ITO 19(1)(1), MUMBAI V. KAMLA ARJUN DHARIRA, MUMBAI

ITA 8194/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9323 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: M P MAKHIJA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Fair market value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI SANJAY ARORA (ACCOUNTANT MEMBER) ITA NO.8194/MUM/2011 ASSESSMENT YEAR: 2006-07 ITO 19(1)(1), R.NO.319, PIRAMAL CHAMBERS, PAREL, MUMBAI. KAMLA ARJUN DHARIRA, 402, MANGAL SMURTI, 14 TH ROAD, KHAR(W), MUMBAI-52. PA NO.ADUPD 0965 A (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI A.K.NAYAK RESPONDENT BY: SHRI M.P.MAKHIJA DATE OF HEARING: 20.11.2012 DATE OF PRONOUNCEMENT: 23. 11.2012 ORDER PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST ORDER DATED 3.10.2011 OF LD CIT(A)-22, MUMBAI ON FOLLOWI NG GROUNDS: 1. THAT LD CIT(A) HAS ERRED TO DIRECT THE AO TO RE PLACE THE FIGURE OF SALE CONSIDERATION AS SECTION 50C(2) AT RS.19,58,000 IN PLACE OF RS.29,13,977 AND RECOMPUTED THE CAPITAL GAINS. 2. THAT THE LD CIT(A) HAS ERRED IN ACCEPTING THE VA LUATION REPORT OF THE DVO WITHOUT EXAMINING WHETHER THE DVO HAD CORRECTLY DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY IN HIS VALUATION REPORT. 2. WE HAVE HEARD LD REPRESENTATIVES OF PARTIES AND PERUSED ORDERS OF AUTHORITIES BELOW. WE OBSERVE THAT ASSESSEE SOLD A PROPERTY AT 32, SILK HOUSE FOR A TOTAL CONSIDERATION OF RS.18,33,000. AS PER SALE AGREEME NT, THE VALUE OF THE PROPERTY BY STAMP DUTY AUTHORITIES WAS RS.29,13,077/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO INTENDED TO INVOKE THE PROVISIO NS OF SECTION 50C OF THE I.T.ACT, 1961. THE ASSESSEE VIDE LETTER DATED 15.12.2008 OBJ ECTED TO ADOPTION OF THE VALUATION ITA NO.8194/MUM/2011 ASSESSMENT YEAR: 2006-07 2 ADOPTED BY STAMP DUTY AUTHORITIES AND FURNISHED THE VALUATION REPORT OF ADJACENT PROPERTY ALONGWITH XEROX COPY OF THE STAMP DUTY VAL UATION THEREOF. AO DID NOT ACCEPT THE CONTENTION OF ASSESSEE AND CONSIDERED THE SALE VALUE AS PER SECTION 50C OF THE ACT AT RS.29,13,077 AND COMPUTED THE LONG TERM CAPITAL GAINS ACCORDINGLY. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST A PPELLATE AUTHORITY. 3. LD CIT(A) OBSERVED THAT ASSESSEE VIDE HIS LETTER DATED 15.12.2008 ALSO REQUESTED THE AO TO REFER THE MATTER FOR DETERMINATION OF FAI R MARKET VALUE TO THE DEPARTMENTAL VALUATION OFFICER WHICH WAS NOT ACCEPTED BY AO. LD CIT(A) SOUGHT REMAND REPORT FROM THE AO WITH THE DIRECTION TO REFER THE MATTER TO DV O TO ASCERTAIN THE VALUE OF THE PROPERTY. AO VIDE LETTER DATED 14.7.2011 FORWARDED THE REPORT OF THE DVO WHEREIN, THE SAID PROPERTY WAS VALUED AT RS.19,58,000. LD CIT(A ) AFTER GIVING OPPORTUNITY TO THE ASSESSEE CONSIDERED THE VALUE OF THE SAID PROPERTY FOR THE PURPOSE OF COMPUTING CAPITAL GAIN AT RS.19,58,000 AS PER SECTION 50C(2) OF THE A CT IN STEAD OF RS.29,13,077/-. 4. DURING THE COURSE OF HEARING, LD D.R. RELIED ON ORDER OF AO AND SUBMITTED THAT THE SAID REMAND REPORT WAS SOUGHT BY LD CIT(A) AND ACCEPTED BY HIM. HENCE, AO WAS PRECLUDED TO EXAMINE THE DVO REPORT. HE SUBMITTED THAT MATTER SHOULD BE RESTORED TO THE FILE OF AO FOR HIS FRESH CONSIDERATION. 5. ON THE OTHER HAND, LD A.R. SUPPORTED THE ORDER O F LD CIT(A) AND SUBMITTED THAT ASSESSEE EVEN REQUESTED THE AO TO REFER THE MATTER TO DVO AS PER SECTION 50C(2) OF THE ACT. HE FURTHER SUBMITTED THAT LD CIT(A) SOUGHT TH E DVO REPORT THROUGH AO AND AO SENT THE REPORT OF DVO WITH HIS REMAND REPORT, WHIC H WAS ACCEPTED BY LD CIT(A). HE SUBMITTED THAT THE ORDER OF LD CIT(A) IS JUSTIFIED. 6. WE ARE OF THE CONSIDERED VIEW THAT LD CIT(A) HAS RIGHTLY ADOPTED THE VALUE OF THE PROPERTY UNDER CONSIDERATION AS PER DVO REPORT IN S TEAD OF TAKING VALUATION AS ADOPTED BY STAMP DUTY AUTHORITIES AND, ACCORDINGLY, COMPUTE D THE CAPITAL GAINS. THERE IS NO INFIRMITY IN THE ORDER OF LD CIT(A). THEREFORE, WE UPHOLD HIS ORDER AND REJECT GROUND OF APPEAL TAKEN BY DEPARTMENT. ITA NO.8194/MUM/2011 ASSESSMENT YEAR: 2006-07 3 7. IN THE RESULT, APPEAL FILED BY DEPARTMENT IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON 23 RD NOVEMBER, 2012 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 23 RD NOVEMBER, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),22, MUMBAI 4. COMMISSIONER OF INCOME TAX, 9 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH A MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI