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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI SANDEEP GOSAIN & SHRI AMARJIT SINGH
आदेश / O R D E R
PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER :
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)–3, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-3/Wd.3(3)(4)/117/16-17 dated 03/05/2018 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(hereinafter referred to as "the Act") dated 31/03/2016 relevant to Assessment Year (AY) 2013-14.
The assessee has raised the following grounds of appeal:-
Shri Pramod Somnath Agrawal vs. ITO Asst.Year – 2013-14 - 2 -
The Ld.CIT(Appeals)-3 Ahmedabad has erred in law and on facts in passing appellate order dated 03/05/2018 for A.Y. 2013-14 in the case of appellant by confirming disallowance made by the A.O.
2. The Ld.CIT Appeals erred in law and on facts in confirming the addition made by the A.O. on account of Long Term Capital Gain of Rs.28,18,267/- u/s.54 of the Act on the basis of report of DVO.
Today, the case was fixed for hearing but none appeared on behalf of assessee nor any adjournment application has been filed on record.
From the records, we observe that required notice was sent to the assessee by Registered Post which was duly served upon the assessee and in this respect acknowledgment from the Department of Posts has already been placed on record which shows that even in spite of service of notice, the assessee or his representative has not come before this Court for attending the hearing which goes to show that assessee is not interested in pursuing with his present appeal. However, Ld.DR present in the Court is ready to the arguments, therefore we proceed to decide the appeal on merits ex-parte qua the assessee, after hearing the Ld.DR.
Brief facts of the case are that the assessee has filed his e-return of income on 05/08/2013 declaring total income at Rs.8,89,919/-. The assessee is engaged in the business of trading in household hardware material and LTCG and other sources income. The case was selected for scrutiny by serving statutory notice and after seeking reply of the assessee, the assessment was finalized u/s.143(3) and made disallowance by the Assessing Officer.
Shri Pramod Somnath Agrawal vs. ITO Asst.Year – 2013-14 - 3 -
Aggrieved by the order of the AO, assessee preferred appeal before Ld.CIT(A), who after considering the written submissions of the assessee, dismissed the appeal filed by the assessee.
Aggrieved by the order of the ld.CIT(A), now the Assessee is in appeal before us on the grounds mentioned hereinabove. Although assessee has raised two grounds but both the grounds raised by the assessee are inter- connected, inter-related and relates to challenging the order of Ld.CIT(A) in confirming the addition made by the Assessing Officer on account of Long Term Capital Gain (LTCG) of Rs.28,18,267/- u/s.54 of the Act.
We have heard the Ld.DR and perused the material placed on record as well as the orders passed by the revenue authorities. Before we decide this issue on merits, it is necessary to evaluate the order passed by the Ld.CIT(A) while deciding this ground. We find that the Ld.CIT(A) referred the ratio laid down by the Apex Court in the case of Suraj Lamp and Industries Pvt.Ltd. vs. State of Haryana (2012) 340 ITR 1 (SC), in his order while deciding the issue. The Ld.CIT(A) has dealt with this ground in paragraph Nos.3 & 4 of his order, however, the relevant portion contained in paragraph No.3.2 of his order is reproduced hereunder:
“3.2 Decision: I have considered the facts mentioned in the assessment order and the submissions of the appellant carefully. The issue is relating to computation of LTCG on the sale of immovable property. The appellant had claimed cost of acquisition and cost of improvement which appeared to AO on higher side, therefore, the matter was referred to DVO on 04.03.2016 as per law. The DVO submitted the report dated 31.03.2016. As per assessment order, the DVO's report was finalized by the DVO in presence of Shri Pratik Jain, C.A. and also the valuation
Shri Pramod Somnath Agrawal vs. ITO Asst.Year – 2013-14 - 4 - report of registered valuer submitted by the appellant was considered in the process. The AO has mentioned in assessment order at page No.3 that the appellant neither had any objection before DVO nor before AO against the reference made to the DVO. Now the appellant re-submitted that the interior decoration expenses should be allowed as per following case laws:
Rajat B. Mehta Vs. ITO, International Taxation, Vadodara – A.Y. 2011-12 Saleem Fazelonoy Vs. DCIT – (2007) 108 TTJ (Mumbai) 894.
I have examined the ratio laid down in above case laws and the only common point is relating to deduction u/s.54F. However, the interior decoration has been specifically commented by the DVO as mentioned in page 3 of assessment order as under:
Cost of acquisition being ½ of Rs. 1,80,400/- Rs. 54,200/- Cost of improvement being ½ of Rs.22,62,400/- Rs.11,31,200/- The report of DVO has been in the knowledge of the appellant and same has been considered to make impugned addition after proper opportunity of being heard given to the appellant. The appellant has co-operated with the assessing officer and furnished submissions during assessment proceedings and the process of DVO's report was simultaneously conducted with the full knowledge of the appellant.
As a matter of fact, the absolute rights were not handed out to the purchaser, therefore, the sale is complete as per ratio in the case of Suraj Lamp and Industries Pvt. Ltd. Vs. State of Haryana [2012] 340 ITR 1 (SC) is relied which is as under:
"Immovable property can be legally and lawfully transferred or conveyed only by a registered deed of conveyance. Transactions of the nature of general power of attorney sales or sale agreements/general powers of attorney will transfers do not convey title and do not amount to transfer, nor can they be recognized as valid modes of transfer of immovable property."
The objection to the jantri valuation has neither been taken at SVA level or at AO's level. Also the appellant was required to raise objection to the valuation rate before DVO while he was finalizing the report in presence of the AR of the appellant. The ratio laid down in the case laws relied by appellant have already been considered by the AO. The undersigned is not having any fresh material to be considered. Consequently, the addition made on account of DVO's report and u/s.50C of Rs.28,16,267/- is hereby confirmed. Grounds No.1 to 6 of appeal are dismissed.”
Shri Pramod Somnath Agrawal vs. ITO Asst.Year – 2013-14 - 5 -
After having gone through the facts of the present case, we find that the assessee miserably failed to explain the impugned assessment before Assessing Officer as well as CIT(A). Therefore, the Assessing Officer as well as CIT(A) decided the orders against the assessee while making additions. Even before us, no new facts or circumstances have been placed on record and the orders passed by the revenue authorities have also gone unrebutted, therefore, we find no reason to interfere into or to deviate from such findings of the authorities below and we uphold the decision of the Ld.CIT(A) and reject the grounds raised by the Assessee.