RINA SURENDRA PATEL, NAVI MUMBAI v. ITO WD 19(2)(2), MUMBAI

ITA 943/MUM/2012 | misc
Pronouncement Date: 03-07-2013 | Result: Allowed

Appeal Details

RSA Number 94319914 RSA 2012
Assessee PAN AABPP4866A
Bench Mumbai
Appeal Number ITA 943/MUM/2012
Duration Of Justice 1 year(s) 4 month(s) 23 day(s)
Appellant RINA SURENDRA PATEL, NAVI MUMBAI
Respondent ITO WD 19(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 03-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 03-07-2013
Date Of Final Hearing 13-06-2013
Next Hearing Date 13-06-2013
Assessment Year misc
Appeal Filed On 10-02-2012
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H MUMBAI . . ! # $%& $ BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI D. KARUNAKARA RAO AM $ ./I.T.A. NO.943/M/2012 ( ' ( )( / ASSESSMENT YEAR : 2007-2008) RINA SURENDRA PATEL FLAT NO.1203 BLDG. NO.53 SEAWOODS ESTATES SECTOR NO.54 56 & 58 PALM BEACH ROAD NERUL NAVI MUMBAI. / VS. ITO-WARD 19(2)(2) C-11 ROAD NO.609 PRATYAKSHAKAR BHAVAN BKC BANDRA (E) MUMBAI 400051. &* # $ ./PAN : AABPP 4866 A ( *+ /APPELLANT) .. ( -*+ / RESPONDENT) *+ . / $ / APPELLANT BY : SHRI N.R. AGARWAL -*+ . / $ / RESPONDENT BY : SHRI RAJARSHI DWIVEDI DR $ . 0# /DATE OF HEARING : 13.6.2013 1) . 0# /DATE OF PRONOUNCEMENT : 3.7.2013 %2 %2 %2 %2 / O R D E R PER D. KARUNAKARA RAO AM: THIS APPEAL FILED BY THE ASSESSEE ON 10.2.2012 IS A GAINST THE ORDER OF CIT (A)- 35 MUMBAI DATED 14.11.2011 FOR THE ASSESSMENT YEAR 2007-2008. 2. IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD CIT (A) HAS ERRED IN REJECTING THE APPELLANTS CLAIMS OF SALES CONSIDE R OF RS.2 35 000/- FOR COMPUTING CAPITAL GAIN. 2. THE LD CIT (A) FAILED TO APPRECIATE THAT (A) THE ASSESSING OFFICER HAS ERRED IN CONSIDERING STAMP DUTY VALUATION U/S 50C WITHOUT REFERRING TO THE VALUATION OFFICER U/S 50C(2). (B) THE ASSESSING OFFICER HAS ERRED IN ASSESSING THE CAPITAL GAIN FOR THE AY 2007-2008 INSTEAD OF AY 2009-2010 .\ 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY CAPITA GAIN AND INC OME FROM OTHER SOURCES. ASSESSEE FILED THE RETURN DECLARING THE TOTAL INCOM E OF RS. 3 01 251/-. AS A RESULT OF SCRUTINY U/S 143(3) OF THE ACT ASSESSED INCOME OF THE ASSESSEE WAS DETERMINED AT 2 RS. 10 31 308/-. DURING THE ASSESSMENT PROCEEDINGS FROM THE PARTICULARS FILED BEFORE HIM AO NOTICED THAT ASSESSEE ACQUIRED A FLA T AT MIRA ROAD IN THE FY 1996-97 FOR A SUM OF RS. 2 35 000/- AND ITS INDEXED COST IS OF RS. 3 92 943/-. ASSESSEE GAVE POWER OF ATTORNEY TO MR. AKHTAR SHAIK ON 7.2.2007 FOR SALE OF THE PROPERTY AGAINST THE PAY ORDER NO.021431. ASSESSEE TREATED THE SAME AS A SALE AND OFFERED THE CAPITAL LOSS OF RS. 1 57 943/- IN THE AY 2007-2008. SUBSEQUENTL Y THE SAID AKHTAR SHAIK SOLD THE PROPERTY TO MR. HARI SINGH ON 20.8.2 008 FOR A SUM OF RS. 2.5 LACS USING THE POWER OF ATTORNEY GIVEN TO HIM. AO NOTIC ED THAT THE MARKET VALUATION OF THE SAID PROPERTY AS PER STAMP DUTY AUTHORITIES IS RS. 11 23 000/-. AO ISSUED SHOW CAUSE NOTICE PROPOSING TO INVOKE THE PROVISION S OF SECTION 50C OF THE ACT. IN REPLY ASSESSEE FILED A LETTER DATED 14.12.2009 STA TING THAT THE FLAT IN QUESTION SUFFERS FROM NUMBER OF DISADVANTAGES LOCATIONALLY IN AS MUCH THE FLAT IS IN POOR CONDITION DUE TO HEAVY WATER LOGGING AT TIMES AND A BSENCE OF PERMANENT WATER SUPPLY TO THE FLAT. ASSESSEE MENTIONED THAT THE MA RKET VALUE OF THE FLAT IS ONLY RS. 2.5 LACS AND NOT RS. 11.25 LACS AS MENTIONED IN THE STAMP DUTY REGISTERED DOCUMENT. THUS THE ASSESSEE INDIRECTLY INVOKED THE PROVISION S OF SUB SECTION (2) OF SECTION 50C OF THE ACT BY SUBMITTING THE ABOVE OBJECTIONS. AO DID NOT CONSIDER THE SAID OBJECTIONS AND NOT SOUGHT THE HELP OF DVO AND PROCE EDED TO MAKE ADDITION OF THE DIFFERENCE OF AMOUNT IE (RS. 11.25 LACS RS. 2.5 L ACS = RS. 8.75 LACS) IN THE ASSESSMENT. AGGRIEVED ASSESSEE FILED AN APPEAL BE FORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY ASSESSEE SUBMITTED THAT THE MARKET VALUE OF THE FLAT IS MUCH LOWER THAN THE VALUE OF THE STAMP DUTY AUTHORITYS VALUATION DUE TO THE DISADVA NTAGES SUCH AS POOR CONDITION OF THE FLAT / BUILDING WATER LOGGING DUE TO LOW LEVEL OF THE BUILDING QUA THE ROAD LEVELS. HE FURTHER RELIED ON NUMBER OF DECISIONS IN FAVOUR OF THE PROPOSAL FOR MAKING A REFERENCE TO THE VALUATION AUTHORITIES FOR DETERMIN ATION OF THE MARKET VALUE OF THE SAID FLAT. CIT (A) CONSIDERED THE SAME AND REJECTE D THE ASSESSEES OBJECTIONS BY MENTIONING THAT ASSESSEE FAILED TO INVOKE THE PROVI SIONS OF SECTION 50C(2) BY MAKING A SPECIFIC REQUEST FOR REFERRAL TO DVO BEFORE THE A SSESSING OFFICER. PARA 4 OF THE IMPUGNED ORDER IS RELEVANT FOR DISCUSSION BY THE CI T(A). ACCORDINGLY ASSESSEES 3 APPEAL WAS DISMISSED BY THE CIT (A). AGGRIEVED AS SESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. DURING THE PROCEEDINGS BEFORE US SHRI N.R. AGAR WAL LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE APPEAL IS TO BE SET ASI DE ON TWO GROUNDS IE (I) AO FAILED ULTIMATELY TO MAKE A REFERENCE TO THE VALUATION AUT HORITIES AS PER THE PROVISIONS OF SUB-SECTION (2) OF SECTION 50C OF THE ACT AND THE A SSESSEE IS THE SUFFERER; AND (II) ON THE ISSUE OF TAXABILITY OF CAPITAL GAINS IN THE ASS ESSMENT YEAR 2009-2010 DURING TO WHICH THE STAMP DUTY OF RS. 2.5 LACS IS RELEVANT BE CAUSE THIS VALUE OF RS 11.25 LAKHS IS THE FIGURE BORNE ON THE LAND REGISTRATION DOCUMENTS DRAWN FOR THAT YEAR. 6. ON THE OTHER HAND LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AND THE INFORMATION FILED BEFORE US. W E FIND THAT THE ORDER OF ASSESSMENT EVIDENCES THE FACTS RELATING TO THE OBJE CTIONS RAISED BY THE ASSESSEE WITH REGARD TO THE LOWER MARKET VALUE OF THE FLAT A T MIRA ROAD AND PARA 6 OF THE ASSESSMENT ORDER IS RELEVANT HERE. OF COURSE THER E IS NO EXPRESSED PRAYER FOR MAKING A REQUEST FOR REFERENCE TO THE VALUATION OFF ICER U/S 50C(2) OF THE ACT. HOWEVER THE IMPUGNED ORDER OF THE CIT (A) CONTAINS THE ASSESSEES REQUEST FOR REFERRAL TO THE DVO AND OBJECTION FOR ADOPTING THE MARKET VALUE OF RS. 11.25 LACS WITHOUT ATTENDING TO THE DISADVANTAGES NARRATED BY THE ASSESSEE BEFORE THE AUTHORITIES. CIT (A) INSTEAD OF RECTIFYING THE SAI D DEFICIENCIES IN THE ORDER OF THE AO HE PREFERRED TO DISMISS THE ASSESSEES OBJECTIONS B Y SIMPLY MENTIONING THAT THE ASSESSEE FAILED TO MAKE A FORMAL PRAYER FOR REFERRA L OF THE PROPERTY TO THE DVO FOR WANT OF MARKET VALUATION. IN OUR OPINION SUCH DEC ISION IS NOT PROPER CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE AND ADMINISTRAT ION OF JUSTICE TO THE APPELLANT. THEREFORE WE FIND IT RELEVANT TO ACCEPT THE PRAYER OF THE ASSESSEE FOR SETTING ASIDE THE GROUNDS RAISED BEFORE US TO THE FILES OF THE AO FOR FRESH ADJUDICATION OF THE ISSUES RAISED IN ACCORDANCE WITH LAW AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY GROUNDS RAISED BY THE ASSESSEE ARE SET ASIDE. 4 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3.7.2013. . SD/- SD/- (D. MANMOHAN ) (D. KARUNAKARA RAO ) / VICE PRESIDENT # $%& / ACCOUNTANT MEMBER MUMBAI; 3% 3.7.2013. . ' . $ ./ OKK SR. PS %2 %2 %2 %2 . .. . '045 '045 '045 '045 65)0 65)0 65)0 65)0 / COPY OF THE ORDER FORWARDED TO : 1. *+ / THE APPELLANT 2. -*+ / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 5 89 '0' / DR ITAT MUMBAI 6. 9( : / GUARD FILE. $-50 '0 //TRUE COPY// %2 $ %2 $ %2 $ %2 $ / BY ORDER / $ $ $ $ ; ; ; ; (DY./ASSTT. REGISTRAR) / ITAT MUMBAI