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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRIPAWAN SINGH, JM &DR. A.L.SAINI, AM
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRIPAWAN SINGH, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.706/SRT/2018 (िनधा�रणवष� / Assessment Year: (2012-13) (Virtual Court Hearing) Mukesh A Patel Income Tax Officer, Ward-6, Vapi Ambalal Ni Wadi, Station Road, Vs. Nr. College Killa Pardi, Valsad �थायीलेखासं./जीआइआरसं./PAN/GIR No.: BJHPP 0041 D (Appellant ) (Respondent)
Assessee by : Shri Surji D Chheda, C.A Respondent by : Shri Deependra Kumar– Sr.-DR
सुनवाईकीतारीख/ Date of Hearing : 27/04/2022 घोषणाकीतारीख/Date of Pronouncement : 27/06/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2012- 13, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals) Valsad [‘CIT(A)’ for short], dated 14.08.2018, which in turn arises out of an order passed by the Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’), dated 31.03.2016.
The grounds of appeal raised by the assessee are as follows:-
“A. NOTICE u/s 148: BAD & ILLEGAL 1. The ld. CIT(A) has erred in law & in facts in confirming action of AO to issue notice u/s 148 of the Act which is bad & illegal and the appellant prays that notice u/s 148 and consequent assessment be quashed. 2. The learned CIT(A) has erred in law and in facts to confirmation of AO for issue of notice u/s 148 even when no amount of escapement of income was recorded in recorded reasons. B. ENHANCEMENT
ITA No.706/SRT/2018 A.Y. 12-13 Mukesh A Patel
1.The learned CIT(A) has erred in law and in facts by enhancing assessment by Rs.17,57,238/-. 2. The learned CIT(A) has erred in enhancing assessment on issue which can be done only by issue of notice u/s 148 or revision u/s 263. C. ADDITION OF Rs.35,33,081/- AS LTCG 1. The learned CIT(A) has erred in law & in facts to confirm the action of the AO to make addition of Rs.35,33,081/- as LTCG by adopting different cost of acquisition than claimed by the appellant. 2. The learned CIT(A) has erred in law & in facts in confirming the action of the learned AO of completely ignoring the approved valuer’s reports without any reason stated in assessment order & relied on of rate of property which is not at all comparable with the appellant’s property. 3. The learned CIT(A) has erred in laws & in facts to confirm the action of the learned AO to substitute its own value as on 01/04/1981 on the basis of sales instances which are not comparable with appellant’s property and failure of the learned AO to consider objection raised by the appellant. D. General 1. The appellant leaves the right to amend, add or alter the ground at the time of regular hearing.”
Further, assessee has filed following additional grounds of appeal, which is reproduced below: “1. The learned AO has erred in law and in facts to refer the matter to the DVO u/s 55A and failed to appreciate the fact that reference is illegal & invalid as reference can be made only when the AO is of the opinion that the value of capital asset claimed by the assessee is less than its fair market value & not when he was of the opinion that the fair market value as on 1/4/81 was more than fair market value and the amended provision being applicable from1.7.12 is not applicable for AY 2012-13. 2. The learned AO has erred in law & in facts to do the assessment u/s 143(3) instead of section 144 when no return was filled by the appellant in response to notice u/s 148 and the observation of the AO in the assessment order that assessee has filed return of income on 10.04.2015 is incorrect as the assessee had filed mere reply stating the reasons for not filing the return vide letter dated 10.04.2015 and the appellant prays that assessment may be annulled and set aside.”
ITA No.706/SRT/2018 A.Y. 12-13 Mukesh A Patel The additional grounds being legal grounds the appellant may be permitted to raise and the assessment may be adjudicated. I am praying that if there is any delay in filing the additional grounds, the same may be condoned. I am relying on the ratio of following judgments for raising the additional grounds: Ahmedabad Electricity Co. Ltd. Vs., CIT 199 ITR 351 (Bom) Jute Corporation of India Ltd Vs. CIT(A) 187 ITR 688 (SC) National Thermal Power Co. Ltd. vs. CIT 229 ITR 383 (SC)”
4.Although, the assessee has raised multiple grounds of appeal, however at the time of hearing, the solitary grievance of the assessee has confined to the additional ground No.1. The ld Counsel pointed out that prior to 1st July, 2012, Assessing Officer cannot make reference to the Valuation Officer, where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the assessing officer is of the opinion that the value so claimed “is less than its fair market value”. The ld Counsel submits that value determined by the Registered Valuer of assessee is not less than its fair market value. That is, Ld. Counsel for the assessee submits that assessee sold the asset on 15.07.2011 which is prior to 01.07.2012 and District Valuation Officer has determined the cost of acquisition @ 34.58 per square meter. However, assessee’s registered value had determined the cost of acquisition at Rs.80 per sq.meter, which is more than the value determined by the District Valuation Officer. Therefore, Ld. Counsel contended that it is purely a legal issue, therefore, additional grounds raised by the assessee may be admitted.
