Sri G.Pratap Reddy, Hyderabad v. ACIT, Hyderabad

ITA 534/HYD/2009 | 2003-2004
Pronouncement Date: 05-02-2010 | Result: Dismissed

Appeal Details

RSA Number 53422514 RSA 2009
Assessee PAN ABDPG7753D
Bench Hyderabad
Appeal Number ITA 534/HYD/2009
Duration Of Justice 9 month(s) 12 day(s)
Appellant Sri G.Pratap Reddy, Hyderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 05-02-2010
Date Of Final Hearing 11-01-2010
Next Hearing Date 11-01-2010
Assessment Year 2003-2004
Appeal Filed On 23-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMEBR ITA NO.534/HYD/09 : ASSTT . YEAR 2003-04 SHRI G.PRATAP REDDY HYDERABAD ( PAN ABDPG 7753 D ) V/S. ASST. COMMISSIONER OF INCOME TAX CIRCLE 10(1) HYDERABAD (APPELLANT) (RESPONDENT) AND ITA NO.744/HYD/09 : ASSTT . YEAR 2003-04 ASST. COMMISSIONER OF INCOME TAX CIRCLE 10(1) HYDERABAD V/S. SHRI G.PRATAP REDDY HYDERABAD ( PAN ABDPG 7753 D ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.RAMA RAO DEPARTMENT BY : SMT. NIVEDITA BISWAS DR O R D E R PER G.C.GUPTA VICE PRESIDENT: THESE CROSS APPEALS BY THE ASSESSEE AND THE DEPARTMENT FOR THE ASSESSMENT YEAR 2003-04 ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS). SINCE COMMON ISSUES AR E INVOLVED THESE ARE BEING DISPOSED OFF BY CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 2 REVENUE'S APPEAL ITA NO.744/HYD/09 : ASSTT. YEAR 2003-04 2. THE ONLY GROUND OF APPEAL OF THE REVENUE READS AS UNDER- '1. THE CIT(APPEALS) ERRED IN ISSUING DIRECTION TO THE ASSESSING OFFICER TO ADOPT THE FAIR MARKET VALUE AS DETERMINED BY THE VALUATION OFFICER. THE DIRECTION S OF THE CIT(APPEALS) IS NOT ACCEPTABLE BECAUSE THE CIT(APPEALS) HAS AFTER GOING THROUGH THE LEGAL PROVISIONS AS LAID DOWN U/S. 50C OBSERVED THAT THE ASSESSING OFFICER WAS NOT UNDER ANY COMPULSION TO R EFER THIS CASE TO THE VALUATION CELL BECAUSE OF THE OBJE CTIONS RAISED BY THE APPELLANT. THE CIT(A) ISSUED DIRECTIO NS TO ADOPT THE RATE PRESCRIBED BY THE VALUATION OFFICER ONLY BECAUSE HIS PREDECESSOR ISSUED DIRECTIONS U/S. 250( 4) TO THE ASSESSING OFFICER TO OBTAIN VALUATION REPORT FR OM THE D.V.O. IT MAY BE MENTIONED HERE THAT AS IT IS NOT BINDING ON THE ASSESSING OFFICER TO REFER TO THE VA LUATION CELL AS PER PROVISIONS OF SEC.50C THE DIRECTION IS SUED EARLIER BY THE CIT(APPEALS) U/S. 250(4) WAS NOT ON VALID GROUND. ACCORDINGLY THE DIRECTIONS ISSUED BY THE CIT(APPEALS) TO ACCEPT THE RATE AS PER THE VALUATIO N REPORT IS NOT BASED ON VALID AGROUND.' 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE ASSESSING OFFICER WAS NOT UNDER ANY COMPULSION TO REFE R THE ISSUE OF VALUATION OF THE PROPERTY TO THE DEPARTMENTAL VA LUATION OFFICER (DVO) DUE TO THE OBJECTIONS RAISED BY THE ASSESSEE. SHE SU BMITTED THAT IT IS NOT BINDING ON THE ASSESSING OFFICER TO REFER THE ISSUE OF VALUATION TO THE VALUATION CELL AS PER THE PROVISIONS OF S.50C OF THE ACT AND CONSEQUENTLY THE DIRECTION ISSUED EARLIER BY TH E CIT(A) UNDER S.250(4) OF THE ACT WAS NOT ON VALID GROUND. SHE SUBMI TTED THAT THE DIRECTIONS ISSUED BY THE CIT(A) TO THE ASSESSING OFFICER TO ACCEPT THE RATE AS PER THE VALUATION REPORT OF THE DVO IS NOT VA LID. 4. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND OPPOSED THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REP RESENTATIVE. ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 3 HE SUBMITTED THAT THE DIRECTION OF THE CIT(A) TO THE A SSESSING OFFICER TO REFER THE ISSUE OF VALUATION OF THE PROPERTY TO T HE DVO AS PER THE PROVISIONS OF S.50C OF THE ACT HAS ALREADY BECOME FINAL AND COULD NOT BE AGITATED NOW IN THE PRESENT APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL. HE SUBMITTED THAT VALUATION MADE BY THE DV O IS ON THE HIGHER SIDE AND THE ASSESSEE HAS SEPARATELY PREFERRED APP EAL ON THIS ISSUE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE PROVISIONS OF S.50C(2) OF THE ACT ASSESSEE CAN CLA IM BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED BY TH E STAMP VALUATION AUTHORITY UNDER S.50C(1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. IN ITO V/S. K .GANDHI (ITA NO.603/HYD/06) CO-ORDINATE BENCH OF THIS TRIBUNAL VIDE ITS ORDER DATED 6TH JUNE 2008 HELD THAT THE WORD 'ANY' BEFORE THE WORDS 'ASSESSING OFFICER' IMPLIES THAT THE ASSESSEE CAN CLAIM EVEN B EFORE THE APPELLATE AUTHORITY THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-CLAUSE (1) OF S.50C EXCEE DS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSF ER AND ACCORDINGLY THE CIT(A) IS WELL WITHIN HIS JURISDICTION TO DIRECT THE ASSESSING OFFICER TO REFER THE MATTER TO THE VALUATION C ELL AS REQUIRED UNDER S.50C(1) AND 50C(2) OF THE ACT. 6. WITH REGARD TO THE OTHER ISSUE RAISED BY THE LEA RNED DEPARTMENTAL REPRESENTATIVE THAT THE VALUATION REPOR T OF THE DVO IS NOT BINDING ON THE ASSESSING OFFICER WE FIND THAT THE P ROVISION OF S.50C(2) OF THE ACT IS VERY MUCH CLEAR ON THIS ISSUE. T HIS PROVISION PROVIDES THAT WHERE SUCH A REFERENCE OF VALUATION OF CAPITAL ASSET IS ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 4 MADE TO THE VALUATION OFFICER BY THE ASSESSING OFFICER T HE PROVISIONS OF SUB-SECTIONS (2) (3) (4) (5) AND (6) OF S.16A AND SOME OTHER PROVISIONS OF THE WEALTH TAX ACT 1957 SHALL WITH NECESSA RY MODIFICATIONS APPLY IN RELATION TO SUCH A REFERENCE A S THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UND ER S.16A(1) OF THAT ACT. THE PROVISIONS OF S.16A(6) OF THE WEALT H TAX ACT 1957 PROVIDES THAT ON RECEIPT OF THE ORDER OF VALUATION UN DER SUB-SECTION (3) OR SUB-SECTION (5) FROM THE VALUATION OFFICER THE ASSESSING OFFICER SHALL AS FAR AS THE VALUATION OF THE ASSET IN QUESTION IS CONCERNED PROCEED TO COMPLETE THE ASSESSMENT IN CONFORMITY WITH THE ESTIMATE OF THE VALUATION OFFICER. THIS PROVISION OF S.16A(6) OF THE WEALTH TAX ACT MAKES THE VALUATION MADE BY THE DVO BINDING ON TH E ASSESSING OFFICER. WE FIND THAT THIS BINDING PROVISION OF S.16A( 6) HAS BEEN SPECIFICALLY APPLIED IN RELATION TO THE CASE OF REFERE NCE OF VALUATION OF A CAPITAL ASSET TO A VALUATION OFFICER UNDER THE PROVISI ONS OF S.50C OF THE ACT. WE ACCORDINGLY HOLD THAT THE VALUATION MADE BY THE DVO WITH REFERENCE TO VALUATION OF A CAPITAL ASST MADE UNDER S.5 0C(2) OF THE ACT IS BINDING ON THE ASSESSING OFFICER AND ACCORDINGLY THERE IS NO MERIT IN THE ARGUMENT OF THE REVENUE THAT THE VALUATION MADE BY THE DVO IS NOT BINDING ON THE ASSESSING OFFICER AS PER THE PROVISION S OF S.50C OF THE ACT. IN THIS VIEW OF THE MATTER WE FIND NO MERI T IN THE GROUND OF APPEAL OF THE REVENUE WHICH IS ACCORDINGLY REJECTED. ASSESSEE'S APPEAL: ITA NO.534/HYD/09 : ASSTT. YEAR 2003-04 7. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER- '1. THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME- TAX(APPEALS) IS ERRONEOUS TO THE EXTENT IT IS PREJ UDICIAL TO THE APPELLANT. ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 5 2. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ER RED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N APPLYING THE PROVISIONS OF SEC.50C OF THE I.T.ACT W ITHOUT CONSIDERING THE REASONS FOR SALE OF THE PROPERTY AT THE PRICE AT WHICH IT IS SOLD AND REGISTERED. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OU GHT TO HAVE DIRECTED THAT IN THE CIRCUMSTANCES THE AC TUAL SALE CONSIDERATION RECEIVED ON THE SALE O THE PROPERTY W AS ONLY RS.59 67 500/- AND NOT THE MARKET VALUE OF THE LAND . THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ADOPT THE SA LE PRICE OF RS.59 67 500/- AS CONSIDERATION RECEIVED INSTEAD THE ESTIMATED FIGURE PROVIDED BY THE VALUATION OFFICER OF RS.76.73 LAKHS AS PER THE VALUATION REPORT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) OU GHT TO HAVE SEEN THAT THE FIGURE ADOPTED BY THE VALUATI ON OFFICER ALSO SHOULD NOT HAVE BEEN ADOPTED FOR THE PURPOSES OF DETERMINING THE CAPITAL GAIN.' 