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Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S.JAYARAMAN
आदेश / O R D E R
PER GEORGE MATHAN, JUDICIAL MEMBER appeals filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-5, Chennai in for the assessment year 2009-10 & in ITA No.220/CIT(A)-5/ 2016-17 both dated 04.12.2017 for the assessment year 2008-09 respectively.
Mr.D.Anand represented on behalf of the Assessee, and Mr.Clement Ramesh Kumar represented on behalf the of the Revenue.
It was submitted by the ld.A.R that the assessee is a HUF, who is in the business of money lending. It was a submission that the assessee had sold an immovable property during the relevant assessment year, which was land and building at Old door No.3/17,New Door No.83,Anna Salai,Chennai-2. It was a submission that the said property was sold for `85 lakhs. It was a submission that the ld. Assessing Officer had completed the assessment u/s.143(3) of the Act on 31.12.2011 by invoking the provisions of the section 50C of the Act at `1,28,78,625/-. It was a further submission that the assessee preferred an appeal before the ITAT and the Tribunal vide its order No.ITA No.1207/Mds/2013 dated 01.01.2016 had restored the issue to the file of ld. Assessing Officer with a direction to refer the matter to the DVO and to obtain valuation in respect of the said property from the DVO. It was a submission that the DVO had furnished his valuation report dated 25.05.2017, valuing the property at `92,52,000/-. It was a submission that when valuing the property, the DVO had made an addition on account of time gap, between 01.08.2007 to 31.05.2008, a increase in land rate on `5601/- Sq.ft. @ 11% per annum and consequently for 10 months increased the value by `514/- per Sq.ft. It was a submission that the assessee having disclosed the value at `85,51,828/- was the value at which the property was sold and the DVO having arrived at `92,52,000/-,the same was within a variation of less than 15% and as per the provisions of the section 55A(b)(i) of the Act, the variation being less than 15%, no addition was liable to be made and the valuation as declared by the assessee was liable to be adopted for the purpose of computing the long term capital gains.
In reply, the ld.D.R vehemently supported the order of the CIT(Appeals).
We have considered the rival submissions. A perusal of provisions of the section 55A(b)(i) of the Act clearly shows that variation of 15% is permitted in respect of valuation as disclosed by the assessee and as valued by the DVO. Here, the difference between the sale consideration as disclosed by the assessee and as arrived at by the DVO is only `7,14,110/-, which is less than 10%, clearly no addition is liable to be made and the long term capital gains is to be computed by applying the value as disclosed by the assessee.
Consequently, the addition as made by the ld. Assessing Officer and confirmed by the Ld.CIT(A), stands deleted.
5.1 We are not going into estimating the net value of land under the pretext of probable increase in land value on account of time gap between guideline value date and the transaction date as the addition made by the ld. Assessing Officer and sustained by the Ld.CIT(A), is being deleted on account of variation which is less than 10% in view of the provisions of the section 55A(b)(i) of the Act.
In the result, the appeal of the assessee in stands allowed.
WTA No.04/Chny/2018
It was submitted by ld.A.R that this is an appeal against the Wealth Tax valuation done by the ld. Assessing Officer. It was a submission that this was the single property owned by the assessee and consequently no wealth tax was liable to be assessed in the hands of the assessee in so far as single asset is exempt under the Wealth Tax Act, also on account of the fact that this was rented out premises during the relevant assessment year, when it was sold.
In reply, the ld.D.R submitted that this was the only property, has not been verified by the ld. Assessing Officer. It was a submission that he had no objection, if the issues were restored to the file of the AO for re-adjudication.
We have heard the rival submissions and perused the materials available on record. It is noticed that the property at Old door No.3/17, New Door No.83, Anna Salai,Chennai-2, which has been sold by the assessee, was the only property owned by the assessee and as to whether it was a rented out premises has not been considered by the ld. Assessing Officer. This being so, in the interest of justice, this issue is restored to the file of ld. Assessing Officer for re-adjudication after granting adequate opportunity of being heard.
The ld. Assessing Officer is to verify whether it is only the property owned by the assessee and as to whether this was a tenant property during the relevant time. In the event, answer to any of the said issues in positive, then no Wealth Tax is liable to be levied in respect of the said property. Here, as per the valuation report paced before us, in the description of the property regarding the ownership history, it does mention that property is a tenanted property. Though we can analyze all such documents as it is recorded by the DVO, still this issue is restored to the file of ld. Assessing Officer for re-adjudication as this issue has not been considered by the ld. Assessing Officer and the Ld.CIT(A). In the circumstances, the issue in this appeal is restored to the file of ld. Assessing Officer for re-adjudication after granting adequate opportunity of being heard.
In the result, the appeal of the assessee in WTA No.04/Chny/2018 stands partly allowed for statistical purposes.
To summarize the result, the appeals of the assessee in is allowed, and in WTA No.04/Chny/2018 is partly allowed for statistical purposes.
Order pronounced on 04th October, 2018, at Chennai.