Raghupathy Gowtham , CHENNAI V. ITO Non Corporate Ward 16(3), CHENNAI

MA 72/CHNY/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6845 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R V AROON PRASAD IRS
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Sale consideration of property below Jantri Value; Additional evidence
• Section: 50C; 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D (SMC) BENCH : CHENNAI . , ! [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEM BER ] M.P.NO.72/CHNY/2018 ( IN ./I.T.A. NO.2288/MDS/2017 ) & I.T.A. NO.2288/MDS/2017 / ASSESSMENT YEAR : 2013-2014. RAGHUPATHY GOWTHAM 100, KGT NAGAR, BLUE DALE APARTMENTS, KATTAUPAKKAM, POONAMALLEE, CHENNAI 600 056. [PAN AOBPG 1999K] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 16(3) CHENNAI. (PETITIONER) ( '#$% /RESPONDENT) PETITIONER BY : SHRI. B. RAMAKRISHNAN, C.A., RESPONDENT BY : SHRI. R.V. AROON PRASAD, IRS, JCIT. /DATE OF HEARING : 13.07.2018 /DATE OF PRONOUNCEMENT : 13.07.2018 & / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: ASSESSEE IN THIS MISCELLANEOUS PETITION STATES THAT THE FOLLOWING GROUNDS RAISED BY IT WERE NOT DISPOSED OF BY THIS TRIBUNAL. 4, FOR THAT THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) ERRED IN NOT ADJUDICATING THE GROUND RAISED BY THE APPELLANT PERTAINING TO RECOMPUTATION OF DEDUCTION CLAIMED U/S.54F OF THE ACT ON ACCOUNT OF CHANGE IN CAPITAL GAINS OR INVESTMENT MADE. M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 2 -: 5. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN ENHANCING THE ASSESSMENT U/S.251(1) BY DISALLOWING THE INVESTMENT U/S.54F OF THE ACT OF F20,00,000/-. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AGAINS T CAPITAL GAINS ARISING ON SALE OF A LAND AT SOORAPATTU VILLA GE, TIRUVALLUR DIST, ASSESSEE HAD CLAIMED DEDUCTION U/S.54F OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT) FOR INVESTMENT IN A CONSTRUC TION OF NEW RESIDENTIAL PROPERTY. AS PER THE LD. AUTHORISED REPRESENTATIVE , THE MATTER REGARDING VALUATION OF THE PROPERTY WHICH WAS SOLD GIVING RISE TO THE CAPITAL GAINS WAS ONE OF THE ISSUES RAISED BY THE ASSESSEE IN ITS APPEAL BEFORE THE TRIBUNAL. CONTENTION OF THE LD. AUTHOR ISED REPRESENTATIVE WAS THAT THERE WAS A REFERENCE MADE TO DISTRICT VAL UATION OFFICER U/S.50C OF THE ACT BY THE LD. ASSESSING OFFICER WH ICH WAS DENIED BY THE SAID AUTHORITY FOR A REASON THAT OBJECTION WERE FILED BEFORE FIRST APPELLATE AUTHORITY (DRO (STAMPS)) U/S.47A(1) OF TH E INDIAN STAMP DUTY ACT AND REFERENCE U/S.50C OF THE ACT WAS NOT VALID. AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE BEFORE THIS TRIBUNAL HAD FILED ADDITIONAL EVIDENCE WHICH PROVED THAT THERE WAS NO SUCH OBJECTION OR APPEAL FILED. TAKING NOTE OF THIS, THE TRIBUNAL HAD REMITTED THE QUESTION REGARDING VALUATION OF THE PROPERTY WHICH WAS SOLD, BACK TO THE LD. ASSESSING OFFICER, FOR CONSIDERING WHETHER A REFERENCE COULD BE M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 3 -: MADE TO DVO FOR ASCERTAINING THE CORRECT VALUE OF T HE PROPERTY WHICH WAS SOLD. FURTHER, AS PER THE LD. AUTHORISED REPRE SENTATIVE, IN THE COMPUTATION FILED, ASSESSEE HAD CLAIMED DEDUCTION U/S.54F OF THE ACT WHICH WAS WRONGLY COMPUTED BY THE ASSESSING AUTHORI TY. SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE, WAS THAT AS SESSEE IN ITS APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD , APART FROM QUESTIONING THE DENIAL OF REFERENCE TO DVO UNDER SE CTION 50C OF THE ACT ALSO RAISED GROUNDS QUESTIONING THE COMPUTATI ON MADE BY THE LD. ASSESSING OFFICER FOR THE PURPOSE OF DEDUCTION U/S. 54F OF THE ACT. AS PER THE LD. AUTHORISED REPRESENTATIVE, ASSESSEE COU LD AVAIL DEDUCTION TO THE EXTENT OF F1,14,80,252/- WHEREAS THE LD. ASS ESSING OFFICER HAD RESTRICTED THE ADDITION TO F70,82,060/-. CONTENTIO N OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD FURTHER CURTAILED THE DEDUCTION ALLO WED TO THE ASSESSEE U/S.54F OF THE ACT, DISBELIEVING THE WORK DONE BY THE CONTRACTOR SHRI. T. ARMSTRONG NAVIN. ACCORDING TO THE LD. AUTHORISED REPRESENTATIVE, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD DIRECTED T HE LD. ASSESSING OFFICER TO RECALCULATE THE DEDUCTION AVAILABLE TO T HE ASSESSEE U/S.54F OF THE ACT AFTER REDUCING F20,00,000/- WHICH WAS TH E SHARE OF EXPENSES INCURRED BY THE ASSESSEE FOR CONSTRUCTION OF A NEW RESIDENCE. THIS AS PER THE LD. AUTHORISED REPRESENTATIVE, RESU LTED IN ENHANCEMENT OF THE CAPITAL GAINS. CONTENTION OF THE LD. AUTHOR ISED REPRESENTATIVE M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 4 -: WAS THAT ASSESSEE HAD SPECIFICALLY RAISED THIS ISSU E AND ARGUED BEFORE THIS TRIBUNAL. HOWEVER, AS PER THE LD. AUTHORISED R EPRESENTATIVE, THIS TRIBUNAL HAD NOT ADJUDICATED SUCH ISSUE. 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE FAIRL Y AGREED THAT THE ISSUE REGARDING DEDUCTION UNDER SECTION 54 F OF THE ACT WAS NOT ADJUDICATED BY THIS TRIBUNAL. HOWEVER, ACCORDI NG TO HIM, THE QUESTION REGARDING VALUATION OF THE PROPERTY WHICH WAS SOLD BY THE ASSESSEE, HAVING BEING SENT BACK TO THE LD. ASSESSI NG OFFICER FOR CONSIDERING A REFERENCE TO THE DVO AS STIPULATED U/ S.50C OF THE ACT, THE ISSUE REGARDING COMPUTATION OF DEDUCTION U/S.5 4F OF THE ACT ALSO COULD GO BACK TO THE LD. ASSESSING OFFICER. 4. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS. A READING OF THE ORDER OF THE TRIBUNAL THUS INDICATE THAT THIS TRIBUNAL HAD DEALT ONLY WITH THE ISSUE REGARDING REFERENCE TO THE DVO FOR VALUING THE PROPERTY SOLD BY THE ASSESSEE, AS STIPULATED U/S.50C OF THE ACT. RELEVANT PARA 3 TO 8 OF THE O RDER DATED 22.01.2018 IS REPRODUCED HEREUNDER:- 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEES FATHER SHRI M. D. RAGHUPATHY AND SHRI A. VENKATESH JOINTLY PURCHASED A VACANT LAND MEASURING 1.00 ACRES COMPRI SED IN S.NO. 112/LA AND 112/1B AT NO. 54, SOOROPATTU VILLA GE, MADHAVARAM TALUK, TIRUVALLUR DISTRICT VIDE SALE DEE D DATED M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 5 -: 20.03.1997 FOR A CONSIDERATION OF 2,00,000/-. THE ASSESSEE INHERITED 50% SHARE OF THE PROPERTY ALONG WITH SMT. R. RAJESWARI AND SMT. MAMTA RAGHUPATHY ON 28.11.2003. THE ABOVE MENTIONED PROPERTY WAS SOLD ON 10.12.2012 FOR A TOTAL CONSIDERATION OF 4,00,00,000/-. THE ASSESSEE RECEIVED 66,66,666/- ON ACCOUNT OF HIS SHARE (1/3RD OF 50%) IN THE PROPERTY.AS PER THE OFFICIAL WEBSITE OF TAMIL NADU REGISTRATION DEPARTMENT, THE GUIDE LINE VALUE OF THE SOLD PROPER TY ON THE DATE OF SALE WAS 6,54,00,000/-. 3.1 THE ASSESSEE RAISED OBJECTIONS, FOR ADOPTING T HIS VALUE AS THE SALE CONSIDERATION RECEIVED UNDER THE PROVIS IONS OF SECTION 50C. CASE WAS REFERRED TO THE DISTRICT VALU ATION AUTHORITY. VIDE LETTER DATED 10.03.2016, THE DVO ST ATED THAT THE STAMP DUTY VALUATION WAS OBJECTED BEFORE THE FI RST APPELLATE AUTHORITY (DRO (STAMPS)) UNDER SECTION 47 A(1) OF THE INDIAN STAMP DUTY ACT AND HENCE THE REFERENCE O F THIS CASE UNDER SECTION 50C SEEMS TO BE INVALID. UNDER T HESE CIRCUMSTANCES, AS PER THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961, THE GUIDE LINE VALUE AS ON TH E DATE OF SALE IS BEING ADOPTED AS THE SALE CONSIDERATION REC EIVED, SUBJECT TO OUTCOME OF APPEAL PENDING BEFORE THE FI RST APPELLATE AUTHORITY UNDER SECTION 47A(1) OF THE IND IAN STAMP DUTY ACT. THE LD. ASSESSING OFFICER COMPLETED THE A SSESSMENT U/S.143(3) OF THE ACT ON 11.09.2014 BY MAKING CERTA IN ADDITIONS, AMONG WHICH AN ADDITION OF 37,56,602/- TO THE INCOME OF ASSESSEE UNDER THE HEAD CAPITAL GAINS B Y ADOPTING THE GUIDELINE VALUE OF THE PROPERTY U/S.50 C OF THE ACT. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFIC ER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) WAS CONFIRMED THE ACTION OF THE LD. A SSESSING OFFICER. AGAINST THE ORDER OF LD.CIT(A), NOW THE AS SESSEE IS IN APPEAL BEFORE TRIBUNAL. 4. THE ASSESSEE FILED A LETTER DATED 11.10.2017 S EEKING TO ADMIT THE ADDITIONAL GROUNDS OF APPEAL BEFORE THIS TRIBUNAL. IN THAT LETTER, THE ASSESSEE STATED THAT THE FAILURE T O RAISE THESE GROUNDS BEFORE THE CIT(A) WAS DUE TO INADVERTENCE. THE ASSESSEE FURTHER PLEADED THAT THIS OMISSION IS NOT INTENTIONAL AND CRAVES THE LEAVE OF THE TRIBUNAL TO ADMIT THES E ADDITIONAL GROUNDS. 9. THE LEARNED ASSESSING OFFICER ERRED IN RELYING ON THE DISTRICT VALUATION OFFICERS REPLY THAT AN APPEAL WAS FILED U/S 47A(1) OF THE INDIAN STAMP DUTY ACT AND CONSEQUENTLY THE REFERENCE TO THE DVO IS NOT MAINTAINABLE, WHEN ON FACT NO SUCH APPEAL WAS MADE BY THE ASSESSEE. M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 6 -: 10. THE LEARNED ASSESSING OFFICER, UPHELD THE GUIDELINE VALUE OF 6,54,00,000/- WITHOUT GIVING REFERENCE TO THE PROVISIONS OF SECTION 50C(2). 5. I HAVE GONE THROUGH THE PETITION SEEKING ADMIS SION OF ADDITIONAL GROUNDS. IN MY OPINION, THE ASSESSEE IS HAVING GOOD AND SUFFICIENT REASONS NOT TO RAISE THE ADDITI ONAL GROUNDS ON EARLIER OCCASION BEFORE THE LD.CIT(A). ACCORDING LY, THESE TWO ADDITIONAL GROUNDS ARE ADMITTED FOR ADJUDICATIO N. 6. IN ADDITION TO THIS, THE ASSESSEE FILED ADDITIO NAL EVIDENCES UNDER RULE-29 OF THE INCOME TAX (APPELLAT E PROCEEDINGS) RULES AS FOLLOWS. I) A COPY OF LETTER DATED 13.09.2017 RECEIVED UND ER THE RIGHT TO INFORMATION ACT, FROM THE PUBLIC INFORMATION OFFICER, SUB REGISTRAR OFFICE, AMBATTUR . II)AFFIDAVIT STATING THAT NO APPEAL WAS FILED U/S.4 7A(1) OF THE INDIAN STAMP DUTY ACT. BEFORE US, LD.A.R PRAYED THAT THESE EVIDENCES ARE NOT AVAILABLE ON EARLIER OCCASION AND THROUGH RTI ACT, THIS INFORMATION WAS GOT FROM THE PUBLIC INFORMATION OFFICER, SUB REGISTRAR OFFICE, AMBATTUR VIDE LETTER DATED 13.09.2017 AND PRAYED THAT THESE EVIDENCES ARE VERY CRUCIAL TO DECIDE THE ISSUE AND TO BE ADMITTED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. I HAVE GONE THROUGH THE PETITION SEEKIN G TO ADMIT ADDITIONAL EVIDENCES. IN MY OPINION, THESE DOCUMEN TS ARE NOT AVAILABLE AT THE TIME OF DECIDING THE CASE BY THE L D.CIT(A) AND THESE DOCUMENTS WERE RECEIVED THROUGH A LETTER DATE D 13.09.2017 UNDER THE RIGHT TO INFORMATION ACT. ACCO RDINGLY, THESE ADDITIONAL EVIDENCES ARE ADMITTED FOR ADJUDIC ATION. 8. THE MAIN PLEA OF THE ASSESSEE IS THAT THE LD. A SSESSING OFFICER NOT REFERRED THE MATTER TO DVO ON THE REASO N THAT THE PAYMENT OF STAMP DUTY IS SUBJECT MATTER OF APPEAL B EFORE THE HIGHER FORUM OF THE STATE STAMP DUTY AUTHORITY. HO WEVER, THROUGH RTI APPLICATION, THE INFORMATION FROM SUB R EGISTRAR OFFICE, AMBATTUR WAS GOT VERIFIED AND THE STAMP DUT Y WAS ASSESSED BY THE JOINT SUB REGISTRAR OF SRO, AMBATTU R. HENCE, IN MY OPINION, THESE FACTS TO BE EXAMINED BY THE LD . ASSESSING OFFICER THAT WHETHER THE ASSESSEE APPEALED BEFORE T HE APPELLATE AUTHORITIES OF STAMP DUTY WITH REFERENCE TO STAMP DUTY FEE. ACCORDINGLY, I REMIT THE ISSUE IN DISPUT E TO THE FILE OF LD. ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH. IF REQUIRE, HE M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 7 -: HAS TO REFER THE MATTER TO DVO TO ASCERTAIN THE COR RECT VALUE OF THE PROPERTY, WHICH IS THE SUBJECT MATTER OF THE AS SESSMENT. ASSESSEE IS CORRECT IN THAT THE TRIBUNAL HAD NOT AD JUDICATED GROUND 4 & 5 RAISED BY IT REPRODUCED AT PARA 1 (SUPRA). ACCORD INGLY, I AM RECALLING THE ORDER FOR THE LIMITED PURPOSE ADJUDICATING GROU ND 4 & 5 RAISED BY THE ASSESSEE, WHICH RAISES THE QUESTION REGARDING D EDUCTION AVAILABLE TO THE ASSESSEE U/S.54F OF THE ACT. SUCH DEDUCTION WHICH WAS CLAIMED BY THE ASSESSEE, WAS FURTHER REDUCED ON BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IN MY OPINION THIS IS AN ASP ECT WHICH CAN BE LOOKED INTO BY THE LD. ASSESSING OFFICER, ONCE HE C ONSIDERS THE ISSUE REGARDING VALUATION OF THE PROPERTY SOLD BY THE ASS ESSEE, FOR COMPUTING THE CAPITAL GAINS THAT ARISES TO THE ASS ESSEE. THIS TRIBUNAL HAVING ALREADY REMITTED THE ISSUE REGARDING REFEREN CE TO DVO U/S.50C OF THE ACT BACK TO LD. ASSESSING OFFICER, I AM OF T HE OPINION THAT THE QUESTION REGARDING DEDUCTION AVAILABLE TO THE ASSE SSEE U/S.54F OF THE ACT CAN ALSO BE CONSIDERED BY HIM AFRESH. ESPECIALL Y SO, SINCE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD MADE AN E NHANCEMENT IN COMPUTATION OF CAPITAL GAINS, BY DISBELIEVING THE EVIDENCE FILED BY THE ASSESSEE FOR CONSTRUCTION EXPENSES INCURRED BY IT T HROUGH ONE SHRI. T. ARMSTRONG NAVIN. I THEREFORE ALLOW THE MISCELLANEO US PETITION FILED BY THE ASSESSEE, RECALL THE ORDER OF THE TRIBUNAL IN S O FAR AS IT RELATES TO NON ADJUDICATION OF GROUND 4 & 5 AND DISPOSE OF SU CH GROUNDS WITH A M.P. 72/CHNY/2018 AND ITA NO.2288/2017 :- 8 -: DIRECTION TO THE LD. ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE U/S.54F OF THE ACT AFRESH, IN ACCORDANCE W ITH LAW AFTER CONSIDERING THE EVIDENCE, IF ANY, FILED BY THE ASSE SSEE IN THIS REGARD. GROUND NO.4 AND 5 OF THE ASSESSEE WHICH WERE NOT EA RLIER DISPOSED OFF BY THIS TRIBUNAL IS ALLOWED FOR STATISTICAL PURP OSE. 5. IN THE RESULT, THE MISCELLANEOUS PETITION FIL ED BY THE ASSESSEE IS ALLOWED. APPEAL IN ITA NO.2288/MDS/201 7 IS RECALLED FOR LIMITED PURPOSE OF ADJUDICATING GROUNDS 4 & 5 RAISE D BY THE ASSESSEE, AND THE SAID APPEAL IS ALLOWED FOR STATISTICAL PURP OSE. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 13 TH JULY, 2018 AT CHENNAI. SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER / CHENNAI / DATED:13 TH JULY, 2018. KV ! ' #$ %$ / COPY TO: 1 . PETITIONER 3. - () / CIT(A) 5. $01 ' 2 / DR 2. '345 / RESPONDENT 4. - / CIT 6. 16 7 / GF