Appeal details
Counselvise Citation
[2021] 104 COUNSELVISE.COM (IT) 7715 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 4 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
24-11-2021
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
30-06-2019
Judgement Text
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ ‘B’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD (Conducted through Virtual Court) BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.1127/Ahd/2018 With Cross Objection No.94/Ahd/2019 नधा रण वष / Asstt.Year : 2012-13 ITO, Ward-3(3)(11) Ahmedabad. Vs. Shri Ajay J. Mehta 801, 8 th Floor Astron Tek Park Opp: Fun Republic Cinema Satellite, Ahmedabad. PAN : ANVPM 4947 Q (Applicant) (Responent) Revenue by : Shri R.R. Makwana, Sr.DR Assessee by : Shri Biren Shah, AR स ु नवाई क तार ख/D a t e o f H e a r i n g : 0 8 / 1 1 / 2 0 2 1 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 2 5 / 1 1 / 2 0 2 1 आदेश/O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-3, Ahmedabad dated 22.02.2018 passed for the Asstt.Year 2012-13. On receipt of notice in the Revenue’s appeal, the assessee has filed cross objection bearing no.94/Ahd/2019. Both are disposed of by this common order. 2. Revenue has taken four grounds of appeal. However, only one issue involved in all these four grounds related to determination of deemed sale consideration under section 50C of the Income Tax Act, ITA No.1127/Ahd/2018 With CO 2 1961 for the purpose of computation of capital gain under section 48 of the Act. 3. Brief facts of the case are that the ld.AO has got an information that the assessee has sold a property on 29.9.2011 for a consideration of Rs.80,00,000/- vide registered sale deed bearing no.3273 made with Sub-Registrar Office, Bavla, Ahmedabad. For the purpose of stamp duty valuation, this property was valued at Rs.5,82,39,975/-. On the strength of this information, he recorded reasons and reopened the assessment by issuance of notice under section 148 of the Act on 16.4.2015. The ld.AO has passed the assessment order whereby he made an addition of Rs.5,52,03,376/-. The ld.AO recorded a finding that this property was purchased on 18.9.2010 for a consideration of Rs.24 lakhs and sold on 28.9.2011 disclosing the sale consideration of Rs.80.00 lakhs. The said deed was registered on 29.9.2011. The ld.AO further observed that the assessee has paid a sum of Rs.6,36,599/- for converting this land to non-agriculture land. Thus, he took cost of acquisition at Rs.30,36,599/-. According to the assessee, short term capital gain comes to Rs.49,63,401/- i.e. Rs.80,00,000/- minus Rs.30,36,599/- (sale value minus cost of property). However, the AO took sale consideration at Rs.5,82,39,975/- with the aid of section 50C of the Act. 4. Dissatisfied with computation of the capital gain, the assessee carried the matter in appeal. He has challenged reopening of the assessment which has been rejected by the ld.CIT(A). The assessee has also challenged computation of long term capital gain. The ITA No.1127/Ahd/2018 With CO 3 ld.CIT(A) accepted contentions of the assessee by recording following finding: “5. Decision: I have carefully gone through the reassessment order, submissions filed by the Appellant; remand report furnished by the Assessing Officer and the Appellant's response to the same. The brief facts of the case are that Appellant has sold immoveable property being non- agricultural land at Block No. 456 in Village: Sankod, TA: Bavia, Sub- Dist: Dholka, for consideration of Rs.80,00,0007-to M/s. Ashwa Infracon Pvt. Limited. The Sub-Registrar has valued the property at Rs.5,82,39,975/- whereas sale deed executed during the year shows vale value at Rs.80,00,000/-. The above property was purchased by Appellant on 17th September, 2010 for Rs. 24,00,000/-hence AO has adopted jantri value as correct sale value and computed Short Term Capital Gain at Rs.5,52,07,376/- as against income from capital gain shown in Return of Income under Section 148 of the Act for Rs.49,63,401/-. While making above addition, AO has adopted jantri value as market price of the property as final stamp duty of Rs.28,54,000/- was paid on sale of such property. The AO has also observed that as Appellant was not attending the Assessment Proceedings, summons under Section 131 was issued to the purchaser of the property and Director of the Company has attended the matter with AO wherein he has stated that Ashwa Infracon Pvt. Limited has made agreement with Appellant for purchase of property for Rs.80,00,000/- and stamp duty of Rs. 3,96,000/- was paid on 31st March, 2011. He further informed the AO that sale deed was not registered due to unavoidable circumstances and jantri value was revised with effect from 1st April, 2011 hence he had to pay additional payment of Rs.24,58,000/- at the time of registration of final sale deed on 28th September, 2011. The AO has considered market value of the property at Rs.5,82,39,975/- and computed Short Term Capital Gain accordingly. During the course of Appellate Hearing, Appellant has submitted additional evidence as stated hereinabove and based upon such documents, ARs of the Appellant have argued that agreement to sell was executed on 23rd December, 2010 for sale of property to Ashwa Infracon Pvt. Limited for Rs.80,00,000/-, out of which payment of Rs.19,30,000/- was received on 16th September, 2010, Rs. 10,00,0007- was received on 13th October, 2010 and Rs.25,00,000/- was received on 26th February, 2011 in support of such payment Appellant has submitted copy of bank statement and on verification of the same it is noticed that the above cheques have been realized on such dates. On this basis Appellant has argued that part payment out of agreed consideration was received by Appellant hence agreement to sell executed with buyer of the property was acted upon in substance. The Appellant has also stated that even purchaser party has paid stamp duty of Rs. 3,96,0007- payable on agreed consideration of Rs.80,00,000/-which is also prevailing jantri value of the ITA No.1127/Ahd/2018 With CO 4 property. This fact is also confirmed from the copy of certificate No.IN- GJ16516924342402J dated 31.03.2011, issued under the seal of Sub- Registrar, Bav!a, Govt. of Gujarat. These facts were also admitted by authorized person of buyer of the property and on this basis, Appellant contended that consideration of above property is Rs.80,00,000/- and not Rs.5,82,39,975/-. The delay in registration of sale deed was only on the ground that Appellant was obliged to convert agricultural land into non- agricultural land and such process has taken considerable time. The Appellant has also referred to provisions of Section 2(47) of the Act and contended that transfer of capital asset is before 1st April, 2011 because part performance was already executed with reference to agreement to sell and AO is not justified in making addition adopting jantri value prevailing on the date of execution of final sale deed. The Appellant has mainly relied upon following decisions: (i) Allahabad High Court in the case of Commissioner of Income Tax-11, Agra Versus Sh.ShimbhuMehra, Sh. Vishnu Saran Mehra, Shri Jagdish Saran Mehra, Shri Suman Mehra,Shri KeshoMehra, Sh. Shankar Saran Mehra (Income Tax Appeal No. 373 of 2010, 365 of 2010, 376of2010, 377of2010, 439 of 2010, 442 of 2010) (ii) Mumbai Tribunal in case of Sureshchandra Agarwal v. Income-tax Officer, Ward 20(3)(3) [2011] 15 taxmann.com 115 (Mum.). (iii) Ahmedabad Tribunal in case of Upendra Chinubhai Shah Vs.ACIT vide ITA No: 1552/Ahd/2015 dated 10/08/2016. The Appellant has also argued that as transfer of immoveable property is effected on the date of execution of agreement to sell, jantri value needs to be adopted on the date of execution of agreement to sell and not as per final sale deed. Reliance is mainly placed on following decisions: (i) Hyderabad bench in case of S. Venkat Reddy reported in] 32 taxmann.com 324 (ii) ITAT Delhi in the case of /TO Ward-5(1) New Delhi Versus M/s. Modipqn Ltd. (ITA No. 2049/D&I/2009, ITA No. 2171/Del/2009) (iii) ITAT Bangalore in the case of M/s. Bharathi Dev Anandani Versus Asst Commissioner of Income-tax, Circle 8 (1), Bangalore. (ITA No.882/Bang/2014) (iv) ITAT Visakhapatnam in the case of Koduru Satya Srinivas & Koduru Anupama Versus Assistant Commissioner of Income ITA No.1127/Ahd/2018 With CO 5 Tax, Circle-2 (1) Vijayawada (No.- ITA No. 556A/izag/2008, & ITA No. 557/Vizag/2008) The Appellant has also argued that provisions of Section 50C are amended by Finance Act, 2016 wherein it was brought on Statute that when agreement fixing the amount of consideration and date of registration for transfer of capital assets are not the same, the value adopted by stamp valuation authority on the date of agreement may be taken for the purpose of computation of full value of consideration provided Assessee has received partial amount through account payee cheque before date of agreement for transfer. The Appellant has also contended that such amendment is retrospective amendment for which reliance is placed on following decisions; (i) Ahmedabad ITAT in case of Dharamshibhai Sonani in ITA No. 1237/Ahd/2Q13 dated 3rd September, 2016 • (ii) Vizang Tribunal in case of Chalasani Naga RatnaKumari vs. /TO vide ITA No: 639A/Vizag/2013 dated 23/12/2016 (iii) Ahmedabad ITAT in case of Hansaben Bhaulabhai Prajapati in ITA No. 2412/Ahd/2016 dated 31/10/2017 5.1 The AO in the Remand Report has contended that Appellant has remained non-compliant during Assessment Proceedings in current year as well as in A.Y. 2010-11 hence additional evidences should not be admitted. The AO has also contended that agreement to sell with possession submitted by Appellant shows part payment out of total consideration of Rs.80,00,000/- but Appellant has not submitted such document in Assessment Proceedings and even as per information gathered by her, document was notarized by Kanubhai J. Patel who has made criminal offence for which she has submitted order of Hon'ble