Ratnakar Apstambha,, Nanded v. Pr. Commissioner of Income-tax - 1,,

ITA 1575/PUN/2015 | 2010-2011
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 157524514 RSA 2015
Assessee PAN AAJPL3356L
Bench Pune
Appeal Number ITA 1575/PUN/2015
Duration Of Justice 1 year(s) 11 month(s) 25 day(s)
Appellant Ratnakar Apstambha,, Nanded
Respondent Pr. Commissioner of Income-tax - 1,,
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-11-2017
Date Of Final Hearing 23-11-2017
Next Hearing Date 23-11-2017
Last Hearing Date 21-11-2017
First Hearing Date 21-11-2017
Assessment Year 2010-2011
Appeal Filed On 03-12-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH PUNE . BEFORE MS. SUSHMA CHOWLA JM AND SHRI D. KARUNAKARA RAO AM . / I TA NO. 1575/PUN/2015 / ASSESSMENT YEAR : 2010 - 11 SHRI RATNAKAR APSTAMBHA H. NO.1 - 8 - 495 SHARADA PATNOORKAR NAGAR NANDED - 431 605 PAN : AAJPL3356L ....... / APPELLANT / V/S. THE PR. COMMISSIONER OF INCOME TAX - 1 AURANGABAD. / RESPONDENT A PPELLANT BY : SHRI PRAMOD SHINGTE R ESPONDENT BY : SHRI RAJEEV KUMAR CIT / DATE OF HEARING : 23.11.2017 / DATE OF PRONOUNCEMENT : 28 .11.2017 / ORDER PER SUSHMA CHOWLA JM THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX - 1 AURANGABAD DATED 24.03.2013 RELATING TO ASSESSMENT YEAR 201 0 - 1 1 AGAINST ORDER PASSED UNDER SECTION 263 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT). 2 ITA NO .1575/PUN/2015 A.Y .2010 - 11 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF LAW LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX - 1 AURANGABAD ERRED IN PASSING ORDER U/S. 263 BY DISREGARDING THE FACT THAT THE LEARNED ASSESSING OFFICER HAS PASSED ORDER U/S. 143 (3) BY MAKING ALL THE NECESSARY ENQUIRIES AND THEREFORE SUCH ORDER CANNOT TERMED AS ERRONEOUS U/S. 263 MERELY BECAUSE COMMISSIONER IS OF THE OPINION THAT ASSESSING OFFICER SHOULD HAVE CONDUCTED THE ENQUIRY IN A DIFFERENT MANNER. THE APPELLANT CRAVES FOR TO LEAVE ADD ALTER MODIFY DELETE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME HEARING IN THE INTEREST OF NATURAL JUSTICE . 3 . THE PRESENT APPEAL WAS FILED AFTER DELAY OF 190 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT IN THIS REGARD AND HAS POINTED OUT THAT HE WAS ADVISED THAT SINCE THE MATTER WAS SET ASIDE TO THE FILE OF ASSESSING OFFICER THEREFORE NO FURTHER ACTION WAS REQUIRED . THE A SSESSEE CLAIMED THAT UNDER BONA - FIDE BELIEF NO APPEAL WAS FILED AGAINST THE ORDER U/S. 263 OF THE ACT. HOWEVER LATER HE WAS ADVISED BY ANOTHER TAX CONSULTANT AND HENCE DELAY OCCURRED IN FILING APPEAL IN LATE BY 190 DAYS. THE LD. DR FOR THE REVENUE DID NOT STRONGLY OPPOSE THE APPLICATION MADE BY ASSESSEE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE FIND MERIT IN THE PLEA OF THE ASSESSEE AND CONDONE THE DE LAY IN FILING APPEAL LATE BEFORE THE TRIBUNAL. 4. NOW COMING TO THE MERITS OF THE ISSUE RAISED IN THE APPEAL THE ASSESSEE IS AGGRIEVED BY THE EXERCISE OF JURISDICTION BY COMMISSIONER U/S. 263 OF THE ACT. 5. B RIEFLY STATED IN THE FACTS OF THE CASE THE ASSESSEE AN INDIVIDUAL WAS A BANK EMPLOYEE AND HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3 17 540/ - . THE CASE WAS TAKEN UP FOR SCRUTINY. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DECLARED LONG TERM CAPITAL GAIN FROM SALE OF L AND IN ADDITION TO HIS INCOME FROM SALARY HOUSE PROPERTY AND OTHER SOURCES. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE SOLD 1/3 RD SHARE IN ANCESTRAL LAND AND HAD FURTHER INVESTED RS. 5 50 000/ - IN REC BONDS CLAIMED U/S. 54EC OF THE 3 ITA NO .1575/PUN/2015 A.Y .2010 - 11 ACT. THE ASSESSING OFFICER ALSO NOT ED THAT THE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF ADOPTING FAIR MARKET VALUE AS ON 01.04.1981 AS COST OF ACQUISITION AS PER REGISTERED VALUERS REPORT. THE ASSESSING OFFICER FURTHER NOTED THAT EXCEPT SALARY AND LONG TERM CAPITAL GAIN S ON SALE OF LAND THE ASSESSEE HAD NO OTHER SOURCE OF INCOME. THE ASSESSING OFFICER ACCEPTED THE INCOME OF ASSESSEE. 6 . THE COMMISSIONER ON VERIFICATION OF CASE RECORDS WAS OF THE VIEW THAT THE ORDER PASSED BY ASSESSING OFFICER IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF REVENUE. HE NOTED THAT THE ASSESSEE AS ON 01.04.1981 HAD ADOPTED COST OF ACQUISITION AT RS.2 76 333/ - ON THE BASIS OF VALUATION REPORT OF APPROVED VALUER. THE COMMISSIONER FURTHER NOTED THAT WHILE DETERMINING VALUE OF LAND NEITHER THE SALE INSTANCES OF LAND IN THE VICINITY WERE CONSIDERED NOR ANY BASIS FOR GIVING LAND RATE BY THE VALUER. AS PER THE COMMISSIONER THE RATE OF LAND ADOPTED BY VALUER WAS WITHOUT ANY BASIS AND HENCE THE ORDER PASSED BY ASSESSING OFFICER WAS HELD TO BE ERRONEOUS. THE ISSUE WAS RESTORED BACK TO THE FILE OF ASSESSING OFFICER TO REFER THE MATTER TO THE DEPARTMENTAL VALUER FOR ASCERTAINING FAIR MARKET VALUE OF LAND AS ON 01.04.1981 AND RE - FRAME THE ASSESSMENT ON THAT BASIS. 7 . NOW THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER PASSED U/S. 263 OF THE ACT BEFORE TRIBUNAL. 8 . THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IN QUESTION I.E. COST OF ACQUISITION AS ON 01.04.1981 WAS BASED ON VALUATION REPORT AND THE SAID ASSESSMENT WAS CONFIRMED BY ASSESSING OFFICER D URING ASSESSMENT PROCEEDINGS U/S .143(3) OF THE ACT. HE FURTHER POINTED OUT THAT IN A CASE WHENEVER COST OF ACQUISITION WAS ADOPTED ON THE BASIS OF VALUATION REPORT THEN THE SAME COULD NOT BE TAKEN A T LESSER VALUE IN VIEW OF THE RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PRINTS 360 ITR 697 4 ITA NO .1575/PUN/2015 A.Y .2010 - 11 ( BOM). CONSEQUENTLY THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF RE VENUE. 9 . THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF COMMISSIONER. 10 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST JUR ISDICTION OF COMMISSIONER U/S. 2 63 OF THE ACT. IN THE FACTS OF THE PRESENT CASE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND. THE SAID LAND WAS ANCESTRAL LAND AND AS SUCH COST OF ACQUISITION AS ON 01.04.1981 WAS ADOPTED BY ASSESSEE ON THE BASIS OF VALUATION REPORT OF REGISTERED VALUER. THE INCOME FROM LONG TERM CAPITAL GAIN DECLARED BY ASSESSEE WAS ACCEPTED BY THE ASSESSING OFFICER AS PER ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT. HOWEVER THE COMMISSIONER ON PERUSAL OF RECORD WAS OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER WAS ERRONEOUS SINCE THE VALUATION REPORT HAD NO BASIS. IN OTHER WORDS THE COMMISSIONER WAS NOT AGREEABLE TO THE COST OF ACQUISITION OF LAND SHOWN BY ASSESSEE AS ON 01.04.1981 AND WAS OF THE VIEW THAT THE SAME HAS BEEN CL AIMED AT HIGHER VALUE. WE FIND THAT THE EXERCISE OF JURISDICTION BY COMMISSIONER U/S. 263 OF THE ACT IS INVALID SINCE THE COST OF ACQUISITION AS ON 01.04.1981 COULD NOT BE DISTURBED BY THE REVENUE AUTHORITY ON THE GROUND THAT THE SAME HAS BEEN CLAIMED AT T HE HIGHER VALUE. IN THIS REGARD WE FIND SUPPORT IN THE RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PUJA PRINTS (SUPRA.) WHEREIN IT HAS HELD AS UNDER : 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE IMPUGNED ORDER DATED 18 FEBRUARY 2011 ALLOWING THE RESPONDENT ASSESSEE'S APPEAL HOLDING THAT NO REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER CAN BE MADE UNDER SECTION 55A OF THE ACT ONLY FOLLOWS THE DECISION OF THIS COURT IN THE MATTER OF DAULAL MOHTA HUF (SUPRA). THE REVENUE HAS NOT BEEN ABLE TO POINT OUT HOW THE AFORESAID DECISION IS INAPPLICABLE TO THE PRESENT FACTS NOR HAS THE REVENUE POINT ED OUT THAT THE DECISION IN DAULAL MOHTA HUF (SUPRA) HAS NOT BEEN ACCEPTED BY THE 5 ITA NO .1575/PUN/2015 A.Y .2010 - 11 REVENUE. ON THE AFORESAID GROUND ALONE THIS APPEAL NEED NOT BE ENTERTAINED. HOWEVER AS SUBMISSIONS WERE MADE ON MERITS WE HAVE INDEPENDENTLY EXAMINED THE SAME. 7 . WE FIND THAT SECTION 55A(A) OF THE ACT VERY CLEARLY AT THE RELEVANT TIME PROVIDED THAT A REFERENCE COULD BE MADE TO THE DEPARTMENTAL VALUATION OFFICER ONLY WHEN THE VALUE ADOPTED BY THE ASSESSEE WAS LESS THAN THE FAIR MARKET VALUE. IN THE PRESENT CASE IT IS AN UNDISPUTED POSITION THAT THE VALUE ADOPTED BY THE RESPONDENT - ASSESSEE OF THE PROPERTY AT RS.35.99 LAKHS WAS MUCH MORE THAN THE FAIR MARKET VALUE OF RS.6.68 LAKHS EVEN AS DETERMINED BY THE DEPARTMENTAL VA LUATION OFFICER. IN FACT THE ASSESSING OFFICER REFERRED THE ISSUE OF VALUATION TO THE DEPARTMENTAL VALUATION OFFICER ONLY BECAUSE IN HIS VIEW THE VALUATION OF THE PROPERTY AS ON 1981 AS MADE BY THE RESPONDENT - ASSESSEE WAS HIGHER THAN THE FAIR MARKET VALUE . IN THE AFORESAID CIRCUMSTANCES THE INVOCATION OF SECTION 55A(A) OF THE ACT IS NOT JUSTIFIED. 8. THE CONTENTION OF THE REVENUE THAT IN VIEW OF THE AMENDMENT TO SECTION 55A(A) OF THE ACT IN 2012 BY WHICH THE WORDS 'IS LESS THEN THE FAIR MARKET VALUE' IS SUBSTITUTED BY THE WORDS ' 'IS AT VARIANCE WITH ITS FAIR MARKET VALUE' IS CLARIFACTORY AND SHOULD BE GIVEN RETROSPECTIVE EFFECT. THIS SUBMISSION IS IN F ACE OF THE FACT THAT THE 2012 AMENDMENT WAS MADE EFFECTIVE ONLY FROM 1 JULY 2012. THE PARLIAMENT HAS NOT GIVEN RETROSPECTIVE EFFECT TO THE AMENDMENT. THEREFORE THE LAW TO BE APPLIED IN THE PRESENT CASE IS SECTION 55A(A) OF THE ACT AS EXISTING DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2006 - 07. AT THE RELEVANT TIME VERY CLEARLY REFERENCE COULD BE MADE TO DEPARTMENTAL VALUATION OFFICER ONLY IF THE VALUE DECLARED BY THE ASSESSEE IS IN THE OPINION OF AS SESSING OFFICER LESS THAN ITS FAIR MARKET VALUE. 9. THE CONTENTION OF THE REVENUE THAT THE REFERENCE TO THE 9. THE CONTENTION OF THE REVENUE THAT THE REFERENCE TO THE DEPARTMENTAL VALUATION OFFICER BY THE ASSESSING OFFICER IS SUSTAINABLE IN VIEW OF SECTION 55A(A) (II) OF THE ACT IS NOT ACCEPTABLE. THIS IS FOR THE REASON THAT SECTION 55A(B) OF THE ACT VERY CLEARLY STATES THAT IT WOULD APPLY IN ANY OTHER CASE I.E. A CASE NOT COVERED BY SECTION 55A(A) OF THE ACT. IN THIS CASE IT IS AN UNDISPUTABLE POSITION THAT THE ISSUE IS COVERED BY SECTION 55A(A) OF THE ACT. THEREFORE RESORT CANNOT BE HAD TO THE RESIDUARY CLAUSE PR OVIDED IN SECTION 55A(B)(II) OF THE ACT. IN VIEW OF THE ABOVE THE CBDT CIRCULAR DATED 25 NOVEMBER 1972 CAN HAVE NO APPLICATION IN THE FACE OF THE CLEAR POSITION IN LAW. THIS IS SO AS THE UNDERSTANDING OF THE STATUTORY PROVISIONS BY THE REVENUE AS FOUND IN CIRCULAR ISSUED BY THE CBDT IS NOT BINDING UPON THE ASSESSEE AND IT IS OPEN TO AN ASSESSEE TO CONTEND TO THE CONTRARY. 10. THE CONTENTION OF THE REVENUE THAT THE ASSESSING OFFICER IS ENTITLED TO REFE R THE ISSUE OF VALUATION OF THE PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER IN EXERCISE OF ITS POWER UNDER SECTIONS 131 133(6) AND 142(2) OF THE ACT IS ENTIRELY BASED UPON THE DECISION OF THE GUWAHATI HIGH COURT IN SMT. AMIYA BALA PAUL (SUPRA). HOWEVER THE APEX COURT IN SMT. AMIYA BALA PAUL (SUPRA) HAS REVERSED THE DECISION OF THE GUW AHATI HIGH COURT AND HELD THAT IF THE POWER TO REFER ANY DISPUTE WITH REGARD TO THE VALUATION OF THE PROPERTY WAS ALREADY AVAILABLE UNDER SECTIONS 131(1) 136(6) AND 142(2) OF THE ACT THERE WAS NO NEED TO SPECIFICALLY EMPOWER THE ASSESSING OFFICER TO DO SO IN CIRCUMSTANCES SPECIFIED UNDER SECTION 55A OF THE ACT. IT FURTHER HELD THAT WHEN A SPECIFIC PROVISION UNDER WHICH THE REFERENCE CAN BE MA DE TO THE DEPARTMENTAL VALUATION OFFICER IS AVAILABLE THERE IS NO OCCASION FOR THE ASSESSING OFFICER TO INVOKE THE GENERAL POWERS OF ENQUIRY. 6 ITA NO .1575/PUN/2015 A.Y .2010 - 11 IN VIEW OF THE ABOVE AND PARTICULARLY IN VIEW OF CLEAR PROVISIONS OF LAW AS EXISTING DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2006 - 07 WE ARE OF THE VIEW THAT QUESTIONS (A) AND (B) DO NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. REGARDING QUESTION (C): - 11 . THE TRIBUNAL BY ITS IMPUGNED ORDER HAS MERELY REMANDED THE ISSUE TO THE ASSESSING OFFICER TO DETERMINE THE DATE ON WHICH THE RESPONDENT - ASSESSEE ACQUIRED THE PROPERTY FOR THE PURPOSE OF WORKING OUT THE COST OF ACQUISITION. NO SPECIFIC SUBMISSIONS IN REGARD TO THIS ISSU E WAS MADE BY THE REVENUE DURING THE ORAL SUBMISSIONS. IN ANY EVENT AN ORDER OF REMAND IN THESE FACTS DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. 12. ACCORDINGLY WE SEE NO REASON TO ENTERTAIN QUESTIONS (A) (B) AND (C) AS FORMULATED BY THE REVENUE AS THEY DO NOT RAISE ANY SUBSTANTIAL QUESTIONS OF LAW. ACCORDINGLY APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 1 1 . THUS IN VIEW OF RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT THERE IS NO MERIT IN THE EXERCISE OF JURISDICTION BY THE COMM ISSIONER TO ADOPT THE COST OF ACQUISITION AS ON 01. 04.1981 AT A FIGURE LESS THA N THE ONE ADOPTED BY ASSESSEE. ACCORDINGLY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER COULD NOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. A CCORDINGLY THE EXERCISE OF JURISDICTION U/S. 263 OF THE ACT IN VIEW OF THE SETTLED POSITION OF LAW AS PER RATIO LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT IS NOT WARRANTED . HENCE ORDER PASSED BY THE COMMISSIONER U/S. 263 OF THE ACT IS INVALID AND BAD IN LAW. HENCE THE REVISION ORDER PASSED U/S. 263 OF THE ACT IS CANCELLED AND APPEAL OF THE ASSESSEE IS ALLOWED. 1 2 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON THIS 28 TH DAY OF NOVEMBER 201 7 . SD/ - SD/ - ( D. KARUNAKARA RAO ) ( SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 28 TH NOVEMBER 2017 . SB 7 ITA NO .1575/PUN/2015 A.Y .2010 - 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. CIT - 1 AURANGABAD. 4 . / DR ITAT A BENCH PUNE. 5 . / GUARD FILE. / / TRUE COPY / / / BY ORDER / PRIVATE SECRETARY / ITAT PUNE .