DHANSUKHBHAI THAKORBHAI PATEL,SURAT V. THE INCOMETAX OFFICER WARD-2(2)(1) SURAT, SURAT

ITA 521/SRT/2024

AI Insights

The case involves Dhansukhbhai Thakorbhai Patel, the appellant, who contested the orders of the Income Tax Officer and the Commissioner of Income Tax (Appeals) regarding the taxation of long-term capital gains and other additions under various sections of the Income Tax Act, 1961. The appellant argued that the agricultural land sold did not attract capital gains tax as it was not a capital asset under section 2(14)(iii) of the Act. Additionally, the appellant contested the valuation of the land by the Stamp Valuation Authority, which was significantly higher than the sale consideration. The Tribunal found that the lower authorities had not provided adequate opportunities for the appellant to present his case, leading to a decision to remand the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472211 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 19-11-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 03-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: SAMARJIT NARAYAN SATYAM
• Keywords: Set aside; Capital asset; Opportunity of being heard; Sale consideration of property below Jantri Value; Fair market value; Principle of natural justice
• Section: 143(3); 54; 56(2)(vii)(b); 56(2); 54B; 50C; 2(14)

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 521/SRT/2024 (AY 2014-15) (Physical court hearing) Dhansukhbhai Thakorbhai Patel Moti Kanbiwad AT Post Kathor, Tal: Kamrej, Surat-394 150 [PAN : BDCPP 0036 M] बनाम Vs Income Tax Officer, Ward- 2(2)(1), Surat, Room No. 629, 6th Floor, Aayakar Bhawan, Near Majura Gate, Opp. New Civil Hospital, Surat-395 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Samarjit Narayan Satyam, CA राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta, CIT-DR अपील पंजीकरण/Appeal instituted on 03.05.2024 सुनवाई की तारीख/Date of hearing 19.11.2024 उद ्घोषणा की तारीख/Date of pronouncement 20.11.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as “NFAC/Ld.CIT(A)] dated 08.12.2022 for assessment year (AY) 2014-15, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 28.12.2016. The assessee has raised following grounds of appeal: “(I) Ex-parte order (1) The learned CIT(A) was not justified in passing ex-parte order. (2) The matter may be remitted back to the CIT(A) as the appellant deserves on opportunity of being heard in the interest of natural justice. (II) Long Term Capital Gain of Rs,1,00,00,000: ITA No.521/SRT/2024 (A.Y.14-15) Dhansukhbhai T Patel 2 (1) On the facts and in the circumstances of the case and as per law, the learned CIT(A) was not justified in confirming in taxing long term capital gain at Rs.1,00,00,000 in respect of sale of agricultural land at block No.264, Kathor. (2) On the facts, the appellant submits that the land being situated more than 5 kms, away from Kamrej village, incorrect yardstick of population was applied. (3) The appellant, therefore, submits that there would not bel iability of capital gains the land would not be a capital asset in view of section 2(14)(iii). (4) Without prejudice to the above, the appellant ought to have been granted benefit of deduction of indexed amount of fair market value as on 01-04-1981. (II) Invoking section 50C: (1) The learned CIT(A) was not justified in confirming addition of Rs.1,65,05,216 u/s 50C of the Act when the transfer of agricultural land itself was not liable to the charge of capital gain. (2) Without prejudice to the above, the appellant submits that the value as per stamp valuation authority being excessive and much more than the document, the learned CIT(A) ought to have referred the valuation /s 50C(2). (3) Without prejudice to the above, the learned CIT(A) ought to have called upon to remand to grant deduction of purchase of agricultural land /s 54B when all the conditions relating thereto were complied with. (III) Invoking of section 56(2)(vii) of the Act: (1) On the facts and circumstances of the case and as per law, provisions of section 56(2)(vii) being applicable only to immovable property which is capital asset as per explanation-(d) of the Act have been wrongly invoked. (2) The appellant submits that since the agricultural land purchased was not a capital asset as per section 2(14) of the Act, the addition is required to be deleted. (3) Without prejudice to the above, the appellant submits that the learned CIT(A) ought to have referenced as per Third Proviso to clause (iii) of Section 56(2) of the Act to the District Valuation Officer. (IV) Miscellaneous: (1) All of the above grounds are prejudiced to one another. ITA No.521/SRT/2024 (A.Y.14-15) Dhansukhbhai T Patel 3 (2) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 2. Rival submission of both the parties have been heard and record perused. The Ld. Authorized Representative (Ld.AR) of the assessee submits that Ld.CIT(A) passed the ex parte order and dismissed the appeal in a non-speaking order. The order passed by Ld.CIT(A) is not as per mandate of Section 250(6) of the Act. The Assessing Officer also passed ex parte order for want of proper compliance, though in assessment order mentioned as it is passed under section 143(3) of the Act. The assessee is a pure agriculturist and engaged in agricultural activities and selling milk which is treated as agricultural activities. During the relevant financial year, assessee sold agricultural land for a consideration of Rs.1.00 crores on 06.06.2013. The Stamp Valuation Authority for the purpose of registration of transaction valued the land at Rs.2.65 crores and collected the requisite stamp duty. The Assessing Officer, accordingly, made addition. The assessee also purchased agricultural land on 31.12.2013 for a sale consideration of Rs.26.51 lakh. The Stamp Valuation Authority valued the said land at Rs.2.39 crores. Therefore, Assessing Officer by invoking the provisions of Section 56(2)(vii) and proposed addition of Rs.2.11 crores. The Assessing Officer made both the additions, i.e., section 56(2)(vii)(b) as well as Section 50C of the Act by taking view that assessee has not filed any reply. The assessee is also eligible for deduction under section 54B. 3. The Ld. AR of the assesse submits that though before Assessing Officer, assessee filed certain reply and made a request for making reference to District Valuation Officer, however, neither the report of DVO is mentioned in the assessment order nor it was considered. The Ld. CIT(A) also confirmed the ITA No.521/SRT/2024 (A.Y.14-15) Dhansukhbhai T Patel 4 addition made by Assessing Office in ex parte proceedings. The Ld. AR of the assessee submits that while dismissing, the ld CIT(A) Officer has mentioned that notice of hearing was issued on several occasions. The Ld. AR of the assessee submits that in appeal form, the assessee has filed Form-35, the assessee has mentioned the e-mail id at [e-mail]. However, on perusal of ITBA portal, last notice sent by Assessing Officer on different e-mail id i.e., [e-mail] , thus, the assessee was prevented by sufficient cause for not making timely compliance. The Ld. AR of the assessee submits that he has a limited prayer before the Bench that lower authorities have not given fair and reasonable opportunities of being heard to assessee. Substantial rights of assesse are involved in the present appeal. The Ld. AR of the assessee submits that to avoid long drawn process of remand report before ld CIT(A), if the assessee files evidences to substantiate his claims, the matter may be restored back to Assessing Officer. The ld AR also payed that specific directions may be made to Assessing Officer obtained report of DVO about cost of agriculture land as on 01.04.1981, about the price of land on the date of sale and valuation of agriculture land purchased by the assessee, if such report is not received and further be allowed the assessee to file the reply and to contest the case. The Ld. AR of the assessee submits that assessee undertakes to be more vigilant in future in making timely compliance. 4. On the other hand, Ld. Commissioner of Income-tax Departmental Representative (Ld. CIT-DR) for the Revenue submits that assessee was given ample opportunities by lower authorities. The lower authorities have not no options except to pass order on the basis of material available on record. The ITA No.521/SRT/2024 (A.Y.14-15) Dhansukhbhai T Patel 5 assessee has not made compliance as reflected in the order of Assessing Officer as well as Ld. CIT(A). Therefore, at this stage, assessee does not deserve any further leniency. 5. In short rejoinder, Ld. AR of the assessee submits that only one opportunity may be given to assessee to contest the case on merit as a substantial addition is made in the assessment order by ignoring all vital facts. 6. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that Assessing Officer made addition of Rs.1.65 crores on sale of land by invoking provisions of section 50C of the Act. The Assessing Officer also made addition of Rs. 2.37 Crore under section 56(2)(vii)(b) on account of different of valuation on purchase of land vis-à-vis the value determined by Stamp Valuation Authority. We find that Assessing Officer has made addition in ex parte assessment, though on the face of assessment order it is mentioned as under section 143(3) of the Act. The Ld. CIT(A) confirmed the order in one sentence. The order of Ld. CIT(A) is not ion consonance with the provisions of Section 250(6) of the Act. Considering the fact that the Assessing Officer has made huge addition for want of compliance on behalf of assessee as recorded by lower authorities. Now before us, Ld. AR of the assessee has undertaken that assessee would be more vigilant in timely compliance. Therefore, keeping the principle of natural justice, we set aside the order of Ld. CIT(A) and deem it appropriate to restore the grounds of appeal raised by assessee to the file of Assessing Office to pass assessment order afresh. The Assessing Officer is also directed to consider the claim of assessee under section 54 in accordance with law. Assessing Officer is further directed ITA No.521/SRT/2024 (A.Y.14-15) Dhansukhbhai T Patel 6 to obtained report of DVO about cost of agriculture land as on 01.04.1981, about the price of land on the date of sale and valuation of agriculture land purchased by the assessee, if such report is not received and further be allowed the assessee to file the reply and relevant evidences to contest various additions. Needless to direct the Assessing Officer shall grant opportunity of being heard to assessee. The assessee is also directed to provide all evidences and information again to the Assessing Officer as and when required. In the result, grounds of appeal raised by assessee are treated allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 20/11/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 20/11/2024 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "