S.muthuraja v. Commissioner Of Income Taxcoimbatore

Dated : 22.07.2013 Coram The Honourable Mrs.Justice CHITRA VENKATARAMANandThe Honourable Ms.Justice K.B.K.VASUKI Tax Case (Appeal) Nos.449 of 2013 and 354 of 2013 --- S.Muthuraja .. Appellant in both TC (Appeals) -vs- Commissioner of Income TaxCoimbatore .. Respondent in both TC (Appeals) Tax Case Appeal No.449/2013 filed under Section 260A of the Income Tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Chennai 'C' Bench dated 31.01.2013 passed inI.T.A.No.1587/Mds/2012. Tax Case Appeal No.354/2013 filed under Section 260A of the Income Tax Act, 1961 against theorder of the Income Tax Appellate Tribunal, Chennai 'C' Bench dated 20.05.2013 passed inM.A.No.22/Mds/2013 arising out of I.T.A.No.1587/Mds/2012. For appellant : Mr.R.Janakiraman For respondent : Mr.N.V.BalajiStanding Counsel forIncome Tax Department. The following substantial questions of law are raised by the assessee in seeking admission of the TaxCase Appeal No.449 of 2013 relating to the assessment year 2009-10, preferred as against theorders of the Income Tax Appellate Tribunal, Chennai 'C' Bench dated 31.01.2013 passed inI.T.A.No.1587/Mds/2012. "1. Whether the Tribunal was right in law in confirming the order of the lower authorities inadopting the value as per Section 50C(1) without making any reference to the DVO as providedunder Section 50C(2), inspite of objection raised by the assessee for adoption of the guideline valueby the officer ? 2. Whether the Tribunal was correct in law in adopting the value as per Section 50C(1), in spite ofthe jurisdictional High Court decision holding that once objection is raised the matter shall bereferred to the District Valuation Officer ? 3. Whether the finding of the Tribunal is perverse as no finding was given in respect of thecontentions raised by the assessee ? 4. Whether the Tribunal is right in assessing the capital gains in the hands of assessee when the saleconsideration was received by assessee and his brother as co-owners of the property ? 5. Whether on the facts and in the circumstances of the case, Section 50C itself can be applied inrespect of the property under consideration as part performance was made in 2000 ?" 2. It is seen from the records filed before this Court that the assessee objected to the Assessing Officer adopting the guide-line value relating to the property sold for the sale consideration ofRs.25,60,000/= as against the guide-line value adopted by the Assessing Officer at Rs.39,63,900/-. Inthe objection letter filed by the assessee on 15.12.2011, the assessee specifically pointed out that thesale was more in the nature of distress sale and requested to confirm the actual sale considerationfor the purpose of working out capital gains. The Assessing Officer rejected 50C of the Income TaxAct, 1961 (hereinafter called as the "Act") for the purpose of working out long term capital gains. 3. Aggrieved by the same, the assessee went before the Commissioner of Income Tax (Appeals) andthereafter, before the Income Tax Appellate Tribunal. 4. A reading of the order of the Income Tax Appellate Tribunal shows that it rejected the assessee'sappeal holding that there is nothing on record to show that the assessee had disputed the saleconsideration of Rs.39,63,900/- adopted for the purposes of stamp duty taken as basis under theIncome Tax Act, thus the Assessing Officer rightly invoked Section 50C of the Act. Thus, theassessee's appeal was rejected by the Income Tax Appellate Tribunal. 5. As rightly contended by the learned counsel for the assessee, when specific objection was madeby the assessee as to the Assessing Officer adopting the market value, under Section 50C(2) of theAct, the Assessing Officer ought to have referred the valuation of the capital asset to the ValuationOfficer, whereas, the authorities below referred to Section 50C(1) of the Act alone without advertingto Section 50C(2) of the Act. 5. As rightly contended by the learned counsel for the assessee, when specific objection was madeby the assessee as to the Assessing Officer adopting the market value, under Section 50C(2) of theAct, the Assessing Officer ought to have referred the valuation of the capital asset to the ValuationOfficer, whereas, the authorities below referred to Section 50C(1) of the Act alone without advertingto Section 50C(2) of the Act. 6. A reading of the order of the Assessing Officer shows that having found such an objection, theAssessing Officer committed serious error in not adverting to Section 50C(2) of the Act, the errorproceeded throughout before every Appellate Forum, we do not find any justification in the order ofthe Income Tax Appellate Tribunal taking the view that there is nothing on record to show that theassessee had disputed the sale consideration of Rs.39,63,900/- adopted for the purpose of stampduty for the purposes of working out capital gains. In such view of the matter, the matter is restored to the files of the Assessing Officer to work out capital gains by invoking Section 50C(2) of the Act. 7. In the result, Tax Case (Appeal).No.449 of 2013 stands disposed of. No costs. 8. Tax Case (Appeal).No.354 of 2013 is filed by the same assessee raising the following substantialquestions of law in seeking admission relating to the assessment year 2009-10 as against the ordersof the Income Tax Appellate Tribunal, Chennai 'C' Bench dated 20.05.2013 passed inM.A.No.22/Mds/2013 arising out of I.T.A.No.1587/Mds/2012. "1. Whether the Tribunal was right in saying, though objection was raised in respect of the valuationof the property under Section 50C, the assessee had not asked it to be referred to the DVO ?2. Whether the finding of the Tribunal is perverse as no finding was given in respect of thecontentions raised by the assessee ? 3. Whether the Tribunal is right in assessing the capital gains in the hands of assessee when the saleconsideration was received by assessee and his brother as co-owners of the property ? 4. Whether the Tribunal was right in law in not considering the Board Circular No.14 (XL035) dated11th April 1955 saying that it is the duty of the officer to appraise the assessee of his rights providedunder the Act and not to take advantage of the ignorance of assessee? 9. In view of the order passed in Tax Case (Appeal).No.449 of 2013 setting aside the order of theIncome Tax Appellate Tribunal and restoring the matter to the files of the Assessing Officer forworking out the capital gains, nothing survives in the Tax Case (Appeal) No.354 of 2013. 10. In the result, Tax Case (Appeal).No.354 of 2013 is also disposed of on the above terms. No costs. nvsri To 1. The Commissioner of Income Tax,Coimbatore 2. The Commissioner of Income Tax (Appeals) I, Coimbatore 3. The Income Tax Appellate Tribunal, Bench 'C'Chennai