Hi-Tech Auto,, Mehsana v. The ACIT, Mehsana Circle,, Mehsana

ITA 2703/AHD/2015 | 2012-2013
Pronouncement Date: 22-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 270320514 RSA 2015
Assessee PAN AACFH4949M
Bench Ahmedabad
Appeal Number ITA 2703/AHD/2015
Duration Of Justice 2 year(s) 1 month(s) 28 day(s)
Appellant Hi-Tech Auto,, Mehsana
Respondent The ACIT, Mehsana Circle,, Mehsana
Appeal Type Income Tax Appeal
Pronouncement Date 22-11-2017
Appeal Filed By Assessee
Tags Section 50C(2)
Order Result Partly Allowed
Bench Allotted Not Allotted
Tribunal Order Date 22-11-2017
Assessment Year 2012-2013
Appeal Filed On 24-09-2015
Judgment Text
SMC-ITA NO. 2703/AHD/2015 HI-TECH AUTO VS. ACIT ASSESSMENT YEAR: 2012-13 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER ] ITA NO. 2703/AHD/2015 ASSESSMENT YEAR : 2012-13 HI-TECH AUTO ............APPELLANT NR. KHARI RIVER BRIDGE HIGHWAY MEHSANA-384002 [PAN AACFH 4949 M] VS. ACIT .......................RESPONDENT MEHSANA CIRCLE MEHSANA APPEARANCES BY: NONE FOR THE APPELLANT SANTOSH KARNANI FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 22.11.2017 DATE OF PRONOUNCING THE ORDER : 22.11.2017 D I C T A T E D O R D E R 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT CH ALLENGES CORRECTNESS OF ORDER DATED 07.08.2015 PASSED BY THE CIT(A) GANDHINAGAR AHMEDABAD IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) THE INCOME-TAX ACT 1961 FOR THE ASSESSMENT YEAR 2012-13. 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS RAISED FOLLOWING GRIEVANCE:- 1. LEARNED CIT(A) HAD ERRED IN LAW AND FACTS IN CON FIRMING ADDITION OF INCOME BY DISALLOWING EXPENSES OF RS.87 438/- BY AS SUMING 1/6 TH OF VEHICLE TELEPHONE AND TEA EXPENSE FOR PERSONAL NAT URE 3. SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CONC ERNED IT IS SUFFICIENT TO TAKE NOTE OF THE FACT THAT DURING THE COURSE OF ASSESSME NT PROCEEDINGS THE ASSESSING OFFICER HAS DISALLOWED 1/6 TH OF THE VEHICLE TELEPHONE AND TEA EXPENSES ON THE GROUND THAT THESE EXPENSES WERE NOT FULLY VERIFIABL E AND THAT NON BUSINESS USE OF SUCH EXPENSES COULD NOT BE RULED OUT. AGGRIEVED T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. ASSESSEE IS NOT SATISFIED AND IS IN SECOND APPEAL BEFORE ME. 4. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE AND HAVING PERUSED THE MATERIAL ON RECORD I DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. SMC-ITA NO. 2703/AHD/2015 HI-TECH AUTO VS. ACIT ASSESSMENT YEAR: 2012-13 PAGE 2 OF 4 CIT(A) SO FAR AS THIS DISALLOWANCE IS CONCERNED. O NCE IT IS NOT IN DISPUTE THAT THE SUPPORTING EVIDENCE FOR EXPENSES IS LESS THAN SATIS FACTORY AND THE ASSESSEE HAS NOT DONE ADEQUATE DOCUMENTATION TO SUPPORT BUSINESS USE OF THE EXPENSES A SMALL PORTION OF THESE EXPENSES DISALLOWED BY THE ASSESSI NG OFFICER APPEARS TO BE IN ORDER. IN ANY WAY THERE WAS NO DOCUMENT MATERIAL OR JUSTIFICATION FOR DELETION OF THIS DISALLOWANCE. I THEREFORE CONFIRM THE ORDER OF T HE AUTHORITIES BELOW ON THIS POINT. GROUND NO.1 IS THUS DISMISSED. 5. IN THE SECOND GROUND OF APPEAL THE ASSESSEE HAS RAISED FOLLOWING GRIEVANCE:- 2. LEARNED CIT(A) HAD ERRED IN LAW AND FACTS IN CO NFIRMING ADDITION OF INCOME BY WAY OF DISALLOWANCE OF RS.16 19 409/- ON ACCOUNT OF LTCG U/S 50C OF IT ACT BY TAKING DIFFERENCE IN VALUE BETWEEN SALE AGREEMENT AND JANTRI RATES AS WELL AS DIFFERENCE IN COST OF ACQUI SITION OF LAND. 6. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT WHIL E THE ASSESSEE HAS SHOWN SALE CONSIDERATION FOR THE PURPOSE OF CAPITAL GAINS AT RS.16 49 500/- THE STAMP DUTY VALUATION FOR THE SAID PROPERTY WAS RS.31 63 265/-. ACCORDINGLY HE RECOMPUTED THE CAPITAL GAINS ON THE BASIS OF STAMP DUTY VALUATION FOR THE PROPERTY IN RESPECT OF WHICH CAPITAL GAINS WAS BEING COMPUTED. AGGRIEVED THE A SSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). ONE OF THE CONTENTIONS O F THE ASSESSEE BEFORE THE LEARNED CIT(A) WAS THAT THE ASSESSING OFFICER OUGHT TO HAVE REFERRED THE MATTER TO THE DVO AS REQUIRED BY THE SCHEME OF SECTION 50C(2) OF THE ACT. LEARNED CIT(A) HOWEVER NEGATED THIS CONTENTION AND OBSERVED THAT EVEN THE APPELLANT HAS NOT SUBMITTED ANY VALUATION REPORT OF THE PROPERTY FROM HIS SIDE FROM AN INDEPENDENT REGISTERED VALUER EITHER BEFORE THE AO OR BEFORE ME DURING THE APPELLATE PROCEEDINGS. IT WAS NOTED THAT THE LEARNED COUNSEL FOR THE ASSESSEE WAS REQUESTED VIDE ORDER SHEET ENTRY DATED 03.08.2015 TO FURNISH VALUATION REPORT OF THE PROPERTY BUT THIS REQUEST WAS NOT COMPLIED WITH. LEARNED CIT(A) THEN HELD TH AT THE APPELLANT HAS ACCEPTED THE ADDITION MADE BY THE AO AND THAT NO REFERENCE TO THE DVO UNDER SECTION 50C(2) IS REQUIRED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS NOW IN APPEAL BEFORE ME. 7. HAVING HEARD THE LEARNED DEPARTMENTAL REPRESENTA TIVE AND HAVING PERUSED THE MATERIAL ON RECORD I FIND THAT THIS ISSUE IS N OW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THE DIVISION BENCH ES INCLUDING THE CASE OF RAJ KUMARI AGARWAL VS DCIT REPORTED IN 150 ITD 597 WH EREIN FOLLOWING THE VIEWS OF THE HONBLE CALCUTTA HIGH COURTS JUDGMENT IN THE C ASE OF SUNIL KUMAR AGARWAL VS. CIT (GA NO 3686/2013 IN ITAT NO 221/ 2013; JUDGMENT DATED 13TH MARCH 2014) THE DIVISION BENCH HAS HELD THAT EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW THE ASSESSING OFFICER DISCHARGI NG A QUASI JUDICIAL FUNCTION HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREAT MENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. IN THE PRESENT CASE THE ASSESSING OFFICER HAS SPECIFICALLY REQUESTED FOR REFERENCE BEING MADE TO THE DVO BUT THIS REQUEST HAS SMC-ITA NO. 2703/AHD/2015 HI-TECH AUTO VS. ACIT ASSESSMENT YEAR: 2012-13 PAGE 3 OF 4 BEEN DECLINED ON THE GROUND THAT THE ASSESSEE HAS N OT PRODUCED ANY VERIFICATION BY INDEPENDENT VALUER. THE REJECTION OF THE ASSESSEES REQUEST IS BASED ON THE CONSIDERATIONS WHICH ARE NOT AT ALL RELEVANT OR GER MANE TO THIS CONTEXT. WHETHER THE ASSESSEE PROVIDES AN INDEPENDENT VALUATION REPORT O R NOT ONCE THE ASSESSEE SPECIFICALLY REQUESTS FOR A REFERENCE IS BEING MADE TO THE DVO AS IN THIS CASE SUCH A REFERENCE CANNOT BE DECLINED ON THE GROUND THAT T HERE IS NO MATERIAL TO DOUBT THE STAMP DUTY VALUATION REPORT. IT IS IN THIS BACKDROP THAT I MAY REPRODUCE FOR READY REFERENCE THE OBSERVATIONS MADE BY THE TRIBUNAL IN THE CASE OF RAJ KUMARI AGARWAL (SUPRA) AS FOLLOWS:- 6. WE FIND THAT HERE IS A CASE IN WHICH THE ASSESS EE HAS SPECIFICALLY OBJECTED TO THE ADOPTION OF STAMP DUTY VALUATION RATE. THE M ERE FACT THAT THE APPELLANT HAS NOT CHALLENGED THE STAMP DUTY VALUATION CANNOT BE PUT AGAINST THE ASSESSEE. THE AUTHORITY FOR THE THIS PROPOSITION IS CONTAINED IN HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE O F CIT VS CHANDRA NARAIN CHAUDHURI ([2013] 38 TAXMANN.COM 275 (ALLAHABAD) W HEREIN THEIR LORDSHIPS HAVE OBSERVED THAT THE QUESTION AS TO WHETHER THE ASSESSEE FILED ANY OBJECTIONS BEFORE THE STAMP VALUATION AUTHORITY TO DISPUTE THE VALUATION OR FILED APPEAL OR REVISION OR MADE REFERENCE BEFORE A NY AUTHORITY COURT OR THE HIGH COURT UNDER SUB SECTION (2) (B) OF SECTION 50 C OF THE ACT IS NOT OF ANY RELEVANCE