Shri Haresh M. Dalwadi, Anand V. The Pr. CIT-2, , Vadodara

ITA 1207/AHD/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1783 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-04-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Reason to believe
• Section: 143(3); 50C; 48; 13; 22; 148; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT AT AHMEDABAD) BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO. 1207 /AHD/2018 / ASSTT. YEAR: 2012 - 2013 SHRI HARESH M. DALWADI , PROP. MAHADEV STEEL TRADERS , LOTESHWARBAHGOL GOPI TALKIES ROAD , ANAND 388001 . PAN : ACAPD4945P VS. THE PR. CO MMI SSIONER OF INCOME TAX - 2 , VADODARA . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI MUKUND BAKSHI , A.R REVENUE BY : SHRI VINOD TANWANI, CIT .D. R / DATE OF HEARING : 0 6 / 01 / 2021 / DATE OF PRONOUNCEMENT: 22 / 02 /2021 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE A GAINST THE ORDER OF THE PRINCIPAL COMM ISSIONER OF INCOME TAX - 2 , VADODARA , DATED 23/03 /2018 ARISING IN THE MATTER OF ASSESSM ENT ORDER PASSED UNDER S.263 OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') RELEVANT TO THE ASSESSMENT YEAR 2012 - 20 13 . ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE NOTICE ISSUED UNDER SECTION263 BY THE _PRINCIPAL COMMISSIONER OF INCOME TAX - 2, VADODARA (HEREINAFTER REFERRED TO AS 'PR. CIT') AND THE ORDER PASSED UNDER SECTION 263 DTD. 23.03.2018 ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PR. CIT HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION IN PASSING THE ORDER U/S 263, MORE SO WHEN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 DATED 29.10.2015 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE IN TEREST OF REVENUE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PR. CIT HAS ERRED IN SETTING ASIDE THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT BY THE ASSESSING OFFICER ON THE GROUND THAT THE ENQUIRIES AND VERIFICATION WHI CH SHOULD HAVE BEEN MADE HAS NOT BEEN CONDUCTED IN TERMS OF EXPLANATION - 2 TO SEC. 263 AND THAT THE ASSESSMENT ORDER DOESN'T BECOME ERRONEOUS. 4. THAT PR. CIT HAS ERRED ON FACT AND IN LAW IN NOT APPRECIATING THAT THE REPLY IN SPECIFIC REFERENCE TO THE CLAIM OF CONSIDERATION VALUE OF THE CAPITAL ASSET AT RS. 32,00,0007 - WAS IN ACCORDANCE WITH THE CIRCLE RATE (STAMP DUTY VALUE) PREVAILING ON THE DATE OF AGREEMENT FOR SALE AND THAT PART CONSIDERATION WAS RECEIVED BY ACCOUNT PAYEE CHEQUES MUCH PRIOR TO EFFECTING THE SALE/ CONVEYANCE ON 21.04.2011, WAS INQUIRED DURING THE ASSESSMENT PROCEEDING AND THAT SUCH EXPLANATION HAS BEEN CONSIDERED TO BE IN ACCORDANCE WITH LAW AND THAT THE SAME WAS ALLOWED. 