ALASHORE MARINE EXPORTS PRIVATE LIMITED, BALASORE V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, CUTTACK

ITSSA 79/CTK/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1834 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-06-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 03-06-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 03-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DURYODHAN PARIDA; CHITRASEN PA
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL Alashore Marine Exports Pvt Ltd., D1/18(P), D1/19, D1/37, D1/38, D1/39, Somnathpur Industrial Area, Balasore PAN/GIR No (Appellant Assessee by Per Bench This is an appeal filed by the assessee CIT(A), NFAC, Delhi dated 27.7.2023 2/10596/2018 2. Shri Dury the assessee and Shri IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL AND MANISH AGARWAL, ACCOUNTANT MEMBER IT(ss)A No.79 /CTK/2023 Assessment Years : 2019-2020 Alashore Marine Exports Pvt Ltd., D1/18(P), D1/19, D1/37, D1/38, D1/39, Somnathpur Industrial Area, Vs. Asst. Commissioner of Income Tax, Central Circle, Cuttack PAN/GIR No.AALCA 2704 R (Appellant) .. ( Respondent Assessee by : Shri Duryodhan Parida, CA/Chitrasen Pa Revenue by : Shri Sanjay Kumar, CIT Date of Hearing : 04/0 Date of Pronouncement : 04/0 O R D E R This is an appeal filed by the assessee against the order of the CIT(A), NFAC, Delhi dated 27.7.2023 in Appeal No. 2/10596/2018-19 for the assessment year 2019-2020. Duryodhan Parida and Shri Chitrasen Parida, the assessee and Shri Sanjay Kumar, Ld CIT DR appeared for the revenue. Page1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER , ACCOUNTANT MEMBER 23 20 Asst. Commissioner of Income Tax, Central Circle, Respondent) Duryodhan Parida, CA/Chitrasen Parida, Adv : Shri Sanjay Kumar, CIT DR 06/2024 /06/2024 against the order of the ld in Appeal No.Bhubaneswar- 2020. arida, ld ARs appeared for DR appeared for the revenue. IT(ss)A No.79 /CTK/2023 Assessment Years : 2019-2020 Page2 | 5 3. It was submitted by ld AR that there was a search on the premises of the assessee on 27.2.2020. In the course of search, it was found that the assessee had purchased certain properties at Palasuni, Bhubaneswar. The sale consideration mentioned as per the sale deed was Rs.10,60,01,000/-. No incriminating document was found. In the course of assessment, the Assessing Officer noticed that the stamp duty valuation of the property was Rs.20,55,90,000. The Assessing Officer referred the property for valuation to the Departmental Valuation Officer (DVO). The DVO’s valuation report had not arrived at the time when the assessment was completed. Consequently, the Assessing Officer made an addition of Rs.9,95,89,000/- being the difference between the stamp duty valuation of the property and the purchase consideration as recorded. This was done as per section 56(2)(x)(b)(B) r.w.s 50C of the Act. Aggrieved with the addition, the assessee filed appeal before the ld CIT(A). During the pendency of the appeal before the ld CIT(A), the DVO’s valuation report was received on 21.12.2021. The DVO’s report determined the value of the property at Rs.12,49,13,500/-. Consequently, the ld CIT(A) reduced the addition to Rs.1,89,12,500/-. The ld CIT(A)’s order has not been challenged by the Revenue. Aggrieved with the order of the ld CIT(A), the assessee has filed the impugned appeal before the Tribunal. 4. It was submitted by ld AR that in view of the decision of the Hon’ble Supreme Court in the case of C.B.Gautam vs Union of India, reported in IT(ss)A No.79 /CTK/2023 Assessment Years : 2019-2020 Page3 | 5 199 ITR 530 (SC) as also the decision of the Hon’ble Supreme Court in the case of K.P.Verghese, 131 ITR 597 (SC), the valuation upto 15% between the actual consideration and DVO’s valuation report, should be considered as reasonable and no addition should be made. It was submitted by ld AR that the purchase price disclosed by the assessee was Rs.10.60 crores and as determined by the DVO was Rs.12.49 crores. The valuation being only Rs.1.89 crores, the same was only about 17%. It was the submission that the DVO’s report was admittedly estimation and margin of errors were there. 5. In reply, ld CIT DR submitted that the fact was that there was variation between the DVO’s report and that of the actual sale consideration as disclosed by the assessee, therefore, the same was liable to be confirmed. It was the submission that no specific error in the DVO’s report has been pointed out by the assessee. It was the submission that the DVO himself has given substantial relief to the assessee in the valuation and no further relief is liable to be granted to the assessee. It was the submission that the decision of the Hon’ble Supreme Court in the case of C.B.Gautam and K.P.Verghese (supra) were basically in respect of valuation of the properties in regard to cost of construction. It was the submission that the addition as confirmed by the ld CIT(A) is liable to be sustained. 6. We have considered the rival submissions. The issue in the present case revolves around the DVO’s report. The DVO had been given notice to IT(ss)A No.79 /CTK/2023 Assessment Years : 2019-2020 Page4 | 5 appear in the present case. The DVO has responded vide his letter dated 15.5.2024 that he would be available through online mode on 4.6.2024 i.e. today. It was also intimated that the time of hearing was to be intimated. The Office has also intimated the time of hearing and the link for joining through video conferencing was also sent through the office of Addl. CIT, ITAT (Sr DR), Cuttack. Unfortunately, the DVO has chosen not to appear. A perusal of the facts in the present case clearly shows that in compliance of the provisions of section 50C of the Act, the Assessing officer has called for a valuation report from the DVO. The DVO has given the valuation report, which admittedly, shows the valuation of the property as lesser than the stamp duty valuation. The ld CIT(A) has admittedly accepted the DVO’s valuation report. The revenue has not challenged the order of the ld CIT(A) accepting the reduction of the valuation as made by the DVO. 7. The only issue that is left for consideration before the Tribunal is as to whether the difference in the valuation, which in the present case is about 17% between the actual sale consideration/purchase consideration as disclosed by the assessee and the valuation as done by the DVO is to be sustained or not. Here, we are bound by the decision of the Hon’ble Supreme Court in the case of C.B.Gautam and K.P.Verghese (supra). The decision in the case of C.B. Gautam (supra) was clearly in regard to purchase and sale of the property and the Hon’ble Supreme Court had clearly held that the variations are possible and to the extent of 15% was IT(ss)A No.79 /CTK/2023 Assessment Years : 2019-2020 Page5 | 5 acceptable variation. So also the decision of the Hon’ble Supreme Court in the case of K.P.Verghese (supra). In these circumstances, respectfully following the principles laid down by the Hon’ble Supreme Court in the case of C.B.Gautam and in the case of K.P.Verghese (supra), the Assessing Officer is directed to restrict the addition in the present case to the difference between the purchase consideration (less 15% of DVO’s valuation), which amounts to Rs.1,75,450/- 8. In the result, appeal of the assessee stands partly allowed. Order dictated and pronounced in the open court on 04/06/2024. Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 04/06/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Alashore Marine Exports Pvt Ltd., D1/18(P), D1/19, D1/37, D1/38, D1/39, Somnathpur Industrial Area, Balasore 2. The Respondent: Asst. Commissioner of Income Tax, Central Circle, Cuttack 3. The CIT(A)- 2, Bhubaneswar 4. Pr.CIT-2, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy//