Madhu Sudan Paul, Kolkata V. ITO, Ward-31(1), Kolkata, Kolkata

MA 6/KOL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0790 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 04-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Fair market value; Valuation report; Set aside
• Section: 50C; 254(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L. SAINI, AM MA NO.06/KOL/2015 (ARISING OUT OF . / ITA NO. 102/KOL/2010) ( / ASSESSMENT YEAR:2006-07) SHRI MADHU SUDAN PAL 1/ 2, CHOWRINGHEE ROAD, KOLKATA-700013. VS. ITO, WARD-31(1), KOLKATA ./ ./PAN/GIR NO.: AFTPP 8361 F (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI RAVI TULSIYAN, ADVOCATE RESPONDENT BY : SHRI JAYANTA KHANRA, JCIT, SR. DR / DATE OF HEARING : 21/02/2020 /DATE OF PRONOUNCEMENT : 10/06/2020 / O R D E R DR. A.L. SAINI, AM: BY WAY OF THE CAPTIONED APPLICATION, THE ASSESSEE H AS SOUGHT TO POINT OUT THAT A MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT) HAS CREPT IN TH E ORDER OF THE TRIBUNAL DATED 11.03.2011. 2. THE CASE OF THE ASSESSEE IN THIS MISCELLANEOUS A PPLICATION IS THAT THIS TRIBUNAL, VIDE ITS ORDER DATED 11.03.2011, HAD DIRE CTED THE ASSESSING OFFICER TO ADOPT THE DVO`S VALUATION OR REGISTERED STAMP VALUA TION WHICHEVER IS LESS, HOWEVER IN THE SAID DIRECTION, THE ASSESSEE HAD NOT BEEN GIVEN AN OPPORTUNITY OF RAISING OBJECTION REGARDING VALUATION MADE BY DVO B EFORE THE ASSESSING OFFICER. BECAUSE OF THIS APPARENT MISTAKE, THE ASSESSEE HAD DEPRIVED FROM RAISING OBJECTION SHRI MADHU SUDAN PAL MA NO.06/KOL/2018 (ARISING OUT OF ITA NO. 102/KOL/2010) ASSESSMENT YEAR:2006-07 P PP PA AA AG GG GE EE E | || | 2 22 2 REGARDING VALUATION MADE BY DVO BEFORE THE ASSESSIN G OFFICER AND HENCE TO BE RECTIFIED. THE RELEVANT PARA OF THE ORDER DATED 11. 03.2011,( WHEREIN THIS TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO ADOPT THE DVO `S VALUATION OR REGISTERED STAMP VALUATION WHICHEVER IS LESS), IS REPRODUCED B ELOW: 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD AND ON PERUSAL OF PROVISIONS OF SECTION 50C OF THE ACT IT IS CLEAR THAT WHEN THE ASSESSEE CLAIMS BEFORE THE A.O. THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITIES UNDER S UB-SECTION (1) OF SECTION 50C OF THE IT ACT EXCEEDS FAIR VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THE A.O. MAY REFER TO THE VALUATION OF THE SAID ASSET TO THE DEPARTMENTAL VALUATION OFFICER. IN THIS CASE WHEN THE MATTER HAS BEEN REFERRED TO T HE DVO THEN THE A.O. OUGHT TO HAVE ADOPTED THE FAIR MARKET VALUE DETERMINED BY TH E DVOS VALUATION OR REGISTERED VALUATION AUTHORITIES WHICHEVER IS LESS. IN THIS CASE IT IS APPARENT FROM THE ASSESSMENT ORDER THAT THE A.O. HAS REFERRED THE MATTER TO THE DVO BUT WITHOUT WAITING FOR THE SAME HE HAS COMPLETED THE ASSESSMEN T BY ADOPTING THE VALUE ADOPTED BY THE STAMP REGISTERED AUTHORITIES WHICH I N OUR CONSIDERED VIEW IS NOT IN ACCORDANCE WITH PROVISIONS OF SECTION 50C OF THE I T ACT. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRECT THE A.O. TO ADOPT THE DVOS VALUATION / REGISTERED STAMP VALUATION WHICHE VER IS LESS. WE ORDER ACCORDINGLY. IT IS ABUNDANTLY CLEAR FROM THE ORDER OF THE TRIBUN AL, AS MENTIONED ABOVE THAT IT HAD DIRECTED THE AO STATING THAT: IN THIS CASE WHEN THE MATTER HAS BEEN REFERRED TO THE DVO THEN THE A.O. OUGHT TO HAVE ADOPTED THE FAI R MARKET VALUE DETERMINED BY THE DVOS VALUATION OR REGISTERED VALUATION AUTHORI TIES WHICHEVER IS LESS. HOWEVER, THE TRIBUNAL DID NOT DIRECT THE AO TO AFFO RD THE ASSESSEE AN OPPORTUNITY OF RAISING OBJECTION REGARDING VALUATION MADE BY DV O AND THIS IS THE MISTAKE CREPT IN THE ORDER OF THE TRIBUNAL DATED 11.03.2011 . 3. BEFORE US, LD COUNSEL, SHRI RAVI TULSIYAN BEGINS BY POINTING OUT THAT THIS TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO COMP UTE THE CAPITAL GAIN AFTER RECEIPT OF DVO VALUATION AND TO ADOPT THE DVO VALUA TION OR VALUATION BY REGISTERED STAMP VALUATION AUTHORITY, WHICHEVER IS LESS. THE ASSESSEE HAD APPROACHED THE ASSESSING OFFICER WHEN THE ASSESSING OFFICER WAS PASSING THE APPEAL EFFECT ORDER OF THIS TRIBUNAL. IN THE APPEAL EFFECT PROCEEDINGS, PURSUANT TO SHRI MADHU SUDAN PAL MA NO.06/KOL/2018 (ARISING OUT OF ITA NO. 102/KOL/2010) ASSESSMENT YEAR:2006-07 P PP PA AA AG GG GE EE E | || | 3 33 3 THE ORDER OF THE TRIBUNAL, THE ASSESSEE HAD ASSAILE D THE DECISION OF DVO IN HIS VALUATION OF THE PROPERTY IN QUESTION. HOWEVER, ACC ORDING TO THE LD. COUNSEL, THE CHALLENGE TO THE DVOS VALUATION WAS NOT ENTERTAINE D BY ASSESSING OFFICER WHILE GIVING APPEAL EFFECT OF THIS TRIBUNAL`S ORDER. SINC E IN THE ORDER OF THE TRIBUNAL DATED 11.03.2011, THERE HAS BEEN NO MENTIONED ABOUT ANY LIBERTY TO THE ASSESSEE TO CHALLENGE THE VALUATION AS MADE BY THE DVO THEREFO RE ASSESSING OFFICER DID NOT ENTERTAIN OBJECTION OF THE ASSESSEEE ABOUT VALUATIO N MADE BY THE DVO. THE LD COUNSEL, THEREFORE PRAYED THE BENCH THAT A LIBERTY TO THE ASSESSEE TO CHALLENGE THE VALUATION OF DVO SHOULD BE GIVEN TO THE ASSESSEE AN D HENCE THE ASSESSING OFFICER MAY BE DIRECTED TO ENTERTAIN OBJECTION OF THE ASSE SSEEE ABOUT VALUATION MADE BY THE DVO. 4. PER CONTRA, LD. D.R. VEHEMENTLY OPPOSED THE PLE A OF THE ASSESSEE AND CONTENDED THAT VALUATION REPORT OF THE DVO IS AN INDEPENDENT REPORT AND THEREFORE THIS TRIBUNAL CANNOT GIVE SUCH A LIBERTY TO THE ASSESSEE TO CHALLENGE THE VALUATION OF DVO. 5.WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THRO UGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS BROUGHT ON RECORD. WE NO TE THAT THIS TRIBUNAL HAS PASSED THE ORDER IN ASSESSEE`S OWN CASE IN ITA NO.1 02/KOL/2010, ORDER DATED 11.03.2011, THE PARA NO. 6 OF THE SAID ORDER HAS AL READY BEEN QUOTED BY US, AS ABOVE. WE NOTE THAT ASSESSEE`S SOLITARY GRIEVANCE I S THAT WHILE GIVING APPEAL EFFECT TO THE ABOVE NOTED ORDER OF THE TRIBUNAL, THE AO H AS ADOPTED THE LESSER OF THE TWO VALUATIONS, VIZ: DVO`S VALUATION OR VALUE AS PER RE GISTERED STAMP VALUATION, WHICHEVER IS LESS, BEING IN THIS CASE THE VALUATION MADE BY DVO. THAT IS, IN ASSESEE`S CASE THE AO ADOPTED THE VALUATION MADE BY DVO. THE ASSESSING OFFICER DID NOT GIVE OPPORTUNITY TO THE ASSESSEE TO CHALLEN GE THE DVO VALUATION AND THIS HAS RESULTED INTO LOSS TO THE ASSESSEE. THE LD COUN SEL SUBMITS BEFORE US THAT THE VALUATION MADE BY DVO CAN BE CHALLENGED AND IT SHOU LD BE APPEALABLE BOTH ON FACTS AS WELL AS ON LAW. SHRI MADHU SUDAN PAL MA NO.06/KOL/2018 (ARISING OUT OF ITA NO. 102/KOL/2010) ASSESSMENT YEAR:2006-07 P PP PA AA AG GG GE EE E | || | 4 44 4 WE NOTE THAT AO WAS UNDER A STATUTORY OBLIGATION TO SERVE NOTICE OF HEARING TO THE DVO AND ASSESSEE AND AFFORD THEM AN OPPORTUNITY OF HEARING BUT THE AO HAS FAILED TO DO SO, BECAUSE THIS TRIBUNAL HAS NOT GIVE N SPECIFIC DIRECTION TO AO WHILE PASSING THE ORDER THEREFORE IT IS A MISTAKE APPAREN T FROM RECORD AND SHOULD BE RECTIFIED. 6. WE NOTE THAT VALUATION REPORT OF THE DVO IS NOT THE LAST WORD ON VALUATION, IT CAN BE CHALLENGED BY THE ASSESSEE AND FOR THAT WE A LSO RELY ON THE JUDGMENT OF THE COORDINATE BENCH OF ITAT AHMEDABAD IN THE CASE OF L OVYRANKA VS. DCIT 55 CCH 0582 (AHD-TRIB) WHEREIN IT WAS HELD AS FOLLOWS: 9. THE ASSESSEE BEFORE US IS AN INDIVIDUAL. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS SOLD A BUNGALOW FOR RS 1,15,00,000 BUT THE STAMP DUTY VALU ATION OF THE SAID BUNGALOW, AS EVIDENT FROM THE SALE DEED, WAS RS 1,40,00,000. THE ASSESSEE, HOWEVER, CONTENDED THAT THE FAIR MARKET PRICE OF THE PROPERT Y WAS MUCH LESS THAN THE STAMP DUTY VALUATION, AND, ACCORDINGLY, A REFERENCE WAS M ADE TO THE DEPARTMENTAL VALUATION OFFICER UNDER SECTION 50C(2). THE VALUATI ON AS PER DVO WAS RS 1,27,12,402. THE ASSESSEE MADE ELABORATE SUBMISSION S ON INCORRECTNESS OF THIS VALUATION, AND SUBMITTED THAT THE OBJECTIONS TAKEN BY HIM BEFORE THE DVO WERE NOT PROPERLY DEALT WITH. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE VALUATION DONE BY THE DVO BINDS HIM AND IT IS HIS DUTY TO PAS S AN ORDER IN CONFORMITY WITH THE DVO'S REPORT. HE REFERRED TO, AND RELIED UPON, VARIOUS JUDICIAL PRECEDENTS IN SUPPORT OF THIS PROPOSITION. AGGRIEVED, ASSESSEE CA RRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) OBSERVED THAT 'SECTION 50C OF THE ACT IS A DEEMING PROVISION' AND 'A DEEMI NG PROVISION IS TO BE STRICTLY APPLIED WITHOUT ENLARGING ITS SCOPE'. LEARNED CIT(A ) WAS OF THE VIEW THAT 'CONSIDERING THE PROVISIONS OF SECTION 50C, THE VAL UE TAKEN BY THE AO IS CORRECT' AND NO INTERFERENCE IS THUS CALLED FOR. THE ASSESSE E IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. HE IS ONCE AGAIN CHALLENG ING THE CORRECTNESS OF THE DVO'S REPORT, IS POINTING OUT, WHAT HE PERCEIVES AS , GLARING ERRORS IN THE METHODOLOGY ADOPTED BY THE DVO AND IS SUBMITTING TH AT THE CIT(A) FELL IN ERROR IN NOT ADJUDICATING UPON THE SAME ON MERITS. 10. IN VIEW OF OUR ANALYSIS OF THE LEGAL PROVISIONS EARLIER IN THIS ORDER, THE ASSESSEE IS INDEED CORRECT, EVEN THOUGH SOMEWHAT SE RENDIPITOUSLY. THAT THE CIT(A) OUGHT TO HAVE EXAMINED THE MATTER ON MERITS. OF COU RSE, BEFORE DOING SO, THE CIT(A) WAS UNDER A STATUTORY OBLIGATION TO SERVE NO TICE OF HEARING TO THE DVO AND THUS AFFORD HIM AN OPPORTUNITY OF HEARING. CLEA RLY, LEARNED CIT(A) TOOK TOO NARROW AND SOMEWHAT SUPERFICIAL A VIEW OF HIS POWER S UNDER THE SCHEME OF THE LAW, AND THE ASSESSEE DID NOT POINT OUT THE SPECIFI C LEGAL PROVISIONS TO HIM EITHER. BE THAT AS IT MAY, THE FACT REMAINS THAT CORRECTNES S OF THE DVO'S REPORT IS TO BE EXAMINED ON MERITS AND THERE IS NO ADJUDICATION, ON THAT ASPECT, BY THE CIT(A). IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF T HE CIT(A) FOR ADJUDICATION ON SHRI MADHU SUDAN PAL MA NO.06/KOL/2018 (ARISING OUT OF ITA NO. 102/KOL/2010) ASSESSMENT YEAR:2006-07 P PP PA AA AG GG GE EE E | || | 5 55 5 MERITS IN ACCORDANCE WITH THE SCHEME OF THE LAW, AF TER GIVING A DUE AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE A S ALSO TO THE DVO, AND BY WAY OF A SPEAKING ORDER. WE FURTHER DIRECT THE CIT(A) T O DISPOSE OF THE REMANDED PROCEEDINGS WITHIN THREE MONTHS OF RECEIVING THIS O RDER, AND, IN CASE THE DVO DOES NOT AVAIL THE OPPORTUNITY OF HEARING, ON THE B ASIS OF MATERIAL ON RECORD AND SUBMISSIONS OF THE ASSESSEE. ORDERED, ACCORDINGLY. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES IN THE TERMS INDICATED ABOVE. THEREFORE, RELYING ON THE DECISION OF CO-ORDINATE B ENCH OF AHMEDABAD TRIBUNAL IN THE CASE OF LOVY RANKA VS. DCIT REPORTED IN 17 7 DTR 273 (AHD) (SUPRA) WHEREIN THE SIMILAR ISSUE HAD ARISEN BEFORE THE COO RDINATE BENCH AND THE TRIBUNAL HAS PLEASED TO PASS AN APPROPRIATE ORDER TO CHALLEN GE THE ORDER OF THE DVO IN RESPECT OF VALUATION OF PROPERTY. THEREFORE, WE DI RECT THE ASSESSING OFFICER TO EXAMINE THE DVO VALUATION REPORT AFRESH AND THE ASS ESSEE IS AT LIBERTY TO CHALLENGE THE DVO REPORT IF IT SEEMS TO HIM INCONSISTENT ON L AW AS WELL AS ON FACTS. 7. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER 90 DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO- ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE O F DCIT VS. JCB LIMITED IN ITA NO. 6264/MUM/2018 AND ITA NO. 6103/MUM/2018 FOR A.Y. 2013-14 ORDER DATED 14.05.2020. 8. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED TO THE EXTENT INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 10.06.2020 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 10/06/2020 ( SB, SR.PS ) SHRI MADHU SUDAN PAL MA NO.06/KOL/2018 (ARISING OUT OF ITA NO. 102/KOL/2010) ASSESSMENT YEAR:2006-07 P PP PA AA AG GG GE EE E | || | 6 66 6 COPY OF THE ORDER FORWARDED TO: 1. SHRI MADHU SUDAN PAL 2. ITO, WARD-31(1), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES