Shri Viresh jain,, Dehradun v. ITO, New Delhi

ITA 606/DEL/2010 | 2006-2007
Pronouncement Date: 25-05-2010 | Result: Allowed

Appeal Details

RSA Number 60620114 RSA 2010
Assessee PAN AAPPJ4152M
Bench Delhi
Appeal Number ITA 606/DEL/2010
Duration Of Justice 3 month(s) 17 day(s)
Appellant Shri Viresh jain,, Dehradun
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 25-05-2010
Date Of Final Hearing 25-05-2010
Next Hearing Date 25-05-2010
Assessment Year 2006-2007
Appeal Filed On 08-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H: NEW DELHI BEFORE SHRI C.L.SETHI JM & SHRI R.C. SHARMA AM I.T. A. NO.605/DEL OF 2010 ASSESSMENT YEAR: 2006-07 MRS. TRISHLA JAIN INCOME-TAX OFFICER 4-A RACE COURSE DEHRADUN. VS WARD 2(3) DEHRADUN . PAN : AAPPJ4152M I.T. A. NO.606/DEL OF 2010 ASSESSMENT YEAR: 2006-07 MR. VIRESH JAIN INCOME-TAX OFFICER 4-A RACE COURSE DEHRADUN. VS WARD 2(3) DEHRADUN . PAN : ABVPJ4047J APPELLANT RESPONDENT APPELLANT BY: SHRI ANIL JAIN RESPONDENT BY: SHRI N.K. CHAND ORDER ER C.L. SETHI JM: IN THESE TWO APPEALS FILED BY TWO DIFFERENT ASSESS EES AGAINST TWO SEPARATE ORDERS BOTH DATED 20.11.09 PASSED BY THE CIT(A)-I DEHRADUN FOR THE ASSTT. YEAR 2006-07 A COMMON AND IDENTICAL ISS UE IS INVOLVED REGARDING THE COMPUTATION OF LONG TERM CAPITAL GAIN BY APPLYI NG THE PROVISIONS OF SECTION 50C OF THE INCOME-TAX ACT 1961 (THE ACT). IN BOTH THE APPEALS GROUNDS RAISED BY THE ASSESSEE ARE IDENTICALLY WORD ED AS UNDER: 2 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO ASSESSING THE LONG TERM CAPITAL GAIN AT RS.27 69 840/- AS PER THE PROVISION OF SECTION 50C. 2. THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT STAMP VALUATION ADOPTED IS FOR THE CIRCLE RATE OF CHAKRATA DEHRADUN WHEREAS THE PROPERTY IN QUESTION IS SITUATION AT TILAK ROAD DEHRADUN WHICH IS A DIFFERENT AREA AND IS HAVING LESSER STAM P VALUATION. 3. THE LD. CIT(A) HAS NOT CONSIDERED THE FACT THAT MOST OF THE PROPERTIES UNDER CONSIDERATION ARE OLD TENANTED PROPERTIES ON WHICH THE RENT WAS VERY LESS AND ARE SOLD TO THE TENANTS ONLY. 4. THE LD. CIT(A) HAS NOT CONSIDERED THAT ON SOME OF THE SHOPS THE APPELLANT RECEIVED SALAMI/PREMIUM ABOUT 10-15 YEARS BACK AND SALE DEED IS THE CONTINUATION OF EARLIER SALAMI AGREEMENT. 5. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO THAT THE PROVISIONS OF SECTION 50C(2) ARE NOT APPLICABLE. 2. THESE TWO APPELLANTS ALONG WITH OTHER TWO PERSON S ARE THE CO-OWNERS OF PROPERTY NO.1 TILAK ROAD DEHRADUN HAVING 1/4 TH SHARE EACH IN THE SAID PROPERTY. THE CO-OWNERS HAVE SOLD THE SAID PROPERTY DURING THE YEAR UNDER CONSIDERATION. IN THE COURSE OF ASSESSMENT PROCEED INGS IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITA L GAIN ON SALE OF SHOPS BY SHOWING THE SALE CONSIDERATION AT RS.72 42 500/- . IT WAS FURTHER NOTICED BY THE AO THAT THE VALUE OF THE PROPERTY FIXED BY S TAMP EVALUATION AUTHORITY WAS TAKEN AT RS.1 69 99 000/-. SIMILARLY IN RESPECT OF SOME OTHER 3 PROPERTY THE ASSESSEE HAD SHOWN SALE CONSIDERATION AT RS.2 50 000/- AS AGAINST VALUE FIXED BY STAMP VALUATION AUTHORITY AT RS.13 80 000/-. AFTER APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT THE AO ADOPTED THE SALE CONSIDERATION EQUAL TO THE VALUE ADOPTED BY THE STA MP VALUE AUTHORITY AND THEN DETERMINED THE LONG TERM CAPITAL GAIN FROM THE SALE OF THE PROPERTY IN QUESTION. ON AN APPEAL CIT(A) CONFIRMED THE AOS ACTION BY OBSERVING THAT THE AO HAS GIVEN A CLEAR CUT FINDING THAT FOR THE PURPOSE OF ARRIVING AT THE SALE CONSIDERATION THE PROVISIONS OF SUB SECTI ON (1) OF SECTION 50C ARE TO BE ADOPTED AND SINCE THERE WAS NO REASON TO EXERCI SE DISCRETIONARY POWER U/S 50C(2) OF THE ACT TO MAKE REFERENCE OF THE VALU ATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER BECAUSE THE ASSESSEE NEVER CONTESTED SUCH VALUATION MADE BY THE STAMP VALUATION AUTHORITY. THE CIT(A) THEREFORE HOLD THAT AO WAS VERY MUCH JUSTIFIED IN INVOKING THE PROVISIO NS OF SECTION 50C(1) OF THE ACT IN DETERMINING THE LONG TERM CAPITAL GAIN O NLY. 3. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FIRST AND FORE MOST POINT THAT ARISES FOR OUR CONSIDERATION IS AS TO WHETHER THE AO SHOULD HA VE REFERRED THE MATTER TO THE VALUATION OFFICER U/S 50C(2) OF THE ACT TO DETE RMINE THE FAIR MARKET VALUE BEFORE APPLYING THE PROVISIONS OF SECTION 50C (1) OF THE ACT. IN THIS 4 CONNECTION WE HAVE CAREFULLY PERUSED THE AOS ORDE R AND FIND THAT IN PARA 3.4 OF HIS ORDER THE AO HAS CLEARLY STATED THAT IN THE REPLY THE ASSESSEE HAS EMPHASIZED THAT THE CIRCLE RATE IN RESPECT OF PROPE RTY IS MUCH HIGHER THAN ACTUAL MARKET VALUE AND THE SHOPS/PROPERTY SOLD WAS UNDER OLD TENANCY AND OCCUPANTS. FROM THIS FINDING RECORDED BY THE AO I T IS CLEAR THAT THE ASSESSEE MADE A CLAIM BEFORE THE AO THAT THE CIRCLE RATE WAS MUCH HIGHER THAN THE ACTUAL MARKET VALUE OF THE PROPERTY. SECT ION 50C(2) PROVIDES THAT WITHOUT PREJUDICE TO THE PROVISIONS OF SUB SECTION (1) WHERE THE ASSESSEE CLAIMS BEFORE THE AO THAT THE VALUE ADOPTED OR ASSE SSED BY THE STAMP VALUATION AUTHORITY EXCEEDS FAIR MARKET VALUE OF TH E PROPERTY AS ON THE DATE OF TRANSFER AND THE VALUE SO ADOPTED OR ASSESSED B Y THE STAMP VALUATION AUTHORITY HAS NOT BEEN DISPUTED IN ANY APPEAL OR RE VISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY COURT OR THE HIGH COURT THE AO MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUA TION OFFICER AND IN THAT EVENT RELEVANT AND CORRESPONDING PROVISIONS OF WEA LTH-TAX ACT SHALL WITH NECESSARY MODIFICATIONS WILL APPLY. IN THE PRESEN T CASE IT IS NOT IN DISPUTE` THAT THE ASSESSEE HAS MADE A CLAIM BEFORE THE AO TH AT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY WAS HIGHE R THAN THE FAIR MARKET VALUE. IT IS ALSO NOT THE CASE WHETHER THE VALUE AD OPTED BY THE STAMP VALUATION AUTHORITY HAS EVER BEEN DISPUTED BY THE A SSESSEE IN ANY APPEAL OR 5 REVISION OR OTHERWISE AS REFERRED TO IN SECTION 50C (2) OF THE ACT. IN THESE CIRCUMSTANCES IT WAS THUS INCUMBENT UPON THE AO TO REFER THE MATTER FOR VALUATION TO A VALUATION OFFICER AS PROVIDED IN SEC TION 50C(2) OF THE ACT. IN THIS RESPECT THE VIEW TAKEN BY THE AO AS WELL AS B Y THE CIT(A) IS NOT CORRECT. SINCE THE AO FAILED TO REFER THE MATTER T O THE VALUATION OFFICER U/S 50C(2) OF THE ACT AS REQUIRES WE FIND IT FIT AND P ROPER TO RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATI ON AFTER REFERRING THE MATTER TO THE VALUATION OFFICER U/S 50C(2) OF THE ACT AND THEN TO DECIDE THE ISSUE ACCORDINGLY AS PER LAW. THE AO SHALL PROVIDE REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE MATTER WITH REGARD TO THE DETERMINATION OF SALE CONSIDERATION AND CAPITAL GAIN SHALL REMAIN OP EN BEFORE THE AO AND BOTH THE PARTIES SHALL BE AT LIBERTY TO RAISE ANY O THER CONTENTION/CONTENTIONS SUPPORTED BY ANY OTHER DOCUMENT/DOCUMENTS AS THEY M AY THINK FIT AND PROPER UNDER THE LAW. THE ASSESSEE SHALL BE AT LIB ERTY TO RAISE ALL OTHER ALTERNATIVE CONTENTIONS BEFORE THE AO AND TO PRODUC E ANY OTHER FURTHER EVIDENCE OR EVIDENCES AS HE MAY BE ADVISED WHICH SHALL BE DULY DELIBERATED UPON CONSIDERED AND DECIDED BY THE AO BY PASSING A SPEAKING ORDER AND REASONED ORDER. 5. IN THE RESULT BOTH THESE APPEALS FILED BY TWO D IFFERENT ASSESSEE AE ALLOWED FOR STATISTICAL PURPOSES. 6 6. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 25 TH MAY 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (R.C. SHARMA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH MAY 2010 VIJAY COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-I DEHRADUN 5. DR ASSISTANT REGISTRAR