5. THAT THE PCIT HAS FAILED TO CONSIDER THAT THE ASSESSMENT AS FRAMED BY THE ASSESSING OFFICER WAS AFTER DUE APPLICATION OF MIND, AND AFTER CONSIDERING THE DETAILED REPLIES ON VARIOUS DATES AS FILED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, PR. CIT HAS ERRED IN INVOKING THE PROVISION OF SECTION 263 IN REFERENCE TO SUBSTITUTING THE AMOUNT OF CONSIDERATION ON THE BASIS OF STAMP DUTY VALUE ON THE DATE OF EXECUTION OF SALE DEED ON 21.04.2011 INSTEAD OF THE DATE ON WHICH THE AGREEMENT FOR SALE WAS FINALI SED AND IN CONSEQUENCE THEREOF PART CONSIDERATION WAS ALSO RECEIVED. HENCE THE CONSIDERATION AMOUNT WAS NOT REQUIRED TO BE SUBSTITUTED BY INVOKING THE PROVISIONS OF SEC. 50C OF THE IT. ACT, MORE SO, WHEN THE FIRST PROVISO TO SEC. 50C(1) IS HELD TO BE RETRO SPECTIVE. 7. THAT WITHOUT PREJUDICE, THE PR. CIT HAS EXCEEDED HIS JURISDICTION IN SETTING ASIDE THE ASSESSMENT ORDER AND DIRECTING THE AO TO MAKE FRESH ASSESSMENT WHEN HIS NOTICE AND THE ORDER PASSED IS LIMITED TO CERTAIN ISSUES ONLY. HENCE THE ORDER PASSED U/S 263 IS ILLEGAL AND BAD IN LAW. 8. THAT THE EVIDENCE FILED AND MATERIALS AVAILABLE ON RECORD HAVE NOT BEEN PROPERLY CONSTRUED AND JUDICIOUSLY INTERPRETED, HENCE THE ADDITION/ DISALLOWANCE MADE IS UNCALLED FOR. 9. YOUR APPELLANT CRAVES LIBERTY TO ADD, ALTER, AMEND, SUBSTITUTE OR WITHDRAW ANY OF THE GROUND OF APPEAL HEREINABOVE CONTAINED. ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 3 3 . THE ONLY EFFECTIVE ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED PCIT ERRED IN HOLDING ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH 147 OF THE ACT AS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE . 4 . THE BRIEF FACT OF THE ISSUE ON HAND IS THAT THE ASSESSE IS AN INDIVIDUAL AND DECLARED AN INCOME OF RS. 2,98,180/ - IN THE RETURN FILED FOR THE YEAR UNDER CONSIDERATION WHICH WAS PROCESSED UNDER SECTION 143 (1) OF THE ACT. SUBSEQUENTLY NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON ACCOUNT OF ESCAPEMENT OF INCOME FOR THE DIFFERENCE IN SALE VALUE AND STAMP VALUE OF THE LAND TRANSFERRED DURING THE YEAR. THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT DECLARED INCOME AT RS. 307,950/ - WHICH WAS ACCEPTED AS IT IS BY THE AO IN ASSESSMENT FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT. 4 .1 HOWEVER THE LEARNED PCIT OBSERVED THAT SALE CONSIDERATION WAS SHOWN AT RS. 32 LAKH WHEREAS STAMP VALUE OF THE LAND ON THE DATE OF TRANSFER I.E. 21 - 04 - 2011 WAS AT RS. 77,96,000/ - ONLY. THUS THE AO ERRED IN NOT MAKING ADDITION OF DIFFERENCE IN THE VALUE OF THE PROPERTY VIZ A VIZ STAMP VALUE AS PROVIDED UNDER SECTION 50C OF ACT WHICH IS CAUSING PREJUDIC E TO THE INTEREST OF REVENUE. ACCORDINGLY THE PCIT ISSUED NOTICE UNDER SECTION 263 OF THE ACT. 4 .2 THE ASSESSEE IN RESPONSE TO THE NOTICE SUBMITTED THAT HE HAS TRANSFERRED RESIDENTIAL PROPERTY VIDE SALE DEED DATED 21 - 04 - 2011 F OR RS. 32 LAKH. BUT THE CONSIDERATION WAS DECIDED 3 MONTH BEFORE THE EXECUTION OF SALE DEED WHICH IS EVIDENT FROM PARA 3 PAGE 3 OF THE SALE DEED. ACCORDINGLY THE ASSESSEE CONTENDED THAT AS PER AMENDED PROVISO TO SECTION 50C OF THE ACT, THE STAMP VALUE FOR THE PURPOSE OF CAPITAL GAIN SHOULD BE TAKEN FROM THE DATE OF AGREEMENT TO SALE. THUS IN HIS CASE, THE STAMP VALUE SHOULD BE THE SALE CONSIDERATION AS APPLICABLE IN THE MONTH OF JAN 2011. THE ASSESSEE FURTHER FILED CERTIFICATE OF STAMP VALUE ISSUED BY DEPUTY COLLECTOR SHOWING VALUE AT RS. 6800 PER SQUARE METER. THUS THE ASSESSEE CLAIMED THAT THE VALUE OF THE PROPERTY IN QUESTION IS MEASURED AT RS. 421.40 SQUARE ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 4 METER, AGGREGATING TO STAMP VALUE OF PROPERTY AT RS. 28, 65,500/ - (RS. 6800 X 421.4) WHICH IS LESS THAN CONSIDERATION OF RS. 32 LAKH SHOWN BY HIM. 4.3 BUT THE LEARNED PCIT REJECTED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAS NOT SUBSTANTIATED HIS CLAIM BY DEMONSTRATING EVIDENCES THAT THERE WAS ANY AGREEMENT TO SALE IN THE MONTH OF JANUARY 2011. FURTHER THE PROVISO TO SECTION 50C WAS AMENDED VIDE FINANCE ACT 2016 WITH EFFECT FROM 01 - 04 - 2017 WHICH IS PROSPECTIVE IN NATURE AND THEREFORE NOT APPLICABLE FOR THE YEAR UNDER CONSIDERATION . 4 .4 THE LEARNED PCIT ALSO HELD THAT THE ASSESSMENT HAS BEEN FRAMED BY THE AO UNDER SECTION 143(3)/147 OF THE ACT WITHOUT APPLICATION OF MIND. THUS THE LEARNED PCIT HAS HELD THE ASSESSMENT ORDER AS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE. 5 . BEING AGGRIEVED BY THE ORDER THE LEARNED PCIT, THE ASSESSEE IS IN APPEAL BEFORE US. 6 . THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 41 AND SUBMITTED THAT THE ASSESSMENT WAS FRAMED BY THE AO UNDER SECTION 143(3)/147 OF THE ACT AF TER CONDUCTING NECESSARY VERIFICATION AND ENQUIRIES. 6 .1 THE LEARNED AR ALSO CONTENDED THAT THE VALUE OF THE PROPERTY DETERMINED FOR THE PURPOSE OF STAMP DUTY AT THE TIME OF AGREEMENT I.E. IN THE MONTH OF JANUARY 2011 SHALL BE ADOPTED FOR WORKING OUT THE CAPITAL GAIN IN PURSUANCE TO THE PROVISIONS OF SECTION 50 C OF THE ACT. ACCORDINGLY, THE LEARNED AR CLAIMED THAT THE REVISIONARY PROCEEDINGS INITIATED BY THE LEARNED PCIT ARE NOT SUSTAINABLE. 7 . ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THE COPY OF THE SALE DEED WAS NOT FILED DURING THE ASSESSMENT PROCEEDINGS. THE LEARNED DR ALSO POINTED OUT ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 5 THAT THERE IS NO EVIDENCE SUGGESTING THAT THE CHEQUES ISSUED IN THE MONTH OF JANUARY 2011 WERE CLEARED BY THE ASSESSEE. 8 . SIMILARLY, THE AMENDMENT BROUGHT U NDER THE PROVISIONS OF SECTION 50 C OF THE ACT BY WAY OF THE PROVISO ARE NOT APPLICABLE IN THE YEAR UNDER CONSIDERATION. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED PCIT. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION WE NOTE THAT THE ASSESSEE CONTENDED BEFORE THE AO THAT HE HAS SOLD THE PROPERTY IN THE MONTH OF JANUARY 2011 AT A PRICE OF RS. 32 LAKH WHICH WAS RECEIVED BY HIM IN THE MA NNER AS DETAILED BELOW: DATE OF RECEIPT OF AMOUNT AND CHEQUE NUMBER AMOUNT IN RS. 22 - 01 - 2011 1,00,001 25 - 01 - 2011 4,00,000 14 - 03 - 2011 4,50,000 15 - 03 - 2011 4,50,000 17 - 03 - 2011 4,50,00 0 17 - 03 - 2011 4,50,000 28 - 03 - 2011 4,50,000 28 - 03 - 2011 32,00,001 9 .1 ACCORDINGLY, THE ASSESSEE CONTENDED BEFORE THE AO THAT THE SALE PRICE OF RS. 32 LAKH SHOULD BE TAKEN AS SALE CONSIDERATION FOR WORKING OUT THE CAPITAL GAIN IN PURSUANCE TO THE PROVISIONS OF SECTION 50 C OF THE ACT AS THE JANTARI VALUE OF LAND WAS OF RS. 28,65,520/ - ONLY IN THE MONTH OF JANUARY 2011 . THE CONTENTION OF THE ASSESSEE WAS DULY ACCEPTED BY THE AO IN THE ASSESSMENT FRAMED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT V IDE ORDER DATED 29 - 10 - 2015 . 9 .2 HOWEVE R, THE LEARNED PCIT WAS OF THE VIEW THAT THE VALUE OF THE PROPERTY DETERMINED FOR THE PURPOSE OF STAMP DUTY AT THE TIME OF REGISTRATION SHOULD BE TAKEN AS THE SALE CONSIDERATION IN PURSUANCE TO THE PROVISIONS OF SECTION 50 C OF THE ACT. ACCORDINGLY HE HELD THAT THE ORDER PASSED BY THE AO IS ERRONEOUS INSOFAR ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 6 PREJUDICIAL TO THE INTEREST OF REVENUE AS DISCUSSED IN THE PRECEDING PARAGRAPH. THE PROVISIONS OF SECTION 50 C OF THE ACT HAS A DIRECT BEARING ON THE ISSUE ON HAND WHICH READS AS UNDER: 50C. (1) WHERE TH E CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER 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 R EFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER : 9 .3 A S PER THE PROVISIONS DISCUSSED ABOVE, IT IS MANDATED TO ADOPT THE VALUE OF THE PROPERTY DETERMINED FOR THE PURPOSE OF THE STAMP DUTY AS THE SALE CONSIDERATION FOR WORKING OUT THE CAPITAL GAIN. HOWEVER, IT IS PERTINENT TO NOTE THAT THERE WAS A P ROVISO BROUGHT UNDER SECTION 50 C OF THE ACT WITH EFFECT FROM 1 APRIL 2007 WHICH READS AS UNDER: [ PROVIDED THAT WHERE 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 T AKEN 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 CHEQUE O R 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. ] 9 .4 A S PER THE ABOVE PROVISO, THE VALUE OF THE PROPERTY DETERMIN ED FOR THE PURPOSE OF THE STAMP VALUE AT THE T IME OF REGISTRATION OF THE PROPERTY SHALL NOT BE TAKEN AS SALE CONSIDERATION FOR WORKING OUT THE CAPITAL GAIN IF THERE IS DIFFERENCE BETWEEN THE DATE OF REGISTRATION OF SALE DEED AND FIXING THE SALE CONSIDERATION OF THE PROPERTY AND SELLER HAS RECEIVED THE CONSIDERATION FROM THE BUYER WHOLLY OR PARTLY THROUGH BANKING CHANNEL ON OR BEFORE THE TIME OF AGREEMENT OF TRANSFER. 9 .5 THERE IS NO AMBIGUITY TO THE FACT THAT THE ASSESSEE BEING A SELLER HAS RECEIVED THE CONSIDERATION FROM THE BUYER IN THE FINANCIAL Y EAR 2010 - 11 AS DISCUSSED ABOVE AND THAT TOO THROUGH BANKING CHANNEL AS PROVIDED UNDER 2 ND PROVISO TO SECTION 50 C OF THE ACT WHICH HAS BEEN DISCUSSED ABOVE. THIS FACT HAS NOT BEEN CHALLENGED BY ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 7 THE AUTHORITIES BELOW. THUS IT CAN BE INFERRED THAT THE VALUE O F THE PROPERTY AS DETERMINED BY THE ASSESSEE WITH THE BUYER OF THE PROPERTY FOR TRANSFERRING THE PROPERTY AT THE TIME OF AGREEMENT SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN UNDER THE PROVISIONS OF SECTI ON 48 OF THE ACT. 9 .6 A QUESTION ARISES WHETHER THE AMENDMENT BROUG HT IN THE PROVISO TO SECTION 50C OF THE ACT A S APPLICABLE WITH EFFECT FROM 1 APRIL 2017 CAN BE APPLIED FOR THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2012 - 13. IN THIS REGARD WE FIN D THAT THIS ITAT IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT IN ITA NO 1237/AHD/2013 REPORTED IN 75 TAXMANN.COM 141 HAS HELD THAT SUCH AMENDMENT BEING CLARIFI CATORY IN NATURE IS APPLICABLE RETROSPECTIVELY. THE RELEVANT FINDING OF THE ITAT READS AS UNDER: SO FAR AS SECTION 50C IS CONCERNED, THE FINANCE ACT, 2016, WITH EFFECT FROM 1 - 4 - 2017, INSERTED THE PROVISOS TO SECTION 50C. [PARA 5] THERE CANNOT BE ANY DISPUTE THAT THIS AMENDMENT IN THE SCHEME OF SECTION 50C HAS BEEN MADE TO REMOVE AN INCONGRUITY, RESULTING IN UNDUE HARDSHIP TO THE ASSESSEE. ONCE IT IS NOT IN DISPUTE THAT A STATUTORY AMENDMENT IS BEING MADE TO REMOVE AN UNDUE HARDSHIP TO THE ASSESSEE OR TO REMOVE AN APPARENT INCONGRUITY, SUCH AN AMENDMENT HAS TO BE TREATED AS EFFECTIVE FROM THE DATE ON WHICH THE LAW, CONTAINING SUCH AN UNDUE HARDSHIP OR INCONGRUITY, WAS INTRODUCED. [PARA 7] THE PRESENT AMENDMENT, BEING AN AMENDMENT TO REMOVE AN APPARENT INCONGRUITY WHICH RESULTED IN UNDUE HARDSHIPS TO THE TAXPAYERS, SHOULD BE TREATED AS RETROSPECTIVE IN EFFECT. QUITE CLEARLY THEREFORE, EVEN WHEN THE STATUTE DOES NOT SPECIFICALLY STATE SO, SUCH AMENDMENTS, CAN ONLY BE TREATED AS RETROSPECTIVE AND EFFECTIVE FROM THE DATE RELATED STATUTORY PROVISIONS WAS INTRODUCED. VIEWED THUS, THE PROVISO TO SECTION 50 C SHOULD ALSO BE TREATED AS CURATIVE IN NATURE AND WITH RETROSPECTIVE EFFECT FROM 1 - 4 - 2003, I.E. THE DATE EFFECTIVE FROM WHICH SECTION 50C WAS INTRODUCED. [PARA 8] 9 .7 W E ALSO NOTE THAT THE FACT THAT THE ASSESSEE HAS TRANSFERRED THE PROP ERTY IN THE FINAN CIAL YEAR 2010 - 11 WAS VERY MUCH APPEARING IN THE SALE DEED WHICH IS PLACED ON PAGES 17 - 20 OF THE PAPER BOOK. THE RELEVANT EXTRACT OF THE SALE DEED FOR THE SAKE OF UNDERSTANDING IS REPRODUCED AS UNDER: THE SALES PRICE OF THE SAID PROPERTY, SOLD BY WAY OF THIS SALE DEED BY THE PARTY OF THE SECOND PART SELLER TO THE PARTY OF THE FIRST PART PURCHASER WAS MUTUALLY AFFIXED BETWEEN THE PARTIES PRIOR TO A PERIOD 3 MONTHS AT RS.32,00,001.00 (RUPEES THIRTY TWO LA CS ONE RUPEE ONLY) AND HENCE, AS PER THE SAID UNDERSTANDING, IT COMES TO RS.32,00,001.00 (RUPEES THIRTY ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 8 TOW LACS ONE RUPEE ONLY) AND THE SAID SALES PRICE AMOUNT OF THE SAID PROPERTY HAS BEEN PAID UP BY THE PARTY OF THE FIRST PART PURCHASER TO THE PARTY OF THE SECOND PART SELLER AS PER THE BELOW MENTIONED DE TAILS BY WAY OF CHEQUES AND HENCE, THE PARTY OF THE SECOND PART SELLER HEREBY CONFIRMS AND ACKNOWLEDGES ITS FULL FINAL RECEIPT. 9 .8 F ROM THE ABOVE, THERE REMAINS NO AMBIGUITY THAT THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTION 50 C OF THE ACT FOR ADOPTING THE SALE CONSIDERATION FOR THE TRANSFER OF THE PROPERTY BY THE ASSESSEE. 9 .9 MOVING FURTHER, WE ALSO FIND THAT THE REOPENING IN THE CASE ON HAND WAS MADE ON THE ASSESSEE FOR THE REASON THAT THE ASS ESSEE HAS NOT ADOPTED THE SALE CONSIDERATI ON AS PROVIDED UNDER SECTION 50 C OF THE ACT. IN OTHER WORDS, THE ASSESSEE SHOULD HAVE TAKEN THE VALUE DETERMINED FOR THE PURPOSE OF THE STAMP DUTY AS THE SALE CONSIDERATION FOR WORKING OUT THE CAPITAL GAIN UNDER TH E PROVISIONS OF SECTION 48 OF THE ACT. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 1 47 OF THE ACT ARE EXTRACTED BELOW: AS PER THE AIR INFORMATION, THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY FOR RS.32,00,001/ - ON 21 ST APRIL 2021. JANTRI VALUE OF THE SAID PROPERTY AS PER THE STAMP DUTY PAID BY THE ASSESSEE IS RS.77.96 LACS. THE CAPITAL GAIN OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME FOR A.Y. 2012 - 13 IS THEREFORE, MUCH LESS THAN WHAT HE SHOULD HAVE ACTUALLY BEEN OFF ERED AS PER THE PROVISION OF THE SECTION 50C OF THE ACT. THEREFORE I HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT. 9 .10 THE ASSESSEE DURING THE ASSESSMENT PROCEEDI NGS HAS MADE A REPLY V IDE LETTER DATED NIL WHICH IS EXTRACTED BELOW: I WOULD LIKE TO STATE THAT I HAVE ATTACHED THE COPY OF LETTER GIVEN BY THE PURCHASE OF THE SAID PROPERTY STATING THAT HE RECEIVED THE POSSESSION OF THE SOLD PROPERTY IN THE MONTH OF MARCH 2011. SO, IN LIGHT OF THE ABOVE DISCUSSION, WOULD LIKE TO STATE TO YOUR HONOUR THAT THE JANTRI VALUE ADOPTED BY THE STAMP VALUE AUTHORITY OF THE SOLD PROPERTY SHOULD NOT BE CONSIDERED WHICH WAS PREVAILING IN THE MONTH OF APRIL 2011 BUT IT SHOULD BE CONSID ERED WHICH WAS PREVAILING IN THE MONTH OF JANUARY 2011 AND IT WORKS OUT TO BE RS. 28,65,520. WITH THIS LETTER, I HAVE ATTACHED THE PHOTOCOPY OF JANTRI VALUE CERTIFICATE ISSUED BY THE STAMP VALUATION AUTHORITY FOR THE PERIOD JANUARY 2011. .MOREOVER, AS DISC USSED EARLIER IN THIS PARAGRAPH, THE STAMP VALUE AUTHORITY ADOPTED VALUE FOR THE MONTH OF JANUARY 2011 WAS RS, 28,65,520 WHILE I SOLD THE PROPERTY AT VALUE OF RS, 32,00,001. SO, ACCORDING TO THIS, THE CONSIDERATION RECEIVED BY ME FOR SALE OF PROPERTY IS MO RE THAN THE STAMP DUTY VALUE AUTHORITY ADOPTED VALUE. DUE TO THIS THE IMPLICATION OF SECTION 50C OF THE IT ACT, 1961 IS NOT APPLICATION TO ME . ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 9 9 .11 F ROM THE ABOVE IT IS SIGNIFICANT NOTE THAT THE AO HAS MADE THE ASSESSMENT UNDER SECTION 147 OF THE ACT AFTE R NECESSARY VERIFICATION AND DUE APPLI CATION OF MIND. THUS, ON THIS COUNT AS WELL, THE ORDER OF THE AO CANNOT BE HELD AS ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE. ADMITTEDLY THERE IS AN EXPLANATION - 2 BROUGHT UNDER SECTION 263 OF THE ACT WHI CH STATES THAT THE ORDER OF THE AO SHALL BE DEEMED TO BE ERRONEOUS INSOFAR PREJUDICIAL TO THE INTEREST OF REVENUE IF IT WAS PASSED WITHOUT MAKING ENQUIRIES VERIFICATION WHICH SHOULD HAVE BEEN MADE. IN THIS REGARD, WE FIND THAT THE AO HAS MADE THE ENQUIRIES WHILE FRAMING THE ASSESSMENT UNDER SECTION 147 OF THE ACT WHICH HAVE BEEN DISCUSSED HERE IN ABOVE. HOWEVER, IF THE LEARNED P CIT WAS OF THE VIEW THAT THE AO FAILED TO MAKE THE NECESSARY ENQUIRIES WHICH SHOULD HAVE BEEN MADE DURING THE ASSESSMENT PROCEEDING S THEN IT WAS A DUTY UPON THE LEARNED P CIT TO SPECIFY THE RELEVANT ENQUIRIES WHICH SHOULD HAVE BEEN MADE BUT THE ORDER OF THE LEARNED P CIT IS SILENT ABOUT SUCH ENQUIRIES WHICH SHOULD HAVE BEEN MADE BY THE AO DURING THE ASSESS MENT PROCEEDINGS. IN HOLDING SO WE DRAW SUPPORT AND GUIDANCE FROM THE ORDER OF MUMBAI TRIBUNAL IN THE CASE OF ANIL L TAODARWAL, MUMBAI VS PR CIT 19, IN ITA NO.3498/MUM/2017 VIDE ORDER DATED 02 - 01 - 2018, WHEREIN IT WAS HELD AS UNDER: WE ARE NOT OBLIVIOUS OF THE FACT THAT THE LEGISLATURE, VIDE THE FINANCE ACT , 2015, BY MAKING AVAILABLE EXPLANATION 2 TO SEC. 263 ON THE STATUTE W.E.F 01.06.2015, HAD THEREIN PROVIDED CERTAIN CIRCUMSTANCES, UNDER WHICH THE ORDER PASSED BY THE A.O, IF, IT IS IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER SO, SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HOWEVER, EXERCISE OF SUCH DEEMED POWERS CONFERRED ON THE REVISIONAL AUTHORITY AS PER EXPLANATION 2 HAVE TO CONSTRUED BY STRICTLY CONFINING AND SUBJECT TO SATISFACTION OF THE CONDITIONS CONTEMPLATED THEREIN. WE ARE OF THE CONSIDERED VIEW THAT TO THE EXTENT MAKING OF INQUIRIES AND VERIFICATION WHICH IN THE OPINION OF THE CIT THE A.O SHOULD HAVE MADE, A S CONTEMPLATED IN CLAUSE (A) OF EXPLANATION 2, THOUGH GIVES AN EDGE TO THE OPINION OF THE CIT AS REGARDS THE INQUIRIES AND VERIFICATIONS WHICH THE A.O SHOULD HAVE MADE, BUT THEN, SUCH INQUIRIES AND VERIFICATIONS ARE NOT ONLY REQUIRED TO BE RELEVANT FOR AD JUDICATION OF THE ISSUE, BUT ALSO SHOULD POINT OUT AS TO HOW THE VIEW ARRIVED AT BY THE A.O BY NOT TAKING RECOURSE TO SUCH INQUIRIES AND VERIFICATION, CAN BE FAULTED WITH AND HELD TO BE WRONG. 9 .12 IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACTS IN TOTALITY WE ARE OF THE VIEW THAT THE REVISION PROCEEDINGS INITIATED BY THE LEARNED P CIT UNDER SECTION 263 ITA NO.1207 /AHD/2018 ASSTT. YEAR 2012 - 13 10 OF THE ACT ARE NOT SUSTAINABLE IN THE GIVEN FACTS AND CIRCUMSTANCES. HENCE WE QUASH THE SAME. THUS THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE COURT ON 22 /02 / 2021 AT AHMEDABAD. SD/ - SD/ - (MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 22 / 02 /2021 M ANISH