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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
आयकर अपीलीय अिधकरण ‘ए’’ �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय �ी मनोज कुमार अ�वाल ,लेखा सद� एवं माननीय �ी मनु कुमार िग�र, �ाियक सद� के सम�। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं./ (िनधा�रणवष� / Assessment Year: 2020-21) Revathi Samuel, Vs. The Income Tax Officer, 10A, Ramakrishna Road, International Taxation 2(1) Sreerangapalayam, Chennai. Salem 636 007. [PAN: ACXPS 8637C] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/ Appellant by : Shri. G. Baskar, Advocate ��यथ� क� ओर से /Respondent by : Shri. ARV Srinivasan, Addl. CIT. सुनवाई क� तार�ख/Date of Hearing : 14.05.2024 घोषणा क� तार�ख /Date of Pronouncement : 21.05.2024 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member)
The present appeal has been filed by the assessee challenging the impugned order dated 02.11.2023, passed under section 250 of the Income Tax Act, 1961 (“the Act’) by the Ld. Commissioner of Income Tax(Appeals)[ [In short ‘Ld.CIT(A)’], Chennai-16 for Assessment Year 2020-21. The assessment order was passed by The Income Tax Officer, International Taxation 2(1), Chennai vide order dated 27.05.2022.
The following grounds of appeal are raised by the assessee:-
‘’1. DIN and Limitation 1.1. The CIT(A) having noted that the assessment order was passed without a valid Document Identification Number (DIN), ought to quashed it. 1.2. The CIT(A) ought to have seen that the Assessment Order passed not conformity with the directions of Central Board of Direct Taxes (CBDT), is wrong and liable to be annulled. 1.3. The CIT(A) misconstrued the claim of Appellant of "late making available of order in the income tax portal" as "assessment order was not sent". The CIT(A) erred in holding that the section 153(3) is directory instead of mandatory. 1.4. The CIT(A) after having noted that the order was passed beyond the period of limitation, ought to have held it a nullity.
2. Adoption of FMV of land and non-reference u/s 55A 2.1. The CIT(A) erred in upholding the rejection by the AO of the reasonable FMV adopted by the Appellant. 2.2. The CIT(A) erred in upholding reliance on the guideline value, which is held to be "not sacrosant" for valuation of land. 2.3. The CIT(A) ought to have seen that without making a mandatory reference u/s 55A, the AO can't tinker with the cost of acquisition.
3. Cost of building 3.1. The CIT(A) having accepted the presence of buildings based on the documents, erred in failing to include the cost of construction of the building for computation of capital gains. 3.2. The CIT(A) failed to note the unreasonably expectation of the AO to produce records relating back to 2 decades which is wholly illogical and improbable.
4. Cost of Improvement of building Incurred 4.1. The CIT(A)'s non-granting of cost improvement to the property on the grounds of absurdity is without appreciating the fact that the cost of Improvement constituted mere 1% to 3% of the sale consideration and is very much reasonable. 4.2. The CIT(A) falled to note the unreasonable expectation of the AO to produce records relating back to 2 decades which is wholly illogical and improbable’’.
At the outset, Ld.Counsel has prayed for withdrawal of the ground Nos.1(1.1.) & 1(1.2) relating to Document Identification Number (DIN). Hence, ground No.1 are dismissed as withdrawn.
As far as grounds No.1(1.3) & 1(1.4) are concerned, the Ld.Counsel submitted that assessment order is time barred for the reason that order u/s 143(3) dated 27.05.2022 was not available for download. Ld.Addl.CIT-DR on the contrary placed on record the order sheet datails wherein ‘Revathi Samuel.pdf’ on 27.05.2022 was very much accessible and available on record. Therefore, in view of the order sheet details filed by the revenue, we are of considered view that order u/s.143 (3) of the Act dated 27.05.2022 was uploaded on 27.05.2022 hence uphold the order of CIT(A). Accordingly, we dismiss both the grounds No.1(1.3) & 1(1.4) of the assessee.
Sans unnecessary details, brief facts of the case are that, the assessee, a non-resident individual filed her return of income on 29.12.2020 declaring total income of Rs.3,22,42,050/-. During the Financial Year 2019-20 relevant to Assessment Year 2020-21, the assessee alongwith her son Arjun Samuel had sold property No.1 admeasuring 4348 sq.ft at survey No.232, Ward C, Block 13, T.S. No.9, Perieri Village, Rmakrishna Road, Salem, Tamilnadu for the consideration of Rs.3,40,00,000/- registered on 04.02.2020. In this property share of assessee was 50%, therefore, she received Rs.1,70,00,000/- as ½ share of total consideration. Further, she sold property No.2 admeasuring 7144 sq.ft at door no.14/227, Ward C, Block-13, T.S No.4, Vidyalaya Road, Salem, Tamilnadu for the consideration of Rs.4,90,00,000/- registered on 04.02.2020. During the course of assessment proceedings assessee has filed computation of capital gain. AO not convinced with computation of assessee, computed long term capital gain in his own way. Finally, AO computed the income from LTCG at Rs.5,64,28,433/-.
Aggrieved against the order of AO u/s 143(3) r.w.s.144C(3) dated 27.05.2022, assessee filed appeal before the CIT(A). Appellant also filed submissions and contended that the AO has valued only the land and omitted to the fair market value (FMV) of the building as on 01.04.2001. Therefore, the AO may kindly be directed to accept the FMV of the buildings also for the purpose of computation of capital gains. Ld.CIT(A) vide his order dated 02.11.2023 has upheld the order of AO and dismissed the appeal of the assessee. While dismissing appeal Ld.CIT(A) observed as under: ‘’6.1 After perusal of the rival contentions, the Assessing Officer's adoption of the value of the land at Rs.414/- sq.ft as per guideline value is tangible and is based on a statutory valuation. The sale deeds do document the presence of buildings but there was no evidence whatsoever to show the year of construction of these buildings. There is also no basis for the appellants value of the cost of acquisition of land and building @ Rs.34,78,400/- and FMV of the second property @ Rs.85,72,800/-. Thus, as there is no documentary evidence with respect to the construction of building except for a general estimate, this Ground of Appeal is dismissed’.
On the issue of cost of improvement, assessee has filed paper book containing 120 pages wherein in details were furnished. However, Ld.CIT(A) did not convince with arguments of the assessee held as under:- ‘’But the appellant has not tried to work out the basis for adoption of FMV of both the properties nor the basis for improvement costs. In absence of assigning any value to the buildings constructed, granting of improvement on the same appears absurd. Thus, ground of appeal no.9 also stands dismissed’’.
7. Aggrieved by the order of the Ld. CIT(A), the assessee preferred an appeal before the Tribunal.
8. Before us, Ld. Counsel for the assessee argued that while computing capital gain, AO should have taken FMV as the value of land and building both as on 01.04.2001 instead of land only. Further, he has adopted the same submissions which were taken before the Ld.CIT(A).
9. Per contra, the Ld.Addl. CIT-DR has relied upon the order of the Ld.CIT(A) and prayed for the dismissal the appeal of the assessee.
We have heard the rival contentions of the parties, perused the orders of lower authorities and material available on record. We are convinced by submissions of the Ld.Counsel that AO should have taken FMV as the value of land and building both as on 01.04.2001 instead of land only. Therefore, we direct the AO to examine all the evidences furnished by the assessee in respect of cost of improvement, cost of acquisition of land and building both as on 01.04.2001 for the purpose of computation of capital gains. The assessee is also directed to assist and cooperate ld. CIT(A) in respect of her claim so that AO can compute capital gains accordingly.
In the result, the appeal of the assessee in 2020-2021 is allowed for statistical purposes.
Order pronounced in the open court on 21st day of May, 2024 at Chennai.