Shri Kantibhai Tapubhai Savalia, Ahmedabad V. The Deputy Commissioner of Income Tax, Circle-3(3), Ahmedabad

CO 13/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5355 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 24-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Fair market value; Set aside; Capital Gains
• Section: 143(3); 50C; 201; 143(2); 37; 12; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 3(3), AHMEDABAD (APPELLANT /RESPONDENT ) VS SHRI KANTIBHAI TAPUBHAI SAVALIA, 702, SURMOUNT COMPLEX, OPP. ISCON TEMPLE, S.G. HIGHWAY, SATELLITE, AHMEDABAD PAN: ACWPS4722M (RESPO NDENT /CROSS OBJECTOR ) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: SHRI DHIREN SHAH, A.R. DATE OF HEARING : 19 - 09 - 2 018 DATE OF PRONOUNCEMENT : 25 - 10 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL AND ASSESSEE S CROSS OBJECTION FOR A. Y. 2011 - 12 , ARI SE FROM ORDER OF THE CIT(A) - 12, AHMEDABAD DATED 04 - 07 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.62,63,565/ - MADE ON ACCOUNT OF SALE OF LAND AT VINZOL U/S. 50C OF THE ACT WITHOUT CALLING FOR REM AND REPORT - ON THE SUBMISSION FILED BY THE ASSESSEE AFTER THE COMPLETION OF THE ASSESSMENT ORDER. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.33,88,182/ - MADE ON ACCOUNT OF SALE OF LAND AT MUTHIYA U/S. 50C OF THE ACT WI THOUT I T A NO . 2684 / A HD/20 16 & C O NO.13/AHD/2017 A SS ESSMENT YEAR 2011 - 12 I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 2 CALLING FOR REMAND REPORT ON THE SUBMISSION FILED BY THE ASSESSEE AFTER THE COMPLETION OF THE ASSESSMENT ORDER. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ADOPT JANTRI VALUE ON THE DATE OF AGREEMENT AS AGAINST THE DATE OF REGI STRATION BEFORE STAMP DUTY AUTHORITY AS HELD BY HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF BAGRI IMPEX (P.) LTD. VS. ACIT, CIRCLE - 9, KOKATA (31 TAXMANN.COM 39). 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION IN RESPECT OF M UTHIYA LAND AFTER GIVING FINDING THAT THE DEED VALUE OF LAND IS HIGHER THAN ITS JANTRI VALUE WITHOUT BRINGING ON RECORD THE CORRECT FACTS RELATING TO TRANSACTION. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) OUG HT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) MAY BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE GROUNDS OF APPEAL OF THE REVENUE ARE INT ERCONNECTED TO THE COMMON ISSUE THEREFORE FOR THE SAKE OF CONVENIENCE SAME ARE ADJUDICATED TOGETHER AS FOLLOWS. 4 . THE BRIEF FACT OF THE CASE IS THAT ASSESSEE HAS FILED RETURN OF INCOME 30 TH SEP, 2013 DECLARING TOTAL INCOME OF RS. 2 , 61 , 74 , 430/ - . SUBSEQU ENTLY, A NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 13 TH SEP, 2012 . F ROM THE DETAILS FILED T HE ASSESSING OFFICER NOTICED THAT ASS ESSEE HAS SOLD JOINTLY HELD LAND LOCATED AT V INZOL ON 30 TH MARCH, 2011 FOR RS. 2.4 5 CRORES. THE ASSESSEE WAS HAVING 6 0% O F SHARE IN THIS JOINTLY HELD LAND LOCATED AT VINZOL AND THE SHARE OF SALE CONSIDERATION OF ASSESSEE COMES TO RS. 1.47 CRORES - . ON FURTHER VERIFICATION, THE ASSESSING OFFICER NOTICED THAT STAMP DUTY PAID ON SALE OF THIS LAND WAS RS. 17 , 12 , 000/ - AND THE SALE CONSIDERATION ON THE BASIS OF STAMP DUTY WAS COMPUTED AT RS. 3,49,38,776 / - . T HE 60% SHARE OF THE ASSESSEE COMES TO RS. 2 , 09 , 63 , 266/ - . THE ASSESS EE HAS ALSO SOLD LAND IN MU T H IYA . ON VERIFICATION OF THE DETAILS, THE ASSESSING OFFICER NOTICED THAT IN RESPECT OF MUTHIYA LAND THE SALE VALUE OF THE LAND ACCORDING TO THE STAMP DUTY PAID WAS HIGHER THAN THE SALE CONSIDERATION SHOWN BY THE ASSESSEE. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE OF THIS LAND AT RS. 16 , 6 9 , 436/ - H OWEVER , THE TOTAL SALE CONSIDERATION AS PER STAMP DUTY PAID WAS COMPUTED AT RS. 50 , 57 , 618/ - . THEREFORE, THE ASSESSING OFFICER HAS MADE ADDI TION OF RS. 33 , 88 , 182/ - (50 , 57 , 618 16 , 69 , 436/ - ) BEING THE REMAINING AMOUNT OF LONG TERM CAPITAL GAIN WHICH WAS I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 3 NOT SHOWN BY THE ASSESSEE ACCORDING TO SECTION 50C OF THE ACT. SIMILARLY IN RESPECT OF VINZOL LAND , THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE OF THIS LAND AT RS. 1 , 20 , 25 , 092/ - . HOWEVER, THE LONG TERM CAPITAL GAIN AS PER PROVISION OF SECTION 50C WAS C OMPUTED AT RS. 1 , 82 , 88 , 357/ - . THEREFORE, THE REMAINING AMOUNT OF LONG TERM CAPITAL GAIN OF RS. 62 , 63 , 265/ - (1 , 82 , 88 , 357 - 1 , 20 , 25 , 092) WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT (A). T HE LD. C IT (A) HAS ALLOWED THE APPEAL OF THE ASSESSEE IN RESPECT OF MUTHIYA LAND BY OBSERVING AS UNDER: - 10. HAVING PERUSED THE MATERIAL ON RECORD AND HAVING PERUSED BOTH THE APPEAL ORDERS PASSED BY MY LD. PREDECESSOR, I HAVE COME TO A CONSIDERED CONCLUSION THAT THE ISSUE HAS BEEN DECIDED ON MERIT IN THE CASE OF SANJAY TAPUBHAI SAVALIA AND NOT IN APPELLANT'S OWN CASE FOR A.Y.2010 - 11. THEREFORE, I WOULD BE REQUIRED TO FOLLOW THE ORDER OF MY LD. PREDECESSOR IN THE CASE OF SANJAYJRAPUBHAI SAVALIADATED 30/09/2013 IN PREFERENCE TO THE ORDER DATED 19/09/2013 IN APPELLANT'S OWN' CASE FOR A.Y.2010 - 11. AS SUCH I AM ALSO DECIDING THE MISCELLANEOUS APPLICATION U/S 154 FOR A.Y.2010 - 11 DATED 18/ 10/2013 DISPOSING OF THE GROUND THEREIN ON MERIT AND ALLOWING THE RELATED GROUND B Y A SEPARATE ORDER OF EVEN DATE. THUS, I AGREE WITH THE AR THAT WHEN THE DOCUMENT IS A COMPOSITE DOCUMENT FOR LAND AND CONSTRUCTION THEREON, THE STAMP DUTY AND RELATED VALUATION U/S, 50C HAS TO BE RATIONALLY AND REASONABLY APPORTIONED BETWEEN LAND AND CONS TRUCTION. IF AND ONLY IF THE DEED VALUE OF LAND IS LESS THAN APPORTIONED LAND VALUATION U/S. 50C, THE RELATED ADDITION U/S 50C WOULD BE JUSTIFIED. IT IS CLEAR FROM TABLE 2 THAT AMOUNTS IN COLUMN 2 AND COLUMN 4 ARE MORE THAN AMOUNTS IN COLUMN 6 AND COLUMN 5 RESPECTIVELY. THEREFORE NO ADDITION U/S 50C IN THE HANDS OF THE APPELLANT IS JUSTIFIED. IN VIEW OF THE DISCUSSION AS ABOVE, THE ADDITION U/S 50C OF RS.32,40,780/ - WITH REGARD TO MUTHIYA LAND IS DELETED. RELATED GROUND SUCCEEDS. 6 . IN RESPECT OF LONG TE RM CAPITAL GAIN ON SALE OF VINZOL LAND THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 3. I HAVE GIVEN A CAREFUL CONSIDERATION TO THE FACTS OF THE CASE AND HAVE ALSO PERUSED THE AUTHORITIES RELIED UPON BY THE LD. AR. IT IS A FACT THAT THE LD. AO HAS BROUGHT TO TAX THE AMOUNT OF LONG TERM CAPITAL GAINS FOR THE PRESENT ASSESSMENT YEAR, THUS HOLDING - UNAMBIGUOUSLY THAT THE TRANSFER OF THE PROPERTY TOOK PLACE ON 31/03/2011. IN THIS VIEW OF THE MATTER, THE LD. AO, IN MY CONSIDERED OPINION, COULD NOT HAVE CONTRADICTED HERSELF IN TRAVELLING TO THE NEXT FINANCIAL YEAR SO AS TO ARRIVE AT STAMP DUTY VALUATION U/S 50C AS ON THE DATE OF REGISTRATION OF THE DEED. THE LD. AR HAS SUBMITTED THAT THE ACTUAL STAMP DUTY PAYMENT M ADE BY THE APPELLANT TO THE TUNE OF RS. 12,00,500/ - WAS COMMENSURATE WITH THE JANTRI RATES AS ON 31/03/2011 AND THE APPELLANT HAS ALSO SHOWN THE CORRESPONDING SALE CONSIDERATION IN THE DEED AT RS.2,45,00,000/ - . THEREFORE, IT IS TO BE CONC LUDED THAT THE VALUATION OF THE PROPERTY AS PER THE JANTRI RATES AS ON 31/03/2011 IS CORRECTLY STATED BY THE APPELLANT. ACCORDINGLY, THE CAPITAL GAIN AS RETURNED BY THE APPELLANT HAS RIGHTLY BEEN WORKED OUT AT RS. 1,20,25,092/ - BY ADOPTING THE SALE VALUE A S PER THE DEED AT RS.2,45,00,000/ - .. HON. DELHI BENCH OF I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 4 TRIBUNAL IN MODIPON (SUPRA) HAS CLEARLY RESONATED WITH THE VIEW OF HON. VISHAKHAPATNAM BENCH OF TRIBUNAL EXPRESSED IN KODURU SATYA SRINIVAS WHEREIN THE FOLLOWING WAS OBSERVED WHILE HOLDING IN FAVOUR OF THE ASSESSEE: '6. IN THE CASES BEFORE US ALSO, THERE IS NO DISPUTE THAT THE ASSESSEES HEREIN ENTERED INTO SALE AGREEMENTS ON 04/6/2005 AND THE SALE VALUE FIXED ON THAT DATE WAS EQUIVALENT TO THE SRO RATES FIXED FOR STAMP DUTY PURPOSES. THE CONVEYANCE DE ED WAS REGISTERED ON 25/8/2005, I.E. WITHIN A PERIOD OF THREE MONTHS. THOUGH THE SRO RATES HAD BEEN RAISED UPWARDS ON THAT DATE, YET, AS OBSERVED IN THE ABOVE CITED CASE, THE ASSESSEES HEREIN HAVE FULFILLED A CONTRACTUAL OBLIGATION, WHICH THEY ARE BOUND BY LAW TO CARRY OUT. SINCE THE PROCESS OF SALE HAS BEEN INITIATED FROM THE DATE OF SALE AGREEMENT, WE HAVE HELD IN THE ABOVE CITED CASE THAT THE APPLICABILITY OF PROVISIONS OF SECTION 50C SHOULD BE LOOKED AT ONLY ON THE DATE OF SALE AGREEMENT. IN THE INS TANT CASES, THE QUESTION OF A HIGHER VALUE BY INVOKING PROVISIONS OF SECTION 50C ON THE DATE OF SALE AGREEMENT DOES NOT ARISE AS THE SALE VALUE FIXED BY THE ASSESSEES WAS EQUIVALENT TO THE SRO VALUE FOR STAMP DUTY PURPOSES. 7. IN VIEW OF THE FOREGOING DI SCUSSIONS, WE SET ASIDE THE ORDERS PASSED BY LEARNED CIT(A) IN THE HANDS OF THESE TWO ASSESSEES AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE IN THE COMPUTATION OF CAPITAL GAINS IN THE HANDS OF BOTH THE ASSESSEES'. IN VIEW OF THE ABOVE, AND ALSO IN VIEW OF THE FACT THAT EVEN THE DATES OF EXECUTION AND OF REGISTRATION OF CONSEQUENT DEED FALL IN DIFFERENT FINANCIAL YEARS, THE AR IS RIGHT THAT THE APPELLANT'S FACTS ARE SQUARELY COVERED BY THE DECISION IN KODURU SATYA SRINIVAS AS FURTHER FOLLOWE D IN MODIPON LTD. (SUPRA). THUS, IT IS CLEAR THAT JANTRI RATES PREVAILING ON THE DATE OF EXECUTION OF THE DEED ARE TO BE APPLIED 'FOR THE PURPOSE OF SEC. 50C. THUS, THERE IS NO MERIT IN THE ADDITION OF LTCG WITH REGARD TO VINZOL LAND MADE BY THE AO TO THE TUNE OF RS.62,63,565/ - . THEREFORE, THE ADDITION OF RS.62,63,565/ - IS DELETED. THE APPELLANT GETS EQUIVALENT RELIEF AND THE RELATED GROUND SUCCEEDS. WE OBSERVED THAT THE ASSESSING OFFICER HAS BROUGHT TO TAX THE AMOUNT OF LONG TERM CAPITAL GAINS DURING THE PREVIOUS YEAR 2010 - 2011 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION 2011 - 2012. THE LD. CIT(A) HAS HELD THAT T HE LD. AR HAS SUBMITTED THAT THE ACTUAL STAMP DUTY PAYMENT MADE BY THE APPELLANT TO THE TUNE OF RS. 12,00,500/ - WAS COMMENSURATE WITH THE JANT RI RATES AS ON 31/03/2011 AND THE A SSESSEE T HAS ALSO SHOWN THE CORRESPONDING SALE CONSIDERATION IN THE DEED AT RS.2,45,00,000/ - . AND HE HAS FURTHER HELD THAT THE VALUATION OF THE PROPERTY AS PER THE JANTRI RATES AS ON 31/03/2011 IS CORREC TLY STATED BY THE A SSESSEE . HE HAS ALSO HELD THAT THE THE DATES OF EXECUTION AND OF REGISTRATION OF CONSEQUENT DEED FALL IN DIFFERENT FINANCIAL YEARS . 7 . DURING T H E COURSE OF APPELLATE PROCEEDINGS BEFORE US LD. DEPARTMENTAL REPRESENTATIVE HAS CONT ENDED TH AT LD. CIT(A) HAS ERR ED IN DEL E TING THE ADDITION MADE ON ACCOUNT OF SALE OF LAND AT VINZOL AND AT M UTH I YA U/S. 5 0C OF THE ACT WITHOUT CALLING REMAND REPORT FROM THE ASSESSING OFFICER. ON THE OTHER HAND , LD. AUTHORIZED REPRESENTATIVE HAS FURNISHED PAPER BOOK CONTAINING INFORMATION AND SUBMISSION MADE BEFORE ASSESSING OFFICER AND LD. CIT(A) DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF (2015) 57 TAXMAN.COM 360 (DELHI - TR IB) ITO VS. I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 5 MODIPON LTD. DATED 9 TH JAN, 2015 , (2017) 79 TAXMAN.COM 104 (VISAKH APATANM - TRIB) SMT. CHA LASANI NAGA RATNA KRI VS. ITO DA T ED 23 RD DEC, 2016, (2016) 75 TAXMAN. C OM 141 (AHMEDABAD - TRIB) DHAR AMSHIBHAI SONANI VS. ACI T DATED 30 TH S EP, 2016 AND CIT VS. MORMASJI MANCHAR J I VAID, (2001) 118 TAXMAN.COM 026. 8 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IN RESPECT OF LAND AT MUTHIYA , IT IS NOTICED FROM THE DEVELOPMENT AGREEMENT BETWEEN ASSESSEE AND M/S. SAVA L I A BUI LDERS DATED 5 TH OCTOBER, 2016 , SAVA L I A BUILDERS WAS TO INCUR DEVELOPMENT EXPENSES WHICH WAS TO BE RECOVER E D FROM THE MEMBERS OF THE SCHEME. SIMILARLY, AS PER CLAUSE 12 OF THE AGREEMENT THE AS S ESSEE WAS REQUIRED TO EXECUTE THE SALE DEED OF THE PLOT OF LAND IN FAVOUR OF THE MEMBERS OF THE SCHE M E AS REQUIRED BY M/S. SAVA L IA B UILDERS WHEN T H E FINAL TRANSFE R OF THE COMPLE TE D UNIT S TAKE PLACE . AFTER HANDING OVER T HE POSSESSION OF TH E PL O T THE PURCHASER OF THE PROPER TY HAS GOT CONSTRUCTION OF GROUND AND FIRST FLOOR AS PER THE APPROVED PLAN. T HE COMPLE T E PROPERTY CONSISTING OF LAND AND CONSTRUCT ED PART TO BE TRANSFERRED BY WAY OF REGISTERED DEED ON WHICH THE RESPECTIVE STAMP DUTY TO BE PAID BY THE PURCHASER. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANC ES WE OBSERVE THAT ASSESSING OFFICER HAS NOT CONSIDER E D THE MATERIAL FACT THAT T HE STAMP DUTY WAS NOT PAID EXCLUSIVELY FOR THE PLOT OF LAND BUT PAID JOINTLY FOR THE LAND COST AND THE CONSTRUCTION COST FOR UNIT S AS WHOLE. AS PER THE DEVELOPMENT AGREEM ENT , THE CONSTRUCTION/DEVELOPMENT ON THE LAND WAS UNDERTAKEN BY M/S. SAVA L IA BUILDERS AND THE TOTAL SALE CONSIDERATION FOR THE CONSTRUCT ED PROPERTY WAS APPORTIONED BETWEEN ASSESSEE AND M/S. SAVA L IA BUILDERS WHICH HA D BEEN ACCOUNTED FOR AND DISCLOSED IN THE IR RESPECTIVE RETURN OF INCOME . IT IS ALSO OBSERVED THAT THE SALE CONSIDERATION FOR PLOT OF LAND DISCLOSED BY THE ASSESSEE WAS HIGHER THAN THE VALU E OF LAND AS PER STAMP DUTY PAID AND THE SALE CONSIDERATION OF M/S SAVARIA BUILDERS FROM SALE OF THE CONST RUCTION UNIT WAS ALSO MORE THAN THE VALUE OF THE CONSTRUCTION UNIT DETERMINED ACCORDING TO STAMP DUTY PAID . IN VIEW OF THE ABOVE FACTS AND FINDINGS I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 6 WE DO NOT FIND ANY ERROR IN THE DECISION OF THE LD. T HEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISS ED. VINZOL LAND WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY.THE LEARNED CIT(A) HAS HELD THAT ASSESSING OFFICER HAS BROUGHT TO TAX THE AMOUNT OF LONG - TERM CAPITAL GAIN DURING THE YEAR DURING THE YEAR UNDER CONSIDERATION A SSESSMENT YEARS 2011 - 12. IT IS STATED THAT T HE VALUATION OF THE PROPERTY WAS TAKEN AS PER THE PREVAILING JANTRI RATE AS ON 31ST OF MARCH 2011. THE LD.COUNSEL HAS REFERRED THE DECISION OF THE ITAT VISAKHAPATNEM BENCH (2017) 79 TAXMANN.COM 104 WHERIN IT IS H ELD THAT VALUE OF LANDS SOLD WAS TO BE ADOPTED AS ON DATE OF AGREEMENT OF SALE FOR COMPUTATION OF CAPITAL GAINS UNDER SECTION 50C . THE RELEVANT PART OF THIS DECISION IS REPRODUCED AS UNDER: - ' 12. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIALS ON RECO RD, WE FIND THAT THE A.O. HAS ADOPTED STAMP DUTY VALUE OF THE PROPERTY AS ON THE DATE OF SALE DEED. THE FACTS RELATING TO THE MARKET VALUE AS ON THE DATE OF AGREEMENT TO SALE AND AS ON THE DATE OF SALE DEED IS NOT DISPUTED. THE ONLY DISPUTE IS WHETHER THE STAMP DUTY VALUE AS ON THE DATE OF AGREEMENT TO SALE OR SALE DEED TO BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. THE PURPOSE OF INTRODUCING SECTION 50C OF THE ACT WAS TO COUNTER SUPPRESSION OF SALE CONSIDERATION OF SALE OF IMMOVABLE PROPE RTIES. BEFORE INSERTION OF SECTION 50C OF THE ACT TO THE STATUTE, THERE ARE LOT OF LITIGATIONS AS TO CONSIDERATION SHOWN IN DOCUMENT CONVEYING TITLE AND PAYMENT OF STAMP DUTY. TO OVERCOME THE LITIGATIONS, THE PROVISION OF SECTION 50C OF THE ACT HAS BEEN IN SERTED TO THE STATUTE W.E.F. 1.6.2003 WHEREIN IT IS MADE MANDATORY TO ADOPT VALUE U/S 50C OF THE ACT FOR THE PURPOSE OF DETERMINATION OF CONSIDERATION. A PROVISO TO SECTION 50C OF THE ACT HAS BEEN INSERTED BY THE FINANCE ACT, 2016 W.E.F. 1.4.2007 TO RESOLV E THE GENUINE AND INTENDED HARDSHIP, IN THE CASE IN WHICH THE DATE OF AGREEMENT TO SALE IS PRIOR TO THE DATE OF SALE AND MARKET VALUE OF THE PROPERTY AS ON THE DATE OF AGREEMENT TO SALE AND DATE OF SALE DEED IS DIFFERENT. THE SAID PROVISO TO SECTION 50C OF THE ACT HAS BEEN EXAMINED BY THE COORDINATE BENCH OF ITAT, AHMEDABAD BENCH IN THE CASE OF DHARAMSHIBHAI SONANI V. ASSTT. CIT [2016] 75 TAXMANN.COM 141/161 ITD 627 (AHD. - TRIB.) AND HELD THAT THE PROVISO TO SECTION 50C OF THE ACT INSERTED BY THE FINANCE ACT, 2016 W.E.F. 1.4.2007 IS CURATIVE IN NATURE AND INTENDED TO REMOVE AN UNDUE HARDSHIP TO THE ASSESSEE AND ACCORDINGLY GIVEN RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2003 I.E. THE DATE EFFECTIVE FROM WHICH SECTION 50C OF THE ACT WAS INTRODUCED. ACCORDINGLY, AS PER THE PROVISO, THE STAMP DUTY VALUE OF THE PROPERTY ON THE DATE OF EXECUTION OF I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 7 THE AGREEMENT TO SALE SHOULD BE ADOPTED INSTEAD OF VALUE ON THE DATE OF EXECUTION OF SALE DEED. ' WE HAVE ALSO PERUSED THE PROVISION TO SECTION 50 C OF THE ACT WHICH IS REPRODUCED AS UNDER : - 'SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSF ER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPO SE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSES OF BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER : [ PROVIDED THAT W HERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY 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 CHE QUE 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.] FOLLOWING THIRD PROVISO SHALL BE INSERTED AFTER THE SECOND PROVISO TO SUB - SECTION (1) OF SECTION 50C BY TH E FINANCE ACT, 2018, W.E.F. 1 - 4 - 2019 : PROVIDED ALSO THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED ONE HUNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER , THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERAT ION. (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 SUB - SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHE R 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 S UB - SECTION (1) AND SUB - SECTIONS (6) AND (7) OF SECTION 23A, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY AP PLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB - SECTION (1) OF SECTION 16A OF THAT ACT. [EXPLANATION 1]. FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH - T AX ACT, 1957 (27 OF 1957). [EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.] I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 8 (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB - SECTION (2), WHERE THE VALUE ASCERTAINED UNDER SUB - SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERRED TO IN SUB - SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TR ANSFER.]' THE LD. COUNSEL HAS ALSO REFERRED THE DECISION OF THE COORDINATE BENCH OF ITAT AHMEDABD IN THE CASE OF DHARAMSHIBHAI SONANI(2016) 75 TAXMANN.COM 141(AHMEDABAD - TRIB) WHEREIN IT IS HELD THAT INSERTION OF PROVISO TO SECTION 50C BY THE FINANCE ACT , 2016 WITH EFFECT FROM 1 - 4 - 2017, HAS RETROSPECTIVE EFFECT . REGARDING SALE OF LAND AT VILLAGE V INZOL, THE LD. COUNSEL HAS SUBMITTED THAT SALE DEED WAS EXECUTED ON 31 ST MARCH, 2011 AND OUT OF TOTAL CONSIDERATION OF RS. 2. 45 CRORES THE FOLLOWING PAYMENTS W ERE MADE BEFORE 31 ST MARCH, 2011 DATE AMOUNT (RS.) CHEQUE NO. 16.10.2010 60,00,000 163452 16.10.2010 40,00,000 163453 19.10.2010 30,00,000 163454 19.10.2010 30,00,000 163455 23.10.2010 20,00,000 000056 23.10 .2010 20,00,000 000057 -------------- 2,00,00,000 --------------- THE BALANCE PAYMENT WAS GIVEN BY POSTDATED CHEQU ES ON THE DATE OF EXECUTION OF SALE DEED DATED 31.03.2011 AS UNDER: - DATE NO. AMOUNT (RS.) CHEQUE 06.04.2011 26,40,000 163465 06.04.2011 10,00,000 163466 10.04.2011 7,60,000 163467 20.04.2011 60,000 163468 20.04.2011 40,000 163469 ------------ 45,00,000 ------------- T HE SALE DEED WAS SUBMITTED TO THE SUB - REGISTER FOR ITS REGISTRATION ON 16 TH JULY, 2011 FOR REGISTRATION OF SALE DEED DATED 31.03.2011 . THE ADDITIONAL DUTY OF RS. 511500/ HAS BEEN LEVIED BY THE ASSESSEE FOR THE REGISTRATION OF THE SALE DATED 31.03.2011. THE LD. COUNSEL HAS STATED AFTER REFERR ING THE ABOVE PAYMENT SCHEDULE THAT THE SALE DEED WAS EXECUTED ON 31.03.2011 AND THE PAYMENT WAS MADE BEFORE EXECUTION OF THE SALE DEED. HOWEVER , ON THE PERUSAL OF THE RECORD I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 9 AND MATERIAL WE FIND THAT THE ASSESSEE HAS PROVIDED DETAIL OF CIRCLE RATE PREVAILING AS ON 1.04.2010 AND CLAIMED THAT CIRCLE RATE WAS FURTHER REVISED ON 18/04/2011. APART OF ABOVE , WE CONSIDER THAT THE ASSESSING OFFICER HAS BROUGHT TO TAX THE AMOUNT OF LONG - TERM CAPITAL GAIN DURING THE YEAR UNDER CONSIDERATION AS PER THE DATE OF EXECUTION OF THE SALE DEED 31.03. 