Wasif Ahmed Alavi, Hyd`, Hyderabad V. ITO, Ward-6(3), Hyderabad, Hyderabad

ITA 865/HYD/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7002 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 25-02-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 19-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P BALAKRISHNA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Valuation report; Reason to believe; Capital Gains
• Section: 143(3); 50C; 147

Judgement Text

ITA 865 OF 2017 WASIF AHMED ALAVI HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO.865/HYD/2017 ASSESSMENT YEAR: 2008-09 SRI WASIF AHMED ALAVI, HYDERABAD PAN:ABLPA3649M VS. INCOME TAX OFFICER WARD 6(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. BALAKRISHNA REVENUE BY : SRI SUNIL KUMAR PANDEY,DR DATE OF HEARING: 25/02/2021 DATE OF PRONOUNCEMENT: 09/04/2021 ORDER PER S.S. GODARA, J.M. THIS ASSESSEES APPEAL FOR AY.2008-09 ARISES FROM T HE CIT(A)-6, HYDERABADS ORDER DATED 13.12.2016 PASSED IN APPEAL NO. ITA 0032/2015-16/CIT(A)-6/16-17, IN PROCEEDINGS U/S .143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE CANVAS SED IN THE INSTANT APPEAL CHALLENGES CORRECTNESS OF BOTH T HE LOWER AUTHORITIES ACTION MAKING LTCG ADDITION OF RS.69,5 2,522/- AS AGAINST THAT DECLARED OF RS.6,07,478/- IN THE ORIGI NAL RETURN AFTER INVOKING SEC 50C OF THE ACT. THE CIT (A)S FINDINGS AFFIRMING THE ASSESSING OFFICERS ACTION TO THIS FACT READ AS UND ER: 02.0 THE POINT OF DETERMINATION IN THE APPEAL IS W HETHER THE ASSESSING OFFICER WAS CORRECT IN ADOPTING THE ASSES SEE'S ITA 865 OF 2017 WASIF AHMED ALAVI HYDERABAD PAGE 2 OF 4 SHARE IN THE PROPERTY SOLD AT RS.75,60,OOO/-AS FULL VALUE OF CONSIDERATION U/S 50C OF THE ACT. 02.1 THE PRESENT APPEAL ARISES OUT OF REASSESSMENT MADE BY THE ASSESSING OFFICER U/S 147 R.W.S 143(3) AS HE HA D REASON TO BELIEVE THAT THE ASSESSEE HAD NOT SHOWN CORRECT CAPITAL. GAINS. THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE HAD SOLD A HOUSE BEARING MUNICIPAL NO.6-3-778, PUNJAGUT TA, HYDERABAD THROUGH DOCUMENTS NO.409/2008 AND NO.401/2008 FOR A CONSIDERATION OF RS.30,00,000/-. ON PERUSAL OF THE DOCUMENTS, THE ASSESSING OFFICER FOU ND THAT THE SRO FOR THE PURPOSE OF REGISTRATION HAD ADOPTED THE VALUE OF THE PROPERTY AT RS.1,89,56,000/-. BY APPLYING TH E SRO RATE, THE CAPITAL GAINS WORKED TO RS.88,70,522/-, W HEREAS THE ASSESSEE HAD ONLY SHOWN RS.8,92,522/- AS CAPITA L GAINS. ACCORDINGLY, THE ASSESSING OFFICER ISSUED NO TICE U/S 148. 