Asad Cassim, Chennai vs Assessee
- CitationITA No.1822/Mds/2014
Ratio decidendi
The rule this decision rests on
The Tribunal condoned a delay of 85 days in filing the appeal, holding that an affidavit stating the change of authorised representative as the cause of delay, which the Revenue did not controvert, was sufficient to accept the explanation for the delay. Where the Assessing Officer has invoked Section 50C and adopted a guideline value, but the actual consideration is disputed and the Department's valuation evidence is shown to be unreliable as applied to the asset, the fair market value of the capital asset as on the date of transfer is determined by the Tribunal on the record, reasoning from comparable sale instances in the same locality and survey series, the sale-deed price, and the guideline-value position, and fixing an intermediate value where neither the declared price nor the Department's rate is accepted in full.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
ी ए. मोहन अलंकामणी, लेखा सद य एवं ी एस.एस. गोदारा, या#यक सद य केसम$
BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER
आयकर अपील सं./ITA No.1822/Mds/2014 #नधा%रण वष% / Assessment Year : 2006-07
Shri Asad Cassim, The Assistant Commissioner of P-21/B, 3rd Main Road, v. Income Tax, Anna Nagar, Chennai - 600 040. Business Circle III, Chennai - 600 034. PAN : ADKPA 2015 L (अपीलाथ)/Appellant) (+,यथ)/Respondent)
अपीलाथ) क- ओर से/Appellant by : Shri Anil Nair, CA +,यथ) क- ओर से/Respondent by : Shri P. Radhakrishnan, JCIT
सन ु वाई क- तार ख/Date of Hearing : 26.02.2015 घोषणा क- तार ख/Date of Pronouncement : 11.03.2015
आदे श /O R D E R
PER S.S. GODARA, JUDICIAL MEMBER:
This assessee's appeal for assessment year 2006-07
arises from order of the Commissioner of Income Tax (Appeals)-
III, Chennai, dated 13.11.2013 passed in ITA No.441/2013-14,
assessing value of the capital asset sold at `98,23,000/- against
-2- I.T.A. No. 1822/Mds/2014
` 65,00,000/- declared, in proceedings under Section 143(3) of
the Income-tax Act, 1961 (in short 'the Act').
2. The case file reveals that the present appeal is time
barred by delay of 85 days in filing. The assessee filed an
affidavit dated 25.06.2014 praying for condonation. It is stated
therein that he has changed his authorized representative
causing delay in collection of necessary documents. The
Revenue fails to controvert these solemn affirmations.
Therefore, we accept the assessee's affidavit and condone delay
of 85 days in filing. The case is taken up on merits for disposal.
3. The assessee co-owned a property consisting of land and
building measuring 2200 sq.ft. at OS No.34, RS No.291, Block
No.8, Triplicane-Mylapore Division, Chennai (hereinafter 'the
capital asset'). All of the co-owners sold this asset on
20.03.2006 for `65,00,000/-. The assessee would admit an
income of `15,16,793/- including long term capital gains of
`9,63,875/- as per the actual sale price. The same was
'summarily' processed. Thereafter, the Assessing Officer framed
a regular assessment on 30.12.2008, invoked Section 50C,
-3- I.T.A. No. 1822/Mds/2014
adopted guideline value of `95.20 lakhs as market value of the
asset sold and computed long term capital gains of `15,17,707/-.
4. The assessee preferred an appeal. The CIT(Appeals)
referred the case for valuation. The DVO submitted a report.
The CIT(Appeals) confronted contents thereof to the assessee
and dismissed his appeal as under:-
"6.4 In response to the same, Mr. Asad Cassim along with Mr. Mani Mohan appeared and filed their objections to the valuation officer's report vide letter 30.10.2013. Further, he filed a copy of the sale deed dated 20.03.2006. As admitted by Mr. Asad Cassim in his letter dated 30.10.2013 at para 1 "....... the property was sold on 20.03.2006 and yet the valuation officer has arbitrarily adopted a value of `4000/- per sq.ft. instead of `1843 per sq.ft. (This point escaped my attention while reply to the valuation officer). First, the assessee contents that the A.O. adopted wrong value and requests for referring to valuation officer and then he states that the point escaped his attention. Even in the statement of facts filed along with the appeal, it is noticed that the appellant showed a Long Term Capital Gain of ` 963875/- which was subsequently revised to ` 1517707/-. In fact, the objections of the appellant about the lack of original documents has been considered by the valuation officer in his report and has commented at page 3 of the said valuation report, in reply to objection No.4: "No documentary evidence have been furnished. Hence, the said aspect cannot be considered". Further, as notice from the true copy of the sale deed given by the appellant at page 17 of the said copy mentioned as Annexure 1A, the following details are mentioned:
Stamp Duty paid on:
Land Value : 78,72,120/- Building value : 16,48,780/- Total : 95,20,000/- -4- I.T.A. No. 1822/Mds/2014
Hence, the A.O. was justified in arriving at the value of ` 95.20 lakhs for the said property as against the realized sale value. It was on the appellant request the matter was referred to valuation officer being a technical export and the value arrived at by such authority has to be taken.
Hence, the value of the said property is taken as ` 98.23 lakhs. The A.O. is directed to rework the capital gain accordingly. Appeal dismissed."
This leaves the assessee aggrieved.
5. We have heard both sides and records perused. The
question that arises from the divergent arguments of the parties
is that of valuation of the capital asset sold on 20th March, 2006.
The assessee justifies its price to be `65,00,000/- as per sale
deed. The Revenue's stand is in support of the CIT(Appeals)'s
order relying on DVO's report quoting its value as `98.23 lakhs
@ `4000/- per sq.ft. The Assessing Officer adopted guideline
value u/s 50C of the Act to determine the asset's value at `95.20
lakhs. The case record reveals that the guideline value of the
property sold was `1843/- per sq.ft. upto 31.07.2007.
Thereafter, it stood revised to `5430/- per sq.ft. We reiterate that
the impugned sale deed is dated 20.03.2006. It is evident that
various sale deeds executed between 20.07.2005 to 20.03.2006
per square feet rates of survey nos.289, 267, 292, 293 and 294
-5- I.T.A. No. 1822/Mds/2014
in the very area are between `597 to `783/-. The assessee's
survey number is 291. However, he fails to produce site plan
demonstrating proximity of the above survey numbers. The fact
also remains that since these numbers are in the same series, a
reasonable inference can be drawn that they are situated near to
each other. We deem it appropriate to observe that a crucial
aspect ascertaining fair market value at an exorbitant rate of
`4000/- per sq.ft. can't also be altogether ignored. In these
peculiar circumstances, we apply thumb rule and feel that larger
interest of justice would be met in case the impugned value of
the capital asset is fixed somewhere between `65 lakhs (stated
in the sale deed) and `98.23 lakhs (DVO's rate) is to `80 lakhs.
It is made clear that such valuation issue is always a subjective
dispute not involving any rigid parameter. Thus, the Assessing
Officer is directed to pass a consequential order treating the fair
market value of the assessee's asset sold as `80 lakhs as on
20.03.2006 and compute long term capital gains in question
accordingly.
6. The assessee's appeal is partly allowed.
-6- I.T.A. No. 1822/Mds/2014
Order pronounced on Wednesday, the 11th of March,
2015 at Chennai.
sd/- sd/- (A.Mohan Alankamony) (S.S. Godara) (ए. मोहन अलंकामणी) (एस.एस. गोदारा) लेखा सद य/Accountant Member या#यक सद य/Judicial Member
चे नई/Chennai, th 3दनांक/Dated, the 11 March, 2015.
Kri.
आदे श क- +#त5ल6प अ7े6षत/Copy to: 1. अपीलाथ)/Appellant 2. +,यथ)/Respondent
3. आयकर आयु8त (अपील)/CIT(A)-III, Chennai-34
4. आयकर आयु8त/CIT, Chennai-III, Chennai-34
5. 6वभागीय +#त#न ध/DR
6. गाड% फाईल/GF.
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