NAFISA ABIZAR BANATWALA, Mumbai V. ITO-17(2)(4), Mumbai

ITA 974/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3584 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 20-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Additional evidence; Valuation report
• Section: 50C; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTANT MEMBER ITA NO. 974 / MUM . /201 9 ( ASSESSMENT YEAR : 20 13 14 ) NAFISA ABIZAR BANATWALA B1/5, EMCA HOUSE 289, SHAHID BHAGATSINGH ROAD FORT, MUMBAI 400 001 PAN AKVPB2016Q . APPELLANT V/S INCOME TAX OFFICER WARD 17(2)(4), MUMBAI . RESPONDENT ASSESSEE BY : SHRI RAVINDRA POOJARY REVENUE BY : SHRI SAURABH DESHPANDE DATE OF HEARING 06.02.2020 DATE OF ORDER 04.03.2020 O R D E R PER SAKTIJIT DEY. J.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 11 TH JANUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 58 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 13 14 . 2. IN GROUND NO. (I) , THE ASSESSEE HAS CHALLENGED THE ADDITION MADE OF ` 10,59,863, UNDER THE HEAD LONG TERM CAPITAL GAIN BY INVOKING 2 NAFISA ABIZAR BANATWALA THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 3. B RIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HER RETURN OF INCOME ON 18 TH MARCH 2015, DECLARING TOTAL INCOME OF ` 2,23,554. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICING THAT THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN OF ` 2,23,544, ON SALE OF FLAT AT SUMIT APARTMENT, GOREGAON, MUMBAI, CALLED UPON THE ASSESSEE TO FURNISH THE WORKING OF LONG TERM CAPITAL GAIN AS WELL AS THE SALE DEED. ON PERUSING THE S ALE DEE D , HE FOUND THAT THE STAMP DUTY AUTHORITY HA S VALUED THE PROPERTY FOR STAMP DUTY PURPOSE AT ` 37,80,000, AS AGAINST THE DECLARED SALE CONSIDERATION OF ` 30 LAKH. NOTICING THE ABOVE, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE VALUE DETERMINED BY THE STAMP DUTY AUTHORITY SHOULD NOT BE ADOPTED AS DEEMED SALE CONSIDERATION FOR COMPUTING LONG TERM CAPITAL GAIN. THOUGH, THE ASSESSEE OBJECTED TO THE PROPOSED ADDITION, HOWEVER, THE ASSESSING OFFICER REJECTING THE SUBMISSIONS OF THE ASSESSEE PROCEEDED TO TREAT THE VALUE DETERMINED FOR S TAMP DUTY PURPOSE AS THE DEEMED SALE CONSIDERATION AND COMPUTED LONG TERM CAPITAL GAIN ACCORDINGLY. FURTHER, HE ALSO DISALLOWED DEDUCTION CLAIMED BY THE ASSESSEE TOWARDS AMENITIES AND COST OF REPAIRS. CHALLENGING THE 3 NAFISA ABIZAR BANATWALA AFORESAID DECIS ION OF THE ASSESSING OFF ICER, ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESS ING OFFICER WITHOUT REFERRING THE VALUATION OF THE PROPERTY TO THE DISTRICT VALUATION OFFICER (DVO) HAS STRAIGHT AWAY ADOPTED STAMP DUTY VALUE FOR DETERMINING THE LONG TERM CAPITAL GAIN. HE SUBMITTED , AS PER SECTION 50C(2) OF THE ACT, THE ASSESSING OFFICER HAS TO REFER VALUATION OF THE PROPERTY TO D VO IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE OBJECTS OR NOT TO THE STAMP DUTY VALUATION. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , NOW THE ASSESSEE HAS ALSO GOT THE PROPERTY VALUED F ROM REGISTERED VALUER AND IN THE SAID VALUATION REPORT, THE VALUE OF THE PROPERTY HAS BEEN DETERMINED AT ` 27,20,000. HE SUBMITTED , THE VALUATION REPORT MAY BE ADMI TTED AS THE ADDITIONAL EVIDENCE AND MATTER MAY BE RESTORED TO THE ASSESSING OFFICER FOR EXAMINING THE VALUATION REPORT OF THE REGISTERED VALUER AND REFERRING THE VALUATION TO THE DVO IN TERMS OF SECTION 50C(2) OF THE ACT. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , JUSTIFIED DETERMINATION OF LONG TERM CAPITAL GAIN BY ADOPTING THE VALUATION MADE BY THE STAMP VALUATION AUTHORITY. HOWEVER, HE SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR REFE RRING THE VALUATION TO THE DVO. 4 NAFISA ABIZAR BANATWALA 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. UNDISPUTEDLY, THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SECTION 50C(1) OF THE ACT TO DETERMINE THE LONG TERM CAPITA L GAIN BY ADOPTING THE VAL UE DETERMINED BY THE STAMP VALUATION AUTHORITY AS THE DEEMED SALE CONSIDERATION. HOWEVER, BEFORE DOING SO, HE HAS NOT MADE A NY REFERENCE TO THE DVO TO DETERMINE THE VALUE OF THE PROPERTY IN TERMS OF SECTION 50C(2) OF THE ACT. THE HONBLE CALCUTTA HIGH COUR T IN SU NIL KUMAR AGARWAL V/S CIT , [2014] 225 TAXMAN 211 (CAL.) HAS HELD THAT IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE OBJECTS TO THE STAMP DUTY VALUATION OR NOT, THE ASSESSING OFFICER HAS TO GET THE VALUATION DONE THROUGH THE DVO IN TERMS OF SECTION 5 0C(2) OF THE ACT. IN FACT, BEFORE US, THE ASSESSEE HAS FILED THE VA LUATION REPORT OBTAINED FROM A REGISTERED VALUER VALUING THE PROPERTY AT ` 27,20,000. ADMITTEDLY, THE AFORESAID VALUATION WAS NOT BEFORE THE DEPARTMENTAL AUTHORITIES. THEREFORE, THOUGH , WE A DMIT THE VALUATION REPORT AS ADDITIONAL EVIDENCE, HOWEVER, IN OUR CONSIDERED OPINION, THE VALUATION DONE BY THE REGISTERED VALUER NEEDS TO BE EXAMINED BY THE ASSESSING OFFICER AND THE DVO. THEREFORE, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFIC ER FOR FRESH ADJUDICATION AFTER COMPLYING TO THE PROVISIONS OF SECTION 50C(2) OF THE ACT BY REFERRING THE VALUATION OF THE PROPERTY TO THE DVO. BEFORE DECIDING THE ISSUE, THE ASSESSEE MUST BE AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD. THE GROUND NO. (I) IS ALLOWED FOR STATISTICAL PURPOSES. 5 NAFISA ABIZAR BANATWALA 7. IN GROUNDS NO.(II) AND (IV), THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF CERTAIN DEDUCTION CLAIMED ON ACCOUNT OF AMENITIES, REPAIRS AND RENOVATION AND BROKERAGE FEE WHILE COMPUTING THE LONG TERM CAPITAL GAIN. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE DISALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION IS PRIMARILY ON THE REASONING THAT IT IS NOT SUPPORTED BY PROPER EVIDENCE. KEEPING IN VIEW THE RELEVANT FACTS, WE R ESTORE THE ISSUE RELATING TO ASSESSEES CLAIM OF DEDUCTION ON ACCOUNT OF AMENITIES, REPAIRS, AND RENOVATION AND BROKERAGE FEE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION SO THAT THE ASSESSEE GETS AN OPPORTUNITY TO FURNISH THE REQUIRED EVIDENCES TO PROVE HER CLAIM. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE ISSUE AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THESE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 04.03.2020 SD/ - G. MANJUNATHA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 04.03.2020 6 NAFISA ABIZAR BANATWALA COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI