CHITTU BHAWANJI NARSEY ,MUMBAI vs. ITO WARD -34(1)(1), MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH, MUMBAI
BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER&
MS. PADMAVATHY S, ACCOUNTANT MEMBER
(Physical hearing)
Chittu Bhawanji Narsey
Paavan Residency, 21 Vitthal Nagar
C.H.S. N.S. Road No. 11, JVPD
Scheme, Vile Parle (West),
Mumbai-400049. [PAN: AABPN4473H]
Vs
ITO, Ward-34(1)(1),
Kautilya Bhavan, C41-43, G Block
BKC, Gilban Area, Bandra Kurla
Complex, Bandra East,
Mumbai-400051. Appellant / Assessee
Respondent / Revenue
Assessee by Ms. Kinjal Bhuta, CA
Revenue by Sh. Surendra Mohan, Sr. DR
Date of Institution
23.04.2025
Date of hearing
08.07.2025
Date of pronouncement
18.08.2025
Order under section 254(1) of Income Tax Act
PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT(A)-3, Bengaluru dated 11.02.2025 for assessment year (AY) 2011-12. The assessee has raised following grounds of appeal: ”1. The Ld. Commissioner of Income Tax (Appeals) erred in confirming the actions of the Assessing Officer in making an addition of Rs. 15,97,000/- u/s 50C of the Income Tax Act, 1961 without appreciating the provisions stipulated in the section and ignoring the legal submissions made by the appellant.
The Ld. Commissioner of Income Tax (Appeals) erred in not following the order of the Hon’ble Income Tax Appellate Tribunal in its true spirit thereby violating judicial discipline.
Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) failed to appreciate that the DVO has valued the fair market value of the property sold based on assumptions and ignoring the comparable received by DVO during the physical inspection as well as ignoring the objections raised by the appellants to the valuation before the DVO. Chittu Bhawanji Narsey 2
The appellant craves leave to add, amend, alter, or delete any of the above grounds of appeal.”
Brief facts of the case are that assessee is an individual, filed his return of income for A.Y. 2011-12 on 30.09.2011 declaring income of Rs. 18,37,920/-. The case was selected for scrutiny. During assessment, the assessing officer noted that assessee along with his three other family members, sold flat no. 101, Paavan JVPD, Mumbai vide agreement registered on 07.01.2011 for a consideration of Rs. 3.50 crore. The Stamp Valuation Authority valued the transaction of such sale at Rs. 4.17 crore. Finding difference vis-à-vis, the sale consideration shown by assessee and his co-owner and the value determined by Stamp Valuation Authority, the assessing officer was of the view that provisions of section 50C is applicable. On show-cause, the assessee and his co-owners, the assessee contended that he and all co-owners proposed to sale said flat in November-December, 2010. However, the agreement to sale was executed on 30.12.2010. The agreement was ultimately registered on 07.01.2011. The Stamp Valuation Authority valued the property for the purpose of registration as per ready reckoner rate as on 07.01.2011, whereas the agreement to sale was made in November / December, 2010. The assessing officer on the basis of difference in the value declared by the assessee and determined by Stamp Valuation Officer computed long term capital gain on 1/4th share of assessee at Rs. 19,07,033/-. 3. Aggrieved by the action of assessing officer, the assessee filed appeal before ld. CIT(A). Before ld. CIT(A), the assessee requested to adopt the ready reckoner rate as on 31.12.2010 as proposal of sale was made on 27.11.2010. The assessee also made submission that matter may be referred to Chittu Bhawanji Narsey 3
Departmental Valuation Officer (DVO) for ascertaining the fair market value as per section 50C(2). The submission of assessee was not accepted and ld.
CIT(A) confirmed the action of assessing officer. The assessee approached the Tribunal wherein matter was restored back to the file of assessing officer with the direction for making reference to DVO for ascertaining fair market value.
The matter was referred to DVO vide reference dated 06.07.2018 for ascertaining value of asset as on 27.11.2010 (wrongly mentioned as 27.11.2018). The DVO submitted his valuation report dated 19.12.2018
wherein, the DVO estimated fair market value as on 27.11.2010 at Rs. 4.13
crore. The assessing officer on the basis of report of DVO computed capital gain of Rs. 18,05,479/- on the share of assessee. Again, feeling aggrieved by the action of assessing officer, the assessee filed appeal before ld. CIT(A).
Before ld. CIT(A), the assessee reiterated all his submissions as made earlier either before assessing officer or ld. CIT(A) in first round of assessment and /appeal. The assessee also stated that assessee along with other co-owners agreed to sale the residential flat to Hitesh P Ruparelia for a consideration of Rs. 3.50 crore. The buyer approached the State Bank of India for Home loan on 24.10.2010. The loan was sanctioned on 16.12.2010. On the advice of State Bank of India, the buyer insisted that co-owners registered the redevelopment agreement for said flat which was presented to Stamp
Valuation Authority on 27.10.2010 for adjudication. On 29.11.2010, the Stamp
Valuation Authority ascertained the ready reckoner value of said flat at Rs.
3.21 crore. The redevelopment agreement dated 29.12.2010 was registered on 30.12.2010. Pursuant to such agreement finalise and executed on Chittu Bhawanji Narsey
4
12.2010 a post dated cheque of Rs. 12,50,000/- for assessee share was handed over by the purchaser and ultimately the agreement to sale was registered on 07.01.2011. In the meantime, the ready reckoner rate was revised. The ready reckoner rate in Mumbai was increased from 10 to 40%. The rate in Vile Pare (West) for residential land was Rs. 1,07,800/- per square meter as on 31.12.2010, and was raised to Rs. 1,45,500/- per square meter as on 01.01.2011. Thus, the ready reckoner rate was increased by 34.97%. The relevant evidence was furnished. The assessee ascertained that as result of revision ready reckoner rate determined on 30.12.2010 which was Rs. 3.21 crore, was revised to 4.17 crore as on 07.01.2011 i.e. when sale agreement was ultimately registered in the office of Sub-