2015 (7) TMI 144 - AT - Income Tax

Validity of reassessment proceedings u/s. 147/148 - assessment of deemed sales consideration u/s. 50C - Held that - The case was reopened u/s. 148 after recording the reasons within 4 years. The assessee had not disclosed long term capital gain in the computation of income even there was no long term capital gain on sale of land. The A.O. recorded the reasons as per law and issued notice u/s. 148. The ld. A.R. had not controverted the findings given by the ld. CIT(A) on this issue by relying upon various decisions on this issue by the various Courts. There is no material with the assessee to show that he has challenged the proceeding u/s. 148 before the A.O. and asked to give the copy of reasons recorded to the A.O. He had co-operated in the proceeding with the A.O. without any objection. Therefore, at the stage of appellant, he cannot take other route to defend his case. Further, the assessee himself admitted that the show cause notice was issued for making addition u/s. 50C by letter dated 02.02.2011 by the A.O., whereas assessment was completed on 25.10.2011 by the A.O. Therefore, there is no justification of challenging the 148 proceeding by the assessee. - Decided against assessee. Long term capital gain u/s. 50C - A.O. made addition on the basis of valuation of stamp authority for stamp purposes u/s. 50C - CIT(A) confirmed the addition by observing that the appellant had failed to furnish the report of Government Approved Valuer before the A.O. to support the claim of index cost acquisition - Held that - The assessee claimed that he had valued the property for cost of acquisition as on 01.04.1981 from Government Approved Valuer, submitted before the A.O. by letter dated 16.02.2011. It does not indicate that assessee had filed this report before the A.O. but value was stated at ₹ 20,80,000/- as on 01.04.1981 which prima facie indicates that assessee had obtained the Valuation Report and claimed cost of acquisition at ₹ 20,80,000/- as on 01.04.1981. For computation of capital gain cost of acquisition as on 01.04.1981 is required in case of property held before 01.04.1981. The copy of report was filed before the ld. CIT(A). Therefore, in the interest of justice, we direct to A.O. to consider the Valuation Report as on 01.04.1981 and verify the veracity of the Valuation Report obtained by the assessee and take decision as per law. Accordingly, we set aside these grounds. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Validity of reassessment proceedings u/s. 147/148 of the I.T. Act, 1961
2. Addition of deemed sales consideration u/s. 50C as Long Term Capital Gain (LTCG)
3. Admission of valuation report of Govt. approved valuer for cost of acquisition u/s 55(2)(b) of the Act
4. Deletion of interest charged u/s. 234B of the Act

Issue 1:
The appeal challenged the validity of reassessment proceedings u/s. 147/148 of the I.T. Act, 1961, and the consequent re-assessment order. The appellant argued that the proceedings were wrong, without jurisdiction, and bad-in-law ab initio. The A.O. had not allowed indexation on the cost valued by the Government Valuer as on 01.04.1981, resulting in the addition of Long Term Capital Gain (LTCG). The Tribunal held that the case was reopened within 4 years as per law, and the appellant failed to challenge the proceedings before the A.O. The Tribunal dismissed the appeal on this ground.

Issue 2:
The second and third grounds challenged the addition of deemed sales consideration u/s. 50C as LTCG. The A.O. based the addition on the valuation by the Stamp Authority for stamp purposes. The appellant claimed ownership through HUF and provided a valuation report from a Government Approved Valuer for cost of acquisition. However, the report was not submitted to the A.O. The CIT(A) dismissed the claim due to lack of evidence. The Tribunal directed the A.O. to consider the Valuation Report and verify its authenticity, setting aside the earlier decision.

Issue 3:
The appellant contested the non-admission of the valuation report of the Govt. approved valuer for cost of acquisition u/s 55(2)(b) of the Act. The CIT(A) held that the report was not filed before the A.O. but during the appellant proceeding, and dismissed the claim. The Tribunal directed the A.O. to consider the Valuation Report and make a decision as per law, setting aside the CIT(A)'s decision.

Issue 4:
The final ground related to the deletion of interest charged u/s. 234B of the Act. The Tribunal did not provide specific details on this issue in the summary of the judgment.

In conclusion, the Tribunal partly allowed the appeal, directing the A.O. to re-evaluate the Valuation Report for cost of acquisition and make decisions accordingly.