Case Law Details
Damodaran Jaishankar Vs ITO (ITAT Chennai)
The issue under consideration is whether the AO is correct in adopting land value of adjacent area, just because the colony is adjacent to a road, which has a higher guideline value is justified in law and in ignoring the specific guideline value fixed by the Government in respect of specific colony or flat?
ITAT states that. the sale deed is not a subject matter of re-valuation of the Sub-Registrar, nor is there any allegation of low stamp duty in respect of the said property by the Sub-Registrar. Guideline value listed shows that in respect of Jayanth colony specific guideline value has been fixed by the Government. The purchase deed shows the specific prescribe value. When there is a specific guideline value fixed by the Government in respect of specific colony or flat, just because the said colony or flat is adjacent to a road, which has a higher guideline value, the higher value cannot be adopted for the purpose of making an addition by invoking the provisions of section 56(2)(vii)(b)(ii) of the Act. This being so, ITAT are of the view that the addition made by the Assessing Officer is unsustainable in so far as the sale deed has been executed at the value as prescribed by the Government in respect of Jayanth colony itself. This being so, the addition made by the Assessing Officer and confirmed by the ld.CIT(A) stands deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-9, Chennai in ITA No.23/C.I.T(A)-9/2018-19 dated 27.06.2019 for the assessment year 2016-17.
2. Mr.R.Vijayaraghavan represented on behalf of the Assessee and Mr.AR.V.Sreenivasan represented on behalf of the Revenue.
3. It was submitted by the ld.AR that the assessee had purchased a flat in housing board colony in Anna Nagar, namely Jayanth colony, Chennai 600 040 vide sale deed dated 07.01.2016 for a consideration of Rs.47/- lakhs. The assessee had entered into the sale agreement for the purchase of said flat on 30.09.2015. The said Jayanth colony is adjacent to 20th Main Road, Anna Nagar, which is considered as a posh and commercial area. It was submitted that the guideline rate for Jayanth colony was Rs.6,030/- per sq.feet It was submitted that the assessee had disclosed the sale consideration at Rs.9,000/- per sq.feet. It was submitted that as the scheduled in the sale deed referred to 20th Main road, Anna Nagar scheme, the Assessing Officer applied the guideline rate in respect of the 20th Main road, which was shown at 12,000/- per sq.ft and consequently, invoked the provisions of section 56 of the Act and had made an addition by applying the provisions of section 56(2)(vii)(b)(ii) of the Act and determined the value of property at Rs.61,16,000/- resulting in addition of Rs.14,16,000/-. It was submitted that the property being in the Jayanth colony and the Jayanth colony having been given a specific guideline value, the action of the Assessing Officer in adopting the value of Rs.12,000/- per sq. feet in respect of area of 20th Main Road, Anna Nagar was not liable to be done. It was further submitted that the addition made by the Assessing Officer and confirmed by the ld.CIT(A) was liable to be deleted. It was a submission that the ld.CIT(A) has without considering the submissions of the assessee confirmed the addition as made by the Assessing Officer.
4. In reply, the ld.DR vehemently supported the orders of the authorities below.
5. We have heard the rival contentions and perused the material available on record. A perusal of the road map as shown by the assessee at page 47 of the paper book, shows that the said Jayanth colony is adjacent to 10th street and 20th main road of Anna Nagar. A perusal of the guideline value in respect of the period 01.04.2012 to 08.06.2017 shows the guideline value fixed by the State Government in respect of Jayanth colony was Rs.9,000/- per sq.feet and the same was revised downward from 09.06.2017 to Rs.6,000/- per sq.feet. Similarly, in respect of 20th main road, Anna Nagar, for the period 01.04.2012 to 08.06.2017, the guideline value prescribed is Rs.12,000/- per sq.ft, which has been revised from 09.06.2017 to Rs.8,040/- per sq.ft. Admittedly, the property has been purchased by the assessee vide sale deed dated 07.01.2016. The Purchase Deed placed at pages 20 to 30 of paper book, clearly shows that the property is in block 156, Jayanth colony, 20th Main road, Anna Nagar scheme, Chennai. The sale deed is not a subject matter of re-valuation of the Sub-Registrar, nor is there any allegation of low stamp duty in respect of the said property by the Sub-Registrar. Guideline value listed shows that in respect of Jayanth colony specific guideline value has been fixed by the Government. The purchase deed shows the specific prescribe value. In respect of 20th Main Road also, there is a guideline value fixed by the Government. When there is a specific guideline value fixed by the Government in respect of specific colony or flat, just because the said colony or flat is adjacent to a road, which has a higher guideline value, the higher value cannot be adopted for the purpose of making an addition by invoking the provisions of section 56(2)(vii)(b)(ii) of the Act. This being so, we are of the view that the addition made by the Assessing Officer is unsustainable in so far as the sale deed has been executed at the value as prescribed by the Government in respect of Jayanth colony itself. This being so, the addition made by the Assessing Officer and confirmed by the ld.CIT(A) stands deleted.
6. In the result, the appeal of the assessee is allowed.
Order pronounced on 05th November, 2019, at Chennai.
Author Bio
