LATE SHRI DHAN SINGH BHATI L/H NEHA BHATI, Ajmer V. ITO, Ajmer

ITA 94/JPR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5081 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 04-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PB D VIHYKFKHZ IZRFKHZ
• Assessee Lawyers: AJAY SOMANI SHRI RAG
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 94/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. LATE SHRI DHAN SINGH BHATI, C/O AJAY SOMANI & CO., CHARTERED ACCOUNTANTS, 28, ASHOK MARG, ANA SAGAR LINK ROAD, AJMER. CUKE VS. THE INCOME TAX OFFICER, WARD 2(2), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABYPB 9085 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI AJAY SOMANI JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.08.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/09/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL FILED BY THE LEGAL HEIR OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), AJMER DATED 18.11.2013 PERTAIN ING TO ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL :- 1. THAT THE LD. CIT (A) AJMER HAS ERRED IN LAW AND ON THE FACTS IN IGNORING THE CRUCIAL FACT THAT THE DECEASED APPELLANT WAS 50 % OWNER OF THE PROPERTY (OTHER 50% PERTAINED TO HIS BROTHER). DEEM ED FULL VALUE OF CONSIDERATION UNDER SECTION 50C SHOULD BE ONLY RS. 54,45,575/-. 2. THAT THE LEARNED CIT (A), AJMER HAS GROSSLY ERRED I N LAW AND ON FACTS IN CONFIRMING THE AMENDMENTS IN THE VALUATION OF PROPE RTY AT RS. 1,08,91,151/- WITHOUT WAITING FOR THE FINALIZATION OF THE ISSUES PENDING BEFORE RAJASTHAN TAX BOARD AND CIVIL COURTS REGARDI NG VALUATION OF TRANSFERRED PROPERTY AND ITS VALIDITY. 2 ITA NO. 94/JP/2014 LATE SHRI DHAN SINGH BHATI. 3. THAT WITHOUT PREJUDICE E TO 1 AND 2 ABOVE, THE LD. CIT (A) AJMER HAS IN HIS ORDERS ERRED IN LAW AND FACTS IN NOT CONSIDERING TH AT THE VALUE ADOPTED BY STAMP VALUATION OFFICER OUGHT TO BE LESSER CONSIDER ING :- THE LITIGATIONS AS REGARDS OWNERSHIP. DISPUTES WITH 5 TENANTS AND COURT CASES. PROPERTY NOT IN VACANT POSSESSION OF SELLERS WAS PO SSESSED BY PURCHASER. SOCIAL PRESTIGE AND TRANSACTION IN THE NATURE OF FA MILY TRANSACTION. UNDUE INFLUENCE IN THE NATURE OF RIGHT OF PRE EMPT ION OF PURCHASER DUE TO WILL OF LATE SH. RAMSINGH. 4. THAT THE LD. CIT (A), AJMER HAS FAILED TO ENSURE PR OPER VALUATION OF THE SOLD PROPERTY. THE DEPARTMENTAL VALUATION REQUEST OF THE DECEASED APPELLANT U/S 50C(2) HAS NOT BEEN ACCEPTED BY THE LD. AO IN I TS TRUE SENSE. THE VALUATION REPORT ON RECORD APPROVED VALUER HAS BEEN IGNORED. LD. AO AND CIT (A) HAVE NOT CONSIDERED THE SPECIFIC CIRCUMSTANCES AND STEREOTYPE THINKING HAS LED TO UN JUSTIFIED VALUATION. 5. THAT THE APPELLANT CARVES TO ADD, AMEND, AND ALTER ANY OF THE GROUNDS BEFORE OR AT THE TIME OF APPELLATE HEARING. THE DEA TH OF ASSESSEE AND SUBSEQUENT DEATH OF WIFE BY SYMPATHETICALLY CONSIDE RED. 2. BRIEFLY STATED THE FACTS ARE THAT THIS IS SECOND ROUND OF LITIGATION. IN THE EARLIER ROUND OF LITIGATION, THE LD. CIT (A) HAS DI RECTED THE AO TO ADOPT SALE VALUE OF THE PROPERTY AT RS. 27,00,000/- DECLARED IN RESPECT OF THE PROPERTY KNOWN AS NANKI BHAWAN. HOWEVER, THE LD. CIT (A) GAVE LIBERTY TO T HE AO TO CHANGE THE VALUE IN ACCORDANCE WITH THE ORDER OF I.G. STAMPS. ADMITTED LY, THE ASSESSEE HAS NOT CHALLENGED THE ORDER OF LD. CIT (A) DATED 28.3.2011 . PURSUANT TO THE ORDER DATED 28.03.2011, THE AO PASSED THE IMPUGNED ASSESSMENT O RDER UNDER SECTION 155(15) 3 ITA NO. 94/JP/2014 LATE SHRI DHAN SINGH BHATI. THEREBY ADOPTED THE REVISED VALUE AT RS. 1,08,91,15 1/- AND COMPUTED LONG TERM CAPITAL GAIN AT RS. 70,69,482/-. AGAINST THIS ORDE R, THE ASSESSEE FILED APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL VIDE ORDER DATED 18.11.2013. 3. THE FIRST GROUND OF THE ASSESSEE IS AGAINST FAST ENING LIABILITY OF ENTIRE LONG TERM CAPITAL GAIN ON THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS THE 50% OWNER OF THE PROPERTY AND A S SUCH EVEN IF THE CAPITAL GAIN IS TO BE COMPUTED AGAINST THE ASSESSEE, IT SHOULD B E ONLY TO THE EXTENT OF 50% OF SUCH VALUE. 3.1. ON THE CONTRARY, THE LD. D/R SUBMITTED THAT TH IS ISSUE IS NOT ARISING OUT OF THE IMPUGNED ORDER. HE SUBMITTED THAT THE ISSUE HAS ATT AINED FINALITY AS THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST COMPUTATION OF CAP ITAL GAIN AND MAKING THE ASSESSEE LIABLE FOR SUCH TAX. HE FURTHER SUBMITTED THAT EVEN FROM THE SALE DEED EXECUTED BY THE ASSESSEE AS ENCLOSED AT PAPER BOOK PAGES 72 & 73, IT CAN BE INFERRED THAT THE PROPERTY IN QUESTION CAME TO THE ASSESSEE BY WAY OF WILL DATED 26 TH SEPTEMBER, 1996 AND THE ASSESSEE HAS ALSO GOT PROBA TE OF THIS WILL. THEREFORE, THE ASSESSEE CANNOT BLOW HOT AND COLD. 3.2. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. ADMITTEDLY, THIS ISSUE DOES NOT ARISE FROM THE IMPUGNED ORDER. IN EARLIER ROUND OF LITIGATION, LD. CIT (A) HAD DIRECTED THE AO TO REVISE THE VALUE OF THE PROPERTY AS AND WHEN REVISED BY THE I.G. STAMPS. THE AO IN PURSUANCE OF THAT ORDER, REVISED THE VALUE OF THE PROPERTY. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD NOT CHALL ENGED THE ORDER DATED 28 TH MARCH, 4 ITA NO. 94/JP/2014 LATE SHRI DHAN SINGH BHATI. 2011. HENCE THE SUBJECT MATTER OF THE ASSESSMENT WA S TO THE EXTENT OF VALUATION OF PROPERTY, AND NOT THE OWNERSHIP OF THE PROPERTY. B UT IT IS ALSO A SETTLED POSITION OF LAW THAT IF A PERSON IS NOT LIABLE FOR TAX, MERELY BECAUSE HE HAS NOT CLAIMED OTHERWISE, THAT SHOULD NOT GIVE LICENCE TO THE ASSE SSING AUTHORITY TO MAKE THE PERSON LIABLE FOR THE ENTIRE VALUE OF THE PROPERTY. THE ASSESSEE HAS NOT FILED COPY OF THE WILL DATED 26.09.1996. THEREFORE, IN THE INTERE ST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE OF OWNERSHIP OF THE PROPERTY AND LIABILITY OF THE ASSESSEE, TO THE FILE OF THE AO FOR FRESH DECISION. IN THE EVENT THE AO F INDS THAT THE OWNERSHIP OF THE ENTIRE PROPERTY I.E. NANKI BHAWAN OR NANGI BHAWAN, AT PRAKASH ROAD, NAGRA, AJMER WAS BEQUEATHED BY THE FATHER OF THE ASSESSEE IN FAV OUR OF THE ASSESSEE, HE WOULD DECIDE THE ISSUE ACCORDINGLY AS THE OWNER OF THE EN TIRE PROPERTY. HOWEVER, IN CASE HE FINDS OTHER-WISE IN TERMS OF THE WILL RELATED TO THIS PROPERTY, HE WOULD CONSIDER THE SAME AND DECIDE ACCORDINGLY. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 4. GROUNDS NO. 2 TO 4 RELATE TO THE VALUATION OF TH E PROPERTY. THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. HE SUBMITT ED THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THAT THERE WAS LITIGATION IS GOING ON AS REGARDS OWNERSHIP, DISPUTES WITH 5 TENANTS AND COURT CASES, PROPERTY W AS NOT IN VACANT POSSESSION OF SELLERS WAS POSSESSED BY THE PURCHASER, UNDUE INFLU ENCE IN THE NATURE OF RIGHT OF PRE EMPTION OF PURCHASER DUE TO WILL OF LATE SHRI RAM SINGH. IT IS FURTHER CONTENDED THAT DEPARTMENTAL VALUATION REQUEST OF THE DECEASED APPELLANT UNDER SECTION 50C(2) HAS NOT BEEN ACCEPTED BY THE AO. THE VALUATION REP ORT ON RECORD OF APPROVED 5 ITA NO. 94/JP/2014 LATE SHRI DHAN SINGH BHATI. VALUER HAS BEEN IGNORED, AND THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE SPECIFIC CIRCUMSTANCES. 4.1. ON THE CONTRARY, THE LD. D/R HAS OPPOSED THE S UBMISSIONS. HE SUBMITTED THAT THE ISSUE DOES NOT ARISE FROM THE IMPUGNED ORDER AN D NOW THE ASSESSEE CANNOT TAKE THIS ISSUE AS IN THE EARLIER ROUND OF LITIGATION TH IS ISSUE HAS ALREADY BEEN SETTLED. THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THIS. 4.2. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, IN THE EARLIER ROUND OF LITIG ATION THE ISSUE OF VALUATION WAS DECIDED BY LD. CIT (A). THE ASESSEE HAS NOT FILED A NY APPEAL AGAINST SUCH ORDER. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT (A), SAME IS HEREBY AFFIRMED. THESE GROUNDS RAISED IN THIS APPEA L ARE REJECTED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23/09 /2016. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23/09/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- LATE SHRI DHAN SINGH BHATI, AJME R. 2. THE RESPONDENT THE ITO WARD 2(2), AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 94/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 6 ITA NO. 94/JP/2014 LATE SHRI DHAN SINGH BHATI.