2011 . WE CONSIDER THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN ADOPTING THE CIRCLE RATE PREVAILING IN THE NEXT FINANCIAL AS ON 16.07.2011 THE DATE WHEN THE SALE DEED WAS REGISTERED. WE CONSIDER THAT T HE VALUATION OF THE PROPERTY WAS TO BE TAKEN AS PER THE PREVAILING JANTRI RATE AS ON 31ST OF MARCH 2011 AND NOT AS PER THE DATE OF REGISTRA T ION WHICH WAS FALLING IN THE NEXT FINANCIAL YEAR . THE ASSESSING OFFICER HAS NOT DEDUCED THAT HOW THE CIRCLE RATE PREVAILING AS ON 16 JULY 2011 CAN BE ADOPTED FOR COMPUTING THE LONG - TERM CAPITAL GAIN IN THE CASE OF THE ASSESSEE IN THE ASSESSMENT YEAR 2011 - 12 . IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT IT WOULD BE APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICE R TO COMPUTE THE LONG TERM CAPITAL GAIN IN RESPECT OF THE IMPUGNED LAND AS PER THE CIRCLE RATE PREVAILING AS ON 31.03.2011 AFTER VERIFICATION OF THE MATERIAL ON RECORD. ACCORDINGLY THIS PART OF THE GROUND O F APPEAL STANDS RESTORED TO THE FILE OF THE ASSES SING OFFICER FOR DECIDING A FRESH AS DIRECTED ABOVE AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. THEREFORE , THIS GROUND OF APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. C.O. NO. 13/AHD2017 9 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN CR OSS OBJECTION: - '1. LD. CIT(A), AFTER CAREFULLY CONSIDERING THE FACTS OF THE CASE, SUBMISSION OF APPELLANT AND THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT HAS RIGHTLY HELD THAT JANTRI RATES PREVAILING ON THE DATE OF EXECUTION OF THE DEED ARE TO BE APPLIED FOR THE PURPOSE OF SEC 50C AND THE LD. CIT (A) HAS CORRECTLY DELETED THE ACCTION OF RS.62,63,565/ - MADE BY THE LD. A.O. 2. THE LD. CIT (A), AFTER CAREFULLY CONSIDERING THE FACTS OF THE CASE, SUBMISSION OF THE APPELLANT AS WELL AS FOLLOWING T HE ORDER OF LD. PREDECESSOR IN THE GROUP CASE OF SANJAY KANTIBHAI SAVALIYA VIDE APPELLATE ORDER NO.CIT(A) - LLL/169/DCIT/CC2(1)/13 - 14 DATED 30.09.2013 AS WELL AS THE ORDER UNDER SECTION 154 OF THE ACT DATED 04.07.2016 PASSED IN I.T.A NO. 268 4 /AHD/20 16 & C.O. NO. 13/AHD/2017 A.Y. 2011 - 12 PAGE NO D CIT VS. SHRI KANTIBHAI TAPUBHAI SAVALIA 10 APPELLANT'S OWN CASE FOR A.Y. 2010 - 11, THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.33,88,182/ - MADE BY THE LD. A.O ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF MUTHIYA LAND. 10 . CROSS OBJECTION OF THE ASSESSEE ONLY SUPPORT THE CORRECTNESS OF DECISION OF LD. CIT (A) . A FTER TAKING INTO CONSIDERATION THAT THE APPEAL OF THE RE VENUE HAS BEEN PARTLY ALLOWED FOR STATISTICAL PURPOSES , THE CROSS OBJECTION FILED BY THE ASSESSEE IS NOT MAINTAINABLE . ACCORDINGLY , SAME STANDS DISMISSED. 11 . IN THE RESULT, THE GROUND OF APPEAL NO.1 OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND GROUND OF APPEAL OF THE REVENUE FROM 2 TO 6 ARE DISMISSED FOR THE REASON CITED IN THIS ORDER AND CR OSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 25 - 10 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 25 /10 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,