M/S RADHA SWWAMI BUILDCON PVT. LTD., JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, JAIPUR

MA 57/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7634 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 16-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Keywords: Rectification of order; Fair market value; Valuation report; Set aside

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM MA NO. 57/JP/2019 ( ARISING OUT OF ITA NO. 1131/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 M/S RADHA SWAMI BUILDCON PVT. LTD., SUN N MOON CHAMBERS, S-4, S-4, LINKING ROAD, 7 TH FLOOR, NEAR AJMER PULIA, JAIPUR. CUKE VS. THE DCIT CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCR 9835 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 07/07/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSES SEE IS SEEKING FOR RECTIFICATION OF MISTAKE IN THE IMPUGNED ORDER DATED 01.07.2019 OF THIS TRIBUNAL. DUE TO PREVAILING COVID-19 PANDEMIC CONDITION THE HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDEO CO NFERENCE. 2. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT IN PARA 6 OF THE IMPUGNED ORDER, THE TRIBUNAL HAS SET ASIDE THE ISSU E OF DETERMINING OF MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 2 FAIR MARKET VALUE OF THE PROPERTY SOLD BY THE ASSES SEE TO THE RECORD OF THE AO/DVO FOR FRESH DETERMINATION HOWEVER, THE ISS UE REGARDING THE AREA OF TWO OFFICES WRONGLY CONSIDERED BY THE AO/DV O HAS NOT BEEN DECIDED BY THE TRIBUNAL. THE LD. AR HAS REFERRED IN PARA 7 AND 8 OF THE IMPUGNED ORDER AND POINTED OUT THAT THE ACTUAL AREA OF THESE TWO OFFICES SOLD BY THE ASSESSEE IS 247.49 SQ. MT. WHER EAS THE DVO HAS ADDED THE AREA OF 36.31 SQ. MT. ON ACCOUNT OF COMMO N AREA AND ARRIVED TO A TOTAL AREA AT 283.80 SQ. MT. THEREFORE , THE AO HAS DETERMINED THE FAIR MARKET VALUE ON THE BASIS OF IN CORRECT TOTAL AREA OF TWO OFFICE BEARING NO. 202 & 203 OF THE BUILDING WH ICH WERE SOLD BY THE ASSESSEE. THUS, THE LD. AR HAS SUBMITTED THAT A SUI TABLE AMENDMENT/MODIFICATION MAY BE DONE IN THE IMPUGNED ORDER SO THAT IN SET ASIDE PROCEEDING THE AO/DVO SHALL DETERMINED TH E FAIR MARKET VALUE ON THE BASIS OF THE CORRECT AND ACTUAL AREA SOLD BY THE ASSESSEE. 3. ON THE OTHER HAND, LD DR HAS SUBMITTED THAT THE COMMON AREA IS PART AND PARCEL OF THE OFFICES SOLD BY THE ASSESSEE , THEREFORE, DVO HAS RIGHTLY ADDED TO THE AREA OF THE OFFICES TO THE EXT ENT OF 36.31 SQ. MT. ON ACCOUNT OF COMMON AREA. THUS, THERE IS NO MISTAKE I N THE IMPUGNED ORDER OF THE TRIBUNAL WHICH CAN BE RECTIFIED U/S 25 4(2) OF THE INCOME TAX ACT. MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFUL PERUSED THE IMPUGNED ORDER OF THE TRIBUNAL. THE ASSESSEE IS SEE KING FOR RECTIFICATION OF MISTAKE IN THE IMPUGNED ORDER OF THE TRIBUNAL IN RESPECT OF FINDING GIVEN IN PARA 6 AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THE LIMITED GRIEVANCE OF THE ASSESSEE IN RESPECT OF FAIR MARKET VALUE ADOPTED BY THE A.O. IN RESPECT OF OFFICE BEARING NO. 202 AND 203 IS THAT INSTEAD OF C ONSIDERING OVERALL VALUATION OF STAMP DUTY AUTHORITY AS WELL A S FAIR MARKET VALUE DETERMINED BY THE DVO SEPARATE VALUATIONS FOR LAND AND BUILDING OUGHT TO HAVE BEEN CONSIDERED. WE FIND FOR CE IN THIS CONTENTION OF THE LD AR AS THE PROPERTY OFFICE BEAR ING NO. 202 AND 203 HAVING TWO COMPONENTS OF VALUE ONE IS LAND APPORTIONED OR ATTRIBUTED TO THESE TWO OFFICES AND ANOTHER IS V ALUE OF STRUCTURE/BUILDING AS PER THE AREA OF THE TWO OFFIC ES, THUS THE VALUE OF LAND HAS TO BE APPORTIONED IN THE RATIO OF THE AREA OF THESE TWO OFFICES TO THE TOTAL SALABLE AREA OF THE BUILDING. THE SECOND COMPONENT OF VALUE IS THE COST OF CONSTRUCTI ON WHICH IS ALSO TO BE DETERMINED AS PER THE FAIR MARKET RATES PER SQ. FT. THEREFORE, THERE IS NO DISPUTE REGARDING THE TWO CO MPONENTS IN THE FAIR MARKET VALUE OF THE OFFICES. AS IT IS APPA RENT FROM THE DETAILS, WE HAVE REPRODUCED IN THE FOREGOING PARA, THE STAMP DUTY AUTHORITY HAS ADOPTED THE VALUE OF LAND AT RS. 2,75,04,852/- WHEREAS THE VALUE DETERMINED BY THE DVO OF THE LAND IS RS. 1,20,41,900/-. THE SECOND COMPONENT IN THE VALUE AD OPTED BY MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 4 THE STAMP DUTY AUTHORITY IS THE VALUE OF BUILDING W HICH WAS TAKEN AT RS. 15,97,800/- WHEREAS THE DVO HAS DETERMINED T HE FAIR MARKET VALUE OF BUILDING AT RS. 58,75,000/-. THOUGH , THE TOTAL FAIR MARKET VALUE DETERMINED BY THE DVO IS SUBSTANTIALLY LESS THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY, HOWEVER, IF TWO COMPONENTS BEING LAND AND BUILDING ARE TAKEN SEPARA TELY THEN THE FAIR MARKET VALUE DETERMINED BY THE DVO IN RESP ECT OF BUILDING IS HIGHER. HENCE, THE LOWER OF THE TWO VAL UATIONS SHALL BE TAKEN FOR THE PURPOSE OF MAKING ADDITION. HOWEVER, WE FIND THAT THE DVO WHILE DETERMINING THE FAIR MARKET VALUE HAS TAKEN INCORRECT FACTS INTO CONSIDERATION. THE DVO HAS CON SIDERED THE BUILT-UP AREA OF THE OFFICES BY TAKING INCORRECT FA CTS THAT THESE OFFICES ARE AT THIRD FLOOR WHEREAS THE STAMP DUTY A UTHORITY HAS TAKEN BUILT UP AREA OF THE OFFICES BEING AT SECOND FLOOR OF THE COMPLEX. WE FURTHER NOTE THAT AS PER SALE DEED THES E TWO OFFICES ARE SITUATED AT SECOND FLOOR AND NOT AT THIRD FLOOR , FOR WHICH, ANNEXURE C AND D OF THE DVOS REPORT ARE REPRODUCED AS UNDER: MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 5 MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 6 THUS, THE AREA AS WELL AS THE FAIR MARKET VALUE OF THE BUILDING IS DETERMINED BY THE DVO BY CONSIDERING THESE OFFICES SITUATED AT THIRD FLOOR WHEREAS AS PER THE SALE DEED AS WELL AS STAMP DUTY VALUATION THESE TWO OFFICES ARE STATED TO BE AT SEC OND FLOOR OF THE COMPLEX. HENCE, IN VIEW OF THESE FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THIS MA TTER REQUIRES A FRESH CONSIDERATION AT THE LEVEL OF THE A.O./D VO. ACCORDINGLY, MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 7 WE SET ASIDE THIS ISSUE TO THE RECORD OF THE A.O./D VO FOR DETERMINING THE FAIR MARKET VALUE OF THESE TWO OFFI CES NO. 202 AND 203 AFRESH BY VERIFYING THE CORRECT FACTS AND T HEN THE VALUATION SHOULD BE BASED ON CORRECT FACTS. NEEDLES S TO SAY, THE ASSESSEE BE GIVEN APPROPRIATE OPPORTUNITY OF HEARIN G BEFORE PASSING THE ORDER. THUS, DISPUTE WAS REGARDING THE FAIR MARKET VALUE A DOPTED BY THE AO IN RESPECT OF TWO OFFICES BEARING NO. 202 & 203, SUN N MOON CHAMBERS, S- 4, LINKING ROAD, 7 TH FLOOR, NEAR AJMER PULIA, JAIPUR THE TRIBUNAL HAS OBSERVED THAT THE DVO IN HIS VALUATION REPORT STATE D THAT THESE TWO OFFICE ARE SITUATED AT 3 RD FLOOR OF THE BUILDING WHEREAS AS PER SALE DEED SIGHT PLOT ATTACHED TO THE SALE DEED THESE TWO OFFI CES ARE SITUATED A SECOND FLOOR OF THE BUILDING. THEREFORE, THE MATTER WAS SET ASIDE TO THE RECORD OF AO/DVO FOR DETERMINATION OF FAIR MARKET V ALUE OF THESE TWO OFFICES AFTER VERIFICATION OF THE CORRECT FACTS AND ACCORDINGLY THE VALUATION SHOULD BE BASED ON CORRECT FACTS. NOW, TH E ASSESSEE HAS POINTED THAT WHILE SETTING ASIDE THE ISSUE THE TRIB UNAL HAS NOT COMMENTED REGARDING ACTUAL AREA SOLD BY THE ASSESSE E. WE FIND THAT THE AO/DVO HAS CONSIDERED THE TOTAL AREA OF THESE T WO OFFICES AT 283.80 SQ. MT. AS AGAINST AREA OF 247.49 SQ. MT. SO LD BY THE ASSESSEE AS PER SALE DEED. THE AO/DVO ADDED THE COMMON AREA OF 36.31 SQ. MT. MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 8 IN THE AREA OF THESE TWO OFFICE. WE NOTE THAT WHAT IS SOLD BY THE ASSESSEE IS THE OFFICES NO. 202 & 203 AND THE AREA AS PER SALE DEED SHALL BE CONSIDERED AS THE ACTUAL AREA SOLD BY THE ASSESSEE. THE COMMON AREA IN THE BUILDING WHICH IS CLEARLY DESCRI BED IN THE SALE DEED AND AVAILABLE FOR THE PURPOSE OF INGRESS, AGGRESS A S WELL AS COMMON USE CANNOT BE ADDED TO THE AREA OF THESE OFFICES BU T CERTAINLY THESE FACILITIES AVAILABLE TO THE OFFICES SOLD BY THE ASS ESSEE WOULD INCREASE FAIR MARKET PRICES OF THE OFFICES IN QUESTION. ACCORDING LY, AO/DVO IS DIRECTED TO DETERMINE THE FAIR MARKET VALUE BY CONS IDERING THESE COMMON ARE AS A POSITIVES FACTOR WHILE DETERMINING THE FAIR MARKET VALUE OF THE OFFICES BUT THE COMMON AREA CANNOT BE CONSIDERED AS THE AREA SOLD BY THE ASSESSEE WHEN ONLY OFFICES ARE SO LD. HENCE, THE IMPUGNED ORDER IS MODIFIED ACCORDINGLY. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/07/2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/07/2020. * SANTOSH. MA NO.57/JP/2019 M/S RADHA SWAMI BUILDCON PVT. LTD. VS. DCIT 9 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S RADHA SWAMI BUILDCON PVT. LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-3, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {MA NO. 57/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR