Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, : ‘B’ BENCH, KOLKATA
Before: Shri M. Balaganesh & Shri S.S.Viswanethra Ravi
This appeal and corresponding cross objection by the Revenue and Assessee respectively are against the order dt. 20-11-2015 of the CIT-A, 4, Kolkata for the A.Y 2012-13.
The only effective issue is to be justified as to whether the CIT- A justified in directing the AO to refer the capital asset to the concerned DVO to determine the full value of consideration in terms of section 50C of the Act in the fact and circumstances of the case.
The brief facts of the case are that the assessee is a company and manufacturer and dealer in lubricating oils and other petroleum products. The assessee filed its e-return on 26-09-2012 declaring total income of Rs.1,99,15,050/- for the A.Y under consideration. Thereafter, notices u/s. 143(2) and 142(1) of the Act were issued and served on the assessee. In response to which, the AR of the assessee appeared before the AO. During the assessment & CO No. 14/K/16 2 M/s. Universal Petro Chemicals Ltd proceedings the AO noticed that the assessee sold all that piece and parcel of non-agricultural industrial lands in Survey no. 170/4 admeasuring 8200 sq.mtr and Survey No. 170/7 admeasuring 4100 sq.mtrs totaling to 12300 sq. mtrs along with thereon factory building(ground floor) admeasuring 758.71 sq.mtrs and compound wall with 95 H.P power connection, all the appurtenances, attachment, access etc situated in Village-Sayli, U.T of Dadra and Nagar Haveli to S/Sh Rakesh Bhai Shrekrishna Ramgaria and Hemantsinh Bharatsinh Chouhan. The said property was registered in the O/o the Sub-Registrar of Dadra & Nagar Haveli, Silvas vide SR No. 1862/011 dt. 15-06-2011. The Sub-Registrar valued the property at Rs.3,84,00,000/-, but the assessee declared the sale consideration of the said property for the purpose of stamp duty at Rs.99,63,000/- . The AO issued show cause dt. 15-09-2014 to the assessee mentioning as to why the value determined by the Sub-Registrar i.e at Rs. 3,84,00,000/- should not be taken instead of Deed Value of Rs.99,63,000/-.
In response to said show cause the assessee requested the AO to refer the matter to the Valuation Officer for determination of value of capital asset in terms of 50C of the Act and requested for one month time to gather information and to give comparative figures of sale of similar land situated in same local area. But for not submitting any comparative figure of similar kind of land, the AO rejected the claim of the assessee in referring the matter to the Valuation Officer and by invoking the provisions of sub section (1) of section 50C the AO added the difference of Rs.2,84,37,000/- (Rs.3,84,00,000- Rs.99,63,000) under the head ‘long term capital gain’ to the total income of the assessee.
Aggrieved, the assessee challenged the same before the CIT-A. Before him the assessee relied on the following decisions:- In the case of Sunil Kumar Agarwal 372 ITR 83(Cal) In the case of Onkarmal Kajaria Family Trust ITAT, Kolkata In the case of Jawajee Nagnathan Supreme Court & CO No. 14/K/16 3 M/s. Universal Petro Chemicals Ltd
Considering the case laws as relied on by the assessee and submissions of the assessee the CIT-A directed the AO to refer the capital asset to the concerned DVO to determine the full value of the consideration and to re-compute the capital gains after getting the DVO’s report. The relevant portion of the CIT-A’s order is reproduced herein below:-
4.2. I have considered the submissions of the AR of the appellant in the backdrop of the assessment order on the pertinent issue vis-a-vis section 50C of the Act. In this case the value adopted by the Stamp Authorities was Rs.3,84,OO,OOO/- and the appellant had sold the capital asset for Rs.99,63,OOO/-. The appellant had made a prayer for reference to the AO u/s 50C(2) of the Act which was not done. I find this issue is now squarely covered by the jurisdictional Hon'ble Calcutta High Court in GA No.3686 of 2013, ITAT No. 221 of 2013 vide judgment dated 13.03.2014, wherein it was held as follows:
"We have considered the rival submissions advanced by the learned advocates appearing for the parties. The submission of Ms. Ghutghutia that the requirement of clauses a) and (b) of sub-Section 2 of Section 50C has not been met by the assessee, can hardly be accepted. The requirement of clause (b) of sub-Section 2 of Section 50C was evidently met. The only question is whether the requirement of clause (b) of sub-Section 2 of Section 50C was evidently met. The only question is whether the requirement of clause (a) of sub-Section 2 of Section 50C was met by the assessee.
We have already set out hereinabove the recital appearing in the Deeds of Conveyance upon which the assessee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case then it is difficult to accept the proposition that the assessee had accepted that the price fixed by the District Sub Registrar was the fair market value of the property. No such inference can be made as against the assessee because he had nothing to do in the matter. Stamp duty was payable by the purchaser. It was for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub- Registrar, have claimed anything more than the agreed consideration of a sum of Rs. 10 lakhs which, according to the assessee, was the highest prevailing market price It would follow automatically that his case was that the fair market value of the property could not be Rs.35 lakhs as assessed by the District Sub Registrar. In a case of this nature the assessing officer should, in fairness, have given an option to the assessee to have the valuation made by the departmental valuation officer contemplated under Section 50C. As a matter of course, in all such cases the assessing officer should give an option to the assessee to have-the valuation made by the departmental valuation officer.
For the aforesaid reasons, we are of the opinion that the valuation by the departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer is made by the learned advocate representing the assessee, who may not have been properly instructed in law, the assessing officer, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. "
4.3. In view of the above decision of the Hon'ble jurisdictional High Court in the case of Sunil Kumar Agarwal, I direct the AO to refer the capital asset to the concerned OVO to determine the full value of the consideration received or accruing as a result of transfer of the said asset. The AO shall re-compute the Capital Gains after he or she receives the report of the DVO. I find similar provisions are also incorporated in Section 155(15) of the Act. This ground is disposed off in terms of the above findings and the concomitant direction for which this ground is allowed for statistical purposes. [This ground is allowed for statistical purpose]”
& CO No. 14/K/16 4 M/s. Universal Petro Chemicals Ltd
Before us the ld.DR submits that the issue in hand is squarely covered in favour of the assessee by the decision of the Hon’ble High Court of Calcutta in the case of Sunil Kumar Agarwal reported in 372 ITR 83(Cal). The said decision is binding on the revenue. He urged to remand the matter to the AO for his fresh consideration.
On the other hand, the ld.AR is also agreed on such proposition of the ld.DR and in support of his contention, placed reliance on the said decision of the Hon’ble High Court of Calcutta in the case of supra.
Heard rival submissions and perused the material available on record. We find that on similar facts and circumstances the Hon’ble High Court of Calcutta in the case of supra observed that in all such cases the AO should be given option to the assessee to have the valuation made by the District Valuation Officer and it is a machinery provided to give fair treatment to the tax payer or citizen. We further find that the assessee requested the AO to refer the matter to the DVO for determination or valuation of the property. But, the AO rejected such plea of the assessee and for not producing any comparative sale figures on similar type of land located in the same local area. We find that the CIT-A rightly placed reliance on the decision of the Hon’ble High Court of Calcutta in the case of supra and directed the AO to refer the matter to DVO. The ratio laid down by the Hon’ble High Court of Calcutta is applicable to the facts of the present case. The CIT-A was justified in directing the AO to refer the DVO for determination of value of the capital asset and to re-compute the capital gains accordingly, on receiving the DVO’s report in this regard. We find no infirmity in the impugned order of the CIT-A in doing so. We uphold the same. The ground(s) raised by the revenue in this regard is dismissed.
The appeal of the Revenue in for the A.Y 2012-13 is dismissed. & CO No. 14/K/16 5 M/s. Universal Petro Chemicals Ltd
C.O No. 14/Kol/2016 arising out of for the A.Y 2012-13 by the assessee.
The ld.AR submits that the ground no.1 of the C.O is in supporting with the order of the CIT-A, which we have already upheld by dismissing the appeal of the revenue. Therefore, ground no.1 of the C.O of the assessee is dismissed.
Ground no. 2 is relating to confirmation of disallowance of Rs.98,000/- under the head ‘Advance Written Off’ by the order of the CIT-A.
The ld.AR submits that an opportunity may be given to assessee to substantiate its claim by filing of proper evidence along with explanation to substantiate the claim of the assessee and, therefore, prayed to remand this issue to the file of the AO for his fresh consideration.
The ld.DR, on the other hand, relied on the orders of the AO and the CIT-A. However, he has not objected to remand the issue to the file of the AO for his verification.
Heard both the parties and perused the record. We find that the assessee claimed the advances written off under the head ‘Details of Sundry expenses’ related to the factory owned by the assessee. The CIT-A rightly found that the same were not in the nature of debts receivable and we are not in agreement with the submissions of the assessee in remitting the issue to the file of the AO for his fresh consideration. We find no infirmity in the order of CIT-A. Thus, ground no. 2 raised by the assessee in the cross objection is dismissed.
The Cross Objection of the assessee is dismissed. & CO No. 14/K/16 6 M/s. Universal Petro Chemicals Ltd
In the result, the appeal (ITA No. 88/Kol/2016) filed by the Revenue for the A.Y 2012-13 is dismissed and cross objection (C.O No. 14/Kol/2016) filed by the Assessee for the A.Y 2012-13 is dismissed. Order pronounced in the open court on 05-01-2018 Sd/- Sd/- M. Balaganesh S.S. Viswanethra Ravi Accountant Member Judicial Member
Dated :05-01-2018 PP(Sr.P.S.) Copy of the order forwarded to:
1. 1. Appellant/Revenue : Deputy Commissioner of Income Tax, Circle-10(1),P-7, Chowringhee Square, 3rd floor, Kolkata-69. 2 Respondent/Assessee: M/s. Universal Petro-Chemicals Limited, P-34, Shah House, India Exchange Place,Kolkata-1.
3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata