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TMI Blog2021 (9) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to follow the procedure laid down in sub section (2) & (3) of section 5OC of the Act. 5. The Ld. CIT (A) erred in confirming the .assessment where an sale consideration of Rs. 17,68,83,350/ _ had been adopted instead of the actual sale consideration of Rs. 15,00,00,000/ - 6. The Ld. CIT (A) ought to have appreciated the fact that the engaged property sold was in litigation with the tenant and it was adjacent to a dumping yard of GHMC grave yard and a Government Park. 7. The assessee may add, alter or modify or substitute any other point to the Grounds of appeal at any time before or at the time of hearing of the appeal. 1.1 The assessee filed a petition requesting to admit the following additional grounds: "8. As per the ratio laid down by the Hon'ble Supreme Court of India in the case of National Thermal Power Co. Ltd vs. CIT (1998) 229 ITR 383 (SC) the !TAT has jurisdiction to examine the question of law though not arisen before the CIT (A) but has arisen before the ITAT for the first time. 9. The Ld. CIT (A) erred in disallowing the expenditure of Rs. 1 ,35,00,000/-, which is not the subject matter of the appeal and whereas the said expenditure was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to have appreciated that the audited books of account were never rejected by AO during the assessment, and thus reference made to valuation officer without rejecting books of accounts is not tenable as per the judgement of Hon'ble Apex court in the case of Sargam Cinema V. CIT [2011] 197 Taxmann 203 (SC). 11. The appellant may add or alter or amend or modify or substitute or delete or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal. 1.2 We admit the said additional grounds raised by the assessee as they do not require any fresh investigation. 2. Briefly the facts of the case are that the assessee company was incorporated in 1991 and since then the assessee has not filed returns. A survey was conducted on 17/03/2011. Consequent to survey, the assessee filed its return of income for AY 2011-12 on 30/09/2011. Subsequently, the case was taken up for scrutiny and statutory notices were issued accordingly. The assessee filed the required information. 2.1 The AO noted that the assessee sold its entire land of 5052.11 sq.yds located at Indira Park, Hyderabad on 24/01/2011 for a consideration of Rs. 15 crores to a firm namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined on total consideration of Rs. 15 crores, to which, the assessee has offered sale consideration for the purpose of computation of capital gains. Further, he submitted that the property was sold after getting vacated the tenants from the land and the property cannot be sold without vacating them. Due to the circumstances around the land, the land value cannot fetch at fair market value as determined by the SRO for stamp duty purpose. He, therefore, contended that the authorities were not justified to take the sale consideration at Rs. 17,68,83,850/-, which is the SRO value. In support of his arguments, he relied on the following judgments: "1. Appadurai Vijayaraghavan Vs. JCIT, 49 Taxmann 513 (Mad. HC) 2. S. Muthuraja Vs. CIT, 37 taxmann 352 (HC Mad) 3. Lalitha Karan Vs. ITAT, ITA No. 1130/Hyd/2015 4. Ajay Kochar Vs. ITO, ITA No. 1066/Hyd/2017 5. Smt. Chalasani Nagar Ratna Kumari Vs ITO, 70 taxmann.com 104 6. Rahul G Patel Vs. DCIT, 97 Taxmann.com 598 7. Naresh Sunderlal Chug Vs. ITO, 93 Taxmann.com 485 8. Sunil Narang Vs. DCIT, ITA No. 1506/Hyd/2017 9. Babu Reddy Vs. ITO, ITA No. 1028/Hyd/2016 10. DCIT Vs. Venkat Reddy, 32 Taxmann.com 324 6. The ld. DR, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard is hereby rejected. From the assessment order, we observe that the AO has referred the matter to the DVO for determining fair market value as per section 50C(2) of the Act, but, it was not mentioned in the order the details of reference to DVO. He has completed the assessment without waiting for the report of the DVO. As per the judgment of the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal Vs. CIT(GA No. 3686 of 2013/ ITAT No. 221 of 2013), judgment dated 13th March, 2014, if there is a difference in the value of the property as determined by the assessee and the SRO value, the AO is bound to refer the matter to the DVO and the assessment should be done on the basis of DVO report. Similar issue has been decided by the coordinate bench of ITAT, Bengaluru in the case of Shri Somashekar Venkataswamappa Vs. ACIT in ITA No. 1086/Bang/2016 vide order dated 14/08/2019 wherein it was held as under: "3.4.1 We have considered the rival submissions; perused the orders of the authorities below and the material on record. From an appraisal of the records ITA No. 1086/Bang/2019 before us, it is seen that the assessee sold a property at Site No.11/15-490 