Bharathram, CHENNAI V. ITO, CHENNAI

ITA 877/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3971 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.877/MDS/2016 * +* / ASSESSMENT YEAR : 2007-08 SHRI BHARATHRAM, SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AAQPB 3251 L V. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(1), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT ' 1 3& / DATE OF HEARING : 24.10.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 23.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 01.01.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.877/MDS/16 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DETER MINATION OF CAPITAL GAIN ON TRANSFER OF PROPERTY. 3. SHRI T.N. SEETHARAMAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSEE SOLD RESIDENTIAL PLOT I N DEV REGENCY, DOOR NO.6, FIRST MAIN ROAD, GANDHINAGAR, ADYAR, CHE NNAI, FOR ` 19,59,737/-. THE ASSESSING OFFICER BY APPLYING THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT, 1961 (IN SHORT ' THE ACT'), CONSIDERED THE SALE CONSIDERATION AT ` 31,29,000/-. THIS IS THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY. 4. REFERRING TO THE PROVISIONS OF SECTION 50C(2) OF THE ACT, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE CLAIMED THAT THE SALE CONSIDERATION WAS LESS THAN T HE GUIDELINE VALUE PRESCRIBED BY THE STATE REGISTRATION AUTHORIT IES, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO REFER THE MATTER TO T HE VALUATION OFFICER. THE ASSESSING OFFICER HIMSELF ADOPTED THE VALUE DETERMINED BY THE STAMP AUTHORITIES FOR REGISTRATIO N. THEREFORE, THE LD.COUNSEL SUBMITTED THAT THE MATTER MAY BE REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR REFERRING TO VALU ATION OFFICER AND THEREAFTER DECIDE IN ACCORDANCE WITH LAW. 3 I.T.A. NO.877/MDS/16 5. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT SECTION 50C OF THE A CT IS MANDATORY. SINCE THE ASSESSEE CLAIMED THAT THE SALE CONSIDERAT ION IS LESS THAN THE VALUE ADOPTED BY THE STAMP AUTHORITIES, THE ASS ESSING OFFICER BY APPLYING PROVISIONS OF SECTION 50C OF THE ACT FOUND THAT THE SALE CONSIDERATION WAS ` 31,29,000/-. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICE R. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 50 C OF THE ACT. SUB-SECTION (2) OF SECTION 50C OF THE ACT CLEARLY S AYS THAT WHEN THE ASSESSEE CLAIMS THAT THE SALE CONSIDERATION WAS LES S THAN THE VALUE ADOPTED BY STAMP AUTHORITIES FOR THE PURPOSE OF REG ISTRATION, THE ASSESSING AUTHORITY MAY REFER THE MATTER TO THE VAL UATION OFFICER AND DETERMINE THE MARKET VALUE. IN THE CASE BEFORE US, THE ASSESSEE CONSISTENTLY CLAIMS BEFORE THE ASSESSING O FFICER THAT THE PROPERTY WAS SOLD FOR CONSIDERATION LESS THAN THE V ALUE DETERMINED BY THE STAMP AUTHORITIES FOR REGISTRATION. THEREFO RE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE MANDA TORY REQUIREMENT 4 I.T.A. NO.877/MDS/16 OF SECTION 50C(2) OF THE ACT, THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE MATTER TO THE VALUATION OFFICER. 7. THE GUIDELINE VALUE OR THE STAMP VALUE DETERMINE D BY THE REGISTRATION AUTHORITIES CANNOT ALWAYS REPRESENT TH E FAIR MARKET VALUE. THE FAIR MARKET VALUE IS NOTHING BUT A PRIC E THAT MAY BE AGREED BETWEEN THE WILLING PURCHASER AND WILLING SE LLER. THEREFORE, IN VIEW OF THE SPECIFIC PROVISION IN THE INCOME-TAX ACT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER HAS TO BE REFERRED TO THE VALUATION OFFICER AS REQUIRED UNDER SECTION 50C(2) OF THE ACT. SINCE SUCH AN EXERCISE WAS NOT DONE BY THE ASSESSIN G OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF THE AUTHO RITIES BELOW ARE SET ASIDE AND THE ISSUE OF DETERMINATION OF VALUE F OR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REF ER THE MATTER TO THE VALUATION OFFICER AS REQUIRED UNDER SECTION 50C (2) OF THE ACT. ON RECEIPT OF REPORT OF THE VALUATION OFFICER, THE ASSESSING OFFICER SHALL FURNISH A COPY OF THE SAME TO THE ASSESSEE AN D THE ASSESSEE SHALL BE GIVEN AN OPPORTUNITY TO FILE HIS OBJECTION , IF ANY. THEREAFTER THE ASSESSING OFFICER, AFTER TAKING INTO CONSIDERAT ION OF THE REPORT OF 5 I.T.A. NO.877/MDS/16 THE VALUATION OFFICER AND THE OBJECTION, IF ANY, FR OM THE ASSESSEE, HAS TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW, AFT ER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 8. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 23 RD NOVEMBER, 2016. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 8; /3 /DR 6. * < /GF.