SHRI OM PRAKASH AGARWAL, JAIPUR V. DCIT, CIRCLE-6, JAIPUR

ITA 1393/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9104 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 30-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAUL; DCIT
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Fair market value; Competent authority; Set aside; Capital Gains
• Section: 143(3); 54B; 50C; 13

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH JESK LH0 KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH. C. SHARMA, AM & SHRI VIJAY PA L RAO, JM VK;DJ VIHY LA- @ ITA NO. 1393/JP/2019 FU/KZKJ.K O'KZ @ ASSESSMENT YEAR : 2015-16 SHRI OM PRAKASH AGARWAL B-296, HARI MARG, MALVIYA NAGAR, JAIPUR CUKE VS. DCIT CIRCLE-6 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AASPA 2106 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIJAY GOYAL, CA JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAUL, DCIT LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 03 /08/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 18.11.2019 FOR THE A.Y. 2015 -2016, IN THE MATTER OF ORDER PASSED BY THE A.O. U/S 143(3) OF THE INCOM E TAX ACT, 1961 (IN SHORT, THE ACT). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN NOT DECIDING THE GROUND NO. 1 OF THE APPEAL BY HOLDING THAT SAME IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION MORE SO WHEN IN THE WRITTEN SUBMISSION SO FILED THE ASSESSEE GAVE HIS SUBMISSION ON THIS GROUND OF APPEAL ALSO. ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN REJECTING THE CLAIM OF THE ASSESSE THAT THE LAND SO SOLD IS NOT A CAPITAL ASSETS, THEREFORE NO CAPITAL GAIN IS CHARGEABLE THEREON MORE SO WHEN THE ASSESSEE SUBMITTED THE COMPLETE DO CUMENTS IN SUPPORT OF HIS CLAIM. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT CONSIDERING THE CLAIM O F THE ASSESSEE THAT THE PROVISION OF SECTION50C ARE NOT APPLICABLE ON THE L AND SO SOLD BY THE ASSESSEE BECAUSE THE ASSESSEE WAS NOT THE ABSOLUTE OWNER OF SUCH LAND BUT ONLY HAVING THE KHATEDARI RIGHTS THEREON AND HE TRANSFERRED HIS TENANCY RIGHTS ON SUCH LAND AND LD. CIT(A) ERRED IN NOT GIVING HER FINDING ON THIS ISSUE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT CONFIRMING THE ACTION O F THE AO WHEREIN HE DID NOT DEAL WITH THE OBJECTION OF THE ASSESSEE WITH RE GARD TO APPLYING HIGHER DLC BY REGISTRAR AUTHORITIES IN THE STATUTORY MANNE R. 5. THAT THE ORDER OF THE LD. CIT(A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, CAPRICIOUS AND AGAINST THE LAW AND FACTS OF THE CASE. THE ORDER OF THE LD.CIT(A) IN THIS REGARD DESERVES TO BE SET ASIDE AND ADDITION MADE BY THE AO DESERVES TO BE DE LETED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.61.50 LACS MADE BY THE AO. 2.1 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS P ERUSED. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING HIS INCOME FROM BUSINESS, INTEREST FROM PARTIES, INTEREST ON FDR. THE ASSESSE E WAS JOINTLY OWNER OF AN AGRICULTURAL LAND 2.09 HECTARE WHEREIN THE ASSES SEE HAS 1/4 TH SHARE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE A ND HIS CO-OWNERS SOLD 2.09 HECTARE (8.26 BIGHA) AGRICULTURAL LAND ON 2-12 -2014. THE DLC RATE OF THE LAND WAS RS. 44,35,410/- PER BIGHA. ACCORDINGLY THE VALUE OF THE LAND ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 3 AS PER THE DLC RATE COMES TO RS.3,66,36,487/-. THE SAID VALUE DECLARED BY THE ASSESSEE WAS @ RS.59,56,416/- PER BIGHA WHICH C OMES TO RS.4,92,00,000/-. THE STAMP DUTY AUTHORITY LEVIED T HE STAMP DUTY BY ASSESSING THE VALUE @ 150% OF SALE VALUE DECLARED I N THE SALE DEED VALUED BY STAMP DUTY AUTHORITY AT RS.7,38,00,000/-. ON THE BASIS OF DECLARED SALE CONSIDERATION, THE ASSESSEE OFFERED THE GAIN EARNED ON SALES OF THIS LAND AS LONG TERM CAPITAL GAIN AND PART OF THE SAME CLAIMED EXEMPTED U/S 54B OF THE ACT. THE ASSESSMENT OF THE ASSESSEE WAS COMPLET ED U/S 143(3) AT THE TOTAL INCOME OF RS.86,55,578/- AS AGAINST THE RETUR NED INCOME OF RS.25,05,580/ BY MAKING ADDITION OF RS.61,50,000/- BY APPLYING THE DEEMING PROVISIONS OF SECTION 50C OF THE ACT BEING THE DIFFERENCE OF SALES CONSIDERATION AND VALUE ASSESSED BY STAMP DUTY AUTH ORITY FOR LEVY OF STAMP DUTY (RS.7,38,00,000 MINUS RS.4,92,00,000) 1/4 TH OF RS.2,46,00,000/-. 2.2 BY IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.61.50 LACS MADE U/S 50C OF THE ACT, 2.3 NOW THE ASSESSEE IS IN APPEAL BEFORE US. IT WAS ARGUED BY THE LD. AR OF THE ASSESSEE THAT AS PER THE PROVISIONS OF SECTI ON 2(14)(III) OF THE ACT THE AGRICULTURAL LAND SO SOLD BY THE ASSESSEE WAS N OT CAPITAL ASSET. ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 4 HOWEVER, WHILE FILING OF THE RETURN AS WELL AS AT T HE TIME OF ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT RAISE THIS CLAIM BEFORE THE AO THAT THE AGRICULTURAL LAND SO SOLD IS NOT A CAPITAL ASSETS B ECAUSE OF MISTAKE OR MISCONCEPTION OF ASSESSEE AND HIS THEN LD. AR. HOWE VER DURING THE COURSE OF APPEAL PROCEEDINGS BEFORE LD. CIT (A), THIS CLA IM WAS ALSO ARGUED ON THE GROUND THAT THE AGRICULTURE LAND SO SOLD IS NOT A CAPITAL ASSETS, HENCE CAPITAL GAIN IS NOT CHARGEABLE THEREON. THE LD. AR OF THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSEE FILED APPLICATION UNDE R RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCE (PAGE 6-8 OF ENCLOSURE). TH E LD CIT(A) ALSO CALLED REMAND REPORT FROM AO ON THE ADDITIONAL EVIDENCE. T HE AO SUBMITTED REMAND REPORT AND THE ASSESSEE SUBMITTED REJOINDER. THE FINDING OF LD. CIT (A) IS AT PAGE 13 OF THE ORDER OF LD. CIT (A). THE LD. CIT (A) REJEC TED THE ARGUMENT AND CLAIM OF ASSESSEE FOR THE FOLLOWIN G REASONS: - (I) THE ASSESSEE HIMSELF DECLARED CAPITAL GAIN ON S ALE OF LAND AS LONG TERM CAPITAL GAIN AND EVEN DURING ASSESSMENT PROCEE DINGS IT WAS NEVER PLEADED HENCE THE PLEA IS AFTERTHOUGHT. (II) THE CERTIFICATE OF PATWARI IS NOT APPROPRIATE AS HE IS NOT COMPETENT AUTHORITY TO ISSUE THE SAME. (III) THE ASSESSEE HAS NOT OBJECTED TO THE VALUATIO N BEFORE THE APPROPRIATE AUTHORITIES. IF THE ASSESSEE DID NOT AG REE WITH THE VALUATION BY SUB REGISTRAR, HE SHOULD HAVE MADE A REQUEST BEF ORE ASSESSING OFFICER FOR REFERRING THE MATTER TO DVO WHICH WAS NOT DONE. ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 5 2.4 WITH REGARD TO THE MERIT OF THE ADDITION, THE L D. AR OF THE ASSESSEE CONTENDED THAT THE AGRICULTURE LAND SO SOLD BY THE ASSESSEE IS AN RURAL AGRICULTURE LAND (PAGE COPY OF SALE DEED 14-21 & C OPY OF JAMABANDI AT PAGE 1-2 OF ENCLOSURE). THE LAND WAS SITUATED IN VI LLAGE CHIMANPURA, URF DHAB KA NA, TEHSIL AMBER, DISTRICT JAIPUR POPULATIO N OF WHICH ACCORDING TO LAST CENSES I.E. CENSES 2011 IS 1068 I.E. LESS THAN 10,000. (PAGE 3 OF ENCLOSURE). FURTHER THE LAND WAS NOT SITUATED IN THE MUNICIPALI TY AREA (PAGE 4 OF ENCLOSURE ) . THE COPIES OF FOLLOWING DOCUMENTS WERE SUBMITTED BEFORE LD. CIT (A) TO SUBSTANTIATE THIS CLAIM AND THE SAME ARE ALSO ENCLOSED AT PAGE NOS. 1 TO 5 OF ENCLOSURE OF THIS WRITTEN SUBMI SSION: - (I) COPY OF JAMABANDI TO PROVE THAT THE LAND SO SOL D WAS AGRICULTURE LAND. (PAGE 1-2 OF ENCLOSURE ) (II) PRINTOUT OF CENSUS 2011 ABSTRACT DATA FROM THE WEB SITE HTTP://CENSUSINDIA.GOV.IN/ (PAGE 3 OF ENCLOSURE ) (III) CERTIFICATE OF PATWARI REGARDING OUTSIDE MUNI CIPAL LIMIT (PAGE 4 OF ENCLOSURE) (IV) CERTIFIED COPY OF REVENUE RECORD OF THE AGRICU LTURE LAND. (PAGE 5 OF ENCLOSURE) 2.5 THE LD. AR OF THE ASSESSEE FURTHER CLARIFIED T HAT FROM THE VERIFICATION OF THE ABOVE MENTIONED RECORDS, ITS REVEALS THAT: - ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 6 (I) THE LAND SOLD WAS RURAL AGRICULTURAL LAND SITUA TE IN CHIMANPURA, URF DHABKA NA, TEHSIL AMBER, DISTRICT. THIS VILLAGE IS ADMINISTERED BY PANCHAYAT AND NOT BY ANY MUNICIP ALITY, MUNICIPAL COUNCIL, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE ETC. (II) THE POPULATION OF VILLAGE (I.E. AREA IN WHICH LAND IS SITUATED) AS PER LAST CENSUS WAS ONLY 1068 I.E. BEL OW TO 10,000. (III) THE VILLAGE (I.E. AREA IN WHICH LAND IS SITUA TED) IS ABOUT 1 KM FAR FROM LAST MUNICIPAL LIMITS OF KUNDA CHECK PO ST. THUS AS PER PROVISIONS OF SECTION 2(14)(III) (A) OR (B) OF THE INCOME TAX ACT, 1961, THE LAND SO SOLD BY THE ASSESSEE IS NOT THE CAPITAL ASSETS. THE LAND IS AN AGRICULTURAL LAND AND THIS IS PROVED FRO M JAMABANDI REPORT. FURTHER THE LAND DOES NOT SITUATE IN MUNICIPAL JURI SDICTION AND POPULATION OF THE AREA WHERE THE LAND IS SITUATED IS LESS THAN 10 000. THUS THE LAND DOES FALLS IN THE CATEGORY 29(4)(III)(A). THE LAND ALSO DOES NOT FALL IN THE CATEGORY 2(14)(III)(B) AS THE POPULATION OF THE AREA WHERE T HE LAND IS SITUATED IS LESS THAN 10000. THUS THE LAND DOES NOT FALL EITHER IN ( A) OR (B) OF SECTION 2(14)(III) AND THUS, NO CAPITAL GAIN IS CHARGEABLE THEREON. 2.6 AS PER LD. AR OF THE ASSESSEE, THE LD CIT (A) R EJECTED THIS ARGUMENT OF THE ASSESSEE SIMPLY BY HOLDING THAT THE ASSESSEE HIMSELF DECLARED ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 7 CAPITAL GAIN ON SALE OF LAND AS LONG TERM CAPITAL G AIN AND EVEN DURING ASSESSMENT PROCEEDINGS, IT WAS NEVER PLEADED. HENCE THE PLEA IS AFTERTHOUGHT [PAGE 13 PARA 3.5.3 AND 3.5.4 OF ORDER OF CIT(A)]. HOWEVER LD. CIT (A) HAS NOT ADJUDICATED THIS MATTER ON MERI T. THE LD. CIT (A) HAS CO-TERMINUS POWERS OF THE ASSESSING OFFICER. HENCE, IF SOME CLAIM IS NOT MADE DURING ASSESSMENT PROCEEDINGS AND SUBSEQUENTLY IT IS RAISED BEFORE LD.CIT (A) THE SAME SHOULD BE ADJUDICATED IN THE IN TEREST OF JUSTICE WHICH HAS NOT BEEN DONE BY LD.CIT (A) IN INSTANT CASE. TH E ANOTHER OBJECTION OF THE LD. CIT (A) IS WITH RESPECT TO CERTIFICATE SUBM ITTED BY THE ASSESSEE IN SUPPORT OF DISTANCE OF THE LAND FROM MUNICIPAL LIMI T WHICH WAS OBTAINED FROM VILLAGE PATWARI. THE LD. CIT (A) REJECTED SUCH CERTIFICATE BY HOLDING CERTIFICATE OF PATWARI WHICH IS NOT APPROPRIATE AS HE IS NOT COMPETENT AUTHORITY TO ISSUE THE SAME. IN THIS REGARD, THIS IS TO SUBMIT THAT THE PATWARI IS ALSO A GOVERNMENT REVENUE AUTHORITY, THE REFORE THE CERTIFICATE GIVEN BY HIM CANNOT BE DOUBTED. FURTHER IN THE INCO ME TAX ACT, THERE IS NO PRESCRIBED RULE REGARDING SUBMITTING THE CERTIFI CATE. FURTHER IN THE REMAND REPORT, THE AO ALSO ACCEPTED THE CONTENTS O F SUCH CERTIFICATE. FOR THIS PURPOSE, THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CIRCULAR AND JUDGEMENTS ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 8 (I) CBDT VIDE CIRCULAR NO. 14 OF 1955, DT. 11TH APR IL, 1955, INSTRUCTED THAT 'OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVA NTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DU TIES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY. (II) DECISION OF GUJARAT HIGH COURT S.R. KOSHTI V/S . COMMISSIONER OF INCOME TAX- (2005) 276 ITR 165. (III) DELHI HIGH COURT IN THE CASE OF CIT VS. BHAR AT GENERAL REINSURANCE CO. LTD. (1971) 081 ITR 0303, DELHI HIG H COURT 2.7 AS PER LD. AR OF THE ASSESSEE, THE PROVISION OF SECTION 50C IS A DEEMING PROVISION UNDER WHICH ACTUAL SALE CONSIDERA TION IS TO BE SUBSTITUTED BY THE FAIR MARKET VALUE WHICH IS A DLC RATE AS PER SUB-REGISTRAR, IF ACTUAL SALE CONSIDERATION IS LOWE R THAN THE DLC RATE. AS PER THE LD.AR OF THE ASSESSEE, IN THE INSTANT CASE, THE AO WAS NOT JUSTIFIED IN IGNORING DLC RATE AND COMPUTE THE CAPITAL GAIN B Y TAKING DLC RATE AT 1.5 TIME WHICH WAS ON THE BASIS OF THE LETTER ISSUE D BY THE STATE GOVT. DATED 14-04-2014 FOR CHARGING STAMP DUTY IN CASE OF SALE TO ANY COMPANY, FIRM OR INSTITUTION. AS PER THE LD. AR OF THE ASSES SEE, THE LETTER ISSUED BY THE STATE GOVT. DOES NOT OVERRIDE THE PROVISION OF SECTION 50C, ACCORDING TO WHICH MARKET VALUE AS PER DLC IS TO BE TAKEN WH ETHER SALE IS TO AN INDIVIDUAL OR A COMPANY. 2.8 ON THE OTHER HAND, THE LD. DR VEHEMENTLY ARGUED THAT THE GROUND WITH REGARD TO LAND BEING AGRICULTURAL LAND WAS NOT TAKEN BEFORE THE AO, ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 9 ACCORDINGLY, THE LD. CIT(A) WAS JUSTIFIED IN REJECT ING THE GROUND TAKEN BEFORE HIM FOR THE FIRST TIME. WITH REGARD TO THE P ROVISIONS OF SECTION 50C, HE CONTENDED THAT THE AO HAS CORRECTLY TAKEN THE VA LUE AS PER DLC RATE DETERMINED BY THE SUB-REGISTRAR WHILE REGISTERING T HE SALE DEED. 2.9 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAD ALSO DE LIBERATED ON THE JUDICIAL PRONOUNCEMENTS AND THE RELEVANT PROVISIONS OF LAW M ORE PRECISELY TO THE DEEMING PROVISIONS OF SECTION 50C OF THE ACT. FROM THE RECORD, WE FOUND THAT THE ASSESSEE WAS JOINT OWNER OF AN AGRICULTUR AL LAND 2.09 HECTARE SITUATED IN VILLAGE CHIMANPURA, URF DHAB KA NALA, T EHSIL AMER, DISTRICT JAIPUR WHEREIN THE ASSESSEE HAS 1/4 SHARE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE AND HIS CO-OWNERS SOLD 2.09 HECTARE (8.26 BIGHA) AGRICULTURE LAND ON 05/12/2014 BY EXECUTING THE REGISTERED SALE DEED IN FAVOUR OF M/S NANAK HOTEL PRIVATE LIMITED. IN THE REGISTERED SALE DEED THE DESCRIPTION OF THE LAND IS AGRICULTURAL LA ND AND AT THE POINT OF THE SALE THE LAND WAS NOT CONVERTED OR DEVELOPED LAND. THE DLC RATE OF THE LAND WAS 44,35,410/- PER BIGHA. ACCORDINGLY THE VA LUE OF THE LAND AS PER THE DLC RATE COMES TO RS. 3,66,36,487/-. THE SALE V ALUE DECLARED BY THE ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 10 ASSESSEE WAS RS. 4,92,00,000/- WHICH COMES TO RS. 5 9,56,416/- PER BIGHA. THE STAMP DUTY AUTHORITY LEVIED THE STAMP DUTY BY ASSESSING THE VALUE @ 150% OF VALUE DECLARED IN THE SALE DEED VALUED FOR STAMP DUTY PURPOSE AT RS. 7,38,00,000/- FOR STAMP DUTY PURPOSE. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS BEFORE IST APPELLATE AUTHORI TY, THE ASSESSEE OBJECTED THE VALUE ADOPTED BY STAMP DUTY AUTHORITIES. THE AS SESSEE SOLD THE AGRICULTURE LAND WITHOUT ANY CONVERSION, CHANGE IN LAND USE OR ANY SHORT OF COMMERCIAL ACTIVITIES. IT WAS EXPLAINED TO AO THA T SINCE THE AGRICULTURE LAND WAS SOLD TO THE COMPANY, THEREFORE BY VIRTUE O F LETTER NO. F7(39) JAN/2013/PART-1/2845-3385 DATED 14.07.2014 ISSUED B Y DIRECTOR GENERAL, REGISTRAR & STAMPS DEPTT. KAR BHAWAN, AJMER THE DUT Y WAS COLLECTED FROM BUYER OF LAND, BY ASSESSING THE VALUE OF LAND 1.5 T IME TO THE NORMAL RATE. HOWEVER, IN THE CASE OF THE ASSESSEE THE VALUE ASSE SSED BY THE STAMP DUTY AUTHORITY 1.5 TIMES OF THE DECLARED VALUE IN SALE D EED AS AGAINST THE NORMAL RATE I.E, DLC RATE AS MENTIONED IN THE CIRCULAR. T HE COPY OF DLC CHART APPLICABLE AS ON THE DATE OF TRANSACTION WAS SUBMIT TED ALONG WITH APPLICATION SUBMITTED UNDER RULE 46A OF THE ACT . THE TOTAL AREA OF LAND IS 2.09 HECTARE I.E. 8.26 BIGHA AND HIGHEST RATE PER B IGHA PREVAILING AT THE TIME OF SALE WAS RS. 44,35,410/- AND ACCORDINGLY TH E DLC RATE OF THE LAND ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 11 COMES RS. 3,66,36,487/-AGAINST WHICH THE LAND WAS S OLD FOR RS. 4,92,00,000/-, THEREFORE THERE REMAINS NO DOUBT THA T THE LAND WAS NOT SOLD BELOW TO PREVAILING MARKET RATE. THE HIGHER RATE AP PLIED BY THE STAMP DUTY AUTHORITY ONLY BECAUSE OF THE FACT THAT THE LAND WA S SOLD TO COMPANY. THE DLC RATES ARE INDICATIVE OF MARKET RATE OF THE PROP ERTY SOLD. THE MARKET RATE DEPENDS ON MARKET CONDITION AND NOT DEPENDS WH ETHER THE BUYER IS A COMPANY OR INDIVIDUAL. THE 1.5 TIMES OF THE NORMAL RATE OF THE PROPERTY WAS ASSESSED JUST TO LEVY STAMP DUTY BUT THE DEEMED SALE CONSIDERATION FOR THE PURPOSE OF SECTION 50C CAN BE TAKEN AS DLC RATE AND IN THE CASE OF THE ASSESSEE SALE VALUE DECLARED IN THE SALE DEED I S MUCH MORE THAN DLC RATES. AS PER OUR CONSIDERED VIEW, THE DEEMING PROVISION OF SECTI ON 50C CANNOT BE EXTENDED BEYOND THE FOUR CORNER OF THE LA W FOR WHICH IT IS MEANT. UNDER SECTION 50C, THE FAIR MARKET VALUE WHI CH IS IN THE FORM OF DLC IS TO BE ADOPTED IF THE SALE CONSIDERATION IS L OWER THAN DLC RATE. THE LETTER ISSUED BY THE DIRECTOR GENERAL, REGISTRATION & STAMPS FOR LEVYING STAMP DUTY AT 1.5 TIME OF DLC RATE IN CASE THE SALE IS AFFECTED TO A COMPANY DOES NOT OVERRIDE THE PROVISIONS OF SECTION 50C. THIS LETTER IS ONLY MEANT FOR COLLECTING HIGHER STAMP DUTY IN CASE OF SALE TO A COMPANY, FIRM OR INSTITUTION. IN THE INSTANT CASE, THE SALE CONSIDERATION DECLARED BY ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 12 THE ASSESSEE WAS MORE THAN DLC RATE, THEREFORE, THE AO WAS NOT JUSTIFIED IN SUBSTITUTING THE DLC RATE BY TAKING 1.5 OF THE S ALE CONSIDERATION OF THE LAND SO SOLD BY THE ASSESSEE. SECTION 50C WAS INTRO DUCED IN THE INCOME-TAX ACT, 1961 BY THE FINANCE ACT, 2002 WITH EFFECT FROM 1-4-2003 FOR SUBSTITUTING VALUATION DONE FOR STAMP VALUATION PURPOSES AS FULL VALUE OF CONSIDERATION IN PLACE OF APPARENT CONSIDERATION SHOWN BY THE TRANSFEROR OF CAPITAL ASSET, BEING LAND OR BUILDING . EARLIER THERE USED TO BE A PROVISION IN SECTION 52 OF THE INCOME-TAX ACT, 19 61 WHICH ENABLED THE ASSESSING OFFICER TO REFER THE PROPERTY UNDER TRANS FER TO THE VALUATION. OFFICER FOR DETERMINING MARKET VALUE. HOWEVER, IN K .P. VARGHESE V.ITO (1981) 131 ITR 597 (SUPREME COURT), IT WAS HELD THA T SECTION 52(2) CANNOT BE APPLIED TO GENUINE TRANSACTION UNLESS THE RE ARE EVIDENCES TO SHOW THAT CONSIDERATION DECLARED IN THE SALE DEED I S UNDERSTATED. IN OTHER WORDS UNLESS THE REVENUE WAS ABLE TO SHOW THAT SOME THING OVER AND ABOVE THE SALE CONSIDERATION HAD PASSED HANDS BETWE EN THE TRANSFEREE AND THE TRANSFEROR, SECTION 52(2) COULD NOT BE INVO KED. IT BECAME ALMOST A HERCULEAN TASK FOR THE ASSESSING OFFICER TO COLLE CT EVIDENCE TO SHOW THE EXCHANGE OF ADDITIONAL MONEY FOR CONSIDERATION WAS OTHER THAN APPARENT SALE CONSIDERATION. ACCORDINGLY, IT WAS CONSIDERED TO INSERT A DEEMING ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 13 PROVISION BY WAY OF SECTION 50C FOR SUBSTITUTING AP PARENT SALE CONSIDERATION BY VALUATION DONE BY SVA SUBJECT TO C ERTAIN CONDITIONS., CALCULATING CAPITAL GAINS UNDER SECTION 48. FOR THE PURPOSE OF LEVY OF STAMP DUTY, LOCAL COMMITTEE PRESCRIBES CIRCLE RATE OR DLC RATE. THE DLC RATES ARE CONSIDERED AS INDICATIVE OF FAIR MARKET V ALUE OF THE PROPERTY. THE REAL SPIRIT BEHIND THE INSERTION OF DEEMING SEC TION 50C TO APPLY A COMMON VALUE FOR ALL THE PROPERTY SITUATED IN THAT PARTICULAR AREA. SOMETIMES THE STATE GOVERNMENTS PRESCRIBES CERTAIN FORMULA BASED ON DLC RATES TO LEVY MORE STAMP DUTY. IN THE CASE OF T HE ASSESSEE THE LAND WAS SOLD TO A COMPANY AND ACCORDING TO THE CIRCULAR F7(39) JAN/2013/PART-1/2845-3385 DATED 14.07.2014 THE VALU ATION OF THE AGRICULTURAL LAND WOULD BE 1.5 TIME OF NORMAL VALUE IN CASE THE PURCHASER IS A COMPANY, FIRM OR INSTITUTION. THE MULTIPLICATI ON BY 1.5 TIME OF NORMAL RATE HAS BEEN PRESCRIBED BY STATE GOVT. FOR THE PURPOSE OF LEVY OF MORE STAMP DUTY FROM COMPANY/FIRMS/OR INSTITUTION WHO BU YS THE LAND. THIS CIRCULAR IS NO WAY GOING TO AFFECT THE FAIR MARKET VALUE OF LAND I.E. DLC THE DLC RATE PRESCRIBED FOR THE LAND WAS RS. 44,35,410/ - PER BIGHA ACCORDINGLY THE NORMAL VALUE OF THE LAND AS PER THE DLC RATE CO MES TO RS. 3,66,36,487/-. THE SALE VALUE DECLARED BY THE ASSES SEE WAS RS. ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 14 4,92,00,000/- WHICH COMES TO RS. 59,56,416/- PER BI GHA. THE SALE VALUE DECLARED BY THE ASSESSEE WAS MORE THAN THE DLC RATE WHICH IS INDICATIVE OF FAIR MARKET VALUE PREVAILING IN THAT AREA. THE FAIR MARKET VALUE CANNOT VARY ACCORDING TO THE STATUS OF THE BUYER PERSON. IF BUY ER IS AN INDIVIDUAL THEN THE FAIR MARKET VALUE WOULD BE RS. 3,66,36,487/- AN D IF THE BUYER IS A COMPANY OR FIRM OR INSTITUTION THEN THE FAIR MARKET VALUE OF THE PROPERTY WOULD BE 1.5 TIME OF THE NORMAL VALUE, THIS CANNOT BE INTENTION OF SECTION 50C WHICH REQUIRE SUBSTITUTION OF FAIR MARKET VALUE I.E. DLC IN PLACE OF SALE CONSIDERATION MENTIONED IN THE SALE DEED, IF IT IS FOUND TO BE LOWER THAN DLC. FURTHERMORE, THE STAMP DUTY AUTHORITY LEVIED T HE STAMP DUTY ARBITRARY BY ASSESSING THE VALUE @ 1.5 TIME OF VALUE DECLARED IN THE SALE DEED VALUED FOR STAMP DUTY PURPOSE AT RS. 7,38,00,000/- FOR STAMP DUTY PURPOSE AS AGAINST 1.5 TIME OF NORMAL DLC. FURTHERMORE AS PER PROVISIONS OF INCOME TAX ACT IF THE AO DOES NOT AGREE WITH THE EX PLANATION OF THE ASSESSEE WITH REGARD TO CONSIDERATION DISCLOSED BY HIM THEN HE SHOULD REFER THE MATTER TO DVO FOR GETTING ITS MARKET RATE ESTIMATED AS ON DATE OF THE SALE. IN CASE AO IS NOT SATISFIED WITH THE EXPL ANATION OF THE ASSESSEE, HE 'SHOULD' REFER THE MATTER TO THE DVO FOR THE VAL UATION PURPOSE. THUS AS PER PROVISIONS OF THIS SECTION IF THE ASSESSEE RAIS E ANY SORT OF OBJECTION ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 15 REGARDING THE VALUE ADOPTED BY THE REGISTRAR AUTHOR ITY AND IF THE AO IS NOT SATISFIED ON THAT THEN THE AO SHOULD REFER THE MATT ER TO DVO. THIS IS A LEGAL REQUIREMENT WHICH MUST BE COMPLIED WITH BY TH E AO. 2.10 IN VIEW OF ABOVE DISCUSSIONS, IT IS UNDISPUTED FACT THAT ASSESSEE HAD DECLARED SALE CONSIDERATION MORE THAN DLC, ACCORDIN GLY THERE IS NO JUSTIFICATION FOR MAKING ANY ADDITION U/S 50C OF TH E ACT. WE DIRECT ACCORDINGLY. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN TERMS INDICATED HEREINABOVE ORDER PRONOUNCED IN THE OPEN COURT ON 03 /08/20 20. SD/- SD/- FOT; IKY JKO JESK LH0 KEKZ (VIJAY PAL RAO) (RAMESH. C. SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03/08/2020. *MISHRA . ITA NO.1393/JP/2019 SHRI OM PR AKASH AGARWAL VS DCIT, CIRCLE-6, JAIPUR 16 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH AGARWAL, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT,CIRCLE-6, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1393/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR