TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 1989
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....e or alter or modify any or more ground(s) of appeal during the appellate proceedings. 4. That the order of the Ld CIT(A)-1, Agra, being erroneous in law and on facts be set aside and the order of the Assessing Officer be restored. 2. Facts of the case are that during the Financial Year 2012-13 relevant to the Assessment Year 2013-14,the assessee has sold his factory building realizingaconsideration of Rs. 5,00,00,000/- towards the land and Rs. 80,00,000/- towards the construction as against the circle values of Rs. 5,00,08,000/- and 1,36,00,000/- respectively. Thus, the total sale consideration fell short by Rs. 56,08,000/- in comparison to values adopted for stamp value purposes which the Ld AO added to the income of the assessee under the deeming provision of section 50C of the Act. 3. Being aggrieved, assessee carried the matter in appeal before the Ld CIT(A) who quashed the addition observing vide para 7.3 as under: "I have carefully considered the appellant's submission, the facts of the case and the legal position in this regard. The undisputed fact in this case is that the appellant had taken objection against the A.O.'s proposed action of applying the provisions of....
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....ve different fair market values depending on their location, approach, use, condition, expected remaining useful life and other impediments. A property shrouded with litigation would not fetch as much value as a clean property. Similarly, just a day prior to fixation of circle rates, value of property would be different and on the next day it would be different; while in actual its fair market value would be same on both days. The factory building sold by the assessee too did not have a fair market value to the extent as worked out for stamp purposes as per circle rates. In this respect following factors, that impacted the fair market value of the property sold, are highlighted: 1. The factory building admeasuring 1248.58 Sq. mtrs was standing on a land of 17860 Sq. Mtrs. A buyer would not easily be available for such a vast area. 2. In the factory building assessee was having a shoe manufacturing unit and it was constructed accordingly. Therefore, only a person interested to set up similar unit would have been interested in the purchase of the property in same condition. This factor limited the scope for its sale in an open market. 3. As may be noted from the sale deed, th....
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....ng any of the reasons given by the assessee made the impugned addition in a cryptic manner observing in Para 3 as under: "During the course of assessment, it was noticed that the assessee sold his factory including the land and constructions, for which he received total sale consideration Rs. 5,80,00,000/-. The capital gain worked out by the assessee as per his return of is shown at Rs. 33,00,201/- which was calculated on the basis of actual sale consideration. On perusal of sale deed it was noticed that the actual value as per the circle rate and the statutory norms for cost of constructions it is shown as Rs. 6,36,08,000/- and stamp duly has been paid accordingly. The assessee vide a show cause notice dated 17.02.2016 was required to clarify as to why this difference should not be added to the income of the assessee. The assessee furnished written submission dated nil in this regard. Considering the reply of the assessee and in view of section 50C of the I.T.Act, 1961, Rs. 56,08,000/- is being added to the income of the assessee."(emphasis supplied by us) 8. We have no hesitation to hold that theorder as passed by the AO is an epitome of a non-speaking order which itself can....
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.... the reasons for the decisions reached are not mentioned and apparent in the order passed. Further, it is only a speaking order that can indicate whether the decision maker has acted lawfully and in just and fair manner. This is necessary to inspire confidence of the taxpayer and to make him aware the grounds which weighed in the mind of AO in determining the questions of facts and law arising for determination. The requirement of the speaking order is all the more necessary, if appeal is provided against it. It enables the appellate authority to know the reasons for it and to test the validity of the order. A speaking order indicates the mind of the author of the order as well as reasons for the findings arrived at and is necessary for knowing the reasons for the decision arrived at and to indicate whether in coming to the decision mind has been applied reasonably, relevantly and rationally. The mandate of giving reasons or passing a reasoned order or giving a reasoned decision is not only a part of natural justice, but it is a safeguard against arbitrariness. When an adjudicator is obliged to give his reasons for conclusions, it will make it necessary for him to consider the matt....
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....ority on the date of agreement may be taken for the purposes of computing full value of consideration for such transfer: Provided further that the first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been received by way of an account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account, on or before the date of the agreement for transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed or assessable by the stamp valuation authority under subsection (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub....
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....nt order where assessee stated before the AO that the stamp valuation cannot be applied as the sale was made under distressing circumstances. The Revenue challenged the action of the Ld. CIT(Appeals) on the grounds as mentioned in the order passed by the Hon'ble ITAT, which were as under: "1. The learned CIT(A) has erred in law in allowing the assessee's appeal and annullingthe order passed by the AO. 2. The order of learned CIT(A) is erroneous and bad in law and deserves to be cancelled and the order passed by the AO deserves to be sustained on the facts of the case. 3. The spirit of s. 50C regarding full value of consideration has not been appreciated by the learned CIT(A). The full value of consideration and indexed cost of acquisition were rightly adopted by the AO in respect of both the properties. 4. Even if the learned CIT(A) was of the view that the matter should have been referred to the Valuation Officer under s. 50C (2)(a) of IT. Act, 1961, he might have directed the AO to make valuation after referring to Valuation Officer, if AO has made valuation without any such reference. 5. The order of the learned CIT(A) in annulling the assessment is not acceptable ....
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....ue of the property on the date of transfer, the AO has to apply his mind on the validity of the objection of the assessee. He may either accept the valuation of the property on the basis of the report of the approved valuer filed by the assessee, or invite objection from the department and refer the question of valuation of the capital asset to DVO in accordance with Section 55-A of the Act. In all these events, the AO has to record valid reasons, which are justifiable in law. He is not required to adopt an evasive approach of applying deeming provision without deciding the objection or to refer the matter to the DVO under Section 55-A of the Act as a matter of course, without considering the report of approved valuer submitted by the assessee. The Hon'ble High Court further held that Section 50-C of the Act is a rule of evidence in assessing the valuation of property for calculating the capital gain. The deeming provision under Section 50 C (1) of the Act is rebuttable. It is well known that an immovable property may have various attributes, charges, encumbrances, limitations and conditions. The Stamp Valuation Authority does not take into consideration the attributes of the prop....
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....procedure prescribed therein, particularly, in the backdrop of the fact that the assessee has prima-facia shown that it was a tenanted property and, therefore, subject to certain encumbrances and also the fact the in the absence of obtaining a DVO's report, asssessee cannot be put to the trouble of facing a virtual trial even after five years of appearing before AO/DVO at this stage to prove the sale price declared by her is reasonable." 21. In the case of ACIT Vs Anima Investment Ltd [ 73 ITD 0125] Third Member, ITAT, Delhi observed in para 13 of the order as under: "The powers of the Tribunal in the matter of setting aside an assessment are large and wide, but these cannot be exercised to allow the AO an opportunity to patch up the weak part of his case and to fill up the omission. In my opinion, a party guilty of remissness and gross negligence is not entitled to indulgence being shown. In this context, I would like to make a reference to a decision of the Chennai Bench of the Tribunal in the case of Tatia Skyline & Health Farms Ltd. vs. Asstt. CIT (2000) 66 TTJ (Chennai) 203 : (1999) 70 ITD 387 (Chennai). In this decision, on the assessee's request that the case be sent back....
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....ointing out how the additions made could not be sustained for want of adequate supporting material. It is for the Department to gather the material and make proper assessments and the Tribunal is not in that fashion an IT authority. Under the IT authorities stipulated under the IT Act, the Tribunal is not one of them. It is purely an appellate authority. Therefore, the object of the appeal before the Tribunal is whether the addition or disallowance sustained was in accordance with law and supported by material. If there is no sufficient material, the addition must be deleted. The Tribunal cannot order further enquiry with a view to sustain the addition. This will amount to taking sides with the parties which is not the function of a judicial authority like the Tribunal." 23. Hon'ble Supreme Court also in the case of 'Parusram Pottery Works Co. Ltd Vs ITO', 106 ITR 0001 (SC)]observed as follows: - It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the sub....