IN THIS CASE AS THE AO HIMSELF OBSERVED THAT THE ASSESSEE DID NOT DISPUTE THE STAMP VALUATION BEFORE THE STAMP VALUAT ION AUTHORITY. THERE MAY BE SEVERAL REASONS FOR THE PURCHASER NOT TO FILE SU CH OBJECTION. A PURCHASER MAY NOT GO INTO LITIGATION AND PAY STAMP DUTY AS FIXED BY THE STAMP VALUATION AUTHORITY WHICH MAY BE OVER AND ABOVE TH E FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER THOUGH THE AM OUNT SO DETERMINED HAS NOT BEEN ACTUALLY RECEIVED BY OWNER OF THE PROPERTY. T HE POSITION AS TO WHETHER REFERENCE SHOULD BE MADE TO THE DVO EVEN WHEN THER E IS NO SPECIFIC PLEA TO THAT EFFECT BY THE ASSESSEE IS NOW WELL SET OUT IN HONBLE CALCUTTA HIGH COURTS JUDGMENT IN THE CASE OF SUNIL KUMAR AGARWAL CIT ( GA NO 3686/2013 IN ITAT NO 221/ 2013; JUDGMENT DATED 13TH MARCH 201 4) WHEREIN THEIR LORDSHIPS HAVE INTER ALIA OBSERVED AS FOLLOWS:- . WE ARE OF THE OPINION THAT THE VALUATION BY THE DEP ARTMENTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID N OT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB REGISTRAR FOR THE PURPO SE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADE QUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. T HERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOUL D NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESE NTING THE ASSESSEE WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW THE ASSESSING OFFICER DISCHARGING A QUASI JUDICIAL FUN CTION HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREAT MENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW . SMC-ITA NO. 2703/AHD/2015 HI-TECH AUTO VS. ACIT ASSESSMENT YEAR: 2012-13 PAGE 4 OF 4 7. AS THERE IS NO BINDING JUDICIAL PRECEDENT CONTRA RY TO WHAT HAS BEEN HELD BY HONBLE CALCUTTA HIGH COURT AS ABOVE THE ESTEEMED VIEWS OF THEIR LORDSHIPS EVEN THOUGH FROM A NON JURISDICTIONAL HI GH COURT BIND US AS WELL. 8. IN THE LIGHT OF THE ABOVE LEGAL POSITION THE PL EA OF THE ASSESSEE AS SET OUT IN THE GROUND OF APPEAL IS INDEED WELL TAKEN. THE PREVAILING LEGAL POSITION IS NOW LIKE THIS. ONCE THE ASSESSEE CLAIMS THAT THE AC TUAL MARKET VALUE OF THE LAND OR BUILDING IS LESS THAN STAMP DUTY VALUATION ADOPTED BY THE AUTHORITIES IT IS INCUMBENT UPON THE ASSESSING OFFICER TO REFER TH E VALUATION OF SAID LAND OR BUILDING TO THE DEPARTMENTAL VALUATION OFFICER. IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT DONE SO. IN VIEW OF THIS FACTUAL POSITION AND IN THE LIGHT OF THE DISCUSSIONS ABOVE WE DEEM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO AFTER MAKING A REFERENCE TO THE DVO AND COMPLETING THE ASSESSMENT ON THE BASIS OF THE VALUATION SO RECEIVED FROM THE DVO. WHILE SO DECIDI NG THE MATTER AFRESH THE ASSESSING OFFICER WILL DECIDE THE MATTER IN ACCORDA NCE WITH THE LAW BY WAY OF A SPEAKING ORDER AND AFTER GIVING A REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. WE DIRECT SO. 8. IN VIEW OF THE ABOVE DISCUSSION AND BEARING IN M IND THE ENTIRETY OF THE CASE I UPHOLD THE GRIEVANCE OF THE ASSESSEE TO THE EXTENT THAT A REFERENCE IS REQUIRED TO BE MADE TO THE DVO ON THE SCHEME OF SECTION 50C(2) OF THE ACT AND FOR THAT LIMITED PURPOSE I REMIT THE MATTER BACK TO THE FILE OF ASS ESSING OFFICER FOR FURTHER ACTION IN ACCORDANCE WITH LAW. GROUND NO.2 IS THUS ALLOWED F OR STATISTICAL PURPOSES. 9. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. DICTATED AND PRONOUNCED IN THE OPEN COURT TODAY ON THE 22 ND NOVEMBER 2017. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD THE 22 ND DAY OF NOVEMBER 2017 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD