VALARMATHI (MOTHER AND GUARDIAN OF TAMILARASI - MINOR),CHENNAI vs ITO NCW 2(2), CHENNAI

Income Tax Appellate Tribunal, ‘ B’ (SMC

Before: SHRI N.R.S. GANESAN & SHRI INTURI RAMA RAO]

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

1. This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-2, Chennai

ITA No .3364/2018 :- 2 -: (‘CIT(A)’ for short) dated 31.10.2018 for the Assessment Year (AY) 2010-2011. The Assessee raised the following grounds of appeal: 2.

The order of the Commissioner of Income Tax (Appeals) is opposed to the facts and circumstances of the case and is bad in law.

The Commissioner (Appeals) erred in holding that the Assessing Officer has rightly adopted the guideline value of Rs.15,41,491/- as the sale consideration (of Vacant Land at Chengalpattu) by invoking the provisions of section 50C of the Income Tax Act, and dismissing the appeal.

3. The appellant submits that as the Mother and Guardian of her daughter Tamilarasi (Minor aged 12 years) she had sold a piece of Vacant land measuring 1141 Sq.ft situated in T.S.No.18312C1, Ward I, Block No.6, Rajaji Street, Chengalpattu with a 3 feet wide common passage (Total area including the passage 1252 Sq.ft) — vide Sale Deed dt.09.04.2009 registered as Document No.1717 of 2009 with the Joint Sub-Registrar II, Chengalpattu — for a sale consideration of Rs.5,79,7501- (Land Rate Rs.508 per Sq.ft) and offered Long Term Capital Gain of Rs.4,23,4861- while the Assessing Officer had computed the LTCG as Rs.13,85,227/- adopting Rs.15,41,491/- (land rate Rs.1351 per Sq.ft) as sale consideration invoking section 50C of the Act.

The appellant further submits that on a Reference made by the Assessing Officer u/s 50C(2) of the Act to the Valuation Officer, in the course of the proceedings u/s 16A(5) of the WT Act, 1957 r.w section 50C(2) of the IT Act, 1961, the appellant had raised the following objections.

(i) The subject property is situated on the backside of Rajaji Street and is land locked on 3 sides and access to the property is limited through a 3 feet wide common passage

ITA No .3364/2018 :- 3 -:

(ii)ln view of the severe restrictions on the access to the property and threat by the owner of the front portion to exercise his right and close the passage of remaining 3 feet the appellant was compelled to sell the property to the owner of the front portion.

(iii) The property also suffered from the disadvantage of being a Minor’s property with attendant hazards to the purchaser.

The appellant submits that the above negative indicators which resulted in restricted sale value as compared with the guide line value have not been given due weight / credence either by the Valuation Officer or by the Commissioner (Appeals) before whom the said objections were urged.

The appellant invites a reference to Para 5.2 of the order dt.05.09.2018 U.S 16A(5) of the WT Act, 1957 r.w.s 50C(2) of the IT Act, 1961 of the Assistant Valuation Officer, Unit II, Valuation Cell, Income Tax Department, Chennai wherein under the head “Rates” the Valuation Officer has set out the guideline value of house site land furnished by the Joint Sub-Registrar II, Chengalpattu as below:

From 1-4-2003 to 31-07-2007 for Rajaji Salai @ Rs.5891- per Sq.ft and From 01-08-2007 to 31-03-2012 for Rajaji Salai @ Rs.1000/- per Sq.ft

Considering the above data furnished by the Stamp Valuation Authority and the negative indicators referred to in Ground No.4 above it is submitted that the value adopted as Rs.1351/- per Sq.ft for the subject property sold on 09.04.2009 for purposes of computation of capital gain is unrealistic, arbitrary and highly excessive.

The appellant urges and submits that the Commissioner (Appeals) ought to have accepted the actual sale consideration and the Long Term Capital Gain admitted and granted appropriate relief.

For these and other grounds that may be adduced at the time of hearing the appellant prays that the Hon’ble Tribunal be pleased to allow the appeal and render justice.

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The brief facts of the case are as under:

The appellant is an individual and minor represented by mother and guardian. The return of income for the AY 2010-11 was not filed voluntarily u/s.139(1) of the Income Tax Act, 1961 (in short ‘’the Act’’).

The Assessing Officer had come to know that he had sold the property vide document No.1717/2009, dated 09.04.2009 for consideration of �5,79,750/- whose market value is �15,41,491/-.

Based on this information, the Assessing Officer formed an opinion that income had escaped assessment and accordingly issued notice u/s.148 of the Act on 29.03.2017. Against the said return of income, the assessment was completed by the Income Tax Officer, Non Corporate Ward 2(2), Chennai (herein after referred as Assessing Officer) vide order dated14.12.2017 passed u/s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) at total income of Rs.15,58,020/-.

While doing so, the Assessing Officer adopted value for stamp duty purpose as deemed consideration under the provisions of Section 50C of the Act and assessed to capital gains. Assessee had objected adoption of market value as deemed consideration and requested the Assessing Officer to refer the matter to the DVO. Accordingly, the Assessing Officer referred the matter to the DVO. The report from the DVO was not received by the Assessing Officer. However, the ITA No .3364/2018 :- 5 -: assessment was completed by the Assessing Officer adopting value for stamp duty purpose for deemed purpose.

Being aggrieved, an appeal was preferred before the 4.

Ld.CIT(A), who vide impugned order confirmed the action of the Assessing Officer (AO).

Being aggrieved by the order of the CIT(A), the appellant is 5. in appeal before us in the present appeal. Ld. Counsel submitted that assessee had filed objections before DVO vide letter dated 10.08.2018. It was contended that the DVO had not considered the objections filed by the assessee, accordingly the valuation report is not valid in law. Therefore, he submitted that the matter should be remitted for denovo assessment.

6. On the other hand, the ld. Sr. Departmental Representative placed reliance on the orders of lower authorities.

We heard the rival submissions and perused the material on 7. record. The issue in the present appeal relates to adoption of the value adopted for sale deed purpose as deemed consideration u/s.50C of the Act. Admittedly, assessee had filed objections for adoption of the market value of the deemed consideration u/s.50C of the Act and the ITA No .3364/2018 :- 6 -:

Assessing Officer had rightly referred the matter to the DVO, but the report of the DVO was received subsequent to the completion of the assessment. Therefore, we are of the considered opinion that the matter should be sent back to the Assessing Officer to the stage of receipt of DVO report for denovo assessment.

In the result, the appeal filed by the assessee is partly 8. allowed for statistical purpose.

Order pronounced on 8th day of November, 2019, at Chennai.

VALARMATHI (MOTHER AND GUARDIAN OF TAMILARASI - MINOR),CHENNAI vs. ITO NCW 2(2), CHENNAI