On the other hand, ld DR objected the prayer of the assessee for admission of additional ground. We have heard both the parties and note that additional ground raised by the assessee is purely a legal issue which goes to the root of the matter and all facts are available on assessment record, therefore, we admit the additional ground raised by the assessee for adjudication.
ITA No.706/SRT/2018 A.Y. 12-13 Mukesh A Patel
We note that issue raised by the assessee in the additional grounds of appeal is squarely covered by the order of the Co-ordinate Bench of ITAT Surat in the case of Swami Satyananda, in ITA No.1614/Kol/2018, Assessment Year: 2012-13, wherein the Coordinate Bench held as follows:
“6. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other material available on record. Before us, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld Counsel relied on the submissions made before the authorities below. The issue which needs to be addressed by us is that for the purpose of computation of long term capital gain, the value of immovable property determined by the District Valuation Officer as on 01.04.1981 at Rs. 5,82,083/- should be adopted or valuation done by Registered Valuer of the assessee at Rs. 18,51,000/- should be adopted? First of all, let us go through the provisions of section 55A of the Income tax Act 1961, which reads as follows:
“Section 55A:Reference to Valuation Officer. 55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the [Assessing] Officer may refer the valuation of capital asset to a Valuation Officer— (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the [Assessing] officer is of opinion that the value so claimed [is at variance with its fair market value]; (b) in any other case, if the [Assessing] Officer is of opinion— (i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf ; or (ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do, and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub-section (1) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the [Assessing] Officer under sub-section (1) of section 16A of that Act. Explanation.—In this section, "Valuation Officer" has the same meaning, as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).] Page | 4
ITA No.706/SRT/2018 A.Y. 12-13 Mukesh A Patel
We note that section 55A(a) was amended by the Finance Act 2012, with effect from 01.07.2012. Prior to 01.07.2012, section 55A(a) reads as follows:
“Section 55A:Reference to Valuation Officer. 55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the [Assessing] Officer may refer the valuation of capital asset to a Valuation Officer— (a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the [Assessing] Officer is of opinion that the value so claimed [is less than its fair market value];
We note that amended provisions of section 55A(a) is applicable from 01.07.2012, that is, (previous year 01.07.2012 to 31.03.2013) for assessment year 2013-14 onwards. Whereas the assessee sold the property on 21.07.2011, therefore amended provisions of section 55A(a) does not apply to the assessee under consideration. In assessee`s case the assessment year is A.Y. 2012-13 whereas amended provisions of section 55A(a) of the Act are applicable from A.Y. 2013-14. Hence, pre-amended section 55A(a) is applicable to the assessee wherein the terminology used is “is less than its fair market value” . We note that assessee`s qualified Registered Valuer of Income Tax had valued the property at fair market value on 01.04.1981 at Rs. 18,51,000/- which is not less than the fair market value done by the District Valuation Officer of Income Tax Department at Rs.5,82,083/-. Based on the position in law as explained above, we direct the assessing officer to take the fair market value of the property as on 01.04.1981 at Rs. 18,51,000/- for the purpose of computation of long term capital gain. 7. In the result, the appeal of the assessee is allowed.”
As the issue is squarely covered in favour of assessee by the decision of this combination in the case of Swami Satyananda, (supra).Therefore respectfully following the binding decision of this Co-ordinate Bench, we direct assessing officer to take indexed cost of acquisition of asset at Rs.80 per sq.meter, for the purpose of computation of long term capital gain.
In the result, appeal of the assessee is allowed.
ITA No.706/SRT/2018 A.Y. 12-13 Mukesh A Patel
Before parting, we would make it clear that since we have adjudicated the issue in favour of assessee, taking into account the additional grounds raised by assessee, therefore, other grounds raised by the assessee become infructuous and academic, hence we do not deal with them.
Order is pronounced on 27/06/2022 by placing the result on the Notice Board.
Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 27/06/2022 Dkp Outsourcing Sr.P.S. Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat