Income Tax Appellate Tribunal - Jaipur
Shri Kailash Chand Agarwal, Jaipur vs Assistant Commissioner Of Income Tax, ... on 30 December, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"A" JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA. No. 846/JP/2017
fu/kZkj.k o"kZ@Assessment Year : 2013-14
Shri Kailash Chand Agarwal cuke The ACIT,
G-6-7, Road No. 9, Vijay Badi, Vs. Circle-4,
Sikar Road, Jaipur. Jaipur.
ToLFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABPPA 5346 D
vihykFkhZ@Appellant izR;FkhZ@Respondent
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s Assessee by : Shri Vedant Gupta (C.A.)
jktLo dh vksj ls@ Revenue by : Shri K.C. Gupta (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 04/12/2019
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 30/12/2019
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-II, Jaipur dated 15.09.2017 for the Assessment Year 2013-14 wherein the assessee has taken the following grounds of appeal:
"1. On the facts and circumstances of the case & in law, Ld. Lower authorities grossly erred in taking sale value as per section 50C at Rs. 11,45,000/- instead of Rs. 6,75,000/- as sale value ignoring the value assessed by registered valuer at Rs. 6,60,880/.
2. On the facts and circumstances of the case & in law, Ld. Lower authorities grossly erred in relying upon the report of DVO made 2 ITA No. 846/JP/2017 Shri Kailash Chand Agarwal vs. DCIT on the basis of CPWD rates as it is a settled law that State PWD rates should be adopted. Moreover Ld Lower authorities did not consider the objections filed by the assessee in regards to repot of DVO."
2. Briefly the facts of the case are that the assessment in this case was completed U/s 143(3) of the Act dated 29.12.2015. During the course of assessment proceedings, the Assessing Officer observed that the assessee has shown sale consideration of three shops at Rs. 6,75,000/- being his 1/3 share out of total sale consideration of Rs. 20,25,000/- whereas the Sub-Registrar has valued these three shops at Rs. 39,65,418/- and the assessee's share comes to Rs. 13,21,806/-. The assessee was issued a show cause as to why the value should not be taken as per Section 50C at Rs. 13,21,806/- to which the assessee objected and submitted that the matter may be referred to the valuation officer for determination of fair market value. Thereafter, the AO referred the matter to valuation Officer on 05.08.2015 for determination fair market of the assets as on 01.02.2013. The Valuation Officer submitted his report dated 05.10.2015 estimated the value of shops at Rs. 11,94,402/- and based on objection filed by the assessee, subsequently revised and finalized the value of the shops at Rs. 11,45,000/- vide his report dated 30.10.2015. Against the said valuation, the assessee again filed an objection before the Valuation Officer and thereafter before the Assessing Officer. In its objection before the AO, the assessee submitted copy of the valuation report by a registered valuer. It was further submitted that the value of the shops are determined by the Valuation Officer based on the DLC rate whereas the value has to be 3 ITA No. 846/JP/2017 Shri Kailash Chand Agarwal vs. DCIT determined as per fair market value i.e. amount which the property can fetch in the open market based on its location. It was submitted that the Valuation Officer has not taken into consideration the fact that the shops of the assessee are situated just in front of the railway bridge and due to such railway bridge, commercial value of shops has come down drastically. In support, the copy of the letter No. 11/8601 issued from the office of the Collector, Sikar regarding acquisition of land for proposed over bridge under the Central Land Acquisition Act was submitted. It was further submitted that the valuation Officer has taken value of construction of the three shops as per CPWD rate whereas it should be valued as per PWD rate a position which has been accepted by the Hon'ble Rajasthan High Court in case of CIT vs. Shri Prem Kumar Mardhiya 216 ITR 508. It was further submitted that the comparable case of sale of shops was also not considered by the Valuation Officer. The objections so filed by the assessee were considered but not found acceptable to the Assessing Officer. As per the Assessing officer, he is not a technical person to value the shops and the determination of the valuation is final as per report of Valuation officer and undersigned has no authority to interfere in the valuation so made by the Valuation Officer . Further the valuation done by the Registered valuer has no sanctity once the valuation has been done by the Valuation Officer. Accordingly, he adopted sale consideration of shops at Rs. 11,45,000/- and long term capital gain on sale of shops was determined at Rs. 10,85,000/- after providing deduction for indexed cost of acquisition.
3. Against the said findings, the assessee filed an appeal before the ld. CIT(A). The ld CIT(A) rejected the submission of the assessee 4 ITA No. 846/JP/2017 Shri Kailash Chand Agarwal vs. DCIT holding that adequate opportunity has been granted at the time of valuation and the valuation has been done by the valuation officer as per the prescribed and approved method. Therefore, the action of the AO was upheld. Against the said findings, the assessee is in before us.
4. During the course of hearing, the ld. AR reiterated the submissions made before the lower authorities. It has submitted that though the valuation report is binding on the AO, however, the ld. CIT(A) being the appellate authority could have been considered the objections so filed by the assessee and the matter could have been referred to the Valuation Officer for consideration of the objections so raised by the assessee. In support, reliance was placed on the decision of the Tribunal in case of Smt Vimla Devi Samariya vs ITO (ITA No. 348/JP/2018 dated 11.07.2019). It was further submitted that firstly the valuation has been done by the valuation Officer applying the DLC rate and not as per fair market value and the fact that the shops were situated near the limits of railway over bridge was not considered because of which the value of the shops had come done drastically. It was further submitted that it is now a settled proposition that the PWD rates have to be considered by the Valuation Officer as there is not dispute that the property lies in case of State of Rajasthan and in support reliance was placed on the decision of Hon'ble Supreme Court in case of CIT vs. Sunita Mansingha (Civil Appeal No. 3064/2007 dated 29.03.2017).
5. Per contra, the ld. DR submitted that once the valuation officer has submitted his report to the Assessing officer, the latter is guided by 5 ITA No. 846/JP/2017 Shri Kailash Chand Agarwal vs. DCIT the said report and cannot entertain any further objections raised by the assessee. It was further submitted that various objections raised by the assessee relating to fall in value of the shops due to railway overbridge, adoption of CPWD rates have been duly considered by the Valuation officer and our reference was drawn to report of the Valuation officer dated 30.10.2015 wherein the valuation report has commented on each of the objections raised by the assessee and has finally determined the value of the shops at Rs 11,45,000. He accordingly submitted that there is no infirmity in the order of the lower authorities and the same should be confirmed.
6. We have heard the rival contention and perused the material available on record. It is a settled legal proposition that the DVO report is binding on the Assessing Officer but once the matter is before the appellate authority and the assessee is aggrieved with the report of the DVO, the appellate authority should have considered the assessee's objections and should not have been guided solely by the report of the DVO. In the instant case, the ld AR has raised two specific objections. First objection relates to determination of fair market value as against DLC value and the fall in the fair market value especially due to the fact that the shops of the assessee are situated just in front of the railway bridge and due to such railway bridge, commercial value of shops has come down drastically. We find that the said objection has been duly considered and addressed by the DVO in its report dated 30.10.2015. In his report, the DVO has stated that the shops are situated on main 100 feet wide road having all commercial amenities and regarding railway bridge, the assessee has not provided any alignment map/route 6 ITA No. 846/JP/2017 Shri Kailash Chand Agarwal vs. DCIT map of bridge and at present, the work is stopped and as on date of sale, the bridge is not in existence. The said findings of the DVO remain uncontroverted before us and we therefore don't find any justifiable reason to interfere with the said findings of the DVO and the first objection is hereby dismissed. Regarding the other objection raised by the ld AR regarding adoption of CPWD rates as against PWD rates, we agree with ld AR that where the shops are situated in the jurisdiction of state PWD, State PWD rates should be applied for estimation of cost of construction of shops. The same is the consistent position of this Bench following the decision of Hon'ble Supreme Court in the case of CIT Vs. Sunita Mansingha (supra) including the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Hotel Joshi (242 ITR 478). In absence of any contrary precedent brought to our notice, we direct the adoption of state PWD rates for determination of cost of construction of shops and to this limited extent, the matter is remanded to the file of AO/DVO to determine the value of the shops after considering state PWD rates. Thus, first ground of appeal is dismissed and the second ground of appeal is allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 30/12/2019.
Sd/- Sd/-
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(Vijay Pal Rao) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 30/12/2019.
7 ITA No. 846/JP/2017
Shri Kailash Chand Agarwal vs. DCIT
*Santosh
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Kailash Chand Agarwal, Jaipur.
2. izR;FkhZ@ The Respondent- ACIT, Circle-4, Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File { ITA No. 846/JP/2017} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar