IN INCOME TAX APPELLATE TRIBUNAL B , BENCH KOLKATA BEFORE SHRI M. BALAGANESH, AM & SHRI S.S.VISWANETHRA RAVI, JM IT(SS)A No.20/Kol/2015 (Assessment Year :2011-2012) DCIT-CC-1(3), Kolkata Vs. M/s Punam Chand Mittal, 10C, Middleton Row, th Dabriwala House, 4 Floor, Kolkata-700071 PAN/GIR No. : AADFP 7834 L (Appellant) .. (Respondent) Revenue by : Shri G.Mallikarjuna CIT DR Assessee by : Shri D.S.Damle, FCA Date of Hearing : 04/10/2016 Date of Pronouncement 19/10/2016 O R D E R PER M.BALAGANESH, AM This appeal of assessee arises out of order of Learned CIT(A), Central-1, Kolkata, in Appeal No.133/CIT(A)C-I/CC-V/13-14, dated 29.8.14 passed against assessment framed u/s.143(3) of Income Tax Act, 1961 (hereinafter referred to as Act ). 2. At outset, there was delay of 67 days in filing this appeal by revenue before us. ld DR prayed for condonation of delay and stated that ld AO had filed affidavit to this effect. ld AR severely objected to condonation of delay and stated that reasoning given by revenue that ld AO was awaiting from 14.11.14 to 28.12.14 for valuation report from District Valuation Officer (DVO). He argued that same does not constitute reasonable cause for delay in filing appeal. He stated that issue involved was with regard to adoption of value as per section 50C of Act. He briefly explained facts of case that assessee had reported consideration at Rs 18 lacs. assessee held 6 acres of land as capital asset which was converted into stock in trade on 1.1.2011 and 2 IT(SS)A No.20/15 immediately after conversion, sold said lands on 11.1.2011 to its sister concern M/s PCM Tea Processing Pvt Ltd. ld AO resorted to adoption of value determined u/s 50C of Act as full value of consideration. assessee objected to same stating that value determined by stamp valuation authority does not constitute fair market value of land. revenue adopted value determined by stamp valuation authority at Rs.1,06,88,658/- and substituted capital gains accordingly as against reported consideration of Rs.18,00,000/-. ld CITA directed ld AO to refer valuation of property to District Valuation Officer in terms of section 50C(2) of Act and by placing reliance on decision of Hon ble Jurisdictional High Court in case of Sunil Kumar Agarwal vs CIT reported in (2015) 372 ITR 83 (Cal) , and decide issue accordingly. ld AR stated that valuation report of DVO stated consideration value to be Rs 21 lacs as against reported amount of Rs 18 lacs by assessee. This situation was totally favourable to assessee and hence ld AO after obtaining valuation report decided to prefer appeal before this tribunal as DVO valuation had considerably brought down consideration figure from Rs. 1.06 crores to Rs. 21 lacs. He argued that reasoning given by revenue only tantamounts to shopping of judicial forums and does not constitute reasonable cause for delay. He argued that even though ld CITA had directed ld AO to refer valuation of asset to ld DVO, there was no necessity for ld AO to wait for said report from ld DVO for preferring appeal before tribunal. If ld AO is aggrieved with order of ld CITA, he should have preferred appeal before tribunal and thereafter obtained report of ld DVO and give effect to order of ld CITA. Accordingly he argued that explanation for delay between 14.11.2014 to 28.12.2014 does not stand properly explained in facts and circumstances of case. He also quoted example in this regard :- 3 IT(SS)A No.20/15 Suppose order u/s 263 of Act was passed by ld CIT and assessee does not prefer appeal against that order before tribunal within time. He waits for giving effect order to be given by ld AO pursuant to ld CIT s order u/s 263 of Act. Observing later that giving effect order is against assessee, he /she prefers to file appeal before tribunal with delay condonation petition on ground that assessee was waiting for giving effect order to be completed. Can this be construed as proper explanation of delay on part of assessee ? answer would be emphatic no . situation in instant case also squarely falls under aforesaid example. Accordingly, he objected to condonation of delay and prayed for dismissal of appeal of revenue as not maintainable on ground of delay. He argued that even on merits, revenue does not have any case as ld CITA had only directed as per law and by following Jurisdictional High Court decision. 3. In response to this, ld DR stated that ld AO had to follow directions of ld CITA who had directed ld AO to refer case to ld DVO in terms of section 50(C ) (2) of Act and decide issue accordingly as per law. Hence ld AO had to wait for valuation report before giving effect to appellate order and only thereafter could proceed in preferring appeal before tribunal. He argued that once valuation report was obtained, thereafter ld AO was pre-occupied with time barring matters and after finishing time barring matters was awaiting for approvals of higher authorities as per procedure laid down by Central Board of Direct Taxes. Accordingly he prayed for condonation of delay. On merits of addition, he argued that argued that provisions of section 50C (2) of Act uses expression may refer to valuation of asset to valuation officer and it is not mandatory on part of ld AO to refer to DVO. Hence he objected to directions of ld CITA to ld AO to determine consideration value based on value determined by DVO. 4 IT(SS)A No.20/15 3. We have heard rival submissions. We find that revenue had filed affidavit seeking for condonation of delay in filing appeal as below:- AFFIDAVIT I, Arup Chattrjee, son of late Animesh Chatterjee aged about 47 years, working as Deputy Commissioner of Income Tax, Central Circle-1(3), Kolkata residing at 38/5/2 Mahatma Gandhi Road, Kolkata-700082 do hereby solemnly affirm and stated regarding date of filing of appeal in case of m/s Punam Chand Mittal expired on 14.11.2014. Reasons responsible for delay in filing appeal are narrated below :- D T E R E S O N 14-11-2014 to 28- Valuation report is awaited from Valuation officer 12-2014 29-12-2014 Received Valuation Report 30-12-2014 Order passed after giving appeal effect 31-12-2014 to 02- Busy in Time-barring matters 01-2015 03-01-2015 to 04- Saturday & Sunday 01-2015 05-01-2015 to 08- Busy in time barring matters 01-2015 09-01-2015 Appeal Scrutiny report sent to CIT(C)-1, Kol through proper channel 10-01-2015 & 11-01- Saturday & Sunday 2015 12-01-2015 to 14- File is with CIT(C)-1, Kolkata 01-2015 15-01-2015 File received from CIT(C)-1 Kolkata suggesting 2nd appeal 16-01-2015 Prepared papers for filing second appeal 17-01-2015 & 18-01- Staturday & Sunday 2015 19-01-2015 Affidavit before Notary is made In view of above your are kindly requested to condone delay and allow me to file appeal APPELLANT DCIT, CC-1(3), KOLKATA I, Arup Chattrjee, DCIT, CC-1(3), Kolkata do hereby verify that fact referred to above are true and correct to best of my knowledge and belief. Dated 19th January, 2015 APPELLANT DCIT, CC-1(3),KOLKATA 5 IT(SS)A No.20/15 3.1. facts stated hereinabove in submissions of ld AR remain undisputed and hence same are not reiterated herein for sake of brevity. We find that ld AR had advanced arguments vehemently for not condoning delay in filing appeal of revenue by 67 days. However, in interest of justice, we decide to condone delay of 67 days in filing appeal by revenue and admit appeal for adjudication. 3.2. On merits, we hold that ld CITA had rightly directed ld AO to refer matter to ld DVO in terms of section 50C(2) of Act as assessee had admittedly objected to value determined by stamp valuation authority u/s 50C of Act in assessment proceedings itself. It is found that ultimately ld DVO had adopted consideration figure to be approximately Rs 21 lacs as against Rs 18 lacs reported by assessee. We find that Hon ble Jurisdictional High Court in case of Sunil Kumar Agarwal vs CIT reported in (2015) 372 ITR 83 (Cal) had held that reference to ld DVO is beneficial provision and hence same could not be taken away by ld AO from purview of assessee, and reference to ld DVO was required to avoid miscarriage of justice. It was also held that legislature had taken care to prove adequate machinery to give fair treatment to assessee, there is no reason why same should not be used and benefit thereof should be refused. Hence, we hold that appeal of revenue fails on merits of case. Accordingly, grounds raised by revenue are dismissed. 4. In result, appeal of revenue is dismissed. Order pronounced in open court on this 19/10/ 2016. Sd/- Sd/- (S.S.VISWANETHRA RAVI) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata; Dated 19/10/2016 Prakash Mishra, . PS 6 IT(SS)A No.20/15 Copy of Order forwarded to : 1. Appellant-DCIT-CC-1(3), Kolkata 2. Respondent-M/s Punam Chand Mittal 3. CIT(A), Kolkata. 4. CIT 5. DR, ITAT, Kolkata 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar) ITAT, DCIT-CC-1(3), Kolkata v. M/s Punam Chand Mittal