Estate Rajendra Dutta, Kolkata V. ITO, Ward 31(1), Kolkata, Kolkata

ITA 902/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5293 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 01-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: K K SARKAR
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH KOLKATA BEFORE SHRI A.T.VARKEY , JM &DR. A.L.SAINI, AM ./ ITA NO . 902 / KOL/ 201 7 ( / ASSESSMENT YEAR: 2012 - 13 ) ESTATE RAJENDRA DUTTA 9, S.N. BANERJEE ROAD, KOLKATA - 700013 VS. ITO, WARD - 31(1), KOLKATA ./ ./ PAN/GIR NO.: AAATE 0528 P ( ASSESSEE ) .. (RE VENUE ) ASSESSEE BY : SHRI K .K. SARKAR , FCA RESPONDENT BY : SHRI C.J.SINGH, JCIT, SR. DR / DATE OF HEARING : 10 /04/2019 / DATE OF PRONOUNCEMENT : 29 / 05 /201 9 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE A SSESSEE , PERTAINING TO ASSESSMENT YEAR 2012 - 13, IS DIRECTED AGAINST AN ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 9 , KOLKATA (IN SHORT THE LD. CIT(A)], WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) DATED 10 .03.2015. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT THE LEARNED ASSESSING OFFICER ERRED IN CONSIDERING RS. 55,00,000/ - BEING THE CONSIDERATION VALUE IN THE FORM OF 2 COMPLETE FLATS AS COST TO DETERMINE THE CAPITAL GAIN OF THE 999 YEARS LEASED OUT PROPERTY. ESTATE RAJENDRA DUTTA ITA NO. 902 /KOL/201 7 ASSESSMENT YEAR: 2012 - 13 PAGE | 2 THAT THE LEARNED CIT(APPEALS) CONFIRMED THE CALCULATION OF CAPITAL GAIN IGNORING THE CONCEPT OF COST OF ACQUISITION, FAIR MARKET VALUE REGISTERED VALUER AND RELEVANT SECTION 55(3) OF INCOME TAX ACT, 1961. 2. THAT THE LEARNED ASSESSING OFFICER ERRONEOUSLY ADDED BACK RS. 10,00,000/ - AS UNDISCLOSED INCOME. THAT THE LEARNED CIT(APPEALS) CONFIRMED THE ADDITION WITHOUT GOING THROUGH THE FACTS FURNISHED AT THE TIME OF HEARING. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND, MODIFY, SUBSTITUTE AN D/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING, IF NECESSARY SO ARISES. 3. AT THE OUTSET ITSELF , THE LD. COUNSEL FOR THE A SSESSEE AS WELL AS LD. DR FOR THE R EVENUE , BOTH HAVE AGREED THAT DURING THE ASSESSMENT PROCEEDING S THE ASSESSING OFFICER DID NOT REFER THE MATTER FOR VALUATION OF PROPERTY TO THE DEPARTMENT AL VALUATION OFFICER (DVO). THEREFORE , THE MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT LD. ASSESSING OFFICER SHOULD REFER THE MATTER TO THE DVO FOR VALUATION OF THE PROPERTIES AND THEN AFTER TAKING INTO ACCOUNT THE VALUATION REPORT, TO ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT DISPUTED PROPERTY IS 999 YEARS LEASED OUT PROPERTY AND THE LD. ASSESSING OFFICER DID NOT REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER( DVO ) FOR VALUATION THEREFORE , FAIR VALUATION OF THE PROPERTIES UNDER CONSIDERATION HAVE NOT BEEN DONE AND CONSEQUENTLY THE CAPITAL GAIN COMPUTED BY THE ASSESSING OFFICER / ADDITION MADE BY THE ASSESSING OFFICER CONTAINS AN OBVIOUS ERROR . HENCE, THE MATTER SHOULD BE REFERRED TO DVO FO R FAIR VALUATION . WE NOTE THAT THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB - REGISTRAR FOR THE PURPOSE OF STAMP DUTY. ESTATE RAJENDRA DUTTA ITA NO. 902 /KOL/201 7 ASSESSMENT YEAR: 2012 - 13 PAGE | 3 FOR THE AFORESAID REASONS, WE ARE OF THE OPINI ON THAT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. THERE I S NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE ASSESSEE, THE ASSESSING OFFICER, WHILE DISCHARGING A QUASI JUDICIAL FUNCTION, HAS TH E BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT , BY GIVING ASSESSEE AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. FOR THAT WE RELY ON THE JUDGMENT OF THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF SUNIL KUMAR AGARWAL VS. CIT REPORTED IN (201 5) 372 ITR 83 WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER SHOULD REFER THE MATTER TO DVO FOR VALUATION AND AFTER GETTING VALUATION REPORT, THE ASSESSING OFFICER SHOULD FRAME THE ASSESSMENT. FOR THE AFORESAID REASONS, THE ORDER OF LD CIT(A), UNDER CHAL LENGE IS SET ASIDE AND T HE MATTER IS REMANDED BACK TO THE FILE OF ASSESSING OFFICER , H E SHALL REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN ACCORDANCE WITH LAW. AFTER SUCH VALUATION IS MADE, THE ASSESSMENT SHALL BE MADE DE NOVO IN ACCORDANCE WITH LAW. STATISTICAL PURPOSES THE APPEAL OF THE ASSESSEE IS TREATED TO BE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 29 .05.2019 SD/ - ( A.T.VARKEY ) SD/ - (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 29 / 05 / 201 9 ( SB , SR.PS ) ESTATE RAJENDRA DUTTA ITA NO. 902 /KOL/201 7 ASSESSMENT YEAR: 2012 - 13 PAGE | 4 COPY OF THE ORDER FORWARDED TO: 1. ESTATE RAJENDRA DUTTA 2. ITO, WARD - 31(1), KOLKATA 3. C.I.T(A) - 4. C.I.T. - KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES