Shri Manish Chittranjan Parikh, Baroda V. The Income tax Officer,Ward-5(4), Baroda

ITA 1147/AHD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57073 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 01-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KUNAIR
• Assessee Lawyers: U S BHATI
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Revision of order; Source of fund; Fair market value; Valuation report
• Section: 68; 54; 263; 50C; 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 1147/ AHD/2008 (ASSESSMENT YEAR 2003-04) SHRI MANISH CHITTRANJAN PARIKH, 114, SANGAM SOCIETY, SANGAM CHAR RASTA, BARODA VS. ITO, WARD 5(4), BARODA PAN/GIR NO. : AIUPP5531F (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI U S BHATI, AR RESPONDENT BY: SHRI JAMES KUNAIR, DR DATE OF HEARING: 01.12.2011 DATE OF PRONOUNCEMENT: 31.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) V BARODA DATED 25.01.2008 FOR THE ASSESSMENT YEAR 2003-04. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ALL THE GROUNDS OF APPEAL IN THIS APPEAL ARE MUTUA LLY EXCLUSIVE AND WITHOUT PREJUDICE TO EACH OTHER. 1. THE LEARNED COMMISSIONER OF INCOME TAX (A )- V, BARODA ['THE CIT(A)'] ERRED IN FACT AND IN LAW IN MAKING A DDITION OF RS. 7,30,000/- INVOKING PROVISION OF SECTION 68 OF THE INCOME TAX ACT, 1961 ['THE ACT']. 3. THE BRIEF FACTS OF THIS ISSUE TILL THE ASSESSMEN T STAGE ARE NOTED BY LD. CIT(A) IN PARA 2, 2.1 & 2.2 OF HIS ORDER WHICH ARE REPRODUCED BELOW: I.T.A.NO. 1147 /AHD/2008 2 THE FIRST GROUND OF APPEAL IS AGAINST ADDITION OF RS.8 LACS UNDER SECTION 68 OF THE ACT MADE BY THE A.O. THE A .O. HAS DISCUSSED THIS ISSUE ON PARA 4 OF HIS ASSESSMENT OR DER. ON VERIFICATION OF APPELLANT'S CAPITAL ACCOUNT, THE AO FOUND THAT THERE IS AN INTRODUCTION OF RS.8,00,000/- MADE BY THE APP ELLANT ON 14.04.2002 WITH A NARRATION CALLED ' CASH RECEIVED AS PER MOTHER'S WILL'. THE APPELLANT CLAIMED BEFORE THE AO THAT HIS MOTHER EXPIRED ON 11.01.2002 AND ACCORDING TO HER WILL, HE INHERITED HER SAVINGS TO THE TUNE OF RS.13,50,000/-. THE APPELLAN T FURNISHED A COPY OF WILL DATED 03.11.2001 TO THE AO. THE AO ASK ED FOR SOURCES OF INCOME, PA NUMBER; COPY OF BANK ACCOUNT ETC. FROM THE APPELLANT RELATING TO THE SOURCES OF HIS MOTHER 'S INCOME. THE APPELLANT ARGUED THAT HIS MOTHER WAS A HOUSE WIFE. HOWEVER, SHE INHERITED FROM HER HUSBAND SEVERAL ASSET. HE STATED THAT AS PER THE I.T. RETURN OF HIS FATHER, HIS FATHER HAD GROSS ASS ETS WORTH RS.4,84,333/- AS ON 31.10.1987. THE APPELLANT ALSO STATED THAT HIS MOTHER HAD SAVED MONEY FOR KIDNEY TRANSPLANTATION A MOUNTING TO RS. 14-15 LACS, WHICH SHE COULD NOT USE BECAUSE OF HER UNTIMELY DEATH. 2.1 THE AO DID NOT ACCEPT THE EXPLANATIONS OF THE A PPELLANT FOR THE FOLLOWING REASONS: (I) THE APPELLANT FAILED TO PROD UCE ANY DOCUMENTARY EVIDENCE REGARDING POSSESSION OF HUGE D EPOSITS OR INVESTMENTS BY HIS MOTHER OR EVIDENCE OF SALE. THE AO STATED THAT EVEN IF THE WILL SUBMITTED' BY THE APPELLANT IS TAK EN INTO BELIEF, SMT. VINABEN HAD BEQUEATHED THE JEWELLERY, BANK DEP OSITS, FDS, SHARES ETC. HENCE THERE COULD HAVE BEEN NO LIQUID C ASH, (II) THE AO STATED THAT ACCORDING TO THE WILL, SMT.VINABEN C OLLECTED RS.13.50,000/- MAINLY FROM DISPOSING OF COLLECTIONS OF MUSIC BOOKS, ARTIFACTS, FURNITURE, PRIVATE FDS, SHARES, S AVINGS ACCOUNT ETC., BUT THE APPELLANT COULD NOT PRODUCE ANY EVIDE NCE REGARDING THESE, (III) EVEN THOUGH SMT.VINABEN, BY THE APPELL ANT HAD WEALTH TO THE TUNE OF RS.74,00,000/- + REAL ESTATE OF RS.1 ,50,00,000/-, SHE NEVER FURNISHED HER RETURN OF INCOME AND RETURN OF WEALTH, (IV) THE AO STATED THAT THE LAST RETURN FILED BY HIS FATHER SHRI C.G.PARIKH DISCLOSES A TOTAL INCOME OF RS.44,564/- AND A CAPIT AL OF RS.4,57,473/- AS ON 31.10.1987. IT CANNOT BE BELIEV ED THAT FROM THIS AMOUNT, THERE WAS AN ACCRETION TO THE TUNE OF RS.74 ,62,000/-. (V) THE AO STATED THAT EVEN IN THE BALANCE SHEET OF THE APPELLANT'S FATHER FOR A.Y. 1988-89, THE SO CALLED ASSETS SUCH AS MUSIC BOOKS, ARTIFACTS ETC. WHICH WERE CLAIMED TO HAVE BEEN DISP OSED OFF BY THE I.T.A.NO. 1147 /AHD/2008 3 APPELLANT, NEVER APPEARED, (VI) THE AO ARGUED THAT THE' APPELLANT HAS FURNISHED A LETTER SIGNED BY ONE SHRI TIMIR KAN TILAL ' CLAIMING THAT THE APPELLANT'S MOTHER VEENABEN PARIKH HAD ENT RUSTED AN AMOUNT OF RS.3,50,000/- TO MR.KANTILAL'S MOTHER. TH E AO SAID THAT THE SAID LETTER HAS NO DETAILS, REGARDING WHEN THE AMOUNT WAS ENTRUSTED, WHEN RETURNED BACK, MODE OF PAYMENTS, RE PAYMENTS, PAN OF THE RECIPIENT ETC. THE AO ARGUED THAT THE EV IDENCES ARE NOT RELIABLE AND IT IS AN ATTEMPT TO EXPLAIN CASH DEPOS ITS, (VII) SIMILAR ARGUMENTS HAVE BEEN MADE BY THE A.O. REGARDING ONE LETTER SIGNED BY VARIETY. RECORD CENTRE REGARDING RS.75,000/-. (V III) THE AO ARGUED THAT THE CLAIM OF THE POSSESSION AND DISPOSA L OF SHARES IS ALSO NOT ACCEPTABLE AS THERE IS NO SUCH TRANSACTION S REFLECTED IN THE SAVINGS BANK ACCOUNT OF THE APPELLANT'S MOTHERS, (I X) THE AO ARGUED THAT THE CLAIM OF THE APPELLANT THAT THERE W AS SUBSTANTIAL INCOME FROM LETTING OUT OF HOARDINGS IS ALSO NOT AC CEPTABLE. HE STATED THAT COPY OF AGREEMENT PRODUCED ONLY INDICAT E ANNUAL INCOME OF RS. 15,000/- FOR THREE YEARS, WHICH COULD HAVE BEEN SENT BY THE APPELLANT'S MOTHER, (X) IN PARA 4.8 OF HIS O RDER, THE AO STATED THAT THE EXISTENCE OF A WILL IS ALSO DOUBTFU L. HE STATED THAT THE SO CALLED WILL RUNS INTO THREE PAGES. THE FIRST PAGE IS MADE ON A STAMP -53OER OF RS.10/- ISSUED ON 30.09.1981. THE S ECOND PAGE IS PLAIN PAPER. THE THIRD PAGE IS ON A STAMP PAPER OF RS.5/- ISSUED ON 15.01.1976. THE WILL IS CLAIMED TO HAVE BEEN EXECUT ED ON 03.11.2001. THE AO POINTED OUT THAT THE MOST IMPORT ANT PART OF THE WILL RELATING TO BEQUEATHING OF ASSETS ARE WRITTEN ON PLAIN PAPER. THE TWO STAMP PAPERS ARE PURCHASED AT DIFFERENT POI NTS OF TIME FROM TWO DIFFERENT VENDORS. THE WILL IS NEITHER REG ISTER NOR NOTARIZED. 2.2 FROM THE ABOVE FACTS, THE AO CONCLUDED THAT THE APPELLANT IS TRYING TO EXPLAIN INTRODUCTION OF CASH OF RS.8,00,0 00/- BY SHOWING IT AS -AN INHERITANCE FROM HIS MOTHER. HE HELD IT A S UNEXPLAINED CASH CREDITS AND ADDED THE SAME TO THE INCOME OF TH E 23PELLANT UNDER SECTION 68 OF THE I.T.ACT,1961. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A). LD. CIT(A) HAS UPHELD THIS ADDITION AF TER ALLOWING RELIEF OF RS.70,000/- ON THE BASIS OF BANK WITHDRAWALS ON 24. 06.1998 OF I.T.A.NO. 1147 /AHD/2008 4 RS.70,000/- AND IN THIS MANNER, HE CONFIRMED THE BA LANCE ADDITION OF RS.7.30 LACS. AGAINST THIS, THE ASSESSEE IS IN FUR THER APPEAL BEFORE US. 5. LD. A.R. OF THE ASSESSEE REITERATED THE SAME ARG UMENTS WHICH WERE RAISED BEFORE THE LD. CIT(A). HE ALSO SUBMITTED TH AT ON PAGE 152 AND 158 OF THE PAPER BOOK, IS A COPY OF THE RETURN OF N ET WEALTH FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2002-03, I.E. THE PRECEDING YEAR IN RESPECT OF LATE SMT. VEENABEN C PARIKH, MOTHER OF T HE ASSESSEE AND THE SAME WAS FILED BY THE ASSESSEE AS A LEGAL HEIR. ON PAGE 155 OF THE PAPER BOOK IS THE COMPUTATION OF NET WEALTH AS ON 31.03.2 002 WHICH INCLUDES CASH IN HAND OF RS.7.50 LACS. AND THE SAME WAS ACCE PTED BY THE A.O. IN THE ORDER PASSED BY THE A.O. U/S 16(3) READ WITH SE CTION 17 OF WEALTH TAX ACT 1957. COPY OF THIS WEALTH TAX ASSESSMENT ORDER IS ALSO AVAILABLE IN THE PAPER BOOK ON PAGES 156-158 AS PER WHICH, A SEP ARATE ADDITION WAS MADE BY THE A.O. OF RS.49,83,700/- IN RESPECT OF A PLOT OF LAND BUT SO FAR THE WEALTH DECLARED BY THE ASSESSEE IN THE RETURN O F NET WEALTH OF RS.8,19,037/-, THE SAME WAS ACCEPTED AND, THEREFORE , THE SOURCE OF CASH STANDS EXPLAINED AND ACCEPTED BY THE DEPARTMENT. 6. IN REPLY, THE LD. D.R. OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT IS NOTED BY THE A.O. IN PARA 4 OF THE ASSES SMENT ORDER THAT AS PER THE CAPITAL ACCOUNT OF THE ASSESSEE, THE ASSESSEE H AS INTRODUCED A SUM OF RS.8 LACS IN CASH ON 14.04.2002 WITH THE NARRATION AS THE CASH RECEIVED AS PER MOTHERS WILL. THIS WAS NOT ACCEPTED BY THE A. O. AND ADDITION WAS MADE BY HIM. A COPY OF THE WILL OF HIS MOTHER IS A VAILABLE ON PAGE 6 & 7 OF THE PAPER BOOK. THIS WILL IS DATED 03.11.2001. AS PER CLAUSE 4 OF THIS WILL, IT IS SAID THAT SHE IS HAVING A SUM OF RS.13. 50 LACS WITH HER AND THE I.T.A.NO. 1147 /AHD/2008 5 SAME IS BEQUEATHED BY HER TO HER SON AND DAUGHTER I N LAW. HER RETURN OF NET WEALTH AND ITS WEALTH TAX ASSESSMENT ORDER ARE AVAILABLE ON PAGE 153- 158 OF THE PAPER BOOK. THIS RETURN OF NET WEALTH F OR THE YEAR ENDED 31.03.2002 WAS FILED BY THE ASSESSEE BEING LEGAL HE IR OF HIS MOTHER SMT. VEENABEN C PARIKH. AS PER THE COMPUTATION OF NET W EALTH AS ON 31.03.2002, AVAILABLE ON PAGE 155 OF THE PAPER BOOK , THERE WAS CASH IN HAND SHOWN OF RS.7.50 LACS AND TOTAL NET WEALTH WAS WORKED OUT AT RS.8,19,037/- AND AS PER THE WEALTH TAX ASSESSMENT ORDER, THE SAME WAS ACCEPTED AFTER MAKING AN ADDITION OF RS.49,83,700/- IN RESPECT OF A PLOT OF LAND. THIS SUBMISSION OF THE ASSESSEE WAS REJECTED BY THE AUTHORITIES BELOW ON THE BASIS THAT HE ASSESSEE COULD NOT SHOW AND EXPLAIN AS TO WHEN THE ASSETS WERE LIQUIDATED AND SOLD GENERATING THE CASH. LD. CIT(A) ALSO POINTED OUT IN PARA 2.4 OF HIS ORDER THAT IT I S HUGE ASSET CLAIMED TO HAVE BEEN OWNED AND LATER BEQUEATHED TO THE ASSESSE E, WERE NOT SHOWN IN I T AND WT RETURNS BY THE ASSESSEES MOTHER. THIS OBSERVATION OF LD. CIT(A) IS NOT CORRECT WHEN WE FIND THAT THE RETURN OF NET WEALTH FOR THE MOTHER OF THE ASSESSEE WAS FILED BY THE ASSESSEE AS A LEGAL HEIR ON 16.06.2006 IN RESPONSE TO THE NOTICE ISSUED BY THE A.O. U/S 17 OF WEALTH TAX ACT ON 27.03.2006. IN THE SAID RETURN OF WEALT H FILED BY THE ASSESSEE IN RESPECT OF HIS DECEASED MOTHER, TOTAL NET WEALTH WAS WORKED OUT AT RS.8,19,0937/- AS ON 31.03.2002 WHICH INCLUDED AN A MOUNT OF RS.7.50 LACS BEING CASH IN HAND. IN WEALTH TAX ASSESSMENT ORDER PASSED BY THE A.O. ON 29.11.2006 U/S 16(3) READ WITH SECTION 17 O F WT ACT 1957, THIS CLAIM WAS ACCEPTED BY THE A.O. AND THE NET WEALTH W AS ASSESSED AT RS.58,02,800/- AFTER MAKING ADDITION OF RS.49,83,70 0/- IN RESPECT OF PLOT OF LAND. HENCE, THIS IS ADMITTED POSITION THAT THE MOTHER OF THE ASSESSEE WAS HAVING CASH IN HAND OF RS.7.50 LACS AS ON 31.03 .2002 WHEREAS THE ASSESSEE HAS INTRODUCED RS.8 LACS ON ACCOUNT OF THE AMOUNT RECEIVED BY I.T.A.NO. 1147 /AHD/2008 6 HIM FROM HIS MOTHER IN THE PRESENT YEAR AND HENCE, IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSEE SHOULD BE ACCEPT ED TO THE EXTENT OF RS.7.50 LACS. WE HOLD ACCORDINGLY. WE CONFIRM THE ADDITION OF RS.50,000/- AND DELETE THE BALANCE ADDITION. THIS GROUND OF THE ASSESSEES APPEAL IS PARTLY ALLOWED. 8. GROUNDS NO.2, 3 & 4 ARE INTERCONNECTED WHICH ARE AS UNDER: 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING ACTION OF THE INCOME TAX OFFICER, WARD 5 (4) ['THE AO'] IN SUBSTITUTING THE FAIR MARKET VALUE OF LAND AS ON 1- 4-81 AT RS. 70,000/- AS AGAINST RS. 8,61,047/- AS CLAIMED BY TH E APPELLANT. 3. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CONFIRMING ACTION OF THE AO IN IGNORING THE OPINION OF A TECHN ICAL EXPERT, A REGISTERED VALUER AND SUBSTITUTING HIS OWN VIEW. 4. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CONFIRMING ACTION OF THE AO IN ENHANCING LONG TERM CAPITAL GAI N FROM RS. 13,80,339/- TO RS. 49,16,319/- AND THEREBY INCREASI NG THE TOTAL INCOME OF THE APPELLANT. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CON FIRMING ACTION OF THE AO IN RESTRICTING EXEMPTION U/S. 54F TO RS. 21,67,075/- AS AGAINST ENTIRE CAPITAL GAINS CONSIDERED EXEMPT BY T HE APPELLANT. 5. THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN CONFIRMING ACTION OF THE AO IN CHARGING INTEREST U/S. 234B AND 234D OF THE ACT. 9. THE BRIEF FACTS OF THIS ISSUE ARE NOTED BY LD. C IT(A) IN PARA 3 & 3.1 OF HIS ORDER WHICH ARE REPRODUCED BELOW: 3. THE SECOND AND THIRD GROUNDS OF APPEAL ARE AGAI NST ENHANCEMENT OF LONG TERM CAPITAL GAIN FROM RS.13,80 ,339/- TO RS.49,16,319/-. THE AO HAS SUBSTITUTED THE VALUE OF LAND AS ON 11.04.1981 FOR RS.70,000/- AS AGAINST RS.8,61,047/- CLAIMED BY THE APPELLANT. THE AO HAS DISCUSSED THIS ISSUE IN PARA 5 TO 5.1.11 OF HIS ASSESSMENT ORDER. THE AO FOUND THAT THE APPELLA NT HAS DISCLOSED A LONG TERM CAPITAL GAIN OF RS.13,80,339/ - ON SALE OF LAND. THE SALE VALUE IS SHOWN AT RS.52,29,219/- WHI LE THE FAIR MARKET VALUE AS ON 11.04.1981 IS TAKEN AT RS.8,61,0 47/-. THE AO FOUND THAT THE PROPERTY CONCERNED WAS PURCHASED BY THE LATE FATHER OF THE APPELLANT FOR A CONSIDERATION OF RS.44,999/- AS ON I.T.A.NO. 1147 /AHD/2008 7 28.08.1997. THE APPELLANT COULD ANY PRODUCE THE AGR EEMENT FOR SALE OF LAND ENTERED ON 29.01.1976 IRE POSSESSION R ECEIPT DATED 20.08.1978 BEFORE THE AO. THE APPELLANT COULD NOT P RODUCE THE COPY OF PURCHASE BILL BEFORE THE AO. THE APPELLANT HAD CLAIMED THE VALUE OF THE SAME LAND AT RS.8,61,047/- AS ON 01.04 .1981 VALUED BY A REGISTERED VALUER. THE AO POINTED OUT THAT ~IS PR ICE IS ALMOST 20 TIMES OF THE PURCHASE PRICE OF RS.44,999/- ONLY AFT ER A GAPE OF 4 YEARS. THE AO ALSO POINTED OUT THAT THE APPELLANT'S FATHER LATE SHRI C. G. PARIKH HAD SHOWN THE VALUE OF THE LAND AT RS. 11,797/- FOR A.Y.1988-89. THE AO ALSO POINTED OUT THAT ACCORDING DEVELOPMENT AGREEMENT DATED 14.02.2002, THE APPELLA NT HAS CLAIMED THAT THE SAID LAND WAS PURCHASED ON 04.07.1 983, HENCE THE A.O. PROPOSED TO TAKE THE PURCHASE YEAR TO BE THE A SSESSMENT YEAR 3.1 AFTER EXAMINING THE SUBMISSIONS MADE BY THE APP ELLANT, THE AO DETERMINED THE FAIR MARKET VALUE OF THE LAND AT RS.70,000/-, ALLOWING APPRECIATION OF ABOUT 40 TO 50%. HE HAS CA LCULATED THE INDEXED COST OF LAND AT RS.3,12,900/- AND HAS DETER MINED THE CAPITAL GAIN AT RS.49,16,319/-. 10. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A). IT WAS SUBMITTED BEFORE LD. CIT(A) THA T THE VALUATION OF THE REGISTERED VALUER CANNOT BE DISREGARDED. BUT THIS CLAIM OF THE ASSESSEE WAS REJECTED BY LD. CIT(A) ON THIS BASIS THAT IF TH E PURCHASE PRICE OF THE LAND WAS RS.44,999/- AS PER BANAKHAT DATED 22.1.197 6, WHICH IS AN ACCEPTED FACT BY BOTH THE PARTIES, THEN THE COST OF THE LAND CANNOT BE RS.8,61,047/- ON 01.04.1981. REGARDING THIE QUANTU M OF DEDUCTION ALLOWED BY THE A.O. U/S 54F, IT WAS HELD BY LD. CI T(A) THAT AS PER THE SAID SECTION, IT IS REQUIRED THAT THE ASSESSEE HAS TO DEPOSIT THE AMOUNT BEFORE THE DUE DATE OF FILING OF RETURN AND SINCE T HE TOTAL DEPOSIT TILL THAT DATE WAS FOUND TO BE RS.23.05 LACS, THE A.O. HAS CO RRECTLY ALLOWED DEDUCTION U/S 54F TO THE EXTENT OF RS.21,67,075/- A ND IN THIS MANNER, HE DECIDED BOTH THE ISSUES AGAINST THE ASSESSEE AND NO W, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. I.T.A.NO. 1147 /AHD/2008 8 11. IT IS SUBMITTED BY LD. A.R. THAT ON PAGES 13-15 OF THE PAPER BOOK IS THE VALUATION REPORT OF A REGISTERED VALUER SHOWING THE VALUE OF THE PROPERTY AS ON 01.04.1981 AT RS.12.69 LACS WHICH IS THE VALUE OF A JOINT PROPERTY IN THE NAME OF S/SHRI C G PARIKH, VEENA C PARIKH AND MANISH C PARIKH. HE ALSO DRAWN OUR ATTENTION TO PAGE 140 OF THE PAPER BOOK WHICH IS A LETTER OF THE REGISTERED VALUER TO THE A.O. AS PER WHICH, HE EXPLAINED THE BASIS OF THE RATES ADOPTED BY HIM AT RS.80/- PE R SQ. FT FOR VALUING THE PROPERTY IN QUESTION. HE SUBMITTED THAT THE VALUA TION REPORT SHOULD BE ACCEPTED AND IN SUPPORT OF THIS CONTENTION, RELIANC E WAS PLACED ON THE FOLLOWING JUDGEMENTS: (A) MRS. SOSAMMA PAULOSE VS JCIT 79 TTJ (COCHIN) 5 73 (B) NEVILLE DE NORANHA VS ACIT 115 TTJ 390 (C) CIT VS KUMARARANI SMT. MEENAKSHI ACHI 208 CTR 9 1 (MADRAS) 12. ONE MORE CONTENTION WAS RAISED THAT THE REQUIRE MENT OF SECTION 54F IS THAT THE AMOUNT SHOULD BE DEPOSITED IN THE B ANK BEFORE THE DATE FOR FURNISHING THE INCOME AND AS PER THE JUDGMENT OF HO NBLE GAUHATI HIGH COURT RENDERED IN THE CASE OF CIT VS RAJESH KUMAR J ALAN AS REPORTED IN 286 ITR 274, IT WAS HELD THAT THE DATE OF FURNISHIN G RETURN OF INCOME CAN BE THE DATE U/S 139(4) OF THE INCOME TAX ACT, 1961 AND HENCE, PROFITS UTILIZED FOR SPECIFIED PURPOSE BEFORE THAT DATE SHO ULD BE ENTITLED TO EXEMPTION U/S 54. IT WAS SUBMITTED THAT IN THE PRE SENT CASE ALSO, THE DEPOSIT MADE BY THE ASSESSEE TILL THE DATE OF ACTUA L FILING OF RETURN OF INCOME SHOULD BE CONSIDERED FOR THE PURPOSE OF QUAN TIFYING FOR DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 54F. 13. AS AGAINST THIS, LD. D.R. OF THE REVENUE SUPPOR TED THE ORDERS OF AUTHORITIES BELOW. REGARDING THE JUDGMENT OF HONB LE GAUHATI HIGH COURT, IT WAS SUBMITTED BY HIM THAT THIS JUDGEMENT IS NOT OF THE I.T.A.NO. 1147 /AHD/2008 9 JURISDICTIONAL HIGH COURT AND HENCE, NOT BINDING. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD. A.R. THAT THERE IS NO CONTRARY DECISION OF ANY OTHER HIGH COURT ON THIS ISSUE. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGMENTS CITED BY THE LD. A.R. THE FIRST ASPECT T O BE DECIDED BY US IS REGARDING THE QUANTUM OF CAPITAL GAIN AND THE SECON D ASPECT IS REGARDING EXEMPTION ALLOWED TO THE ASSESSEE U/S 54F. REGARDI NG THE FIRST ASPECT, WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE LD. CI T(A) AGAINST THE ASSESSEE AS PER PARA 3.3 OF HIS ORDER WHICH IS REPR ODUCED BELOW: 3.3 I HAVE CONSIDERED THE FACTS OF TH E CASE, THE ARGUMENTS OF THE AO AND THE SUBMISSIONS MADE BY THE LEARNED AR AS WELL. I FIND THAT THE AO HAS TAKEN A REASONABLE BASIS FOR THE VALUATION OF THE LAND FROM THE RECORDS OF THE APPEL LANT HIMSELF. IF THE PURCHASE PRICE OF THE LAND WAS ONLY RS. 44,999 /- AS PER BANAKHAT DATED 28.01.1976, WHICH IS AN ACCEPTED FAC T BY BOTH THE PARTIES ,THEN THE COST OF THE LAND CANNOT BE RS.8 ,61,047/- AS ON 01.04.1981 THE APPELLANT HAS ALSO NOT BEEN ABLE TO PROVIDE A COPY OF PURCHASE DEED. IT HAS NOT BEEN EXPLAINED HOW THE LAND WAS SHOWN AT RS. 11,799/- IN THE RETURN OF INCOME FOR A .Y. 1988-89 BY SHRI C.G. PARIKH, THE OWNER OF THE LAND. THE AO HAS ALLOWED SUFFICIENT APPRECIATION ON THE PURCHASE PRICE SHOWN BY THE APPELLANT HIMSELF AND HAS ARRIVED AT A FAIR MARKET VALUE OF RS. 70,000/-. WHEN THE PURCHASE PRICE SHOWN BY THE APP ELLANT HIMSELF IS BEING ACCEPTED, THERE IS NO NEED TO TAKE CONTEMP ORARY SAMPLES. THE APPELLANT HAS NOT BEEN ABLE TO EX PLAIN HOW THE DEVELOPMENT AGREEMENT SHOWS THE PURCHASE OF LAND AS ON 04.07.1983. CONSIDERING ALL THE FACTS, I FIND THAT THE ACTION OF THE AO IS LOGICAL AND ACCORDING TO LAW. THE ENHANCEMENT OF CAPITAL GAIN MADE BY THE AO BY SUBSTITUTING THE FAIR MARKET VALUE IS UPHELD. THUS, THESE GROUNDS OF APPEAL ARE DISMISSED . 15. IN THE LIGHT OF THIS DECISION OF LD. CIT(A) ON THIS ISSUE, NOW WE EXAMINE THE APPLICABILITY OF VARIOUS JUDGEMENTS CIT ED BY LD. A.R.: I.T.A.NO. 1147 /AHD/2008 10 - THE FIRST TRIBUNAL DECISION IS THE DECISION IN TH E CASE OF MRS. SOSAMMA PAULOSE (SUPRA). IN THAT CASE, IT IS NOTED BY THE TRIBUNAL THAT THE A.O. BRUSHED ASIDE THE REPOT OF THE REGISTERED VALU ER WITHOUT POINTING OUT ANY SPECIFIC REASON. IN THE PRESENT CASE, CIT(A) H AS GIVEN THE SPECIFIC REASON THAT WHEN THE PROPERTY WAS PURCHASED FOR RS. 44,999/- AS PER BANAKHAT DATED 22.01.1976, THE COST OF THE LAND CAN NOT BE RS.86,01,047/- AS ON 01.04.1981. ONE MORE REASON HAS BEEN GIVEN B Y LD. CIT(A) THAT THE ASSESSEE HAS FURNISHED COPY OF THE DEVELOPMENT AGREEMENT SHOWING THE DATE OF PURCHASE OF THE LAND AS ON 04.07.1983. HENCE, WE FIND THAT THE FACTS OF THE PRESENT CASE ARE DIFFERENT AND HEN CE, THIS TRIBUNAL DECISION IS NOT APPLICABLE IN THE PRESENT CASE. - REGARDING THE 2 ND TRIBUNAL DECISION CITED BY THE LD. A.R. BEING THE JUDGMENT RENDERED IN THE CASE OF NEVILLE DE NORANHA (SUPRA). WE FIND THAT THIS JUDGEMENT IS NOT APPLICABLE IN THE PRESEN T CASE BECAUSE THE FACTS ARE ENTIRELY DIFFERENT. IN THAT CASE, THE ISSUE IN DISPUTE WAS REGARDING ADOPTION OF THE PROVISIONS OF SECTION 50C BY THE A. O. AND IT WAS HELD THAT THE ASSESSEES CASE SHOULD BE CONSIDERED TO BE COMI NG WITHIN THE MISCHIEF OF CHAPTER XXC ALONE AND NOT OF SECTION 50C. IN TH E PRESENT CASE, THERE IS NO DISPUTE REGARDING APPLICABILITY OF SECTION 50 C AND CHAPTER XXC AND HENCE, THIS TRIBUNAL DECISION IS ALSO NOT RELEV ANT IN THE PRESENT CASE. - THE 3 RD DECISION CITED BY THE LD. A.R. IS THE JUDGEMENT OF HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF KUMARARAN I SMT. MEENAKSHI ACHI (SUPRA). THIS JUDGEMENT IS ALSO NOT APPLICABL E SINCE THE FACTS OF THE PRESENT CASE ARE DIFFERENT. IN THAT CASE, IT IS NO TED BY HONBLE MADRAS HIGH COURT THAT NO REASON WAS GIVEN BY THE A.O. FOR NOT ACCEPTING THE VALUE ADOPTED BY THE ASSESSEE AND CIT(A) HAS DROPPE D THE PROCEEDINGS U/S 263 IN THE CASE OF OTHER CO-OWNER ON THE SAME I SSUE AS HE FOUND NO JUSTIFICATION TO REJECT THE VALUE ADOPTED BY THE AS SESSEE. IN THE PRESENT I.T.A.NO. 1147 /AHD/2008 11 CASE, PROPER REASONING ARE GIVEN BY THE AUTHORITIES BELOW FOR NOT ACCEPTING THE VALUE ADOPTED BY THE ASSESSEE ON THE BASIS OF THE REPORT OF THE REGISTERED VALUER AND HENCE, THIS JUDGMENT IS A LSO NOT APPLICABLE IN THE PRESENT CASE. 16. IN VIEW OF ABOVE DISCUSSION, WE FIND THAT NONE OF THE JUDGEMENTS CITED BY THE LD. A.R. IS APPLICABLE IN THE PRESENT CASE AND SINCE THE CLAIM OF THE ASSESSEE HAS BEEN REJECTED BY LD. CIT(A) ON THE BASIS OF VALID REASONS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE AND HENCE, GROUNDS NO. 2 & 3 ARE REJE CTED. 17. REGARDING GROUND NO.4, WE FIND THAT IN THE PRES ENT CASE, THE PROPERTY IN QUESTION WAS SOLD BY THE ASSESSEE DURIN G THE FINANCIAL YEAR 2002-03 AND THE RETURN OF INCOME WAS FILED BY THE A SSESSEE ON 28.03.2005 BEING THE DATE PERMITTED U/S 139(4) OF THE INCOME T AX ACT, 1961. THE DETAILS OF DEPOSITS MADE BY THE ASSESSEE IN THE CAP ITAL GAIN ACCOUNT NO.10188 OF UBI ARE NOTED BY THE A.O. ON PAGES 19 & 20 OF THE ASSESSMENT ORDER AS PER WHICH, THE ASSESSEE HAS DEP OSITED A SUM OF RS.52,29,300/- AND THE LAST DATE OF DEPOSIT IS 20.0 2.2004. THE A.O. HAS CONSIDERED THIS DEPOSIT OF RS.23.05 LACS ONLY FOR W ORKING OUT DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 54F BY HOLDING THAT T HE ASSESSEE IS ELIGIBLE FOR DEDUCTION ONLY IN RESPECT OF DEPOSITS TILL THE DUE DATE OF FURNISHING RETURN OF INCOME U/S 139(1) I.E. 03 RD OCT. 2003. NOW, AS PER THE JUDGEMENT OF HONBLE GUAHATI HIGH COURT RENDERED IN THE CASE OF R. K. JALAN (SUPRA), THE DATE OF FURNISHING RETURN OF INC OME CAN BE THE DATE U/S 139(4) AND HENCE, PROFITS UTILIZED FOR SPECIFIED PU RPOSE BEFORE THIS DATE SHOULD BE CONSIDERED FOR THE PURPOSE OF DEDUCTION A LLOWABLE U/S 54. THE REQUIREMENT OF SECTION 54 AND SECTION 54F ARE IDENT ICAL AND HENCE, IN OUR CONSIDERED OPINION, EVEN FOR THE PROPOSE OF SECTION 54F ALSO, THIS JUDGEMENT IS APPLICABLE. WE OBSERVE THE FACT THAT THIS JUDGMENT IS OF I.T.A.NO. 1147 /AHD/2008 12 HONBLE GUAHATI HIGH COURT WHICH IS NOT THE JURISDI CTIONAL HIGH COURT IN THE PRESENT CASE BUT THERE IS NO CONTRARY DECISION OF JURISDICTIONAL HIGH COURT OR OF HONBLE SUPREME COURT OR ANY OTHER HIGH COURT AND HENCE, IN OUR CONSIDERED OPINION, EVEN IF THIS JUDGMENT IS NOT BINDING, IT HAS A PERSUASIVE VALUE AND WE DO NOT FIND ANY REASON FOR NOT FOLLOWING THIS ONLY JUDGMENT OF HONBLE GUAHATI HIGH COURT IN THE FACTS OF THE PRESENT CASE. WE, THEREFORE, DIRECT THE A.O. THAT HE SHOUL D QUANTIFY THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 54F IN THE LIGHT OF T HIS JUDGEMENT OF HONBLE GUAHATI HIGH COURT AND THEREFORE, HE SHOULD CONSIDE R THE NET DEPOSIT BY THE ASSESSEE IN THE DEPOSIT SCHEME TILL THE DATE OF FILING OF RETURN OF INCOME I.E. 28.03.2005 WHICH IS BEFORE THE DATE PER MITTED U/S 139(4) OF THE INCOME TAX ACT, 1961. GROUND N.4 OF THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSE IN TERMS INDICATED ABOVE. 18. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS PA RTLY ALLOWED. 19. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (D. K. TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO. 1147 /AHD/2008 13 1. DATE OF DICTATION 24/1 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/1.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.30/1 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/1 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/1 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .