DR. CHANDIDAS GUPTA, MUMBAI v. ITO 11(2)(2), MUMBAI

ITA 3666/MUM/2009 | 2004-2005
Pronouncement Date: 19-03-2010 | Result: Allowed

Appeal Details

RSA Number 366619914 RSA 2009
Bench Mumbai
Appeal Number ITA 3666/MUM/2009
Duration Of Justice 9 month(s) 13 day(s)
Appellant DR. CHANDIDAS GUPTA, MUMBAI
Respondent ITO 11(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 19-03-2010
Date Of Final Hearing 11-03-2010
Next Hearing Date 11-03-2010
Assessment Year 2004-2005
Appeal Filed On 05-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI. BEFORE SHRI R.V.EASWAR SR.VP AND SHRI P.M. JAGT AP AM I.T.A. NO.3666/MUM/2009 (ASSESSMENT YEAR : 2004-05) DR. CHANDIDAS GUPTA 23 GREEN PARK 11 ST.PAUL ROAD BANDRA MUMBAI-400 050. PAN:AAFPG3871J VS. INCOME TAX OFFICER-11(2)(2) AAYAKAR BHAVAN NEW MARINE LINES MUMBAI-400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. R.N.VASANI RESPONDENT BY : MR. NAVEEN GUPTA DR O R D E R PER R.V.EASWAR SENIOR VICE PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE RELATING TO THE ASSESSMENT YEAR 2004-0 5. HE IS A DOCTOR BY PROFESSION. THE APPEAL ARISES OUT OF THE ASSESSMENT MADE ON HIM UNDER SECTION 143(3) OF THE INCOME TAX ACT ON 22.11.2006. 2. THE ONLY GROUND TAKEN IN THE APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE COMPUTATION OF THE CAPITAL GAINS MADE BY THE ASSESSING OFFICER BY INVOKING SECTION 50C OF THE ACT. THE ASSESSEE SOLD IMMOVABLE PROPERTY CONSISTING OF LAND AND BUILDING SITUATED AT VILLAGE KHATIARI DIST. ALMORA UTTARANCHAL. THE TOTAL CONSIDERATION AMOUNTED TO RS.13 LAKHS OUT OF WHICH ASSESSEES 75% SHARE WAS RS.9 75 000/-. THE ASSESSE E DECLARED CAPITAL GAINS OF RS.66 205/- AFTER CLAIMING DEDUCTI ON FOR COST OF INDEXATION AND THE PROPORTIONATE EXPENSES. WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFICER INVOKED SECTI ON 50C OF THE ACT AND CALLED UPON THE ASSESSEE INFORMATION AS TO THE VALUATION OF THE PROPERTY FOR STAMP DUTY PURPOSES. THE ASSESSEE SUBMITTED THE COPY OF THE SALE AGREEMENT A ND THE RELEVANT DOCUMENTS CALLED FOR FROM WHICH THE ASSESS ING OFFICER ITA NO.3666/M/09 2 NOTICED THAT THE STAMP DUTY VALUATION OF THE PROPER TY WAS RS.20 06 500/-. HE THEREFORE CALLED UPON THE ASSESS EE TO EXPLAIN WHY THE CAPITAL GAINS SHOULD NOT BE COMPUTE D UNDER SECTION 50C BY TAKING THE STAMP DUTY VALUATION AS THE FULL VALUE OF CONSIDERATION FOR THE TRANSFER. THE ASSES SEE STATED THAT HE WAS AGED 69 AND WAS RESIDING IN MUMBAI THAT IT WAS DIFFICULT FOR HIM TO MANAGE THE PROPERTY THAT THE PROPERTY WAS UNDER ENCROACHMENT BY LOCAL VILLAGERS AND THEREFOR E THE ASSESSEE WAS FORCED TO SELL THE SAME AS A DISTRESS SALE THAT AS PER NOTIFICATION ISSUED BY GOVERNMENT OF UTTARANCHA L THERE WERE RESTRICTIONS ON THE SALE OF IMMOVABLE PROPERTY IN T HE STATE TO RESIDENTS OUTSIDE THE STATE THAT THE BUILDING WHIC H STOOD ON THE LAND WAS VERY OLD AND WAS IN A DILAPIDATED CONDITIO N AND IN ANY EVENT THE VALUATION REPORT OF THE APPROVED VALUER DATED 15.12.2003 SHOWED THAT THE FAIR MARKET VALUE OF THE ENTIRE PROPERTY WAS ONLY RS.11.28 LAKHS AND THAT IN THESE CIRCUMSTANCES THE COMPUTATION OF THE CAPITAL GAINS ON THE BASIS OF THE SALE VALUE OF RS.13 LAKHS WAS FAIR AND REASO NABLE AND SHOULD BE ACCEPTED. THE ASSESSEE ALSO REQUESTED TH AT UNDER SECTION 50C(2)(A) THE ASSESSING OFFICER MAY REFER T HE VALUATION OF THE PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER SINCE THE VALUE ASSESSED BY THE STAMP VALUATION AUTHORITIES EXCEEDED THE FAIR MARKET VALUE OF THE PROPERTY AS SHOWN IN THE A PPROVED VALUERS REPORT. 3. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DID NOT SUBMIT ALL THE RELEVANT DOCUMENTS SUPPORTING THE CL AIM UNDER SECTION 50C(2)(A) ALONG WITH THE RETURN AND THAT TH EY WERE SUBMITTED ONLY DURING THE ASSESSMENT PROCEEDINGS A FTER TAKING SEVERAL ADJOURNMENTS WHICH DELAYED THE FINALISATI ON OF THE ASSESSMENT AND REFERENCE TO THE VALUATION OFFICER O F THE DEPARTMENT AS ENVISAGED BY THE AFORESAID STATUTORY PROVISION WAS NOT POSSIBLE AS THE ASSESSMENT WAS GETTING BARR ED BY TIME ITA NO.3666/M/09 3 BY 31.12.2006. HE THEREFORE DID NOT REFER THE VALUA TION OF THE PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER AND PROCEEDED TO COMPUTE THE CAPITAL GAINS ON THE BASIS OF THE STAMP VALUE OF RS.20 06 500/-. 4. ON APPEAL THE CIT(A) DISMISSED THE ASSESSEES C ASE HOLDING THAT THE ONLY OPTION LEFT TO THE ASSESSING OFFICER IN THE CIRCUMSTANCES WAS TO PROCEED WITH THE COMPUTATION O F CAPITAL GAINS ON THE BASIS OF THE VALUE ADOPTED BY THE STAM P VALUATION AUTHORITIES. 5. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRI BUNAL. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO GONE THRO UGH THE RELEVANT STATUTORY PROVISIONS. UNDER SUB-SECTION (1 ) OF SECTION 50C IF THE SALE CONSIDERATION FOR THE PROPERTY IS LESS THAN THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES THE CA PITAL GAINS CAN BE COMPUTED BY THE ASSESSING OFFICER BY TAKING THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES AS THE FULL V ALUATION OF THE CONSIDERATION. HOWEVER UNDER CLAUSE (A) OF SUB -SECTION (2) IF THE ASSESSEE CLAIMS THAT THE VALUATION FOR STAMP DUTY PURPOSES EXCEEDS THE FAIR MARKET VALUE OF THE PROP ERTY THEN THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E PROPERTY TO THE DEPARTMENTAL VALUATION OFFICER. IN THE CASE BEF ORE US THE ASSESSING OFFICER HIMSELF HAS ACCEPTED IN THE ASSES SMENT ORDER THAT A CLAIM HAD BEEN MADE BY THE ASSESSEE UNDER TH E AFORESAID PROVISIONS ON THE BASIS OF THE APPROVED VALUERS RE PORT ACCORDING TO WHICH THE FAIR MARKET VALUE OF THE PRO PERTY WAS RS.11 28 000/- WHICH IS LESS THAN THE STAMP DUTY VA LUE OF RS.20 06 500/-. HE HAS NOT DISPUTED THE ASSESSEES CLAIM THAT THE AFORESAID PROVISION IS APPLICABLE AND THAT A RE FERENCE HAS TO BE MADE TO THE DEPARTMENTAL VALUATION OFFICER. ALL THAT HE HAS STATED IN THE ASSESSMENT ORDER IS THAT THERE IS NO TIME LEFT TO CARRY OUT THE EXERCISE OF REFERRING THE VALUATION T O THE DEPARTMENTAL VALUATION OFFICER AS THE ASSESSMENT WA S GETTING BARRED BY TIME ON 31.12.2006. WE ARE UNABLE TO UPHO LD THE ITA NO.3666/M/09 4 STAND TAKEN BY THE ASSESSING OFFICER. THE ASSESSMEN T ORDER ITSELF WAS PASSED ON 22.11.2006 AND FIVE WEEKS TIME WAS AVAILABLE TO THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT WHICH WAS GETTING BARRED BY TIME ONLY ON 31.12.2006 . THE ASSESSEE HAD MADE THE CLAIM BY LETTER DATED 6.11.20 06 WHICH WAS IN RESPONSE TO THE QUERY RAISED BY THE ASSESSIN G OFFICER ON 26.10.2006. IT CANNOT THEREFORE BE STATED THAT THE DELAY WAS ENTIRELY ON THE PART OF THE ASSESSEE. UNDER THE CIR CUMSTANCES WE ARE OF THE VIEW THAT THE ORDERS OF THE DEPARTMEN TAL AUTHORITIES ON THIS POINT HAVE TO BE SET ASIDE. WE DO SO AND DIRECT THE ASSESSING OFFICER TO PROCESS THE ASSESSE ES CLAIM MADE UNDER SECTION 50C(2)(A) AND REFER THE MATTER T O THE DEPARTMENTAL VALUATION OFFICER AS CONTEMPLATED BY T HE STATUTORY PROVISIONS AND COMPUTE THE CAPITAL GAINS IN ACCORDA NCE WITH LAW. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GI VEN DUE OPPORTUNITY. THE APPEAL IS ACCORDINGLY ALLOWED IN T HE ABOVE TERMS FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 19 TH DAY OF MARCH 2010. SD/- ( P.M. JAGTAP ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI DATED 19 TH MARCH 2010. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-XI MUMBAI. 4. THE CIT(A)-XI MUMBAI 5. THE DR C BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR I.T.A.T MUMBAI