Sri Arijit Chakraborty, Howrah v. ITO, Ward - 46(1), Kolkata

ITA 1945/KOL/2009 | 2005-2006
Pronouncement Date: 07-05-2010

Appeal Details

RSA Number 194523514 RSA 2009
Assessee PAN AETPC6433L
Bench Kolkata
Appeal Number ITA 1945/KOL/2009
Duration Of Justice 5 month(s) 19 day(s)
Appellant Sri Arijit Chakraborty, Howrah
Respondent ITO, Ward - 46(1), Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 07-05-2010
Assessment Year 2005-2006
Appeal Filed On 18-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI B . C. MEENA AM] I.T.A. NO.1945/KOL/2009 ASSESSMENT YEAR: 2005-06 SRI ARIJIT CHAKRABORTY -VS- INCOME-TAX OFFICER WD-46(1) KOLKATA (PA NO.AETPC 6433 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI SOUMITRA CHOWDHURY RESPONDENT BY : SMT. JYOTI KUMARI O R D E R PER D. K. TYAGI JM: THIS APPEALS PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) KOLKATA DATED 27.08.2009 FOR ASSESSMENT YEA R 2005-06. 2. THOUGH THE ASSESSEE HAS FILED AS MANY AS NINE GR OUNDS OF APPEAL BUT AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE PRESSED ONLY GROUND NO. 7 WHICH READS AS UNDER : 7. FOR THAT ON THE FACTS OF THE CASE THE LD. CIT( A) WAS WRONG IN CONFIRMING THE VALUE OF THE PROPERTY AS ON 1.4.1981 AT RS.1 49 525/- AS AGAINST RS.11 30 525/- SHOWN BY ASSESSEE THEREFORE THE ORDER PASSED BY THE LD. CI T(A) IS COMPLETELY ARBITRARY UNJUSTIFIED AND ILLEGAL. HE ALSO PRAYED THAT THE FOLLOWING ADDITIONAL GROUND MAY BE ADMITTED IN DECIDING THE APPEAL. FOR THAT ON THE FACTS OF THE CASE THE ORDER PASSE D BY THE LD. CIT(A) IS COMPLETELY ARBITRARY UNJUSTIFIED AND ILLEGAL AS HE HAS NOT CO NSIDERED THE FACTS THAT THE AO HAS NOT FOLLOWED SEC. 50C(2) OF THE I. T. ACT AND HE HAS NO T REFERRED TO VALUATION CELL THEREFORE THE WHOLE ORDER PASSED BY THE LD. CIT(A) IS COMPLET ELY ARBITRARY UNJUSTIFIED AND ILLEGAL. 2.1. AFTER HEARING BOTH THE PARTIES THE ADDITIONAL GROUND HAS BEEN ADMITTED AS ALL THE FACTS RELATING TO THIS GROUND ARE ALREADY ON RECORD AND IT GOES TO THE ROOT OF THE MATTER. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSM ENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAS SOLD PROPERTY AT NARASINGH DA TTA ROAD HOWRAH MEASURING 25.4375 COTTAHS. THE ASSESSEE RECEIVED THIS PROPERTY BY WIL L FROM HIS GRAND MOTHER. THE AO GAVE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE COM PUTATION OF THE CALCULATION OF INDEXED COST OF ACQUISITION. A SUMMON U/S. 131 WAS ALSO ISSUED TO THE ASSESSEE. THE ASSESSEE DID NOT RESPOND. THEN THE A.O CALLED FOR I NFORMATION FROM THE DISTRICT 2 REGISTRAR HOWRAH U/S. 133(6) REGARDING SALE OF THE PROPERTY IN THAT LOCATION WHEREIN THE ASSESSEES PROPERTY EXISTED. THE DISTRICT REGISTRAR FURNISHED THE DETAILS OF REGISTRATIONS MADE IN 1981 FOR VARIOUS PROPERTIES IN THE LOCALITY . THE DETAILS GIVEN BY THE DISTRICT REGISTRAR ARE EXTRACTED AT PAGE-2 OF THE ASSESSMENT ORDER. THE A.O FURNISHED