Vikram Subhash Tilekar, Pune V. Income-tax Officer, Ward - 14 (4), Pune

ITA 963/PUN/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1001 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS S MUNDHE
• Keywords: Capital asset; Retrospective amendment; Cost of acquisition; Fair market value; Valuation report; Condonation of delay; Set aside; Capital Gains
• Section: 143(3); 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.962/PUN/2019 / ASSESSMENT YEAR : 2008-09 PRITAM SUBHASH TILEKAR, KAVDI PAT, KADAMWAK WASTI, HAVELI, PUNE 412 201. PAN : ACKPT8568J. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 14(4), PUNE. . / RESPONDENT . / ITA NO.963/PUN/2019 / ASSESSMENT YEAR : 2008-09 VIKRAM SUBHASH TILEKAR, KAVDI PAT, KADAMWAK WASTI, HAVELI, PUNE 412 201. PAN : AFVPT3869A. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 14(4), PUNE. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI VISHWAS S. MUNDHE. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY TWO DIFFERENT ASSESSEES, RELATE D TO EACH OTHER, ARE EMANATING OUT OF THE CONSOLIDATED ORDER OF / DATE OF HEARING : 26.08.2019 / DATE OF PRONOUNCEMENT: 06.09.2019 2 COMMISSIONER OF INCOME TAX (APPEALS) 9, PUNE DATED 05.02.2 019 FOR A.Y. 2008-09. 2. BEFORE ME, AT THE OUTSET, BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS FILED BY TWO DIFFERENT ASSESSEES ARE AGAINST TH E CONSOLIDATED ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 9, PUNE, THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTIC AL EXCEPT FOR THE ASSESSEE AND THE AMOUNTS INVOLVED AND THEREFORE THE SUBMISSIONS MADE BY THEM WHILE ARGUING ONE APPEAL WOULD BE EQUALLY APPLICABLE TO THE OTHER APPEAL ALSO AND THUS BOTH THE A PPEALS CAN BE HEARD TOGETHER. IN VIEW OF THE AFORESAID SUBMISSIONS OF BO TH THE PARTIES, I, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOS E OF BOTH THE APPEALS BY A CONSOLIDATED ORDER BUT HOWEVER, PROCEED W ITH NARRATING THE FACTS IN ITA NO.962/PUN/2019 FOR ASSESSMENT YEAR 2008-09 . 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL AND IS HAVING INCOME FROM AGRICULT URE. AO NOTED THAT IN THE CASE OF ASSESSEE THE DUE DATE FO R FILING OF RETURN U/S 1391(1) OF THE ACT FOR A.Y. 2008-09 WAS ON 31.07.2008 BUT ASSESSEE HAD NOT FILED THE RETURN OF INCOME. HE ACCORDIN GLY ISSUED NOTICE U/S 148 OF THE ACT ON 20.03.2015. IN RESPONSE TO NOTICE U/S 148 OF THE ACT, ASSESSEE FILED THE RETURN OF INCOME ON 31.0 7.2015 DECLARING TOTAL INCOME AT RS.1,19,060/-. THE CASE WAS TAKE N UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDER DATED 16.02.2016 DETERMINING THE TOTA L TAXABLE INCOME AT RS.2,98,000/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE CONSOLIDATED O RDER DATED 3 DT.05.02.2019 (IN APPEAL NO.PN/CIT(A)-7-TRF.FROM/CIT(A-9 TRF. IN/10233/2016-17) DISMISSED THE APPEAL OF ASSESSEE. AGG RIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS R AISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN INITIATING THE R EASSESSMENT PROCEEDING U/S 147 OF THE INCOME TAX ACT,1961 THERE BY PASSING THE ORDER U/S. 143(3) R.W.S. 147 OF THE ACT AND FURTHER ERRED IN DENYING THE EXEMPTION AND COST OF ACQUISITION TO TH E ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN ADOPTING A VALUA TION AS ON 01/04/1981 BY TAKING SOME AVERAGE VALUE AND BY REJE CTING APPELLANT'S VALUATION REPORT WITHOUT ASSIGNING ANY COGENT REASO N WHATSOEVER, THEREFORE SUCH ACTION IS BAD IN LAW AND APPELLANT P RAYS THAT VALUE ADOPTED AS ON 01/04/1981 SHALL BE TAKEN AS CLAIMED BY YOUR APPELLANT IN THE RETURN OF INCOME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN DENYING THE EXEM PTION U/S.54F, IN SPITE OF THE DETAILED SUBMISSION MADE BEFORE