THE DEEMING PROVISIONS ARE REBUTTABLE ONE. WE HAVE EXAMINED THE ENTIRE FACTS OF THIS CASE IN THE LIGHT OF TH E PROVISIONS AND PRECEDENTS RELIED ON BEFORE US. IN OUR CONSIDERED OPINION THE BENEFITTING REPLY OF ALL THE QUERIES AROSE IN OUR MINDS AS WELL AS BY THE PARTIES IS THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LEARNED AO WITH A DIRECTION THAT HE SHALL REFER THIS MATTER OF VALUATION IN THE LIGHT OF SUB - S.(2) OF S.50C TO THE DVO FOR DETERMINING THE CONSIDERATION OF THIS PLOT SOLD BY THE ASSESSEE UNDER S. 50C TO THE DVO FOR DETERMINING THE CONSIDERATION OF THIS PLOT SOLD BY THE ASSESSEE UNDER S. 50C OF THE ACT. THE OTHER CONNECTED GROUNDS ARE ALSO RELATE TO THIS MAIN GROUND. THEREFORE, THE ENTIRE APPEAL IS RESTORED BACK TO THE FILE OF THE AO WITH THE DIRECTION THAT HE WOULD DO AS DIRECTED ABOVE AND ALSO GIVE AN OPPORTUNITY OF HEARING TO THE ASSESSEE AS PER LAW. FROM ABOVE DECISION, IT IS CLEAR THAT ONCE ASSESSEE DISPUTES BEFORE ASSESSING OFFICER THAT VALUE ADOPTED BY STAMP DUTY AUTHORITIES EXCEEDS THE FAIR MARKET VALUE OF PROPERTY, ASSESSING OFFICER IS BOUND TO REFER THE MATTER TO DVO. SIMILAR VIEW HAS BEEN TAKEN BY HON BLE CALCUTTA HIGH COURT IN CASE OF SUNIL KUMAR AGARWAL VS. COMMISSIONER OF INCOME TAX - SILIGURI IN GA NO. 3686 OF 2013 & ITAT NO. 221 OF 2013 AND ALSO ITAT, CHENNAI D BENCH IN CASE OF SMT. D. VANAJA DEVI VS. ASSISTANT COMMISSION ER OF INCOME TAX IN ITA NO. 1653/MDS/2011. NOTHING CONTRARY HAS BEEN BROUGHT INTO OUR KNOWLEDGE ON BEHALF OF REVENUE. FACTS BEING SIMILAR, SO FOLLOWING SAME I.T .A. NO. 819 / JP /2 0 1 2 A.Y. 200 9 - 1 0 ( SH . SHANKAR DAS MANWANI VS. ADIT (INT. TAX) ) PAGE 5 REASONING , THE ORDER OF CIT(A) IN CONFIRMING COMPUTATION OF LONG TERM CAPITAL GAIN IS SET ASIDE T O ASSESSING OFFICER WITH THE DIRECTION TO REFER THE MATTER TO DVO AS PER LAW TO DETERMINE THE FAIR MARKET VALUE OF FLAT SOLD BY ASSESSEE AND ACCORDINGLY DIRECTED TO COMPUTE THE LONG TERM CAPITAL GAIN AFRESH AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 5 . AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . PRONOUNCED IN THE OPEN COURT ON THIS THE 5 TH DAY OF DECEM BER, 2014. SD/ - SD/ - ( B. C. MEENA ) (SHAILENDRA KUMAR YADAV ) AC COUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT - SH . SHANKAR DAS MANWANI 2. THE RESPONDENT - ADIT (INT. TAX) 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 819 /JP/ 2012 ) BY ORDER A.R., JAIPUR.