03.0 DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE SUBMITTED THAT THE SAID PROPERTY HAD BEEN UNDER' PR OLONGED LITIGATION AND THERE HAD BEEN CROSS REGISTRATIONS B Y VARIOUS PARTIES AND THEREFORE THE PROVISIONS OF SEC 50C SHO ULD NOT BE APPLIED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE BEING THE ELDER SON OF THE FAMILY HAD DECLARED 50% OF THE REC ORDED SALE CONSIDERATION, LE. RS.15,00,000/- AS PER THE PROVIS IONS OF MUSLIM LAW. TO MEET THE PRINCIPLES OF NATURAL JUSTI CE; THE ASSESSING OFFICER MADE A REFERENCE TO THE DVO, HYDE RABAD IN ACCORDANCE WITH SUB-SECTION (2) OF SECTION 50C O F THE ACT. THE DVO ESTIMATED THE VALUE OF THE TWO PROPERTIES A T RS.1,51,20,000/- AS AGAINST THE SRO VALUE OF RS.1,89,56,000/-. THE ASSESSING OFFICER ADOPTED THE VALUE GIVEN BY THE VALUATION OFFICER AND REWORKED THE CAP ITAL GAINS BY TAKING 50% OF RS.1,51,20,000/- AS FULL VAL UE OF CONSIDERATION IN THE HANDS OF THE ASSESSEE. AFTER R EDUCING. THE COST OF ACQUISITION, THE LONG TERM CAPITAL GAIN S WAS COMPUTED AT RS.69,52,522/-. 04.0 THE APPEAL WAS FIXED FOR HEARING ON 07.06.2016 . ON ASSESSEE'S REQUEST, IT WAS REPOSTED TO 15.06.2016 A ND AGAIN TO 06.07.2016. ON 06.07.2016, AGAIN ON REQUEST BEIN G MADE, THE CASE WAS ADJOURNED TO 28.07.2016 AND LATER TO 08.09.2016. ON 08.09.2016, A LETTER FOR ADJOURNMENT WAS FILED. STILL ONE MORE OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO PRESENT HIS CASE ON 06.10.2016 AND AGAIN ON 24.10.2 016. AGAIN ON THE COUNSEL'S REQUEST, FURTHER DATES WERE GIVEN FOR 05.12.2016 AND 09.12.2016, BUT TO NO AVAIL. IT CAN SAFELY BE PRESUMED THAT THE ASSESSEE IS NOT INTERESTED IN PUR SUING THE APPEAL AND IS WASTING THE TIME OF THE DEPARTMENT. ACCORDINGLY, THE APPEAL IS BEING DECIDED ON THE BAS IS OF MATERIAL AVAILABLE ON RECORD. DECISION: 05.0 ACCORDING TO THE ASSESSEE, THE PROPERTY SOLD W AS UNDER PROLONGED LITIGATION AND THEREFORE THE VALUATION MA DE BY THE ITA 865 OF 2017 WASIF AHMED ALAVI HYDERABAD PAGE 3 OF 4 DVO WAS NOT CORRECT. AS PER THE DEEMING PROVISIONS OF SEC 50C OF THE ACT, WHEN THE SALE CONSIDERATION AS PER THE DOCUMENT OF TRANSACTION IS LESS THAN THE SRO VALUE ADOPTED FOR STAMP DUTY PURPOSES THEN THE LATTER WILL BE DEE MED TO BE THE FULL VALUE OF CONSIDERATION. 05,1 THE ONLY EXCEPTION BEING WHERE THE ASSESSEE CL AIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY THE AUTHORITY UNDER SUB-SECTION (1) EXC EEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER. 05.2 IN VIEW OF THE ASSESSEE'S CLAIM THAT THE VALUE ADOPTED BY THE SRO EXCEEDED THE FAIR MARKET VALUE OF THE PR OPERTY AS ON THE DATE OF TRANSFER, THE ASSESSING OFFICER REFE RRED THE MATTER TO THE DVO AS PER THE PROVISIONS OF SEC SAC AND ON RECEIPT OF THE VALUATION REPORT FROM THE DVO, THE S AME WAS ADOPTED BY THE ASSESSING OFFICER AS THE FULL VALUE OF CONSIDERATION. THUS, THE ASSESSING OFFICER'S ACT IN APPLYING THE VALUE AS GIVEN BY THE DVO IS HELD TO BE CORRECT AND IN KEEPING WITH THE PROVISIONS OF SEC SAC OF THE ACT. IN VIEW OF IT, I SEE NO REASON TO INTERFERE WITH THE DECISION OF T HE ASSESSING OFFICER AND THE FULL VALUE OF CONSIDERATION ADOPTED BY ASSESSING OFFICER STANDS CONFIRMED. 3. LEARNED COUNSELS ONLY ARGUMENTS AS WELL AS WRIT TEN SUBMISSIONS VEHEMENTLY STATE THAT BOTH THE LOWER AU THORITIES HAVE ERRED IN LAW AND IN FACTS IN MAKING THE IMPUGN ED LTCG ADDITION. HIS CASE IS THAT THE IMPUGNED CAPITAL ASS ET WAS LOCKED UP IN VARIOUS LITIGATIONS WHICH WAS NOT IN THE NOTI CE OF THE ASSESSING OFFICER AS WELL. WE FIND NO REASON TO EXP RESS OUR AGREEMENT WITH THE ASSESSEES FOREGOING ARGUMENTS. IT IS MADE CLEAR THAT AT NO POINT OF TIME ANY EVIDENCE OF ANY SUCH LITIGATION PENDING HAVING ACTED AS A DEPRESSING FACTOR IN THE CAPITAL ASSETS VALUATION HAS FILED BEFORE US TILL DATE. AND ALSO T HAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY MATERIAL THAT HIS TITL E HAD EVER CLAIMED AS DEFECTIVE IN ANY JUDICIAL PROCEEDING IN OTHER WORDS. WE THEREFORE, FIND NO REASON TO INTERFERE WITH THE IMP UGNED SEC 50C ADDITIONS IN PRINCIPLE. ITA 865 OF 2017 WASIF AHMED ALAVI HYDERABAD PAGE 4 OF 4 4. NEXT COMES EQUALLY IMPORTANT ASPECT OF QUANTIFIC ATION OF THE IMPUGNED LTCG ADDITION. WE FIND THAT THE ALT HOUGH THE ASSESSING OFFICER HAS GONE BY THE DVOS VALUATION R EPORT, THE FACT HOWEVER REMAINS THAT POSSIBILITY OF ATLEAST SOME DI STRESSING FACTORS CANNOT BE ALTOGETHER RULED OUT IN ANY CASE. WE KEEP IN MIND ALL VITAL FACTORS AND ARE OF THE OPINION THAT A LUMPSUM RELIEF OF RS.5.00 LAKHS (RUPEES FIVE LAKHS) OUT OF THE IMP UGNED LTCG ADDITION OF RS.69,52,522/- WOULD BE JUST AND PROPER WITH A RIDER THAT THE SAME SHALL NOT BE TREATED AS A PRECEDENT I N ANY OTHER CASE. THE ASSESSEE GETS PART RELIEF. NECESSARY COMP UTATION SHALL FOLLOW AS PER LAW. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. 5. THE DELAY OF 61 DAYS IN FILING OF THE INSTANT AP PEAL SOUGHT TO BE ATTRIBUTABLE TO VARIOUS MISCELLANEOUS REASONS STANDS CONDONED AS PER THE REVENUES FAILURE IN RESULTING THE CONDONATION AVERMENTS TO THIS EFFECT. 6. THIS ASSESSEES APPEAL IS TREATED AS PARTLY ALL OWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH APRIL, 2021. SD/- SD/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER HYDERABAD, DATED 9 TH APRIL, 2021. VINODAN/SPS COPY TO: 1 SRI WASIF AHMED ALAVI C/O P BALAKRISHNA, ROOM NO.216/ASSESSEE 2 ND FLOOR, NBK ESTATE, GOLCONDA X ROAD, HYDERABAD 500020 2 ITO WARD 6(3) IT TOWERS, AC GUARDS, HYDERABAD 500 004 3 CIT (A)-6, HYDERABAD 4 PR. CIT -6 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER