KANHAIYALAL KALYANMAL,JAIPUR vs. ACIT, JAIPUR

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ITA 978/JPR/2015Status: DisposedITAT Jaipur31 January 2017AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the AO ought to have referred the valuation of the property to the Departmental Valuation Officer (DVO) as per Section 50C(2) of the Act, given the assessee's claim of a lesser market value.

What were the facts?

The Assessing Officer (AO) invoked Section 50C and computed Short Term Capital Gain based on stamp duty valuation, which was higher than the actual sale consideration. The assessee claimed a lower market value for the property sold.

What were the issues?

Whether the AO was justified in not referring the property valuation to the DVO under Section 50C(2) when the assessee disputed the stamp duty value?

Which sections of the Income-tax Act were involved?

Section 50C,Section 50C(2),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM vk;dj vihy la-@ITA No. 978/JP/2015

For Appellant: Shri Rajeev Pandey (CA) jktLo dh vksj ls@

PER SHRI KUL BHARAT, JM.

This appeal by the assessee is directed against the order of ld. CIT (A)-2,

Jaipur dated 27.11.2015 pertaining to assessment year 2010-11. The assessee has

raised the following grounds of appeal :-

“ On the facts and in the circumstances of the case ld. CIT (Appeals) erred in –

1.

Upholding the assessment order passed u/ 143(3) which I unjust and not following provisions of law.

2.

In upholding the addition of Rs. 23,32,654/- on account of Short Term Capital Gain and taking amount of sale consideration to be the value for stamp duty purposes u/s 50C on sale of Plot No. 39, Mission Compound, Ajmer Road, Jaipur Rs. 65,78,244/- instead of actual sale consideration of Rs. 40 lacs and further erred in holding

2 ITA No. 978/JP/2015 Kanhaiyalal Kalyanmal

that the appellant firm had not objected to the valuation u/s 50C of IT Act, 1961 and therefore not following provisions of law on issue of valuation.

3.

In disregarding the crucial fact that 39 Mission Compound (the property sold) was under possession of a party and assessee was unable to restrain and evict the encroacher and the party had proved before the District and Session Court of his possession and therefore ld. CIT (A) disregarded the point of dispute had made assessee firm agree on sale of Rs. 40 laces and the investment made by the firm was recouped.

4.

Assessee objects to charge of interest u/ 234A, 234B and 234C.

5.

Assessee reserves the right to add, alter, amend and withdraw of any of the grounds.

2.

Briefly stated the facts are that the case of the assessee was picked up for

scrutiny assessment and the assessment under section 143(3) of the Income Tax

Act, 1961 (hereinafter referred to as the Act) was framed vide order dated

02.03.2013. While framing the assessment, the AO computed Short Term Capital

Gain at Rs. 23,32,654/- by invoking provisions of section 50C of the Act. Aggrieved

by this, the assessee preferred an appeal before ld. CIT (A), who after considering

the submissions partly allowed the appeal. While partly allowing the appeal, the ld.

CIT (A) affirmed the addition made by the AO. Aggrieved, the assessee has filed the

present appeal before this Tribunal.

3.

At the outset, the ld. Counsel for the assessee submitted that the AO was not

justified in not referring the matter to the Departmental Valuation Officer (DVO). He

submitted that during the assessment proceedings, the assessee had claimed market

value of the property lesser than the value adopted by the AO. Under these facts,

3 ITA No. 978/JP/2015 Kanhaiyalal Kalyanmal

the AO ought to have referred the issue of valuation to the DVO in terms of section

50C(2) of the Act.

3.1. On the contrary, the ld. D/R supported the orders of the authorities below.

3.2. We have heard rival contention, perused the material available on record and

gone through the orders of the authorities below. There is no dispute with regard to

the fact that the AO has invoked the provisions of section 50C of the Act and

adopted the valuation as per Stamp Valuation Authority. During the course of

hearing, the ld. Counsel has drawn our attention to the assessment order wherein

the submissions of the assessee are reproduced. In the submissions, the assessee

has claimed the lesser market value of the property. Therefore, in our considered

view, in terms of section 50C(2) of the Act, the AO ought to have referred the

matter of valuation to the DVO. We, therefore, set aside the impugned order and

restore the issue to the file of the AO with the direction that the AO would compute

the Capital Gain afresh after obtaining the Valuation Report from the DVO in terms

of section 50C(2) of the Act. Needless to mention that the AO would provide

sufficient opportunity of being heard to the assessee. Grounds raised by the

assessee are allowed for statistical purposes.

4.

In the result, appeal of the assessee is allowed for statistical purposes.

Order is pronounced in the open court on 31.01.2017.

Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 31/01/2017. Das/

4 ITA No. 978/JP/2015 Kanhaiyalal Kalyanmal

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

1.

The Appellant- Shri Kanhaiyalal Kalyanmal, Jaipur. 2. The Respondent – The ACIT, Circle-6, Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 978/JP/2015)

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

5 ITA No. 978/JP/2015 Kanhaiyalal Kalyanmal

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