LOWER AUTHORITIES. WITHOUT PREJUDICE TO ABOVE GROUNDS FOLLOWING GROUND S ARE TAKEN ON MERIT 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN TREATING THE AGR ICULTURAL LAND AS CAPITAL ASSET AND THEREBY TAXING IT UNDER THE HEAD CAPITAL GAIN BY IGNORING THE FACT THAT, THE LIMIT OF 8 KMS, THE RELE VANT DATE FOR CHECKING THE MUNICIPAL LIMIT SHALL BE MUNICIPAL LIMIT AS ON 0 6/01/1994, (DATE ON WHICH NOTIFICATION FOR 8 KMS IS ISSUED), IN SUCH CA SE IT IS YOUR APPELLANTS CONTENTION THAT, THE LAND FALLS BEYOND THE 8KM'S TH EREFORE ENTIRE TRANSACTION IS OUTSIDE THE AMBIT OF CHARGING PROVIS ION OF INCOME TAX. 4. SIMILAR GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN I TA NO.963/PUN/2019 FOR A.Y. 2008-09. 4.1. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETH ER. 5. BEFORE ME, LD.A.R. AT THE OUTSET, SUBMITTED THAT THERE IS DELAY OF 29 DAYS IN FILING THE PRESENT APPEAL. HE SUBMITTED SWORN A FFIDAVIT OF ASSESSEE WHEREIN THE REASONS FOR DELAY IS EXPLAINED AND SUBMITTED THAT THE DELAY IS NOT INTENTIONAL AND THEREFORE PRAYED THAT TH E DELAY OF 29 4 DAYS BE CONDONED. LD.D.R. DID NOT SERIOUSLY OBJECT TO T HE PRAYER OF CONDONATION. 6. ON THE ISSUE OF CONDONATION OF DELAY OF APPEAL, I HAVE G ONE THROUGH THE SWORN AFFIDAVIT FILED BY THE ASSESSEE AND HEAR D THE LD.A.R. AFTER CONSIDERING THE REASONS STATED IN THE AFFIDAVIT, I AM OF THE VIEW THAT THE DELAY IN FILING THE APPEAL HAS BEEN SATISFACTORILY EXPLAINED. IN VIEW OF THESE FACTS, I CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 7. DURING THE RE-ASSESSMENT PROCEEDINGS, AO NOTICED THA T INFORMATION WAS RECEIVED FROM THE OFFICE OF DDIT(INV), UNIT-II, PUNE VIDE LETTER DATED 24.02.2015 WHEREIN IT WAS NOTED THAT AS SESSEE HAD SOLD LAND TO DSK GROUP FOR ITS PROJECT DREAM CITY AND HAD RECEIVED RS.4,06,771/- TOWARDS HIS SHARE AS SALE CONSIDERATION. AS SESSEE HAD SUBMITTED VALUATION REPORT OF SHRI G. L. KULKARNI, GOVERNME NT APPROVED VALUER, FOR THE VALUE OF LAND AS ON 01.04.1981. THE VALUATION REPORT SUBMITTED BY THE ASSESSEE WAS NOT ACC EPTED BY THE AO AND THEREFORE HE REFERRED THE VALUATION TO THE VALUA TION OFFICER U/S 55A OF THE ACT TO COMPUTE THE VALUE OF THE LAND AS ON 01.04.1981. THE VALUATION OFFICER SUBMITTED HIS REPORT ON 28.12.2015. AO NOTICED THAT THE VALUATION MADE BY THE GOVERNMENT APPROVED VA LUER THAT WAS SUBMITTED BY THE ASSESSEE HAD VALUED THE PROPERTY AS ON 01.04.1981 AT 175 PER SQ. MTR. ACCORDING TO THE AO, THE VALUATION R EPORT SUBMITTED BY THE ASSESSEE WAS NOT PROPER AS THE VALUA TION HAD NOT TAKEN ANY DIRECT EVIDENCE OR COMPARABLE SALE INSTANCES. THE VALUER HAD CONSIDERED THE PROPERTY AS HAVING NA POTENTIAL EVEN IN THE YEAR 1981, WHEREAS THE AREA WAS NOT IN MUNICIPAL CORPORATION LIMIT EVEN AS 5 ON JANUARY, 2016 AND THE VALUER HAD WRONGLY FOLLOWED THE READY RECKNOR METHOD BY ADOPTING THE RATE AT RS.250 PER SQ. MTR. HE ACCORDINGLY REJECTED THE VALUATION REPORT SUBMITTED BY THE ASSESSEE. HE THEREAFTER ON THE BASIS OF THE VALUATION REPORT OF THE VALUATION OFFICER DETERMINED THE VALUATION OF LAND AT RS.625 PER SQ. M TR. AND ACCORDINGLY THE CAPITAL GAIN WAS WORKED OUT AT RS.2,97,11 8/- AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE ME. 8. BEFORE ME, LD.A.R. SUBMITTED THAT ASSESSEE HAD ADOPTE D THE VALUE OF LAND AT RS.175 PER SQ.MTR, WHEREAS THE AO HAD C ONSIDERED THE VALUE OF LAND AT RS.66.5 PER SQ.MTR. HE SUBMITTED THAT T HE VALUE OF THE LAND ADOPTED BY THE ASSESSEE WAS HIGHER AS THE RA TE COMPARED TO BE DETERMINED BY THE DVO AND AS SUCH FOLLOWING THE DECISIO N OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PR INTS (SUPRA), THE AO HAD ERRED IN MAKING REFERENCE TO THE DVO. LD.A.R . FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS IDENTICAL TO T HAT OF VIKAS RAMCHANDRA RAUT AND OTHERS (ITA NOS.1941 TO 44/PUN/2 018 ORDER DATED 18.04.2019). HE SUBMITTED THAT IN THOSE CASES, TH E CO-ORDINATE BENCH OF THE TRIBUNAL BY FOLLOWING THE ORDER OF HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. PUJA PRINTS REPORTED IN (20 14) 360 ITR 697 (BOM) HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSE E. HE PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE SUBMITT ED THAT SINCE THE FACTS IN THE CASE OF ASSESSEE AND THAT OF VIKAS RAMC HANDRA RAUT AND OTHERS ARE IDENTICAL AND THEREFORE FOR SIMILAR REASONS , THE MATTER 6 BE DECIDED ACCORDINGLY. LD. D.R. ON THE OTHER HAND SUPPO RTED THE ORDER OF LOWER AUTHORITIES. 9. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO REFERENCE MADE TO THE DVO IS U/S 55A OF THE ACT. IT IS AN UNDIS PUTED FACT THAT FOR THE PURPOSE OF VALUATION OF THE PROPERTY ASSESSEE HA D GOT THE VALUATION FROM MR. G. KULKARNI, GOVERNMENT APPROVED VALUER, WHO DETERMINED THE VALUE OF THE PROPERTY AS ON 01.04.1981 BY ADOPTING THE RATE AT RS.175/- PER SQ.MTR. THE AO DID NOT ACCE PT THE VALUATION MADE BY THE GOVT. APPROVED VALUER AND REFERRED THE MAT TER TO THE DVO, WHO DETERMINED THE VALUE OF THE IMMOVABLE PROPERTY A S ON 01.04.1981 BY ADOPTING THE RATE AT RS.66.5/- PER SQ.MTR . IT IS THUS CLEAR THAT THE VALUE OF PROPERTY DETERMINED BY THE VALU ER APPOINTED BY THE ASSESSEE WAS HIGHER THAN THE VALUE DETERMINED BY T HE DVO. I FIND THAT THE ISSUE OF REFERENCE U/S 55A WAS BEFORE THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PRINTS (SUPRA). B EFORE THE HONBLE HIGH COURT, REVENUE HAD ARGUED THAT THE AMENDM ENT MADE TO SEC.55A(A) WAS RETROSPECTIVE AND THAT THE AO HAD POWERS U/S 131, 133(C) AND 142(2) TO REFER THE MATTER FOR VALUATION. THESE ARGUMENTS DID NOT FIND FAVOUR WITH THE HONBLE HIGH COURT. THE HONBL E BOMBAY HIGH COURT HAS HELD THAT REFERENCE TO DVO CAN ONLY BE MADE WHEN THE VALUE ADOPTED BY THE ASSESSEE WAS LESS THAN THE FAIR MARKET VALUE. THE HONBLE JURISDICTIONAL HIGH COURT HAS FURTHER HELD THAT AMENDMENT TO PROVISO OF SEC.55A(A) IS APPLICABLE ONLY W.E.F. 01.07.2012 AND HAS NO RETROSPECTIVE EFFECT. BEFORE ME, REV ENUE HAS NOT PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. I THEREFORE 7 RELYING ON THE AFORESAID DECISION OF HONBLE BOMBAY HIGH CO URT IN THE CASE OF PUJA PRINTS (SUPRA) AM OF THE VIEW THAT IN THE PR ESENT CASE, AO WAS NOT JUSTIFIED IN MAKING A REFERENCE TO THE DVO AND CO MPUTING THE CAPITAL GAINS ON THE BASIS OF VALUE ARRIVED AT BY THE VALUA TION OFFICER. I THEREFORE SET ASIDE THE ORDER OF AO AND THUS THE GROUND OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.963/PUN/2019 IS ALLOWED. 11. NOW, I TAKE UP APPEAL OF ASSESSEE IN ITA NO.963/PUN/2 019 FOR A.Y. 2008-09. 12. AS FAR AS THE GROUNDS RAISED IN APPEAL IN ITA NO.963 /PUN/2019 FOR A.Y. 20008-09 IS CONCERNED, IN VIEW OF THE SUBMISSION OF BOTH THE PARTIES THAT THE FACTS OF THE CASE IN THE YEAR BEING IDEN TICAL TO THE FACTS AND ISSUE OF THE CASE IN ITA NO.962/PUN/2019 FOR A.Y. 200 8-09, I THEREFORE FOR THE REASONS STATED HEREIN WHILE DISPOSING OF THE APPEAL IN ITA NO.962/PUN/2019 FOR A.Y. 2008-09 AND FOR SIMILAR REASO NS, SET ASIDE THE ORDER OF AO. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, THE APPEAL OF ASSESSEE IN ITA NO.963/PUN/2019 FOR A.Y. 2008-09 IS ALLOWED. 8 14. TO SUM UP, BOTH THE APPEALS OF ASSESSEES ARE AL LOWED. ORDER PRONOUNCED ON 6 TH DAY OF SEPTEMBER, 2019. SD/-- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 6 TH SEPTEMBER, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-9, PUNE. PR. CIT-6, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.