Shri. Ravindra Waman Soman, Buldhana V. Income Tax Officer , Khamgaon., Khamgaon

ITA 94/NAG/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56367 (ITAT-NAGPUR)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH GOYAL
• Assessee Lawyers: S C THAKAR; C J THAKAR
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Principle of natural justice; Cost of acquisition; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ./ITA NO.94/NAG/2011 ( AY: 2004 - 2005 ) SHRI RAVINDRA WAMAN SOMAN, NAYA MOHALLA, MANGAL GATE ROAD, MALKAPUR. / VS. INCOME TAX OFFICER, KHAMGAON. ./ PAN : BHKPS5975L ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI C.J. THAKAR AND MR. S.C. THAKAR / RESPONDENT BY : SHRI SATISH GOYAL, CIT - DR / DATE OF HEARING : 03.09.2014 / DATE OF PRONOUNCEMENT : 05 .09.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 6.5.2011 IS AGAINST THE ORDER OF THE CIT (A) - I, NAGPUR DATED 4.3.2011 FOR THE ASSESSMENT YEAR 2004 - 05. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. LD CIT (A) ERRED IN TAKING THE VALUATION OF LAND SOLD AT RS. 50,19,000/ - AS PER STAMP DUTY VALUATION , AS AGAINST THE ACTUAL SALE PRICE OF RS. 33,00,000/ - RECEIVED BY THE ASSESSEE, ESPECIALLY WHEN THE SAID PRICE OF RS. 33,00,000/ - IS ACCEPTED BY THE SAME ITO IN THE CASE OF PURCHASER IN HIS SECTION 143(3 ) ASSESSMENT. 2. LOWER AUTHORITIES ERRED IN DENYING TO THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE VALUATION OFFICER AND THE PURCHASER WITH HIS RECORDS. THUS, THE PRINCIPLES OF NATURAL JUSTICE ARE SERIOUSLY VIOLATED. 3. LD CIT (A) FAILED TO SEE THAT THE DVO HAS ADMITTED THAT THERE WERE NO COMPARABLE SALE INSTANCES OF AGRICULTURAL LAND DURING THE PERIOD AND HENCE HE HAS ADOPTED STAMP DUTY VALUATION WHICH VALUATION ITSELF IS UNDER CHALLENGE. THE VALUATION OF DVO WAS THUS MOST ARBITRARY . IT IS ALSO CON TRADICTORY IN AS MUCH AS HE SAYS THAT HE IS ADOPTING COMPARABLE SALE METHOD AND THEN HE PROCEEDS TO VALUE THE PROPERTY AS PER STAMP DUTY VALUATION ON THE GROUND THAT NO COMPARABLE INSTANCES IS AVAILABLE. LD CIT (A) SHOULD HAVE THUS REJECTED THE SAID VALUA TION AS ARBITRARY, CONTRADICTORY AND AGAINST THE EVIDENCE AND MATERIAL ON RECORD. 4. LD CIT (A) ERRED IN NOT TAKING INTO CONSIDERATION THE SALE INSTANCE OF AGRICULTURAL LAND PRODUCED BY THE ASSESSEE ON THE GROUND THAT THE SAME 2 WAS NOT FROM THE SAME MOUZA. SHE FAILED TO SEE THAT THE SAID LAND WAS VERY NEAR TO THE LAND IN QUESTION AND WAS BEST COMPARABLE CASE. 5. ON TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW APPLICABLE THERETO LD CIT (A) ERRED IN TAKING THE VALUE OF LAND SOLD AT RS. 50,19,00 0/ - AS AGAINST ACTUAL CONSIDERATION OF RS. 33,00,000/ - . 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AGRICULTURIST. DURING THE YEAR, ASSESSEE NOT FILED THE RETURN OF INCOME AND AS A RESULT , THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S 147 OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 25,28,634/ - . DURING THE ASSESSMENT, AO OBSERVED THAT THE ASSESSEE SOLD AGRI CULTURAL LAND ADMEASURING 1.21 HECTARES SITUATED AT MOUJE MALKAPUR, DIST. BULDANA ON 17.7.2003 FOR A SALE CONSIDERATION OF RS. 33,00,000/ - . AO FURTHER NOTICED THAT THE SAID LAND WAS REGISTERED FOR VALUATION PURPOSES OF STAMP DUTY AT RS. 50,82,000/ - AND T HEREFORE PROPOSED TO ADOPT THE STAMP DUTY AT RS. 50,82,000/ - AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. ON THE REQUEST OF THE ASSESSEE, AO REFERRED THE MATTER TO THE DISTRICT VALUATION OFFICER (DVO), BHOPAL WHO FIXED THE VALUE OF THE SAID LAND AT RS . 50.82 LAKHS. AT THE SAME TIME AO ALSO POINTED OUT THAT THE APPEAL BY THE PURCHASER AGAINST THE VALUATION OF THE STAMP DUTY HAS BEEN HEARD BY THE DEPUTY INSPECTOR GENERAL OF REGISTRATION AND DEPUTY CONTROL OF STAMP DUTY, AMRAVATI AND THE VALUE HAS BEEN F IXED AT RS. 50.19 LAKHS AND ACCORDINGLY ADOPTED THE VALUE U/S 50C OF THE ACT AT RS. 50,19,000/ - . FURTHER, AO ADOPTED THE COST OF ACQUISITION OF LAND AS ON 1.4.1981 AT RS. 61,500/ - PER ACRE AS AGAINST RS. 95,000/ - PER ACRE ADOPTED BY THE ASSESSEE. AGGRIEVE D WITH THE DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE WHEREIN THE ISSUE WITH REGARD TO INVOKING OF THE DEEMING PROVISION OF SECTION 50C, THE CIT (A) UPHOLD THE DECISION OF THE AO. AGGRIEVED WITH THE DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE M ENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US, AT THE VERY OUTSET, SHRI C.J. THAKAR AND MR. S.C. THAKAR , LD COUNSELS FOR THE ASSESSEE POINTED OUT THAT THE REPORT OF THE DVO 3 WHICH IS PLACED AT PAGES 19 TO 22 OF THE PAPER BOOKS SUFFERS FROM INCONSIST ENCIES. IN THIS REGARD, LD COUNSELS BROUGHT OUR ATTENTION TO PAGE 21 OF THE PAPER BOOK AND MENTIONED THAT PARA 7.1 OF THE VALUATION REPORT RELATING TO THE METHOD ADOPTED MENTIONS THAT COMPARABLE SALE INSTANCES METHOD WAS ADOPTED. BUT, IN PARA 7.2 OF THE SAID REPORT SHOWS WHAT IS ADOPTED IS THE SUB - REGISTRAR OFFICE (SRO) PRICE, THAT TO RELEVANT FOR THE AY 2002 - 2003 AND NO COMPARABLE INSTANCES WERE PICKED UP RELEVANT FOR THE TRANSACTIONS ACCORDING TO JULY, 2003. NON - AVAILABILITY OF THE INSTANCES APPEAR S TO BE THE REASON FOR THE DVO TO RESORT THE SRO PRICE. IN THAT CASE, IT IS NOT UNDERSTOOD AS TO WHY DVO FAILED TO ADOPT OTHER METHODS AVAILABLE FOR THE VALUATION OF THE PROPERTY ITSELF. IT IS ALSO BROUGHT TO OUR NOTICE THAT THE WRITTEN SUBMISSIONS WERE MADE BEFORE THE ITO CRITICIZING THE VALUATION REPORT BUT NO REFERENCE IS MADE IN THE ORDERS OF THE LOWER AUTHORITIES. FURTHER, CRITICIZING THE DVOS REPORT, LD COUNSEL FILED A CO PY OF THE ORDER OF THE ITAT, DELHI BENCH IN THE CASE OF RAVI KANT VS. ITO [20 07] 110 TTJ (DEL) 297 AND MENTIONED THAT THE DVO SHOULD NOT RESORT SRO VALUATIONS WHEN HE IS RELYING ON A COMPARABLE INSTANCES METHOD. HE ALSO MENTIONED THAT IN SUCH CASE OF VALUATION, MATTER SHOULD BE REMANDED FOR DE NOVO VALUATION BY THE DVO. EVENTUALLY , LD COUNSEL PLEADED FOR REMANDING THE ISSUES TO THE FILE OF THE AO WITH A DIRECTION FOR FRESH VALUATION BY THE DVO. 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO AND THE CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. ON HEARING BOTH THE PARTIES ON THE LIMITED ISSUE OF VALIDITY OF THE DVO REPORT, WHICH IS SURROUNDED BY VARIOUS OBJECTIONS OF THE ASSESSEE WHICH WERE NOT ATTENDED BY THE ASSESSING OFFICER / DVO PRIMA FACIE WE FIND THERE ARE INCONSISTENCIES IN THE VALUATION REPORT CONSIDERING THE METHOD ADOPTED AND ACTUAL VALUATION DONE BY THE DVO. IT IS THE REQUIREMENT OF PRINCIPLES OF NATURAL JUSTICE THAT THE OBJECTIONS RAISED BY THE ASSESSEE IN T HE MATTERS RELATING TO THE VALUATION OF THE PROPERTY, THE SAID OBJECTIONS SHOULD BE ADDRESSED BY PASSING A SPEAKING ORDER. THE SAME IS ESSENTIAL MORE SO, WHEN THE VALUATION REPORT IS BINDING ON THE ASSESSING OFFICER. IN OUR OPINION, THE CITED ORDER OF TH E ITAT, DELHI BENCH IN THE CASE OF RAVI KANT (SUPRA) APPLIES TO THE FACTS OF THE 4 PRESENT CASE TO THE EXTENT OF JUSTIFYING FOR REMANDING. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE REMANDED TO THE FILE OF THE AO. AO SHALL MAKE A FRESH REFERENCE T O THE DVO FOR DENOVO VALUATION BY THE DVO. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCE D IN THE OPEN COURT ON 5 TH SEPTEMBER, 2014 . SD/ - SD/ - (VIVEK VARMA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; 5 /09/2014 .../ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. () / THE CIT(A) - 4. / CIT 5. , / DR, ITAT, NAGPUR. 6. / GUARD FILE . //TRUE COPY// / BY ORDER ( SR. PRIVATE SECRETARY) / ITAT, NAGPUR