Case Law Details

Case Name : Astik Mondal Vs ITO (ITAT Kolkata)
Appeal Number : ITA No. 1803/KOL/2019
Date of Judgement/Order : 29/05/2020
Related Assessment Year : 2012-13
Courts : All ITAT (7336) ITAT Kolkata (592)

Astik Mondal Vs ITO (ITAT Kolkata)

The issue under consideration is whether Fair Market Value of property determined without giving access to the DVO’s report to Assessee and without considering the Assessee’s objections is justified in law?

ITAT states that the only dispute involved in the assessee’s case relates to the determination of the indexed cost of acquisition of the assessee’s share of property sold during the year under consideration. He has submitted that the fair market value of the property as on 01.04.1981 was claimed by the assessee on the basis of actual sale instance of the comparable property but the same was not accepted by the Assessing Officer, who adopted the fair market value of the property as on 01.04.1981 on the basis of the valuation made by the Departmental Valuation Officer (DVO). He has contended that the copy of the DVO’s valuation report, however, was never given by the Assessing Officer to the assessee and even the objections raised by the assessee in respect of the valuation determined by the DVO before the ld. CIT(Appeals) were not properly considered by him. He has contended that even the sale instances relied upon by the assessee to justify the fair market value of the property as on 01.04.1981 taken by him were not properly appreciated either by the Assessing Officer or by the ld. CIT(Appeals). ITAT, therefore, find it just and proper to set aside the impugned order of the ld. CIT(Appeals) and remit the matter back to him for deciding the same afresh after giving the assessee proper and sufficient opportunity of being heard and after taking into consideration the outcome of the decision in the case of Shri Samaresh Kumar Mondal on a similar issue.

FULL TEXT OF THE ITAT JUDGEMENT

This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals), Durgapur dated 17.05.2019 and the solitary issue involved therein relates to the addition of Rs.12,84,245/- made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on account of long-term capital gain.

2. The assessee in the present case is an individual, who filed his return of income for the year under consideration originally on 05.09.2012 declaring total income of Rs.4,80,516/-. The said return was initially processed by the Assessing Officer under section 143(1) of the Act on 19.08.2013. Subsequently it was, however, noticed during the course of scrutiny proceedings of Shri Samaresh Mondal, brother of the assessee for A.Y. 2012-13 that the said Shri Samaresh Mondal and assessee had jointly sold the immovable property owned by them during the year under consideration and both of them had failed to declare the said transaction in their returns of income filed for the year under consideration. It was also noticed that the proportionate share of the assessee out of the total market value of the immovable property as certified by the Stamp Valuation Authority was Rs.13,02,661/-. On the basis of this information, the assessment of the assessee for the year under consideration was reopened by the Assessing Officer and a notice under section 148 was issued by him after recording the reasons. In response to the said notice, the return of income was filed by the assessee declaring total income of Rs.5,54,325/-, which was comprising of income from salary and income from other sources. In the computation of total income, the assessee under the head ‘capital gain’ had shown his share in the sale consideration of the immovable property at Rs.13,02,661/- and after deducting the indexed cost of acquisition claimed at Rs.16,88,927/-, long-term capital loss of Rs.3,86,266/- was shown. While examining the indexed cost of acquisition amounting to Rs.16,88,927/- claimed by the assessee, the Assessing Officer found that the fair market value of the property as on 01.04.1981 was taken by the assessee at Rs.16,550/- per Cottah on the basis of one sale instance dated 29.03.1980. According to the Assessing Officer, the said sale instance relied upon by the assessee belonged to different area and even the date of the said sale instance on 29.03.1980 was much before 01.04.1981. He, therefore, referred the property of the assessee for valuation to the Competent Authority and in the valuation report submitted to the Assessing Officer, the Competent Authority determined the fair market value of the assessee’s property as on 01.04.1981 at Rs.10,913/- per acre. By adopting the said valuation, the indexed cost of acquisition of the property was worked out by the Assessing Officer at Rs.18,416/- and after deducting the same from the assessee’s share of sale consideration amounting to Rs.13,02,661/-, long-term capital gain of Rs.12,84,245/- was assessed by the Assessing Officer in the hands of the assessee in the assessment completed under section 143(3)/147 of the Act vide an order dated 27.12.2016.

3. Against the order passed by the Assessing Officer under section 147/143(3) of the Act, an appeal was preferred by the assessee before the ld. CIT(Appeals) and since the submissions made on behalf of the assessee in support of his case on the issue under consideration relating to the addition made by the Assessing Officer on account of long-term capital gain was not found acceptable by him, the ld. CIT(Appeals) confirmed the addition made by the Assessing Officer on account of longterm capital gain. Being aggrieved, the assessee has preferred this appeal before the Tribunal.

4. I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee has submitted that the only dispute involved in the assessee’s case relates to the determination of the indexed cost of acquisition of the assessee’s share of property sold during the year under consideration. He has submitted that the fair market value of the property as on 01.04.1981 was claimed by the assessee on the basis of actual sale instance of the comparable property but the same was not accepted by the Assessing Officer, who adopted the fair market value of the property as on 01.04.1981 on the basis of the valuation made by the Departmental Valuation Officer (DVO). He has contended that the copy of the DVO’s valuation report, however, was never given by the Assessing Officer to the assessee and even the objections raised by the assessee in respect of the valuation determined by the DVO before the ld. CIT(Appeals) were not properly considered by him. He has contended that even the sale instances relied upon by the assessee to justify the fair market value of the property as on 01.04.1981 taken by him were not properly appreciated either by the Assessing Officer or by the ld. CIT(Appeals). He has contended that a similar issue involved in the case of co-owner Shri Samaresh Kumar Mondal, brother of the assessee, has already been sent back by the Tribunal to the Assessing Officer for reconsideration vide its order dated 27.06.2018 passed in ITA No. 1276/KOL/2017 and urged that the case of the assessee may also be sent to the Assessing Officer for deciding the same afresh after taking into consideration the objections raised by the assessee. A perusal of the order of the Tribunal dated 27.06.2018 passed in the case of Samaresh Kumar Mondal, however, shows that a similar issue involved in the said case in the identical facts and circumstances was remitted by the Tribunal back to the ld. CIT(Appeals) for fresh adjudication. I, therefore, find it just and proper to set aside the impugned order of the ld. CIT(Appeals) and remit the matter back to him for deciding the same afresh after giving the assessee proper and sufficient opportunity of being heard and after taking into consideration the outcome of the decision in the case of Shri Samaresh Kumar Mondal on a similar issue.

5. In the result, the appeal of the assessee is treated as allowed for statistical purposes.

Order pronounced in the open Court on May 29, 2020.

Download Judgment/Order

More Under Income Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031