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DVO HAS FIXED THE VALUE OF THE LAND IN QUESTION AT RS .9 LAKHS PER ACRE DURING THE YEAR 2002-03 WHICH IS ON HIGHER SIDE. HE SUBMITTED THAT THE ASSESSEE HAS ENTERED INTO SALE AGREEMENT WITH M/S. VI SHWAMBHAR CONSTRUCTIONS ON 17.5.1999 FOR AN AMOUNT OF RS.7 LAKHS P ER ACRE FOR THE SALE OF ENTIRE LAND AND HAS RECEIVED ADVANCE AMOUN T ALSO. ACTUAL REGISTRATION OF THE SAID LAND TO THE VENDEE WAS DONE ONLY IN THE MONTH OF JUNE 2002 DUE TO VARIOUS REASONS. IN VIEW OF THE AGREEMENT ENTERED INTO IN 1999 ASSESSEE WAS BOUND TO SELL THE LAND AT THE AGREED VALUE OF RS.7 LAKHS PER ACRE AS THERE WAS NO ESCA LATION CLAUSE IN THE SALE AGREEMENT. HE SUBMITTED THAT THE DVO HAS N OT GIVEN DUE CONSIDERATION TO THIS OBJECTION RAISED BY THE ASSESSEE. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSE D THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. SHE SU BMITTED ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 6 THAT THE DVO HAS IN PARA 8.0 OF HIS VALUATION REPOR T HAS GIVEN DUE CONSIDERATION AND THE ESTIMATION OF THE VALUE OF THE LAND AT RS. 9 LAKHS PER ACRE IS IN FACT ON THE LOWER SIDE. THERE IS N O COGENT REASON FOR ESTIMATING THE FAIR MARKET VALUE OF THE LAND AT A PRICE WHICH IS LESS THAN THE AREA RATE ADOPTED BY THE STAMP VALUATION A UTHORITY. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE ASSESSEE'S OBJECTION REGARDING THE SALE AGRE EMENT WITH M/S. VISHWAMBHAR CONSTRUCTIONS DATED 17.5.1999 FOR AN AM OUNT FOR RS.7 LAKHS PER ACRE FOR THE SALE OF ENTIRE LAND AND TH ERE BEING NO ESCALATION CLAUSE IN THE AGREEMENT OF SALE THE ASSESSEE WA S BOUND TO SELL AT THE RATE OF RS.7 LAKHS PER ACRE WAS DULY CONSIDER ED BY THE DVO IN PARA 8 OF HIS VALUATION REPORT FURNISHED IN THE COMPILATION FILED BEFORE THIS TRIBUNAL. THE DVO HAS RECORDED THAT THE A GREEMENT OF SALE ENTERED INTO BY THE ASSESSEE IN THE YEAR 1999 WAS NOT RE GISTERED. THE DVO HAS CONSIDERED ALL THE MERITS AND DEMERITS OF THE LA ND IN QUESTION AND HAS FIXED THE FAIR MARKET VALUE OF THE LAND AT RS.9 LAKHS PER ACRE DURING THE YEAR 2002-03. THERE IS NO MATERI AL BEFORE US TO SUGGEST THAT THE FAIR MARKET VALUE OF THE LAND AS ESTIM ATED BY THE DVO AT RS.9 LAKHS PER ACRE IS NOT REASONABLE. THE ENTIRE L AND WAS VALUED AT RS.1.15 CRORES BY THE STAMP VALUATION AUTHORITY AND TH E SAME WAS REDUCED BY THE DVO TO RS.76.72 LAKHS OUT OF WHICH THE A SSESSEE HAS 1/3RD SHARE ONLY. THE REPORT OF THE DVO HAS TAKEN I NTO CONSIDERATION THE LOCATION AND SPECIFICATION OF THE LAND AND ALL OTH ER RELEVANT FACTORS AND HAS DETERMINED THE FAIR MARKET VALUE OF THE LAND AT RS.9 LAKHS PER ACRE DURING THE YEAR 2002-03 WHICH SEEMS TO BE REASONAB LE. THE SAME IS ACCORDINGLY UPHELD AND GROUNDS OF APPEAL OF THE ASSESSEE ARE REJECTED. ITA NO.534/HYD/09 & 744/HYD/09 SHRI G.PRATAP REDDY HYDERABAD 7 11. IN THE RESULT BOTH THE APPEALS OF THE REVENUE A S WELL AS THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT 5TH FEBRUARY 2010 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 5TH FEBRUARY 2010 COPY FORWARDED TO: 1. SHRI G.PRATAP REDDY C/O. SHRI S.RAMA RAO ADVOCA TE 102 SHRIYA'S ELEGANCE DOOR NO.3-6-643 STREET NO.9 HIMAYATNAGAR HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX CRICLE 10(1) HYDER ABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-VI HYDERABAD 4. COMMISSIONER OF INCOME-TAX V HYDERABAD 5 THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S.