J.Nithyanandan, CHENNAI V. ITO, CHENNAI

MA 100/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5768 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: S SRIDHAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Question of law; Competent authority
• Section: 50C

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER M.P. NO. 100/MDS/2017 [IN I.T.A.NO. 2991 /MDS/2016 ] ASSESSMENT YEAR :20 1 0 - 1 1 SHRI J. NITHYANANDAN, 32, 18 TH WEST CROSS STREET, MKB NAGAR, VYASARPADI, CHENNAI 600 039. [PAN: A GXPN9489K ] VS. THE INCOME TAX OFFICER , NON - CORPORATE WARD 5(2), CHENNAI 600 006 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, J CIT / DATE OF HEARING : 09 . 06 .201 7 / DATE OF P RONOUNCEMENT : 21 . 0 8 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BY MEANS OF PRESENT MISCELLANEOUS PETITION, THE ASSESSEE SEEKS TO RECALL THE ORDER PASSED BY THE TRIBUNAL IN I.T.A. NO. 2991 /MDS/2016 DATED 1 5 .0 3 .20 17 FOR THE ASSESSMENT YEAR 201 0 - 1 1 . BY REFERRING TO THE PETITION, THE LD. COUNSEL FOR THE PETITIONER HAS MAINLY CONTENDED THAT WHILE DECIDING THE APPEAL AGAINST THE ASSESSEE, THE TRIBUNAL HAS NOT CONSIDERED THE GROUNDS RAISED BY THE ASSESSEE IN GROUND NO. 5, 6 & 7 M.P. NO. 100/M/17 2 AND PRAYED THAT THE ORDER OF THE TRIBUNAL SHOULD BE RECALLED AND THE GROUNDS SHALL BE ADJUDICATED. 2. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT ALL THE GROUNDS RAISED IN THE GROUNDS OF APPEAL OF THE ASSESSEE I.E., GROUND NO. 1 TO GROUND NO. 11 ARE RELATE TO INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, WHICH WAS DULY CONSIDERED BY THE TRIBUNAL WHILE DECIDING THE APPEAL. THE LD. DR HAS FURTHER SUBMITTED THAT WHETHER THE ASSESSEE IS A PARTY TO THE STAMP DUTY PROCEEDINGS OR N OT, THE VALUE OF SALE OF PROPERTY WAS UNDER DISPUTE AND ONCE THE SELLER OR PURCHASER APPEALED BEFORE THE DRO (STAMPS) FOR DETERMINING THE VALUE OF THE PROPERTY, THE VALUE DETERMINED BY THE DRO (STAMPS) WOULD BE THE FINAL AND CANNOT BE CHALLENGED BEFORE THE TRIBUNAL. THUS, THERE IS NO APPARENT MISTAKE ON FACE OF THE ORDER OF THE TRIBUNAL, WHICH REQUIRES BE RECALLING AND READJUDICATING AND THEREFORE, THE LD. DR HAS PLEADED THAT THE MP FILED BY THE ASSESSEE SHOULD BE DISMISSED. 3. WE HAVE HEARD BOTH SIDES A ND PERUSED THE ORDER PASSED BY THE TRIBUNAL. AS DISPUTED IN THE MP, IN THE GROUNDS OF APPEAL OF THE ASSESSEE, THE GROUNDS RAISED IN GROUND NO. 5, 6 & 7 ARE REPRODUCED AS UNDER: M.P. NO. 100/M/17 3 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 50C OF THE ACT HAD NO APPLICATION TO THE FACTS OF THE CASE AND OUGHT TO HAVE APPRECIATED THAT THERE WAS NO VARIATION BETWEEN THE STATED CONSIDERATION AND THE GUIDELINE VALUE INASMUCH AS OUGHT TO HAVE APPRECIATED THAT THE SUBSEQUENT EVENTS WERE WRONGLY APPLIED TO SUBSTITUTE THE SALE CONSIDERATION IN THE COMPUTATION OF LONG TERM CAPITAL GAINS. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT IN ANY EVENT THE DEPRESSING FACTORS ATTACHED TO THE PROPERTY/CAPITAL ASSET JUSTIFYING THE STATED CONSIDERATION WERE NOT CO NSIDERED AS WELL AS TOTALLY IGNORED AT ALL STAGES WHILE MECHANICALLY SUBSTITUTING THE VALUE DETERMINED BY THE D RO STAMPS, THEREBY VITIATING THE ENTIRE COMPUTATION OF LONG TERM CAPITAL GAINS. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PLEA FOR TH E CORRECTING THE MISTAKES IN THE VALUE ADOPTED BY THE ASSESSING OFFICER AS WELL AS THE VALUE MECHANICALLY ADOPTED BY THE VALUATION CELL U/S 50C(2) OF THE ACT IN THE PROCESS OF QUANTIFYING SALE CONSIDERATION FOR COMPUTING THE LONG TERM CAPITAL GAINS WERE CO MPLETELY BRUSHED ASIDE AND OVERLOOKED, THEREBY VITIATING THE DECISION RENDERED IN THIS REGARD. TO OUR BE ST OF KNOWLEDGE AND BETTER UNDERSTANDING, THE GROUND NO. 5 RAISED BY THE ASSESSEE IN HIS APPEAL THAT THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 50C OF THE ACT HAD NO APPLICATION . RELATES TO INVOKING PROVISIONS OF SECTION 50C OF THE ACT. WHILE ADJUDICATING THE ISSUE RELATES TO INVOKING PROVISIONS OF SECTION 50C OF THE ACT, THE TRIBUNAL HAS OBSERVED AS UNDER: IN VIEW OF THE FACTS AND CIRCUMSTANCES AS WELL AS ABOVE DECISIONS, WE ARE OF THE CONSIDERED OPINION THAT AFTER CHALLENGING THE VALUE DETERMINED BY SRO BEFORE THE DRO (STAMPS) FOR ASSESSING THE MARKET VALUE, AND PAID THE DIFFERENCE OF STAMP DUTY AND GOT RELEASED THE DOCU MENT ON 16.08.2011, THE ASSESSEE CANNOT CONFRONT THE RATE DETERMINED BY THE DRO BEFORE THE ASSESSING OFFICER. EVEN THOUGH THE ASSESSING OFFICER OBTAINED DVO RATES, WHICH IS SIMILAR TO THE VALUE DETERMINED BY THE DRO, THE ASSESSING OFFICER TAKEN THE DIFFERE NCE IN M.P. NO. 100/M/17 4 VALUE OF DRO AND SRO FOR WORKING OUT THE LONG TERM CAPITAL GAINS AND THE ACTUAL DIFFERENCE WAS BROUGHT TO TAX. FROM THE ABOVE CONCURRENT FINDINGS OF THE TRIBUNAL, IT IS VERY CLEAR THAT THE DRO (STAMPS) OF THE GOVERNMENT OF TAMIL NADU IS THE ULTIMAT E AUTHORITY TO DETERMINE THE VALUE OF THE PROPERTY, WHICH, IN OUR CONSIDERED OPINION CANNOT BE CHALLENGED BEFORE THE TRIBUNAL. WHETHER THE SELLER OR PURCHASER CHALLENGED THE VALUE OF THE PROPERTY BEFORE THE DRO (STAMPS) IS NOT THE QUESTION OF LAW, BUT THE POINT AT ISSUE IS WHETHER THE VALUE DETERMINED BY THE DRO (STAMPS) ON THE PROPERTY SOLD BY THE ASSESSEE AND THE VALUE TAKEN FOR WORKING OUT THE LONG TERM CAPITAL GAINS WAS UNDER DISPUTE. IN THIS CASE, AFTER PAYMENT OF DIFFERENCE IN VALUE OF THE PROPERTY OF SRO AND DRO (STAMPS), THE SRO RELEASED THE DOCUMENT TO THE PURCHASER , AND THEREFORE, THE ASSESSING OFFICER ADOPTED THE VALUE DETERMINED BY THE DRO AS TOTAL SALE CONSIDERATION FOR WORKING OUT THE LONG TERM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. WITH T HIS, IT IS CLEAR THAT THE DRO (STAMPS) IS THE COMPETENT AUTHORITY TO DETERMINE OR RE - DETERMINE THE VALUE OF ANY PROPERTY UNDER DISPUTE AND NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) OR THE TRIBUNAL CAN SAY THAT THE VALUE OF THE PROPERTY DETERMINED BY THE DRO (STAMPS) IS WRONG. FURTHER, AS RAISED IN GROUND NO.6, WHAT ARE THE DEPRESSING FACTORS ATTACHED TO THE PROPERTY OF THE ASSESSEE IS NOT AT ALL POINT AT ISSUE FOR CONSIDERATION. M.P. NO. 100/M/17 5 4. THE DRO HAD INSPECTED THE PROPERTY AND DETERMINED THE MARKET VALU E OF THE PROPERTY AT .555/ - PER SQ.FT. (AGAINST THE GUIDELINE VALUE OF .400/ - PER SQ.FT. AS ON THE DATE OF SALE) I.E., 01.06.2009 AND ENDORSED IN THE DOCUMENT BY THE DRO (STAMPS) DATED 18.07.2011 . THEREAFTER, AFTER COLLECTING THE DIFFERENCE IN STAMP DUTY ON 16.08.2011, THE SRO RELEASED THE DOCUMENT. THE VALUATION OFFICER, UNIT II, VALUATION CELL HAS FILED THE REPORT ON 19.02.2015 . THE ASSESSEE MISINTERPRETED THE FINDINGS OF THE ASSESSING OFFICER AND RAISED GROUND NO. 6. THE CORRECTION OF VALUE OF THE PROP ERTY WAS DONE IN THE YEAR 2011 BY DRO/SRO. THE VALUE DETERMINED BY THE DRO WAS IN FACT, NOT MECHANICALLY ADOPTED BY THE ASSESSING OFFICER. IN HIS REPORT, THE VALUATION OFFICER HAS VERY WELL POINTED OUT THAT AS PER 50C(2) OF THE ACT, THE ASSESSING OFFICER C AN ENTERTAIN ANY APPEAL BY THE ASSESSEE OF SUCH VALUE ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY AND ADOPTED BY THE ASSESSING OFFICER, ONLY IF THE VALUE SO ADOPTED BY THE SRO HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION BEFORE ANY AUTHORITY, COURT O R HIGH COURT. SINCE THE PURCHASER HAS DISPUTED IN ANY APPEAL OR REVISION BEFORE ANY HIGHER FORUM, THE VALUE OF THE PROPERTY DETERMINED BY THE SRO WAS FURTHER CONFIRMED BY THE VALUATION OFFICER . THEREFORE, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS ME CHANICALLY ADOPTED THE VALUE. THUS, WE FIND NO MISTAKE IN THE DECISION OF THE TRIBUNAL TO RECALL AND READJUDICATE THE SAME. IN OUR OPINION, A FAIR READING OF THE ORDER OF THE TRIBUNAL, WE FIND THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL TO ARRIVE AT THE CONCLUSION AND THE M.P. NO. 100/M/17 6 DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH AS THE CONCLUSION REACHED BY THE TRIBUNAL IS NOT PERVERSE. FURTHER THE SUBMISSION OF THE ASSESSEE IN THE MISCELLANEOUS PETITION CLEARLY IS A PRAYER FOR NOT A RECTIFICATION OF THE MISTAKE BUT A REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. BEING SO, WE DO NOT FIND ANY MERIT IN THE ARGUMENTS OF THE LD. COUNSEL AND IF THERE IS A REMEDY , IT LIE ELSEWHERE AND NOT AT THE LEVEL OF TRIBUNAL. ACCORDINGLY, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE MP FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 21 ST AUGUST , 201 7 AT CHENNAI. SD/ - SD / - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 21 . 0 8 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.