Shri Kirankumar N.Champaneriya, Surat V. The Income tax Officer,Ward-2(1), Surat

ITA 1213/AHD/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1155 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 17-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NAGENDRA SINGH
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER SHRI KIRANKUMAR N. CHAMPANERIYA , 98, HARI NAGAR - 2, UDHNA MAIN ROAD, UDHNA, SURAT. PAN: ADNPC 5478 N (APPELLANT) VS INCOME TAX OFFICER, WARD - 2(1), SURAT (RESPONDENT) REVENUE BY : S H RI NAGENDRA S INGH , SR. D . R. ASSESSEE BY: S MT. ARTI N. SHAH , A.R. DATE OF HEARING : 17 - 11 - 2 015 DATE OF PRONOUNCEMENT : 20 - 11 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2006 - 07 , AR ISES FROM ORDER OF THE CIT(A) - II, SURAT DATED 27 - 01 - 2011 IN APPEAL NO. CAS - II/325 /09 - 10 /25 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1213 / A HD/ 20 11 A SSESSMENT YEAR 200 6 - 07 I.T.A NO. 1213 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO 2 2. THE ASSESSEE CHALLENGES SECTION 50C ADDITION OF RS. 26,22,720/ - MADE BY THE CIT(A) AFTER MAKING A REFERENCE TO THE DVO. A PERUSAL OF THE CASE FILE REVEALS THAT HE HAS RAISED AN ADDITIONAL GROUND AS WELL STATING TO HAVE SOLD THE LAND IN QUESTION AS A POWER OF ATTORNEY HOLDER AND NOT AS ITS OWNER. WE FIND THAT THIS ADDITIONAL GROUND DOES NOT NEED ANY NEW FAC T OR EVIDENCE SINCE THE SAME IS ALREADY ON RECORD. WE PROCEED TO ADMIT THIS GROUND ACCORDINGLY AND DEAL WITH MERITS OF THE CASE IN SUCCEEDING PARAGRAPH S. 3. THE ASSESSEE - INDIVIDUAL IS IN BROKERAGE BUSINESS. HE SOLD LAND MEASUR ING 80,940 SQ. MT. @ RS. 55.60 PER SQ. MT COMPRISED IN S UR. NO. 506/04, ABHVA, SURAT FOR RS. 45 LACS. ITS JANTRI PRICE WAS RS. 80,94,000/ - . THE ASSESSING OFFICER ENHANCED THIS VALUE AS PER THE SAID JANTRI PRICE RESULTING IN THE CONSEQUENTIAL ENHANCEMENT OF CAPITAL GAINS TO THE TUNE OF RS. 35,94,000/ - IN ASSESSMENT ORDER DATED 18 - 12 - 2009. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) ACCEPTED HIS PLEA THAT THE ASSESSING AUTHO RITY OUGHT TO HAVE MADE REFERENCE U/S. 50C(2) OF THE ACT. HE REFERRED VALUATION OF ASSESSEE S PLOT UNDER THE ABOVE STATED PROVISION AND SOUGHT REMAND REPORT. THE DVO TOOK INTO ACCOUNT FOUR SALE INSTANCES IN RS NO. 58/02 INVOLVING AREA OF 1518 SQ. MT @ 10 2 PER SQ. MT., RS NO. 416 HAVING AREA OF 6677 @ RS. 87 PER SQ. MT, RS 484 COMPRISING OF AREA MEASURING 643.82 @ RS. 116 PER SQ. MT. AND RS 484 - 485 INVOLVING AREA OF 175.58 SQ. MT @ RS. I.T.A NO. 1213 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO 3 135 PER SQ. MT; RESPECTIVELY AND ADOPTED RATE OF RS. 88 PER SQ. MT. TH EREBY FIXING VALUE OF ASSESSEE S LAND SOLD TO BE RS. 71,22,720/ - . THE ASSESSEE FILED OBJECTIONS BEFORE THE DVO AS WELL AS CIT(A) INTER ALIA POINTING OUT LEGAL DISPUTES PERTAINING TO THE LAND IN QUESTION AND ALSO THE FACT THAT THE LOCAL AUTHORITIES HAD IMP OSED RESTRICTIONS RESERVING ITS PORTION FOR GARDEN ETC. THE ASSESSEE FURTHER STATED THAT THE PLOT SIZES TAKEN IN SALE INSTANCES HEREINABOVE WERE VERY SMALL AS COMPARED TO THE ONE IN QUESTION. THE DVO AS WELL AS THE CIT(A) HAVE REJECTED ALL THESE OBJECTIO NS. THE VALUE OF ASSESSEE S PLOT ACCORDINGLY STAND DETERMINED AS RS. 71,22,720/ - WITH FURTHER DIRECTION TO THE ASSESSING OFFICER FOR COMPUTING CAPITAL GAINS ACCORDINGLY. THIS LEAVES THE ASSESSEE AGGRIEVED. 5 . WE HAVE HEARD BOTH THE PARTIES. CASE RECORD PERUSED WITH THE ASSISTANCE OF BOTH LD. REPRESENTATIVES. WE COME TO ASSESSEE S ADDITIONAL GROUND FIRST THAT HE HAS SOLD HIS LAND AS A POWER OF ATTORNEY HOLDER AND NOT ITS OWNER. HIS CASE IS THAT THE IMPUGNED CAPITAL GAINS HAVE BEEN WRONGLY ASSESSED IN H IS HAND. HE TAKES US TO THE CASE FILE COMPRISING OF A POWER OF ATTORNEY DOCUMENT EXECUTED WAY BACK ON 05 - 07 - 1984 IN HIS FAVOUR. WE COME TO THE SALE DEED AT PAGE 29 OF THE PAPER BOOK AND FIND THAT THE ASSESSEE/VENDOR DID NOT SELL THE LAND SUBJECT MATTER O F THE INSTANT LIS AS POWER OF ATTORNEY HOLDER BUT IN THE CAPACITY OF SOLE INDEPENDENT OWNER. NECESSARY MUTATION RECORD IS ALSO REFERRED TO. IT HAS ALREADY COME ON RECORD THAT THE ASSESSEE HAS HIMSELF DECLARED LONG TERM CAPITAL GAINS OF RS. 18,75,840/ - . THE MERE FACT THAT SOME CIVIL AND CRIMINAL PROCEEDINGS HAVE BEEN INITIATED I.T.A NO. 1213 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO 4 AGAINST HIM DOES NOT MEAN THAT THE SALE DEED IN QUESTION HAS BEEN SET ASIDE OR DECLARED NUL AND VOID. WE OBSERVE IN THESE FACTS AND CIRCUMSTANCES THAT THE ASSESSEE S ADDITIONAL GR OUND IS DEVOID OF MERIT. THE SAME IS ACCORDINGLY REJECTED. 6. THE ASSESSEE S SECOND ARGUMENT DISPUTES VALUATION OF THE LAND SOLD DETERMINED BY THE DVO AS RS. 71,22,720/ - @ RS. 88 PER SQ. MT. AS AGAINST THE ONE STATED IN THE SALE DEED @ RS. 55.60 SQ . MT . COMING TO RS. 45 LACS. HE SUBMITS TH AT THERE ARE VARIOUS DEPRECIATING FACTORS INVOLVED IN THE INSTANT CASE I.E. PENDENCY OF TITLE DISPUTE, SUDA RESERVATION FOR GARDENING ETC. AND THE FACT THAT THE COMPARABL E SALE INSTANCES INVOLVED MUCH SMALLER PORTIONS OF LAND THEN THE ONE IN QUESTION. THE REVENUE STRONGLY SUPPORTS THE DVO S VALUATION AS CONFIRMED IN THE LOWER APPELLATE PROCEEDINGS . IT EMANATE S FROM THE CASE FILE THAT THE DVO HAS ALREADY REDUCED THE JANTRI PRICE FROM RS. 80,94,000/ - TO RS. 71,22,720/ - (SUPRA). HE HAS ALREADY GRANTED RELIEF TO ASSESSEE MORE THAN THAT @ 10% OF THE ORIGINAL VALUE. HE SEEMS TO HAVE TAKEN LOWEST VALUE OF THE ABOVE STATED FOUR SALE INSTANCES (SUPRA). IT DOES NOT REQUIRE A MUCH LENGTHIER DISCUSSION THAT DETERMINATION OF F AIR MARKET VALUE OF ANY PROPERTY IS PURELY A SUBJECTIVE ISSUE TO BE ADJUDICATED KEEPING IN MIND LOCATION, APPROACH THERETO AND ALL OTHER CORROBORATIVE FACTORS. WE TAKE INTO ACCOUNT THIS TRITE PROPORTION FOR APPLYING THUMB RULE IN FACTS OF THE INSTANT CASE AND HOLD IN LARGER INTEREST OF JUSTICE THAT VALUE OF THE ASSESSEE S LAND SOLD DESERVES TO BE FIXED AT RS. 67 LACS. IT IS MADE CLEAR THAT THIS PART REDUCTION IN VALUE IS DUE TO THE ABOVE STATED THREE DEPRECIATING I.T.A NO. 1213 /AHD/20 11 A.Y. 2006 - 07 PAGE NO SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO 5 FACTORS OF PENDENCY OF LEGAL DISPUTES, SUD A RESERVATION AND THE FACT THAT COMPARABLE SALE INSTANCES INVOLVED SMALLER PLOTS OF LAND. WE ACCORDIN GLY DIRECT THE ASSESSING OFFICE R TO COMPUTE THE CAPITAL GAINS BY TAKING THE VALUE OF THE LAND IN QUESTION AT RS. 67 LACS INSTEAD OF THAT DETERMINED BY THE DVO AT RS. 71,22,720/ - . THE ASSESSEE S ARGUMENTS ARE PARTLY ACCEPTED. 7. THIS ASSESSEE S APPEAL IS PARTLY ALLOWED ORDER PR ONOUNCED IN THE OPEN C OURT ON 2 0 - 11 - 2015 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 20 /11 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,