vide Khata No.504 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer shall be excluded. According to sub-section (6) of section 142A, the Valuation Officer shall send a copy of the report of the estimate made under sub-section (4) or sub-section (5), as the case may be of Section 142A, to the Assessing Officer and the assessee, within a period of six months from the end of the month in Which a reference is made under sub-section (1) of section 142A. The Valuation Officer having got a letter 13.12.2016 from the Assessing Officer had time up to 30.6.2017 to send the report. The period of six months odd taken by the Valuation Officer could have been excluded for the purpose of completion of assessment. The Assessing Officer, on the contrary, rushed through the assessment on 27.12.2016 without waiting for the valuation report itself. He has fixed the value of the property at Rs. 1,30,68,000/- for the purpose of computation of capital gains. After deducting the cost of acquisition etc., he has arrived at a difference of Rs. 50,68,000/-and added the same to the. income returned. The order of assessment is bad in law, in as much as, the Assessing Officer has not adopted the value as per Valuation Officer, after having made a reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation report rendered by the DVO. 3.4.5 The CIT(A)'s view is that since the assessee did not make a written request to the AO for reference for valuation of the said property and therefore has not availed the opportunity under section 50C of the Act, the AO had no option but to proceed to apply provision of section 50C of the Act and in this regard placed reliance on the decision of the Hon'ble Madras High Court in the case of Ambattur Clothing Co. Ltd., Vs. ACIT (2010) 326 ITR 245 (Madras). The CIT(A)'s attempt ITA No. 1086/Bang/2019 to buttress this claim was in his observation that the AO's reference to the DVO was made suo-moto and invalid as the AO exceeded his jurisdiction. 3.4.6 Per contra, the learned AR has placed reliance on the decision of the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal Vs. CIT reported in (2015) 372 ITR 83 (Cal). On a perusal thereof, we find that the Hon'ble Court; after detailed consideration of the provisions of section 50C of the Act; has held that the valuation by the DVO, contemplated under section 50C of the Act, is required to give fair treatment to the tax-payer and avoid the miscarriage of justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded to pass the impugned order of assessment on 27.12.2016; just 14 days later; when the DVO had already initiated valuation proceedings by calling for details to be filed by the assessee on 02.01.2017 and had time to submit his Valuation Report upto 30.06.2017. 3.4.7 We now have slightly contrasting judicial pronouncements on the issue before us; wherein Revenue has relied on the Hon'ble Madras High Court in the case of Ambattaur Clothing Co. Ltd., (2010) 326 ITR 235 (Mad) and the learned AR of the assessee has placed reliance on the decision of the Hon'ble Calcutta High Court in the case of Sunil Kumar Agarwal Vs. CIT (2015) 372 ITR 83 (Cal). In our view, in the circumstances that prevail on the issue before us, the Hon'ble Apex Court in the case of CIT Vs. Vegetable Products Ltd., 88 ITR 192 (SC) has laid down the principle that the Rule of judicial precedence demands that if there are judgments in favour of the assessee and against the assessee, then the view favourable to the assessee should be adopted. Respectfully, following the ratio of ITA No. 1086/Bang/2019 the aforesaid decision of the Hon'ble Apex Court in Vegetable Products Ltd., (supra) and from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stand of assessee that the said gain was to be assessed as income from capital gains. There was no dispute about the assessibility of gains as income - from Long Term Capital Gain. The only dispute was that whether against such gains, the assessee could claim deduction under section 54 F of the Act on account of investment in new asset. In this regard, action of the CIT (A) in holding that the said income on sale of development rights was to be treated as adventure in the nature of trade/ business income, was not correct as per provisions of the Act. The powers of CIT (A) are coterminous with the power of Assessing Officer. In other words, the CIT (A) has wide power while deciding the appeal. However, as per Clause (2) of Section 251 of the Act, it is provided that the CIT (A) shall not enhance an assessment or a penalty or reduce the amount of refund, unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. The Explanation taIks about the power of CIT (A) in deciding the appeal and stresses that he may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstandi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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