Puducherry – 605 003 v. S.sithik Ali

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 09.07.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE Mrs.JUSTICE V.BHAVANI SUBBAROYAN T.C.(A) No.1017 of 2019 The Principal Commissioner of Income TaxPuducherryD.P. Thottam, MuthialpetPuducherry – 605 003. Puducherry – 605 003. .. Appellant / Respondent Vs.S.Sithik AliNo.78, Rajagopal StreetVillupuram – 605 602... Respondent / Appellant Prayer : Tax Case (Appeal) filed under Section 260A of theIncome Tax Act, 1961 against the order of the Income TaxAppellate Tribunal, Madras 'A' Bench, Chennai, dated 10.05.2019in ITA.No.195/Chny/2019, Assessment Year : 2010-2011 against theorder dated 06.09.2018 made in ITA.No.80/CIT(A)-PDY/2017-2018 onthe file of the Commissioner of Income-Tax(Appeals) Puducherry,against the order dated 08.12.2017, made in PAN/GIR.CCLPS 9628Hon the file of the Income Tax Officer, Ward, Villupuram. For Appellant : Mr.J.Narayana Swamy, Senior Counsel For Respondent : Ms.Ashokpathy for M/s.Pass Associates 1/4 https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT [Judgment of the Court delivered by T.S.SIVAGNANAM,J.] This appeal by the Revenue filed under Section 260A ofthe Income Tax Act, 1961 [the 'Act' for brevity] is directedagainst the order dated 10.05.2019, passed by the Income TaxAppellateTribunal,Madras'A'Bench,ChennaiinI.T.A.No.195/Chny/2019, for the Assessment Year 2010-2011. 2. The Tax Case appeal was admitted on 10.12.2019, on thefollowing substantial questions of law :“ 1.Is not the order of the Appellate Tribunal perverseby relying upon the Valuation Report dated 08.04.2019of the registered valuer, which in inaccurate,deficient and incomplete without giving any basis forthe adoption of higher rate of Rs.290/- per sq.ft., ason 01.04.1981 and without reference to any comparablecases? 2.Whether the Appellate Tribunal was correct infollowing that the value of the property at Rs.20/- persq.ft., as on 01.04.1981, which was adopted by theAssessing Officer based on Sub Registrar Office report,as per Section 50C of the Income Tax Act? 3. Whether the Appellate Tribunal is justified inaccepting the fresh evidence produced by the assesseenamely Registered Valuer's Report dated 08.04.2019 byignoring Rule 46A of the Income Tax Rules 1962 andwithout providing a fair opportunity to the AssessingOfficer?” 3. We have elaborately heard Mr.J.Narayana Swamy,learned Senior Counsel for the Appellant-Revenue andMr.Ashokpathy, learned counsel for the respondent-Assessee. 4. The issue involved is regarding the valuation of theproperty for the purpose of calculating the capital gain tax.The Assessing Officer determined the value of the property asRs.20/- per sq.ft., as on 01.04.1981, and held that this should 2/4 https://hcservices.ecourts.gov.in/hcservices/ 3. Whether the Appellate Tribunal is justified inaccepting the fresh evidence produced by the assesseenamely Registered Valuer's Report dated 08.04.2019 byignoring Rule 46A of the Income Tax Rules 1962 andwithout providing a fair opportunity to the AssessingOfficer?” 3. We have elaborately heard Mr.J.Narayana Swamy,learned Senior Counsel for the Appellant-Revenue andMr.Ashokpathy, learned counsel for the respondent-Assessee. 4. The issue involved is regarding the valuation of theproperty for the purpose of calculating the capital gain tax.The Assessing Officer determined the value of the property asRs.20/- per sq.ft., as on 01.04.1981, and held that this should 2/4 https://hcservices.ecourts.gov.in/hcservices/ be taken as acquisition of asset for the computation of capitalgain. The Assessee, on the other hand contended that takingnote of various transactions that had taken place in the saidarea/road, the value of the property should be taken at Rs.350/-per sq.ft., The Assessing Officer completed the assessment byorder dated 19.03.2015. However, the Principal Commissioner ofIncome Tax, Puducherry, invoked Section 263 of the Act and heldthat the order of the Assessing Officer dated 19.03.2015 waserroneous and prejudicial to the interests of Revenue andaccordingly, set aside the order of the Assessing Officer, anddirected the Officer to do the assessment afresh adopting theguideline value under Section 50C of the Act with respect to thesale value, upon which the capital gains tax has to becalculated. The Assessee did not challenge the order passedunder Sec.263 of the Act and went back to the Assessing Officer,who completed the assessment by 08.12.2017, determining the costof acquisition as Rs.20/- per sq.ft., and accordingly the longterm capital gains was worked out. The Assessee filed an appealbefore the Commissioner of Income-Tax (Appeals) Puducherry, who,by order dated 06.09.2018, rejected the appeal and confirmed theorder of the Assessing Officer. The Assessee carried the matterby way of appeal to the Tribunal. The Tribunal after carefullyconsidering the facts and also noting that upto the year 1984,the value of the property continued to remain at Rs.20/- persq.ft., and in 1984, it increased to Rs.340.30p per sq.ft., andalso taking note of the report of the approved valuer, whovalued the property at that relevant time to Rs.203/-, foundthat the said value is reasonable. The Assessing Officer, thoughin the first round agreed with the Assessee, but, on thedirections received from the Principal Commissioner of IncomeTax, Puducherry, under Sec.263 of the Act, called for theguideline value from the Sub Registrar Office and fixed the costof acquisition at Rs.20/- per sq.ft., and computed the long termcapital gains. The records which were placed before theAssessing Officer would appear to show that there were notransactions prior to 1984 and in 1984, the value was Rs.340.30pper sq.ft., The Tribunal, after considering the facts found thatit is very unrealistic that the value of the property toincrease from Rs.20/- per sq.ft., to Rs.340.30p per sq.ft.,within a span of three years. Therefore, it thought it fit toadopt the value of the registered valuer, who adopted the valueas Rs.203/- per sq.ft., This was found to be reasonable by theTribunal. 5. In the considered view of this Court, the orderpassed by the Tribunal does not suffer from any perversity, forus to examine the factual conclusion arrived at by the Tribunal,and we also find no substantial questions of law arises for 3/4 consideration in this appeal. Accordingly, the appeal fails andhence, dismissed. The order of the the Income Tax AppellateTribunal, Madras 'A' Bench, Chennai, dated 10.05.2019, passed inITA.No.195/Chny/2019, is hereby confirmed. No costs. 5. In the considered view of this Court, the orderpassed by the Tribunal does not suffer from any perversity, forus to examine the factual conclusion arrived at by the Tribunal,and we also find no substantial questions of law arises for 3/4 consideration in this appeal. Accordingly, the appeal fails andhence, dismissed. The order of the the Income Tax AppellateTribunal, Madras 'A' Bench, Chennai, dated 10.05.2019, passed inITA.No.195/Chny/2019, is hereby confirmed. No costs. -s/d- Assistant Registrar true Copy Sub-Assistant RegistrardsTo:1.The Income Tax Appellate Tribunal A Benchchennai2.The Principal Commissioner of Income TaxPuducherryD.P. Thottam, Muthialpet, Puducherry – 605 003.3.The Commissioner of Income Tax(Appeals)Puducherry.4.The Income tax OfficerWard-I, VillupuramT.C.(A) No.1017 of 2019rld(co)aa10/09/2020 4/4https://hcservices.ecourts.gov.in/hcservices/