Gujarat High Court. In rejoinder Appellant has mainly relied upon written submission filed by him and with regard to authenticity of additional evidence, Appellant has contended that during the course of Assessment Proceedings AO has issued summons to buyer of the property wherein authorized person on behalf of buyer has categorically stated that he has executed agreement with Appellant for transfer of property at Rs.80,00,000/- hence agreement cannot be treated as afterthought. The Appellant has also drawn attention to the fact that buyer of the property has paid stamp duty of Rs.3,96,000/- on 31st March, 2011 for above property and has submitted certificate of stamp duty issued by Sub- Registrar, Bavla, on such date fqr conveyance of immoveable property. On this basis AR of the Appellant has argued that if no agreement to sell is executed, how Sub-Registrar will issue stamp duty certificate in the name of buyer of the property and how buyer of the property will make payment of stamp duty on consideration of Rs.80,00,000/-. Thus, it was stated by Appellant that agreement to sell executed by him was a valid ITA No.1127/Ahd/2018 With CO 6 document. The Appellant has also stated that the person who has notarized was subject to criminal offence for transactions not related to Appellant and if he has forged certain documents in certain : cases, it cannot be presumed that all the documents notarized by him are forged documents. 5.2 On careful consideration of entire facts, it is observed that Appellant has submitted various additional evidences which mainly include agreement to sell, sale deed and copy of bank statement. It is observed that sale deed is already registered deed and it was already available on record of AO. The bank statements were submitted by Appellant in support of his argument that part payment was received pursuant to agreement to sell and such documents being third party documents and directly relatable to issue involved in present appeal hence same are admitted along with agreement to sell submitted by Appellant The Appellant has mainly contended that he has not submitted such documents as he was not aware about consistent failure on the part of his representative. He has appointed another consultant when it came to his notice that his earlier representative had failed to submit documents and even Return of Income under Section 148 of the Act. It is also observed that Appellant filed his Return of Income under Section 148 of the Act on 5th March, 2016 and order was passed on 15th March, 2016 hence even new consultant had no sufficient time for making compliance in Assessment Proceedings. It is also observed that Remand Report was also obtained from AO and her contentions are also considered while adjudicating the present issue. The AO in the Remand Report has contended that Appellant has even remained non-compliant even in Assessment Proceedings for A.Y. 2010-11 hence additional evidence should not be admitted for present year. However, it is observed that Assessment Order for A.Y. 2010-11 was passed under Section 143(3) of the Act and no additions have been made in returned income which proves that Appellant has fully complied with details during Assessment Proceedings for A.Y. 2010-11. The Hon'ble Gujarat High Court in the case of CIT V/s Kamlaben Sureshchandra Bhatti [2014] 44 taxmann.com 459 has held as under: Section 251 of the Income Tax Act, 1961, read with Rule 46A of the Income Tax Rules, 1962 - Commissioner (Appeals) - Powers of (Power to admit additional evidence) - In course of assessment, notice of hearing issued by Assessing Officer was received by Assessee on date of hearing itself - Assessee thus could not produce necessary evidence on such date - Subsequently, when Assessee attended office of Assessing Officer with necessary evidence, he learnt that order of assessment was already passed - In such circumstances, Commissioner (Appeals) permitted additional evidence to be produced before him and while doing so, he also ITA No.1127/Ahd/2018 With CO 7 called remand report from Assessing Officer- Whether on facts, addition of additional evidence could not be stated to be in breach of requirement of Rule 46A particularly when interest of revenue was safeguarded by calling for remand report and permitting Assessing Officer to comment on such additional evidence ~ Held, yes [Para 4] [In favour of Assessee Hon'ble Punjab & Haryana High Court in the case of PCIT V/s Daljit Singh SRA 80 taxmann.com 271 has held that "where additional evidences filed under Rule 46A were relevant for Calculation of real income, same was required to be admitted. Thus, entire additional evidences submitted by Appellant are admitted". The reasons adduced by Appellant are found to be reasonable and additional evidences are admitted under Rule 46A. The return of income in response to notice u/s.148 has been filed on 05.03.2016 but the assessment order has been issued on 15.03.2016 and this fact has important bearing while deciding to admit additional evidences. After considering all the facts and circumstances, the additional evidence submitted by toe appellant is admitted as there was a reasonable cause for not producing the evidences before the A. O. and the same is considered necessary to go to the root of the controversy involved. Therefore, same are admitted for adjudication to provide natural justice to appellant and such admission is supported by following case laws: - Kamlaben S Bhatti 44 Taxman.com 459 (Guj.) - Dharmamdev Finance Pvt Limited 43 taxman.com 395 (Guj.). - ACIT VS Jogindersingh (ITA No. 2942/DELHI/2011) ITAT, Delhi - Anmol Colour India Pvt. Ltd. Vs. ITO 31 SOT 18 (JP) 121ITJ 269: ITAT, Jaipur. - CIT Vs. Khanpur Cool Synthicate (1964) 53IJR 225 (SC): 5.3 .So far as merits of the case are concerned, it is observed that AO has proceeded to make addition u/s 50C of the Act considering JANTRI Value prevailing as on the date of sale and has ignored JANTRI value as on the date of execution of agreement to sale considering such document as not valid document. It is observed that as per final sale deed executed with buyer of the property, appellant has received Rs Rs. 19,30,000 on 16th September, 2010, Rs.10,00,000/- on 13th October, 2010 and Rs.25,00,000/- on 26th February, 2011 and such amounts are duly reflected in bank statement of appellant. These are credible independent evidences not amenable to manipulation by the appellant and these facts are not disputed by AO in the remand report. These facts clearly prove that appellant has received consideration for part performance of contract on or before 31st March 2011 wherein Old JANTRI was prevailing. The Jantri Value was revised on 18th April 2011. If appellant has not entered into any agreement to sale, how he would receive such consideration on ITA No.1127/Ahd/2018 With CO 8 various dates as claimed. The appellant has also submitted Stamp Duty certificate issued by the Government of Gujarat which is part of sale deed executed with buyer of the property. As per such document, purchasing party i.e. Ashwa InfraconPvt Ltd has paid stamp duty amounting to Rs. 3,96,000/-computed on the basis of the Jantri value on 31st March 2011 which is as per JANTRI value prevailing in the financial year in which agreement to sale was executed. The above document is authentic document and available with Sub registrar who has clearly mentioned that as on 31st March 2011, market value of the above property was Rs 80,00,000/- and buyer has paid proper stamp duly. It is also observed that in said document, Ashwa Infracon Pvt Ltd is mentioned as buyer of the property and appellant is mentioned as seller of the property. This being independent document clearly supports the contention of appellant that agreement to sale was executed prior to sale deed and due to such agreement only, buyer of the appellant had paid stamp duty applicable on sale value of land as on 31st March 2011. The AO has doubted genuineness of such document mainly on the ground that notary to such document is subject to criminal proceedings before Hon'ble Gujarat High court. On careful consideration of decision of Hon'ble high court as submitted by AO in remand report, notary was subject to criminal proceedings not in the case of appellant or for documents notarized in case of appellant and even in said case, High court has given bail to said notary and there is no definite allegation against. Mr. Kanubhai J Patel, Notary having specific bearing on the instant case. It is also observed that if one person is found to be guilty for forging document in Notary, it cannot be held that all documents notarized by him are always forged documents and there is nothing on record that as on the date of notary of above document, he was debarred from doing such notary whereas independent evidence in form of certificate issued by Sub registrar, market value of the property was Rs 80,00,OOO/- and stamp duty was already paid before there is increase in any JANTRI value. It is observed that as sale deed was not registered before increase in JANTRI value, buyer of the property has to paid additional stamp duty considering JANTRI value prevailing as on the date of sale. The circumstantial independent evidences such as transactions through banking channel prove that the banakhat was actually in existence much before 18.04.2011, the day on which jantri value was revised. It is also observed that during .the course of assessment proceedings, AO has also issued summons the buyer of the property wherein director of the company has stated that due to illness, authorized person would attend hearing and same was accepted by AO. During the course of hearing, such authorized person has categorically admitted that buyer has entered into agreement to sale (banakhat) with appellant for purchase of property for Rs 80,00,000/-, paid stamp duty on 31st March 2011 considering value of property at Rs. 80,00,000/- and paid additional stamp duty subsequently because sale deed was delayed for final