THIS INFORMATION TO THE ASSESSEE PROPOSING TO TAKE THE V ALUE OF THE PROPERTY SOLD BY THE ASSESSEE AS ON 1-4-81 AT RS.30 525/- FOR THE LAND. THE ASSESSEE SUBMITTED A LETTER STATING THAT THE VALUE OF THE PROPERTY AS ON 1-4-81 BE ADOP TED AT RS.9 00.000/- FOR THE CONSTRUCTION OF BUILDING AND RS.1 00 000/- FOR THE COST OF PROJECTOR AND FURNITURE. THE ASSESSEEE ALSO CONTENDED THAT LEGAL EXPENSES AMOUNT ED TO RS.10 00 000/-. THE A.O EXAMINED THE ASSESSEES CONTENTION. THE A.O NOTICED THAT CINEMA HALL WAS A VERY OLD ASSET AND THE STRUCTURE WAS 11 900 SQ.FT AGAINST 18 000 SQ.FT. CLAIMED BY THE ASSESSEE. . FURTHER THE ASSESSEE CLAIMED VALUE OF RS. 50/- PER SQ FT. FOR THE BUILDING. NO BASIS WAS PROVIDED FOR ADOPTING THIS VALUE AS ON 1-4-81. CONS IDERING THE AGE OF THE BUILDING AND THE NATURE OF THE ASSET BEING DEPRECIABLE ASSET TH E A.O VALUED THE BUILDING AT RS 1 19 000/- AS ON 1-4-81. THE A.O NOTICED THAT IN TH E YEAR 1963 THE VALUE OF THE PROJECTOR ETC WERE. VALUED AT RS.4 700/-. CONSIDERING THIS VA LUE THE A.O ARRIVED AT NIL VALUE FOR THE PROJECTOR. THE A.O REJECTED THE ASSESSEES CONT ENTION OF RS.1 LAKH VALUE FOR THE PROJECTOR. FURTHER THE ASSESSEE CLAIMED LEGAL EXPE NSES OF RS.10 00 000/-. HOWEVER IN THE ABSENCE OF DOCUMENTARY EVIDENCE THIS CONTENTION WAS NOT ACCEPTED BY THE A.O. TO CONCLUDE THE A.O ADOPTED THE LAND VALUE OF RS.30 5 25/- BUILDING VALUE OF PS. 1 19 000/- AND NIL VALUE FOR PROJECTOR/FURNITURE. T HE A.O EXAMINED THE INDEXATION CLAIMED BY THE APPELLANT. THE A.O FURTHER HELD THAT AS PER SEC. 48 COST INFLATION INDEX IS TO BE CONSIDERED FOR THE YEAR IN WHICH THE ASSET IS FIRST HELD BY THE ASSESSEE. THE A.O HELD THAT THE PROBATE WASS ISSUED BY DISTRICT JUDGE ON 23-9-99 AND HENCE FOR THE PURPOSE OF COMPUTING COST INFLATION INDEX 1999-2000 IS THE FIRST YEAR OF HOLDING THE ASSET BY THE ASSESSEE. THE A.O CONSIDERED 1999-2000 AS BASE YEAR FOR COMPUTATION OF THE INDEXED COST. IN RESPECT OF THE SALE VALUE OF THE PROPERTY THE AO THE AO FURTHER OBSERVED THAT THE ASSESSEE DISCLOSED SALE CONSIDERATION OF RS.30 00 000/- FOR THE ASSET. THE SALE DEEDS WERE NOT PRESENTED BEFORE THE AO THE AO CALLED FOR EVIDENCE FROM THE DISTRICT REGISTRAR U/S. 133(6). THE AO NOTICED THAT THE REGISTERED DE EDS WERE EXECUTED FOR 22 COTTAHS OF LAND. THE REGISTRAR VALUED 22 COTTAHS AT RS.79 17 000/- THE BALANCE PORTION OF THE LAND 3.4375 COTTAHS WAS NOT REGISTERED BY ANY DEED. THE AO ADOPTED THE SALE VALUE OF THIS PORTION OF LAND AT RS.12 40 930/- ON THE SAME BASIS . THE AO THEN ARRIVED AT THE SALE 3 CONSIDERATION AT RS.91 57 930/- BASED UPON THE VALU E GIVEN BY THE REGISTERING AUTHORITY. THE AO PROPOSED TO ADOPT THIS VALUE AS SALE CONSIDE RATION AS PER SEC. 50C. 4. AGGRIEVED BY THIS ORDER THE ASSESSEE WENT BEFORE THE FIRST APPELLATE AUTHORITY AND BEFORE HIM ONE OF THE GROUNDS TAKEN BY THE ASSE SSEE WAS THAT THE AO HAS NOT PROVIDED OPPORTUNITY AS PER SECTION 50C(2) OF THE A CT AND THE ASSESSEE SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO CHALLENGE THE FAIR MARKET V ALUE ASSESSED BY THE REGISTERING AUTHORITY AND THE MATTER SHOULD BE REFERRED TO THE VALUATION OFFICER. THE LD. CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAS OBJECTED TO THE COMPUTATION OF THE CAPITAL GAIN AND THE VALUE OF THE ASSET AS ON 1.4.81. THE ASSES SEE HAS NOT OBJECTED TO THE PROPOSED COMPUTATION TO BE ADOPTED AS PER SEC. 50C OF THE AC T. HENCE THE ASSESSEE IS NOT CORRECT IN OBJECTING TO THE COMPUTATION OF THE LONG TERM CA PITAL GAIN MADE BY THE AO AT THE APPEAL STAGE. AND THEREFORE THE APPEAL OF THE ASS ESSEE WAS DISMISSED. 5. FURTHER AGGRIEVED THE ASSESSEE IS IN APPEAL BEF ORE US AND SUBMITTED THAT THE LD. CIT(A) WAS NOT CORRECT IN HOLDING THAT THE ASSESSEE DID NOT OBJECT TO THE COMPUTATION DONE BY THE AO AS PER SECTION 50C OF THE ACT BY PLA CING RELIANCE ON A LETTER DATED 19.12.2008 ADDRESSED TO THE AO. HE SUBMITTED THAT THE ASSESSEE PRAYED FOR REFERRING THE VALUATION TO THE VALUATION CELL AS PER PROVISIONS O F SECTION 50C(2) OF THE I. T. ACT BUT THE SAME WAS NOT DONE BY THE AO. HE FURTHER SUBMIT TED THAT THE AO ALSO TOOK THE VALUE OF THE PROPERTY AS ON 1.4.1981 WITHOUT ANY BASIS. HE THEREFORE PRAYED THAT THE ORDERS PASSED BY THE LOWER AUTHORITIES MAY KINDLY BE SET A SIDE AND THE AO BE DIRECTED TO REFER THE VALUATION OF PROPERTY TO VALUATION CELL AND ALS O FOR VALUING THE PROPERTY AS ON 1.4.1981. 6. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES AND URGED BEFORE THE BENCH TO CONFIRM THE ACTION OF THE LD. CIT(A). 7. AFTER HEARING BOTH THE PARTIES PERUSING THE MAT ERIAL AVAILABLE ON RECORD AND THE CORRESPONDENCE OF THE ASSESSEE WITH THE AO DURING THE ASSESSMENT PROCEEDINGS WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE OBJECTED TO THE COMPUTATION OF LONG TERM CAPITAL GA IN AS PER SECTION 50C OF THE ACT AS HE WANTED THAT THE MATTER SHOULD BE REFERRED TO VALUAT ION CELL AS PER THE PROVISIONS OF SECTION 50C(2). THEREFORE THE AO WAS UNJUSTIFIED IN NOT REFERRING THE MATTER TO THE VALUATION CELL. WE FURTHER FIND THAT VALUATION OF THE PROPERTY TAKEN AS ON 1.4.1981 IS ALSO WITHOUT ANY BASIS. THEREFORE IN THE INTEREST OF NATURAL JUSTICE AND FAIR PLAY WE RESTORE THE MATTER TO THE FILE OF THE AO FOR RECOMP UTING THE LONG TERM CAPITAL GAIN AFTER 4 REFERRING THE MATTER TO THE VALUATION CELL FOR VALU ING THE PROPERTY AS ON THE DATE OF SALE AND ALSO AS ON 1.4.1981. THE APPEAL OF THE ASSESSE E IS THEREFORE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 7.5 .2010 SD/- SD/- (B. C. MEENA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 7TH MAY 2010 COPY TO : 1. SRI ARIJIT CHAKRABORTY 14/1 BEHARILAL CHAKBRABORT Y LANE HOWRAH-711 101 2. ITO WARD-46(1) KOLKATA. 3. CIT(A) KOLKATA 4. CIT KOLKATA. 5. D.R. ITAT KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT. KOLKATA