Smt.Rathnamma Govindaraju , Mysore V. The Assistant Commissioner of Wealth Tax Circle-1(1), Mysore

WTA 22/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5909 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-01-2019
• Assessment Year: 2001-2002
• Appeal Filed On: 19-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Valuation report; Set aside
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER W TA NO S . 20 TO 23 /BANG/201 8 ASSESSMENT YEAR S : 1999 - 2000 TO 2002 - 2003 SMT. RATHNAMMA GOVINDARAJU, NO. 452/453, SANMARGA, BEHIND JSS PUBLIC SCHOOL, SIDDARTHANAGAR, MYSURU. PAN: AHWPG3421G VS. THE ASSISTANT COMMISSIONER OF WEALTH-TAX, CIRCLE 1 [1], MYSURU. APPELLANT RESPONDENT APPELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) DATE OF HEARING : 0 7 .0 2 .2019 DATE OF PRONOUNCEMENT : 08 . 0 2 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER ALL THESE FOUR APPEALS ARE FILED BY THE ASSESSEE AN D THESE ARE DIRECTED AGAINST A COMBINED ORDER OF LD. CIT (A), MYSORE DAT ED 19.01.2018 FOR ASSESSMENT YEARS 1999-2000 TO 2002-03. ALL THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ALTHOUGH THE ASSESSEE HAS RAISED FIVE IDENTICAL GROUNDS IN EACH OF THESE APPEALS, BUT IN COURSE OF HEARING BEFORE US, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT GROUND NOS. 3.2 AND 3.3 ONLY ARE PRES SED IN EACH YEAR AND THE REMAINING GROUNDS IN EACH YEAR ARE NOT PRESSED. ACCORDINGLY WE REPRODUCE GROUND NOS. 3.2 AND 3.3 FROM THE ASSESSEE S APPEAL FOR ASSESSMENT YEAR 1999-2000 IN WTA NO. 20/BANG/2018 B ECAUSE THESE TWO GROUNDS ARE IDENTICAL IN EACH OF THESE APPEALS AND THE REMAINING GROUNDS IN WTA NOS. 20 TO 23/BANG/2018 PAGE 2 OF 5 EACH OF THESE APPEALS ARE REJECTED AS NOT PRESSED. THESE GROUNDS ARE AS UNDER. 3.2 THE LEARNED CIT[A] FURTHER FAILED TO APPRECIATE THAT THE LEARNED DVO HAD ADOPTED THE GUIDELINE RATES FOR COMMERCIAL PROPERTY AND THAT TOO BY ERRONEOUSLY CONSIDERING THE RATES IN A DIFFERENT LOCALITY CALLED SIDHARTHA LAYOUT INSTEAD OF NOTICING THAT TH E APPELLANT'S LANDS WERE LOCATED NEXT TO AN EXISTING RESIDENTIAL LAYOUT CALLED VENKATALINGAIAH RESIDENTIAL LAYOUT AND THAT THESE L ANDS WERE FIT FOR RESIDENTIAL USE ONLY AND HENCE, THE VALUE DETERMINE D WAS HIGHLY EXCESSIVE AND OUGHT TO HAVE BEEN REDUCED SUBSTANTIA LLY. 3.3 THE LEARNED CIT [A] OUGHT TO HAVE APPRECIATED T HAT THE APPELLANT'S LANDS WERE FORMING PART OF THE LANDS IN SURVEY NO.195 OF KETHAMARANAHALLI VILLAGE FOR WHICH THE GUIDELINE VA LUE PUBLISHED BY THE SUB-REGISTRAR WAS IN THE REGION OF RS. 70/- TO 100/- PER SQ.FT AND THEREFORE, THE VALUATION DETERMINED BY THE LEARNED DVO BASED ON THE GUIDELINE VALUE OF SIDDARTHA LAYOUT WAS HIGHLY EXCE SSIVE AND LIABLE TO BE REDUCED SUBSTANTIALLY. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE COPY OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE LD. CWT (A) IS AVAILAB LE ON PAGES 4 TO 8 OF PAPER BOOK AND IN PARTICULAR, OUR ATTENTION WAS DRA WN TO PARA NO. 7 OF THIS WRITTEN SUBMISSION FILED BEFORE CWT (A). HE SUBMIT TED THAT IN THIS PARA, A SPECIFIC CLAIM WAS MADE BY ASSESSEE BEFORE CWT (A) THAT THE LAND IN QUESTION IS SITUATED IN SY.NO. 195, KYATHAMARANAHAL LI AND AS PER GUIDELINE RATE PUBLISHED BY THE REGISTERING AUTHORITY FOR REG ISTRATION AND STAMPS ANNEXED BY THE WTO WITH HIS ORDER, THE RATE PER SQ. FT. FOR KYATHAMARANAHALLI MAIN ROAD WAS RS. 160/- PER SQ.FT . AND THE SAME FOR CROSS ROADS 1 TO 12 AND FOR 1 ST STAGE WAS RS. 70/- AND RS. 80/- PER SQ.FT. FOR FINANCIAL YEAR 1998-99. HE FURTHER POINTED OUT THAT THIS IS ALSO SUBMITTED BEFORE CWT (A) THAT FOR FINANCIAL YEAR 19 99-2000 AND 2000-01, THE RATE VARIED FROM RS. 50/- TO RS. 100/- OF DIFFE RENT AREAS OF KYATHAMARANAHALLI AND THEREFORE, THE RATE ADOPTED B Y THE AVO OF RS. 355/-, RS. 390/-, RS. 430/- AND RS. 475/- PER SQ.FT. FOR D IFFERENT ASSESSMENT YEARS HAS NO BASIS AND RATIONALE. IT IS ALSO SUBMITTED T HAT BEFORE THE AVO ALSO, THE ASSESSEE HAS RAISED OBJECTION IN THIS REGARD BU T THE AVO BRUSHED ASIDE THE SAME BY HOLDING THAT THIS IS NOT BINDING ON THE VALUATION OFFICER TO ADOPT THE GUIDELINE VALUE OF KYATHAMARANAHALLI. HE SUBMI TTED THAT IN SPITE OF THIS SPECIFIC SUBMISSION MADE BEFORE CWT (A), THE LD. CW T (A) HAS DECIDED THE ISSUE IN A CRYPTIC MANNER WITHOUT DISCUSSING OR DEC IDING ABOUT THESE WTA NOS. 20 TO 23/BANG/2018 PAGE 3 OF 5 OBJECTIONS RAISED BEFORE CWT (A). HE SUBMITTED THA T THE MATTER MAY BE RESTORED BACK TO THE FILE OF CWT (A) FOR FRESH DECI SION BY WAY OF A SPEAKING AND REASONED ORDER IN RESPECT OF ALL THE OBJECTIONS OF THE ASSESSEE. AS AGAINST THIS, THE LD. DR OF REVENUE SUPPORTED THE O RDER OF CWT (A). HE FURTHER SUBMITTED THAT IN THE FIRST ROUND, THE TRIB UNAL HAS RESTORED BACK THE MATTER TO THE FILE OF AO FOR FRESH DECISION AFTER O BTAINING REPORT OF DVO. HE FURTHER SUBMITTED THAT AS DIRECTED BY THE TRIBUNAL, THE AO HAS OBTAINED THE REPORT OF THE DVO AND ASSESSMENT IS COMPLETED ON TH E BASIS OF SUCH REPORT AND THEREFORE, THE ORDER OF CWT (A) SHOULD BE CONFI RMED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE TRIBUNAL ORDER IN FIRST ROUND IN WTA NOS. 22 TO 25/BANG/2008 , COPY AVAILABLE ON PAGES 1 TO 3 OF PAPER BOOK, THE TRIBUNAL HAS FOLLOW ED ANOTHER TRIBUNAL ORDER IN WTA NOS. 38 & 39/2005 AND 45 & 46/2005 DATED 04. 08.2006 AND PARA 4 OF THAT TRIBUNAL ORDER WAS REPRODUCED BY TRIBUNAL A ND MATTER WAS RESTORED BACK TO THE FILE OF AO WITH SAME DIRECTIONS. HENCE WE REPRODUCE PARA NO. 4 OF THE EARLIER TRIBUNAL ORDER DATED 04.08.2006 AVAI LABLE ON PAGE NOS. 2 AND 3 OF THE PAPER BOOK. 4. WE HAVE HEARD BOTH THE PARTIES. IN ABSENCE OF CO PY OF VALUATION REPORT, THE ASSESSEE WERE NOT ABLE TO PLACE THEIR O BJECTIONS AGAINST THE VALUATION REPORT. THE LEARNED AO HAS TO GIVE A FIND ING AS TO WHETHER THE ASSET UNDER REFERENCE IS A SITE OR A SITE HAVIN G A BUILDING ON IT. IN CASE IT IS HELD THAT IT IS A SITE HAVING A BUILDING ON IT, THEN IT IS TO BE VALUED. AS PER RULE III OF WEALTH TAX ACT. IN CASE, IT IS TO BE HELD AS A SITE, THEN THE AO WILL HAVE TO CONSIDER THE' CLAIM OF THE ASSESSEE IN RESPECT OF EXEMPTION U/S 5(1)(VI). WE ARE NOT REFER RING TO OTHER GROUNDS OF APPEAL, AS WE FEEL THAT THE MATTER IS RE QUIRED TO BE REAPPRAISED BY THE AO. ASST. ORDERS ARE SET ASIDE T O BE MADE AFRESH. IT IS MADE CLEAR THAT LEARNED CIT(A) AS PER LAW WAS RE QUIRED TO GIVE OPPORTUNITY TO THE VALUATION OFFICER IN CASE WHERE THE AO HAS MADE ASST. ON THE BASIS OF THE REPORT OF THE VALUATION O FFICER. IN THE INSTANT CASE, THE LEARNED CIT(A) HAS NOT PROVIDED OPPORTUNI TY TO THE VALUATION OFFICER. HENCE THE ORDER OF LEARNED CWT I S NOT IN ACCORDANCE WITH PROVISIONS OF THE ACT. SINCE THE IS SUES ARE TO BE RECONSIDERED AFRESH, THEREFORE, WE HAVE THOUGHT IT PROPER TO SET ASIDE THE ENTIRE ASST. ON THE FILE OF THE AO. SINCE THE O RDER OF THE LEARNED CIT(A) IS NOT IN ACCORDANCE WITH THE PROCEDURE PRES CRIBED FOR DECIDING THE APPEAL IN THE CASES WHERE THE AO HAS R ELIED ON THE VALUATION REPORT, THEREFORE THE FINDINGS AS GIVEN B Y LEARNED CIT(A) ARE ALSO SET ASIDE. KEEPING IN VIEW THESE FACTS, WE DO NOT CONSIDER IT NECESSARY TO DECIDE THE REVENUE APPEAL ON MERITS AS THE ENTIRE MATTER IS TO BE CONSIDERED AFRESH BY THE AO. WTA NOS. 20 TO 23/BANG/2018 PAGE 4 OF 5 5. FROM THE ABOVE PARA OF EARLIER TRIBUNAL ORDER AS REPRODUCED ABOVE, IT IS SEEN THAT IN THIS PARA, IT IS STATED BY THE TRIBUNA L THAT IT IS MADE CLEAR THAT LD. CIT (A) AS PER LAW WAS REQUIRED TO GIVE OPPORTUNITY TO VALUATION OFFICER IN CASE WHERE THE AO HAS MADE ASSESSMENT ON THE BASIS OF REPORT OF THE VALUATION OFFICER. THE TRIBUNAL FURTHER HELD THAT SINCE THE CIT(A) HAS NOT PROVIDED OPPORTUNITY TO VALUATION OFFICER, THE ORDE R OF CIT(A) IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. AS PER THAT ORDER, THE MATTER WAS RESTORED BACK TO THE FILE OF AO AND THEREFORE, NO U LTIMATE FINDING WAS GIVEN REGARDING THIS LAPSE ON THE PART OF CWT (A). AS PE R THE IMPUGNED ORDER ALSO, IT IS SEEN THAT THE CWT(A) HAS NOT GRANTED AN OPPORTUNITY TO VALUATION OFFICER OF HEARING. THIS IS ALSO SEEN THAT CWT (A) HAS NOT DECIDED WITH REGARD TO SPECIFIC OBJECTIONS RAISED BY THE ASSESSE E BEFORE HIM AS PER PARA NO. 7 OF THE ASSESSEES WRITTEN SUBMISSIONS MADE BE FORE CWT (A). FOR READY REFERENCE, WE REPRODUCE PARA 7 OF THE WRITTEN SUBMISSIONS OF THE ASSESSEE FILED BEFORE LD. CWT (A) FROM PAGE NO. 6 O F THE PAPER BOOK. 7. ANOTHER SKETCH PLAN (MARKED 2) ANNEXED, THE SUBJ ECT PROPERTY IS COLOURED IN YELLOW WAS THE PROPERTY ORIGINALLY PART OF THE BIGGER PROPERTY CARVED OUT OF LAND SITUATED IN SY.NO.195. KYATHAMARANAHALLI LAND. ANNEXED SKETCH 3 SHOWS HOW THE PROPERTY IS DI VIDED INTO 6 PARTS (YELLOW MARKED AREA AND RG MARKED PORTION IS THE AS SET BELONGS TO APPELLANT, WHICH IS IN DISPUTE). THE WEALTH TAX OFF ICER HAS ANNEXED THE LIST OF GUIDE LINE RATES FOR THE PURPOSE OF VAL UATION AND ACCORDING TO THAT LIST, WHICH IS PUBLISHED BY THE REGISTERING AUTHORITY FOR REGISTRATION AND STAMPS, NOTIFIED FOR FINANCIAL YEA R 1998-99 THE RATE PER SQ.FEET WAS RS.160/- FOR KYATHAMARANAHALLI MAIN ROAD AND RS.70/- RS.80/- PER SQ.FEET FOR CROSS ROAD 1 TO 12 AND FOR 1ST STAGE. SIMILARLY FOR FINANCIAL YEAR (1999-00 & 2000-01, THE RATE VAN ES FROM RS.50/- TO RS.100/-) OF DIFFERENT AREAS OF KYATHAMARANAHALLI. THEREFORE, ADOPTION OF RS.355/-, RS.390/-, RS.430/- AND RS.475 1- PER SQ.FEET BY AVO FOR DIFFERENT ASSESSMENT YEARS HAS NO BASIS AND RATIONALE. THE AVO IN PAGE 7 HAS BRUSHED ASIDE THE OBJECTION HOLDI NG THAT 'THERE IS NO BINDING ON THE VALUATION OFFICER TO ADOPT THE GU IDELINE VALUE OF KYATHAMARANAHALLI. THE STATEMENT OF THE AVO IS NOT SUPPORTED BY ANY OTHER SALE INSTANCE OF THE VICINITY, HENCE HE OUGHT TO HAVE BEEN RELIED ON THE PUBLISHED DATA AVAILABLE. 6. IN VIEW OF ABOVE DISCUSSION, WE FEEL IT PROPER T O RESTORE BACK THE MATTER TO THE FILE OF CWT(A) FOR FRESH DECISION IN ACCORDANCE WITH THE LAW I.E. AFTER PROVIDING OPPORTUNITY OF HEARING TO THE VALUATION O FFICER. WE ALSO MAKE IT CLEAR THAT WHATEVER OBJECTIONS ARE RAISED BY THE AS SESSEE BEFORE CWT(A), WTA NOS. 20 TO 23/BANG/2018 PAGE 5 OF 5 LD. CWT(A) SHOULD PASS A SPEAKING AND REASONED ORDE R IN RESPECT OF ALL SUCH OBJECTIONS. NEEDLESS TO SAY, HE SHOULD PROVID E ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS DECI SION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESENT STAGE. 7. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH FEBRUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.