D.Vedhanand, CHENNAI v. DCIT, Coimbatore

ITA 1218/CHNY/2011 | 2008-2009
Pronouncement Date: 18-11-2011 | Result: Allowed

Appeal Details

RSA Number 121821714 RSA 2011
Assessee PAN AAJPV6824E
Bench Chennai
Appeal Number ITA 1218/CHNY/2011
Duration Of Justice 4 month(s) 20 day(s)
Appellant D.Vedhanand, CHENNAI
Respondent DCIT, Coimbatore
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 18-11-2011
Date Of Final Hearing 31-10-2011
Next Hearing Date 31-10-2011
Assessment Year 2008-2009
Appeal Filed On 28-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI [BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMBER] I.T.A.NO.1218/MDS/2011 ASSESSMENT YEAR : 2008-09 SHRI D. VEDHANAND NO.24 NATRAJ LAYOUT RAMALINGA NAGAR CROSS NO.4 K.K. PUDUR COIMBATORE 641 038. VS THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE III COIMBATORE. [PAN - AAJPV6824E] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR ADVOCATE RESPONDENT BY : SHRI R.B. NAIK CIT-DR DATE OF HEARING : 31.10.2011 DATE OF PRONOUNCEMENT : 18.11.2011 O R D E R PER HARI OM MARATHA JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE FOR ASSESSME NT YEAR 2008-09 IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-I COI MBATORE DATED 26.5.2011. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE AS SESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 26. 12.2008 ITA NO.1218/MDS/11 :- 2 -: ADMITTING TOTAL INCOME OF ` 58 12 270/- WHICH CONSISTED OF INCOME FROM SALARIES INCOME FROM HOUSE PROPERTIES LONG T ERM CAPITAL GAINS AND INCOME FROM OTHER SOURCES. DURING THE COURSE O F ASSESSMENT PROCEEDINGS VARIOUS DETAILS RELATING TO THE SALE O F AGRICULTURAL LAND SITUATED IN COIMBATORE THE SECTIONS MENTIONED IN T HIS ORDER ARE THAT OF INCOME TAX ACT 1961. NO.7/3131 7/3122 7/3133 ETC. FOR WHICH THE ASSESSEE PRODUCED THE COPIES OF THE SALE DOCUME NTS. THE ASSESSEE HAD COMPUTED LONG TERM CAPITAL GAINS (LTCG ) ON THE SALE OF THIS LAND AT ` 54 26 130/- AS AGAINST WHICH THE ASSESSING OFFICER HAS COMPUTED THE LTCG BY INVOKING SECTION 50C AT ` 88 60 435/- AND HAS COMPUTED THE ADDITIONAL INCOME ON THIS ACCOUNT AT ` 34 34 305/- AGAINST WHICH THE ASSESSEE HAS FILED FIRST APPEAL. THE LD. CIT(A) HAS UPHELD THE ACTION OF THE ASSESSING OFFICER ON THE P REMISE THAT THE ASSESSEE HIMSELF HAS AGREED FOR INVOCATION OF SECTI ON 50C AND NOT OBJECTED FOR ADOPTING THE GUIDELINE VALUE U/S 50C. HE HAS ALSO OBSERVED THAT THE ASSESSEE HAS NOT APPEALED AGAINST THE MARKET VALUE FIXED BY THE STAMP VALUATION AUTHORITY (SVA) BEFORE ANY FORUM. IN THE LIGHT OF THE ABOVE OBSERVATIONS HE HAS CONCLUDED T HAT THE ASSESSEE CANNOT OBJECT TO THE ACTION OF THE ASSESSING OFFICE R IN THE GIVEN SCENARIO BY STATING THAT THE ASSESSING OFFICER HAS NOT REFERRED THE MATTER TO THE DVO AS HE HAD HIMSELF AGREED FOR THE APPLICATION OF ITA NO.1218/MDS/11 :- 3 -: PROVISION OF SECTION 50C. ACCORDINGLY HE HAS CONF IRMED THE ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS FURTHE R AGGRIEVED AND HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (AP PEALS) I COIMBATORE DATED 26.5.2011 IN I.T.A.NO.98/2010-11 F OR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN SUSTAINING THE RECOMP UTATION OF LONG TERM CAPITAL GAINS ARISING OR ACCRUING AS A RE SULT OF SALE OF AGRICULTURAL LANDS ON THE APPLICATION OF SECTION 50C OF THE ACT IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE SUSTENANCE OF LONG TERM CAPITAL GAINS ON THE FACTS AND IN THE CIR CUMSTANCES OF THE CASE WAS WRONG INCORRECT UNJUSTIFIED ERRO NEOUS AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE ERRONEOUSLY AND WRONGLY APPLIED TO THE FACTS OF THE CASE INASMUCH AS THERE WAS NO PRES CRIPTION FOR MECHANICAL APPLICATION OF THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY FOR COMPUTING LONG TERM CAPITAL GAINS. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RE WERE DEPRESSING FACTORS ATTACHED TO THE CAPITAL ASSETS/A GRICULTURAL LANDS SUBJECT MATTER OF TRANSFER AND EVEN THOUGH SU CH DEPRESSING FACTORS WERE BROUGHT TO THE NOTICE IN TH E SUPPORT OF THE PLEA FOR NOT APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT MECHANICALLY THE SUSTENANCE OF SUCH RECOMPUTATION WAS ERRONEOUS AND INVALID. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REFERENCE TO THE VALUATION CELL AS MANDATED AND INBUILT IN THE P ROVISIONS OF SECTION 50C OF THE ACT FOR THE DETERMINATION OF SAL E CONSIDERATION IN VIEW OF THE DEPRESSING FACTORS POI NTED OUT AS AGAINST THE MECHANICAL APPLICATION OF THE VALUE DET ERMINED BY ITA NO.1218/MDS/11 :- 4 -: THE STAMP VALUATION AUTHORITY WAS ERRONEOUSLY REJEC TED ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 7. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE FINDINGS RECORDED IN THIS REGARD IN PARA 5 OF THE IMPUGNED O RDER WERE WRONG INCORRECT UNJUSTIFIED ERRONEOUS AND NOT SU STAINABLE BOTH ON FACTS AND IN LAW. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT NON CONSIDERATION OF THE DETAILED WRITTEN SUBMISSIONS FILED AT THE TI ME OF THE APPELLATE PROCEEDINGS INCLUDING CERTAIN BINDING JUD ICIAL PRECEDENTS WOULD VITIATE THE IMPUGNED ORDER. 9. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO AGREEMENT BEFORE THE ASSESSING OFFICER TO ADOPT THE PROVISIONS OF SECTION 50C OF THE ACT FOR COMPUTING LONG TERM C APITAL GAINS INASMUCH AS THE SAID PROVISIONS OF THE ACT WE RE NOT TAKEN INTO CONSIDERATION WITH REFERENCE TO THE PURPOSE AS WELL AS TRUE IMPORT OF THE APPLICABILITY OF SUCH PROVISIONS IN T HE ADOPTION OF GUIDELINE VALUE AS SALE CONSIDERATION IN THE COMPUT ATION OF LONG TERM CAPITAL GAINS. 10. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REJECTION OF THE PRAYER FOR REFERENCE TO THE VALUATION CELL ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WAS ERRONEOUS AND INV ALID. 11. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE RE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNE D ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IS NULLITY IN LAW. 12. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE P ERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD. IT WAS VEHE MENTLY ARGUED BY THE LD.AR THAT THE ASSESSEE NEVER AGREED FOR THE APPLIC ATION OF PROVISIONS ITA NO.1218/MDS/11 :- 5 -: OF SECTION 50C OF THE ACT FOR COMPUTING LTCG. HE H AS FURTHER CONTENDED THAT THE SAID PROVISIONS OF THE ACT WERE NOT EVEN CONSIDERED BY THE ASSESSING OFFICER FOR THE PURPOSE AS HAS BEE N ALLEGED BY THE LD. CIT(A). IT WAS ARGUED THAT THE ASSESSEE HAS PRAYED FOR REFERENCE OF THE MATTER TO THE VALUATION CELL AND HE HAS ALSO CO NTENDED THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE TO JUSTI FY HIS CLAIM. ON THE OTHER HAND THE LD.DR HAS STUCK HIS REASONING TO SU PPORT THE APPELLATE ORDER. AFTER HEARING BOTH SIDES WE HAVE FOUND TH AT THERE SEEMS TO BE SOME AMISS OF CLAIMS AND COUNTER CLAIMS WHICH CA NNOT BE SETTLED BY US WITHOUT REFERENCE TO VARIOUS ASSESSMENT RECO RDS. IT IS A FACT THAT THE ASSESSEE HAS SOLD PIECE OF LAND AND ALSO D ECLARED LTCG WHICH ACCRUED TO HIM AS A RESULT OF SALE THEREOF. THE AP PLICATION OF SECTION 50C OF THE ACT IN THE COMPUTATION OF TOTAL TAXABLE INCOME IS BONE OF CONTENTION BETWEEN THE PARTIES. IT IS TRUE THAT TH E PROVISIONS OF SECTION 50C OF THE ACT CANNOT BE MECHANICALLY APPLI ED AND A PROCEDURE HAS BEEN ALLOWED THEREIN WHICH HAS TO BE FOLLOWED B Y THE PARTIES. IT HAS BEEN CONTENDED THAT PROPER OPPORTUNITY OF HEARI NG WAS NOT PROVIDED TO THE ASSESSEE. THEREFORE IN THE INTERE ST OF JUSTICE WE ARE OF THE CONSIDERED OPINION THAT THE ENTIRE ISSUE NEE DS TO BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DI RECTION THAT HE WILL ITA NO.1218/MDS/11 :- 6 -: PASS A FRESH ORDER ON THIS ISSUE AS PER LAW. NEEDL ESS TO MENTION THAT HE SHALL GIVE DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 18 TH NOVEMBER 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A)-I COIMBATORE 4. CIT-I COIMBATORE 5. DR