Income Tax Appellate Tribunal - Panji
Parvatabai Dada Kharate, Nashik vs Assistant Commissioner Of Income-Tax, ... on 30 November, 2017
आयकर अपीलीय अिधकरण,
अिधकरण पुणे यायपीठ "बी
बी"
बी पुणे म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM
आयकर अपील सं . / ITA No.1592/PUN/2017
िनधारण वष / Assessment Year : 2009-10
Bhagirathibai Sonu Bhagare,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : BTRPB7772B .... अपीलाथ /Appellant
Vs.
Dy. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
आयकर अपील सं . / ITA No.1593/PUN/2017
िनधारण वष / Assessment Year : 2011-12
Arjun Dada Kharate,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : BCMPK8087Q .... अपीलाथ /Appellant
Vs.
Asst. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
आयकर अपील सं . / ITA No.1595/PUN/2017
िनधारण वष / Assessment Year : 2009-10
Balu Vitthal Kharate,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : BEYPK5261C .... अपीलाथ /Appellant
Vs.
Dy. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
आयकर अपील सं . / ITA No.1602/PUN/2017
िनधारण वष / Assessment Year : 2011-12
Parvatabai Dada Kharate,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : DDZPK2026K .... अपीलाथ /Appellant
2
Bhagirathibai S. Bhagare & others
Vs.
Asst. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
आयकर अपील सं . / ITA No.1604/PUN/2017
िनधारण वष / Assessment Year : 2009-10
Usha Vitthal Kharate,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : BGHPK9776M .... अपीलाथ /Appellant
Vs.
Dy. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
आयकर अपील सं . / ITA No.1605/PUN/2017
िनधारण वष / Assessment Year : 2011-12
Usha Vitthal Kharate,
H.No.894/3, Gandharvawadi,
Near Forest Nursery Canal,
Makhmalabad, Nashik - 422013
PAN : BGHPK9776M .... अपीलाथ /Appellant
Vs.
Asst. Commissioner of
Income Tax, Circle-1, Nashik .... थ / Respondent
Assessee by : Shri Pramod Shingte
Revenue by : Shri Mukesh Jha
सुनवाई क तारीख/ घोषणा क तारीख /
Date of Hearing : 29.11.2017 Date of Pronouncement: 30.11.2017
आदेश / ORDER
PER SUSHMA CHOWLA, JM:
The above bunch of appeals filed by different assessees are against the separate orders of CIT(A)-I, Nashik, all dated 05-04-2017 relating to different assessment years against respective orders passed under section 143(3) r.w.s.147 of the Income-tax Act, 1961 (in short 'the Act').
2. The bunch of appeals relating to different assessees were heard together and are being disposed of by this consolidated order for the sake of convenience. 3
Bhagirathibai S. Bhagare & others However, in order to adjudicate the issue reference is being made to facts and issues in ITA No.1592/PUN/2017.
3. The assessee has raised the following grounds of appeal :
"1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Appeal)-I, Nashik, is not justified in confirming the action of the AO of making reference for valuation of property to the DVO u/s.55A of the Act.
2. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax (Appeal)-I, Nashik, is not justified in confirming the addition of Rs.2,54,869/- made by the AO on account of Long Term Capital Gain by confirming the substitution of the valuation of DVO as on 01-04-1981 against the valuation, adopted by the appellant of agriculture land situated at Gat No.150, Makhmalabad, Nashik.
3. The Appellant craves for addition to, deletion, alteration, modification, change any of the grounds."
4. Briefly, in the facts of the case, the assessee during the year under consideration had shown income from long term capital gains in the return of income filed in response to notice under section 148 of the Act. The assessee along with other five members had sold agricultural land situated at Gat No. 150 & 151, Makhmalabad, Nashik to Suyojit Group for a total consideration of Rs.24,50,000/-. The said land was situated within 8 kilometres of the municipal limits and hence gain arising out of sale of capital asset was chargeable to tax. Since the land was ancestral land, the assessee took the fair market value of the said asset as on 01-04-1981 as per the report of approved valuer at Rs.27,59,320/-. The Assessing Officer did not accept the said valuation and made a reference to the Departmental Valuation Officer (in short 'DVO') to determine the fair market value of the said land as on 01-04-1981. The AO determined the income from capital gain and made addition of Rs.2,54,869/-.
5. The said addition was upheld by the CIT(A) holding that the amendment to section 55A by the Finance Act, 2012 came into effect on 01-07-2012. The Assessing Officer in the present facts had made a reference to the DVO on 14-11-2013, i.e. after the amendment. The CIT(A) held the same to be as per the provisions of the Act. The assessee had relied on the ratio laid down by the Hon'ble 4 Bhagirathibai S. Bhagare & others Bombay High Court in the case of CIT Vs. Puja Prints 360 ITR 697 (Bom.) wherein the reference was made under section 55A of the Act, much before 01-04-2012 and hence it was held by the CIT(A) that the said ratio was not applicable.
6. The assessee is in appeal against the order of the CIT(A).
7. The Ld. Authorised Representative for the assessee pointed out that the issue raised in the present appeal is squarely covered by the judgment of the Hon'ble Bombay High Court in the case of CIT Vs. Puja Prints (supra) and the same principle has been applied by the Pune Bench of the Tribunal in the case of ACIT Vs. Shri Bhima Dada Kharate in ITA No. 1582/PUN/2015 for the assessment year 2009-10, order dated 31-10-2017.
8. The Ld. Departmental Representative for the Revenue on the other hand heavily relied on the order of the CIT(A).
9. We have heard the rival contentions and perused the record. The issue which arises in the present bunch of appeals is against the determination of fair market value as on 01-04-1981 in order to compute the income from long term capital gains on sale of ancestral agricultural land, in the hands of the assessee. The assessee had adopted the said cost of acquisition on the basis of the report of the registered valuer. However, the Assessing Officer was of the view that the said cost of acquisition declared by the assessee was higher and a reference was made to the DVO to ascertain the fair market value as on 01-04-1981. The DVO has determined the value as lower than the value declared by the assessee on the basis of the report of the registered valuer. The issue which arises before us is as to whether under section 55A of the Act such a reference can be made in order to determine the fair market value as on 01-04-1981, which is lower than the value declared by the assessee in the computation of income.
10. We find that similar issue arose before the Tribunal in the case of related parties. We make reference to the order of the Tribunal in the case of ACIT Vs. Shri 5 Bhagirathibai S. Bhagare & others Bhima Dada Kharate (supra) wherein after relying on the ratio laid down by the Hon'ble Bombay High Court in the case of CIT Vs. Puja Prints (supra), the Tribunal held as under :
"6 . We have considered the rival submissions. We find that the impugned order dated 18 February, 2011 allowing the respondent assessee's appeal holding that no reference to the Departmental Valuation Officer can be made under Section 55A of the Act, only follows the decision of this Court in the matter of Daulal Mohta HUF (supra). The revenue has not been able to point out how the aforesaid decision is inapplicable to the present facts nor has the revenue pointed out that the decision in Daulal Mohta HUF (supra) has not been accepted by the revenue. On the aforesaid ground alone, this appeal need not be entertained. However, as submissions were made on merits, we have independently examined the same.
7. We find that Section 55A(a) of the Act very clearly at the relevant time provided that a reference could be made to the Departmental Valuation Officer only when the value adopted by the assessee was less than the fair market value. In the present case, it is an undisputed position that the value adopted by the respondent-assessee of the property at Rs.35.99 lakhs was much more than the fair market value of Rs.6.68 lakhs even as determined by the Departmental Valuation Officer. In fact, the Assessing Officer referred the issue of valuation to the Departmental Valuation Officer only because in his view the valuation of the property as on 1981 as made by the respondent-assessee was higher than the fair market value. In the aforesaid circumstances, the invocation of Section 55A(a) of the Act is not justified.
8. The contention of the revenue that in view of the amendment to Section 55A(a) of the Act in 2012 by which the words "is less then the fair market value" is substituted by the words " "is at variance with its fair market value"
is clarifactory and should be given retrospective effect. This submission is in face of the fact that the 2012 amendment was made effective only from 1 July 2012. The Parliament has not given retrospective effect to the amendment. Therefore, the law to be applied in the present case is Section 55A(a) of the Act as existing during the period relevant to the Assessment Year 2006-07. At the relevant time, very clearly reference could be made to Departmental Valuation Officer only if the value declared by the assessee is in the opinion of Assessing Officer less than its fair market value.
9. The contention of the revenue that the reference to the Departmental Valuation Officer by the Assessing Officer is sustainable in view of Section 55A(a) (ii) of the Act is not acceptable. This is for the reason that Section 55A(b)of the Act very clearly states that it would apply in any other case i.e. a case not covered by Section 55A(a) of the Act. In this case, it is an undisputable position that the issue is covered by Section 55A(a) of the Act. Therefore, resort cannot be had to the residuary clause provided in Section 55A(b)(ii) of the Act. In view of the above, the CBDT Circular dated 25 November 1972 can have no application in the face of the clear position in law. This is so as the understanding of the statutory provisions by the revenue as found in Circular issued by the CBDT is not binding upon the assessee and it is open to an assessee to contend to the contrary.
10. The contention of the revenue that the Assessing Officer is entitled to refer the issue of valuation of the property to the Departmental Valuation Officer in exercise of its power under Sections 131, 133(6) and 142(2) of the Act is entirely based upon the decision of the Guwahati High Court in Smt. Amiya Bala Paul (supra). However, the Apex Court in Smt. Amiya Bala Paul (supra) has reversed the decision of the Guwahati High Court and held that if the power to refer any dispute with regard to the valuation of the property was already available under Sections 131(1), 136(6) and 142(2) of the Act, there was no need to specifically empower the Assessing Officer to do so in 6 Bhagirathibai S. Bhagare & others circumstances specified under Section 55A of the Act. It further held that when a specific provision under which the reference can be made to the Departmental Valuation Officer is available, there is no occasion for the Assessing Officer to invoke the general powers of enquiry. In view of the above and particularly in view of clear provisions of law as existing during the period relevant to Assessment Year 2006-07, we are of the view that questions (a) and (b) do not raise any substantial question of law.
Regarding Question (c):-
11 . The Tribunal by its impugned order has merely remanded the issue to the Assessing Officer to determine the date on which the respondent- assessee acquired the property for the purpose of working out the cost of acquisition. No specific submissions in regard to this issue was made by the revenue during the oral submissions. In any event, an order of remand in these facts does not give rise to any substantial question of law.
12. Accordingly, we see no reason to entertain questions (a), (b) and (c) as formulated by the revenue as they do not raise any substantial questions of law. Accordingly, appeal is dismissed with no order as to costs."
11. The Tribunal while deciding the issue had also referred to the observation of the Hon'ble Bombay High Court in the case of CIT Vs. Puja Prints (supra) that the Parliament had not given retrospective effect to the amendment and it was held that the law to be applied was as per the section as existing during the period relating to the assessment year 2006-07.
12. The issue arising in the present appeal before us is identical to the issue before the Hon'ble Bombay High Court in the case of CIT Vs. Puja Prints (supra) and also before the Pune Bench of the Tribunal in the case of ACIT Vs. Shri Bhima Dada Kharate (supra). Following the same parity of reasoning, we reverse the order of the CIT(A) and hold that the fair market value declared by the assessee as on 01-04-1981 on the basis of report of registered valuer is to be adopted for computing the income from long term capital gains. The amendment which was brought in by Finance Act, 2012 is to be applied prospectively and not to the year under consideration, i.e. assessment year 2009-10. Accordingly, we allow the claim of the assessee. The grounds of appeal raised by the assessee are thus allowed.
13. In the bunch of appeals in the case of other assessees, the years under appeal are 2009-10 and 2011-2012 which are also prior to assessment year 2012- 7 Bhagirathibai S. Bhagare & others 13 and consequently the amended provisions of section 55A of the Act are not applicable. Accordingly, we allow the claim of the other assessees in the above appeals listed for hearing. Thus, grounds of appeal raised by the respective assessees are allowed.
14. In the result, all the appeals of the respective assessees are allowed.
Order pronounced in the open court on this 30th day of November, 2017.
Sd/- Sd/-
(ANIL CHATURVEDI) (SUSHMA CHOWLA)
लेखा सद य / ACCOUNTANT MEMBER ाियक सद / JUDICIAL MEMBER
पुणे Pune; दनांक Dated : 30th November, 2017.
सतीश
आदेश क ितिलिप अ
ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2.
यथ / The Respondent
3. The CIT(A)-I, Nashik
4. CIT-I, Nashik
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, "B Bench"
Pune;
6. गाड फाईल / Guard file.
आदेशानुसार/ BY ORDER,स
स यािपत
ित //True Copy//
//True Copy// Senior Private Secretary
आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune