ITO, Ward - 55(1), Kolkata, Kolkata V. Dr. Sandip Kumar Lahiri, Kolkata

ITA 87/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48060 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2011
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA LD
• Assessee Lawyers: RAJEN DHAR LD
• Keywords: Gift; Cost of acquisition; Fair market value; Valuation report

Judgement Text

I.T.A NO. 87/KOL/2011-BKH 1 , C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA BEFORE HON. SRI MAHAVIR SI NGH, JM & HON. SRI B.K.HALDAR, AM () , , . !. !' # / I.T.A NO. 87/KOL/2011 $% &' / ASSESSMENT YEAR : 2007-08 INCOME-TAX OFFICER, VS. DR. SANDIP KUMAR LAHIR I WARD 55(1), KOLKATA PAN: ABAPL 5337L ()* /APPELLANT ) (+,)*/ RESPONDENT ) )* / FOR THE APPELLANT : - / SHRI P.K. MISHRA, LD.DR +,)* / FOR THE RESPONDENT : - / SHRI RAJEN DHAR, LD.AR !. / ORDER .!., , , , !' , ,, , SHRI B.K.HALDAR, ACCOUNTANT MEMBER . : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS), XXXVI KOLKAT A DATED 08/11/2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- (A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) ERRED IN NOT CONSIDERING ANY FAIR MARKET VALUE AS O N 1.4.1981. AS THE IMMOVABLE PROPERTIES WERE INHERITED BY THE ASSE SSEE BY VIRTUE OF A GIFT & WILL FROM HIS MOTHER ON 31.12.1981, THE FA IR MARKET VALUE OF THE PROPERTIES AS ON 01.04.1981 IS TO BE ASCERTA INED ON WHICH COST INFLATION INDEX CAN BE APPLIED. (B) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE L D. CIT(A) ERRED IN NOT CALLING FOR THE VALUATION FROM THE DEP ARTMENTAL VALUER DURING THE COURSE OF APPELLATE PROCEEDINGS. THE VAL UE OF THE IMMOVABLE PROPERTY DETERMINED BY THE DEPARTMENTAL V ALUER SHOULD HAVE BEEN TAKEN AS THE FAIR VALUE AS ON 1.4.1981 ON WHICH COST INFLATION INDEX COULD HAVE BEEN APPLIED TO DETERMIN E THE CAPITAL GAINS. ( C) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS HUMBLY PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND RESTORED TO THE ASSESSING OFFICER WITH A DIRECTION TO DETERMINE THE VALUE OF THE IMMOVABLE PROPERTIES FROM THE DEPARTMENTAL VALUER A ND PASS A FRESH ASSESSMENT ORDER DE NOVO. I.T.A NO. 87/KOL/2011-BKH 2 3. DURING THE ASSESSMENT PROCEEDINGS THE AO HELD TH AT AS PER SECTION 49(1) OF THE ACT THE COST OF ACQUISITION OF THE PROPERTIES SOLD BY THE ASSESSEE DURING THE PREVIOUS YEAR SHOULD BE TAKEN AS THE COST FOR WHICH THE PREVIOUS OWNER ACQUIRED THE SAME. AS THE ASSESSEE FAILED TO PROVIDE THE FIGURE OF COST OF AC QUISITION IN THE HAND OF THE ORIGINAL OWNER AND AS THE ASSESSEE RECEIVED THE PROPERTIES AS GIFT AND UNDER WILL, THE AO TAXED THE WHOLE AMOUNT OF SALE CONSIDERATION I.E. RS.33,50,00 0/- AS INCOME OF THE APPELLANT UNDER THE HEAD CAPITAL GAINS. 3.1 WHILE DOING SO THE AO REJECTED THE REGISTERED V ALUERS REPORT SUBMITTED BY THE ASSESSEE IN SUPPORT OF FAIR MARKET VALUE OF THE SA ID PROPERTIES AS ON 01-04-1981 ON THE GROUND THAT REGISTERED VALUER DID NOT CITE THE VAL UE OF ANY OTHER COMPARABLE PROPERTY WHILE ARRIVING AT THE FAIR MARKET VALUE. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE L D.CIT(A). 5. BEFORE THE LD.CIT(A), IT WAS CONTENDED BY THE AS SESSEE THAT IN TERMS OF SECTION 55(2)(B)(II) AND SECTION 55(3) OF THE ACT THE ASSE SSEE HAD OPTION FOR DETERMINING COST OF ACQUISITION OF THE PROPERTY EITHER ON THE BASIS OF THE ACTUAL COST OF ACQUISITION OF THE PROPERTY TO THE PREVIOUS OWNER OR THE FAIR MARKET V ALUE OF THE PROPERTY AS ON 1-4-1981. AS THE ASSESSEE HAS OPTED FOR DETERMINING THE COST OF ACQUISITION OF THE PROPERTY ON THE BASIS OF THE FAIR MARKET VALUE AS ON 1-4-1981, THE AO WAS NOT JUSTIFIED IN REJECTING THE SAME. IT WAS FURTHER SUBMITTED THAT THE AO HAS NOT GIVEN ANY COGENT REASON FOR REJECTING THE VALUATION REPORT OF THE REGISTERED VALUER. RELI ANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. DUNCAN BROS & CO. LTD (1994) 209 ITR 44. 6. THE LD.CITA) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT AS PER PROVISION OF SECTION 55(2)(B)(II) OF THE ACT THE ASSESSEE HAD AN OPTION FOR DETERMINING THE COST OF ACQUISITION ON THE BASIS OF FAIR MARKET VALUE OF T HE PROPERTIES AS ON 1-4-1981. HE FURTHER HELD THAT THE AO WAS NOT JUSTIFIED IN REJECTING TH E VALUATION REPORT OF THE REGISTERED VALUER MERELY ON THE GROUND THAT THE REGISTERED VA LUER DID NOT CITE ANY OTHER COMPARABLE PROPERTY IN THE SAID REPORT. ACCORDING TO THE LD.CIT(A) IT WAS THE DUTY OF THE AO TO FIND OUT THE VALUE OF SIMILAR AND ADJACENT A SSET AND COMPARE THE SAME WITH THE I.T.A NO. 87/KOL/2011-BKH 3 VALUE DETERMINED BY THE REGISTERED VALUER. ONLY IF THERE WAS CONSIDERABLE DIFFERENCE IN THE PRICE DETERMINED BY THE REGISTERED VALUER AND THAT OF COMPARABLE PROPERTY, THE AO COULD HAVE REFERRED THE MATTER TO THE DEPARTMENTAL VALUER FOR ARRIVING AT THE COST OF ACQUISITION OF THE IMPUGNED PROPERTIES. AS THE AO D ID NOT DO SO, THE LD. CIT(A) DELETED THE IMPUGNED ADDITION OF RS.33.50 LAKH MADE BY THE AO. 7. BEFORE US THE LD.DR HAS RELIED ON THE ORDER OF T HE AO. 8. THE LD.AR FOR THE ASSESSEE ON THE OTHER HAND IN ADDITION TO RELYING ON THE ORDER OF THE LD.CIT(A), SUBMITTED THAT THE DETERMINATION OF COST OF ACQUISITION OF THE PROPERTY IS A FACTUAL MATTER, WHICH HAS BEEN DECIDED BY THE LD.CI T(A). RELYING ON THE ITAT HYDERABAD BENCHS DECISION IN THE CASE OF ACIT VS. JUSTICE MOTILAL B.NAIK [270 ITR 141 (AT) IT WAS SUBMITTED BY HIM THAT THE DEPARTMEN T WAS DEBARRED FROM FILING THE APPEAL BEFORE THE TRIBUNAL IN VIEW OF DEPARTMENTAL INSTRUCTION NO. 1894 DATED JUNE 16, 1992. IT WAS FURTHER SUBMITTED BY HIM THAT THE CASE SHOULD NOT BE REMANDED BACK TO THE FILE OF AO ON THE GROUND THAT THE AO HAS FAILED TO DO WHAT WAS REQUIRED TO BE DONE BY HIM. RELIANCE WAS PLACED ON THE HONBLE ITAT CHANDI GARH BENCHS ORDER IN THE CASE OF SMT. NEENA SYAL VS. ACIT [ 70 ITD 62(CHD)]. 9. IN THE REJOINDER THE LD.DR HAS NOTHING TO SAY. 10. WE HAVE HEARD THE PARTIES AND PERUSED THE RECOR D. IN THE GROUNDS OF APPEAL TAKEN BY THE REVENUE, THE REVENUE HAS NOT DISPUTED THE FI NDING OF THE LD.CIT(A) THAT THE ASSESSEE HAS RIGHT TO OPT FOR DETERMINATION OF COST OF ACQUISITION OF THE IMPUGNED PROPERTIES ON THE BASIS OF FAIR MARKET VALUE AS ON 1-4-1981. THE REVENUES GRIEVANCE IS THAT THE LD.CIT(A) SHOULD NOT HAVE ACCEPTED THE VAL UATION REPORT OF THE REGISTERED VALUER FOR DETERMINING THE FAIR MARKET VALUE OF THE IMPU GNED PROPERTIES AS ON 1-4-1981. HE SHOULD HAVE CALLED FOR THE VALUATION REPORT FROM TH E DEPARTMENTAL VALUER TO DETERMINE THE FAIR MARKET VALUE OF THE IMPUGNED PROPERTIES AS ON 1-4-1981. AS THE LD.CIT(A) HAS NOT DONE SO THE REVENUES CONTENTION IS THAT THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE AO WITH THE DIRECTION THAT THE VALUATION REPOR T FROM THE DEPARTMENTAL VALUATION OFFICER BE OBTAINED FOR THE PURPOSE OF DETERMINATI ON OF FAIR MARKET VALUE OF THE IMPUGNED PROPERTIES AS ON 1-4-1981 AND THEREAFTER DETERMINE THE CAPITAL GAIN AS PER PROVISIONS OF I.T.A NO. 87/KOL/2011-BKH 4 THE ACT. HOWEVER, SUCH CONTENTIONS OF THE REVENUE CANNOT BE ACCEPTED BY US IN VIEW OF THE PROVISION OF SECTION 55A OF THE ACT IT COULD B E SEEN FROM THE SAME THAT REFERENCE TO THE DVO MAY BE MADE ONLY BY THE AO UNDER CERTAIN CI RCUMSTANCES AND ONLY ON HIS SATISFACTION OF THE CONDITIONS MENTIONED THEREIN. THUS, THE LD.CIT(A) WAS NOT DUTY BOUND TO DO WHAT THE REVENUE WANTS HIM TO DO SO. THE REVENUES PRAYER FOR REMANDING THE MATTER BACK TO THE FILE OF THE AO IS ALSO NOT A CCEPTED BY US IN THE FACTS AND CIRCUMSTANCES OBTAINED IN THE PRESENT CASE. IN THIS VIEW OF THE MATTER, WE FIND NO MERIT IN THE APPEAL FILED BY THE REVENUE AND DISMISS THE SAM E. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. !. '/! 0 /$ 1 2 3' ORDER PRONOUNCED IN THE OPEN COURT ON 13-04-2011 SD/- SD/- [ ] [ . ! . , !' ] ( MAHAVIR SINGH ) (B. K. HALDAR) JUDICIAL MEMBER ACCOUNTANT MEMBER (3') DATED :13-04-2011 *PP 45 $67 8 /SR.P.S. !. 9 +: ;!:&<- COPY OF THE ORDER FORWARDED TO: 1. )* /APPELLANT- I.T.O WARD 55(1) 54/2 RAFI AHMED KID WAI ROAD, 4 TH FL., KOL-16. 2 +,)* / RESPONDENT : SHRI SANDIP KUMAR LAHIRI, FLAT 70 8, AUROVILLA 10 MANDEVILLA GARDENS, KOL-19. 3. .$/ THE CIT, 4. .$ ()/ THE CIT(A), KOLKATA. 5. C1 +$/ DR, KOLKATA BENCHES, KOLKATA ,: +/ TRUE COPY , !.$// BY ORDER , 7 /ASSTT. REGISTRAR I.T.A NO. 87/KOL/2011-BKH 5