Shri Govindbhai Vithalbhai Moradiya, Rajkot V. The Income Tax Officer, Ward-2(3), Bhavnagar

ITA 1404/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0939 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 08-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMEET KUMAR VERMA
• Assessee Lawyers: U S BHATI; ABHIMANYU SINGH BHATI A RS
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Cost of acquisition; Fair market value; Set aside
• Section: 50C

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 1404/AHD/2017 ( ASSESSMENT YEAR : 2012-13) SHRI GOVINDBHAI VITHALBHAI MORADIYA PROP. M/S PATEL MEDICAL STORE, DARBARGADH ROAD, DIST. BHAVNAGAR, GARIYADHAR - 364505 / VS. INCOME TAX OFFICER WARD- 2 (3), JASHONATH CHAMBERS, JASHONATH CHOWK, BHAVNAGAR - 364001 ./ ./ PAN/GIR NO. : ALOPM7698B ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI U. S. BHATI & SHRI ABHIMANYU SINGH BHATI, A.RS. / RESPONDENT BY : SHRI SUMEET KUMAR VERMA, SR. D.R. DATE OF HEARING 24/01/2019 !'# / DATE OF PRONOUNCEMENT 25/03/2019 ORDER PER MAHAVIR PRASAD, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, AHM EDABAD [ IN SHORT CIT(A)], APPEAL NO. CIT(A)-6/167/14-15 DATED 24.0 3.2017 ARISING FROM ITA NO. 1404/AHD/2017 [SHRI GOVINDBHAI V. MORADIYA VS. ITO] AY 2012-13 - 2 - THE ASSESSMENT ORDER DATED 11.11.2014 AND FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (LD. CIT(A)) HAS ERRED IN CONFIRMING THE VALUATION TAKEN BY LD. AO BY IGNORIN G THE PROVISIONS OF SECTION 50C(2) OF THE ACT. HE OUGHT TO HAVE REFERRED THE MA TTER TO THE DVO FOR DETERMINED FMV OF THE PROPERTY SOLD. THE LD. AO MAY PLEASE BE DIRECTED TO REFER THE MATTER TO THE DVO TO MEET THE ENDS OF JUSTICE. 2. LD. CIT (A) AS WELL AS ID. AO HAS ERRED IN WORKI NG OUT STCG AT RS.1538130/- WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT AND HAS VIOLATED THE PRINCIPAL OF NATURAL JUSTICE. THE ORDE R PASSED BY LD. AO AS WELL AS CIT(A) MAY PLEASE BE SET ASIDE ON THIS PARTICULAR P OINT OF INFIRMITY OF THE ORDERS IN THE INTEREST OF JUSTICE. 3. LD. CIT{A) HAS ERRED IN NOT ALLOWING LEGAL GROU ND REGARDING APPLICABILITY OF THE PROVISIONS OF SEC. 50C (2) OF THE ACT THOUGH THE SAME WAS CLAIMED DURING THE REMAND PROCEEDINGS ON THE PLEA THAT THE SAME WA S NOT CLAIMED IN DURING THE ASSESSMENT PROCEEDINGS. THIS GROUND BEING LEGAL GRO UND CAN BE TAKEN AT ANY STAGE OF THE PROCEEDINGS. IT IS MOST HUMBLE PRAYER OF THE APPELLANT THAT EITHER LD. CIT(A) OR LD. AO PLEASE BE DIRECTED TO REFER THE MA TTER TO THE DVO CONSIDERING THE LEGALITY OF GROUND TO MEET THE ENDS OF JUSTICE. 2. FACTS OF THE CASE ARE THAT: '4. SHORT TERM CAPITAL GAIN DURING THE COURSE OF PROCEEDINGS, IT WAS NOTICED TH AT DURING THE F.Y. 2011-12, THE ASSESSES ALONG WITH OTHER 7 OTHER CO-OWNERS HAD PURCHASED A LAND SITUATED AT RS NO. 96/3 AT VILLAGE DIDOLI, SURAT (NOW WITHIN SU RAT CITY) FOR O CONSIDERATION OF RS. 1,93,20,000/- AS PER SALE DEED MADE ON 30.06 .2011. FOR THE SAID PURCHASE OF LAND, THE ASSESSEE NOD CONTRIBUTED RS.18,00,000/ -. THE SAID LAND WAS SOLD BY THE ASSESSEE ALONG WITH OTHER 7 CO-OWNERS FOR A CON SIDERATION OF RS. 2,10,00,000/-AS PER SALE DEED MADE ON 24.01.2012. D URING THE COURSE OF PROCEEDINGS IT WAS ALSO NOTICED THAT THE STAMP DUTY PAID BY THE PURCHASER ON THE SAID LAND WAS AMOUNTED TO RS.13,52,000/-. IT WAS FU RTHER NOTICED THAT THE ASSESSEE HAD RECEIVED RS. 26,25,000/- OUT OF SALE PRICE OF R S. 2,10,00,000/- ON ACCOUNT OF THIS TRANSACTION, WHICH WORKS OUT TO 12.5%. HOWEVER , HE HAS NOT OFFERED ANY CAPITAL GAIN IN HIS RETURN OF INCOME FILED FOR A.Y. 2012-13 IN RESPECT OF THE PROPERTY SOLD BY HIM ALONG WITH OTHER 7 CO-OWNERS D URING THE F.Y. 2011-12. MOREOVER, DURING THE COURSE OF PROCEEDINGS IT WAS N OTICED THAT THE STOMP DUTY PAID BY THE PURCHASER FOR THE PURCHASE OF LAND (VAL UE OF WHICH WAS RS. 2,10,00,000/- AS PER SALE DEED MADE ON 24.01.2012) WAS AMOUNTED TO RS.13,52,000/- BECAUSE THE VALUE OF THE LAND ADOPTE D BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY WORKS OUT TO RS.2,76,02,040/-, BUT THE VALUE SHOWN IN THE SALE DEED IS RS. 2,10,00 ,000/-. THEREFORE, THE ITA NO. 1404/AHD/2017 [SHRI GOVINDBHAI V. MORADIYA VS. ITO] AY 2012-13 - 3 - PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 19 61 WAS CLEARLY ATTRACTED IN THE ASSESSEE'S CASE. FOR THE SAKE OF BREVITY, THE RELEV ANT PROVISIONS OF SECTION 50C ARE REPRODUCED AS UNDER: - 'SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES. 50C (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY ANY AU THORITY OF O STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAM P VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED FOR ASSESSABLE) SHALL, FOR THE PURPOSE OF SECTION 48, BE DEEMED TO BE FULL VALUE OF THE CONSIDERATION RECEIV ED OR ACCRUING AS A RESULT OF SUCH TRANSFER' ACCORDINGLY, THE SALE VALUE OF THE SAID LAND IS CON SIDERED AT RS. 2,76,02,040/- INSTEAD OF RS. 2,10,00,000/- U/S. 50C OF THE ACT AN D 12.5% OF THE SAID VALUE WORKS OUT TO RS. 34,50,255/- WHICH IS THE CONSIDERATION D EEMED TO BE RECEIVED BY THE ASSESSEE ON ACCOUNT OF THE LAND SOLD BY HIM ALONGWI TH OTHER 7 CO-OWNERS AS PER SALE DEED DTD. 24.01.2012, U/S. 50C OF THE ACT. IN THE CIRCUMSTANCES, VIDE THIS OFFICE LETTER NO.BNR/WARD-2(3)/GVM/50-C/14-15 DTD. 03.11.2014 THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY ON ADDITION OF RS . 15,38,130/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN SHOULD NOT BE MADE TO THE A SSESSEE'S TOTAL INCOME DECLARED FOR A.Y. 2012-13 U/S. 50C OF THE ACT. THE ASSESSEE, HOWEVER, HAS NEITHER MADE ANY SUBMISSION AGAINST THE SAID LETTER NOR MAD E ANY OBJECTION AGAINST THE PROPOSAL OF THE REVENUE. THEREFORE, THE SHORT TERM CAPITAL GAIN OF THE ASSESSEE DURING THE F. Y. 2011-12 ON ACCOUNT OF SALE OF LAND AS PER SALE DEED MODE ON 24.01.2012 IS WORKED OUT AS UNDER: SALE VALUE OF THE LAND AS PER SECTION : RS.2,76,0 2,040 50C OF THE ACT AS DISCUSSED ABOVE CONSIDERATION DEEMED TO BE RECEIVED BY THE ASSESSEE OUT OF RS. 2,76,02,040/- AS PER SECTION 50C OF THE ACT @ 12.5% : RS. 34,50, 255 LESS: COST OF ACQUISITION : RS 19,12,125 (RS.18,00,000/- AGAINST COST AND RS. 1,12,125/-) - -------------------- SHORT TERM CAPITAL GAIN : RS. 15,38,130 ACCORDINGLY, SHORT TERM CAPITAL GAIN OF RS. 15,38,1 30/- IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE BY THE AO. 3. AGAINST THE ADDITION OF RS.15,38,130/-, THE ASSE SSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A) WHO DISM ISSED THE APPEAL OF THE ASSESSEE. ITA NO. 1404/AHD/2017 [SHRI GOVINDBHAI V. MORADIYA VS. ITO] AY 2012-13 - 4 - 4. NOW, BY WAY OF SECOND APPEAL, ASSESSEE IS BEFORE US. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. IN THIS CASE, THE DISPUTE IS WITH REGARD TO CALCULATIO N OF CAPITAL GAIN TAX. REVENUE AUTHORITIES HAVE TAKEN VALUE OF THE LAND AS PER JANTRI PRICE WHEREAS ASSESSEES CONTENTION IS THAT JANTRI PRICE IS NOT C ORRECT VALUE AND ASSESSEE REQUESTED LOWER AUTHORITIES TO REFER THIS MATTER TO THE DISTRICT VALUATION OFFICER TO DETERMINE THE EXACT VALUE OF THE PROPERT Y BUT LEARNED AO DID NOT EXCEED HIS PRAYER AND MADE ADDITION OF RS.15,38,130 /-. 6. IN SUPPORT OF ITS CONTENTION, LEARNED AR CITED T HE ORDER OF THE CO- ORDINATE SMC BENCH IN ITA NO. 3208/AHD/2015, ORDE R DATED 22.08.2017, WHEREIN IT IS HELD: 5. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. I FIND THAT AS NOTED BY THE TRIBUNAL IN THE CASE OF N ARENDRA DAHYABHAI PATEL VS. ITO (SUPRA) THE LAW IS NOW WELL SETTLED THAT EVEN I N THE ABSENCE OF A SPECIFIC REQUEST FROM THE ASSESSES, THE A.O. HAS TO GIVE AN OPTION TO THE ASSESSEE TO FOLLOW THE COURSE PROVIDED BY LAW UNDER SECTION 50C(2). TH ERE IS A DIRECT DECISION TO THIS EFFECT BY HON'BLE CALCUTTA HIGH COURT IN THE C ASE OF SUNIL KUMAR AGARWAL VS. CIT [(2015) 372 ITR 83 (CAL]. NO JUDICIAL PRECEDENC E TO THE CONTRARY HAS BEEN BROUGHT TO MY NOTICE. RESPECTFULLY FOLLOWING THE E STEEMED VIEW OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SUN// KUMAR AGAR WAL VS. CIT (SUPRA), I UPHOLD THE PLEA OF THE ASSESSEE AND REMIT THE MATTE R TO THE FILE OF ASSESSING OFFICER FOR ADJUDICATION DENOVO AFTER REFERRING THE MATTER TO THE DVO UNDER SECTION 50C(2). AS THE MATTER HAS BEEN REMITTED TO THE FILE OF ASSESSING OFFICER WITH THE ABOVE DIRECTIONS, IT IS NOT REALLY NECESSA RY TO DEAL WITH OTHER ASPECTS OF THE MATTER.' 7. THUS, HAVING PARITY WITH THE AFORESAID JUDGMENT AND IN THE INTEREST OF JUSTICE, WE ALSO THINK IT PROPER TO SET ASIDE THIS MATTER TO THE FILE OF THE AO WHO WILL REFER THIS ISSUE TO DISTRICT VALUATION OFF ICER TO DETERMINE THE VALUE ITA NO. 1404/AHD/2017 [SHRI GOVINDBHAI V. MORADIYA VS. ITO] AY 2012-13 - 5 - OF THE PROPERTY AND THEREAFTER, AO WILL DECIDE THE ISSUE OF CAPITAL GAIN AS PER PROVISIONS OF LAW AFTER AFFORDING OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES AS STATED ABOVE. SD/- SD/- ( PRADIP KUMAR KEDIA ) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 25/03/2019 TRUE COPY S.K.SINHA !'#' / COPY OF ORDER FORWARDED TO:- $. / REVENUE 2. / ASSESSEE '. ()* + / CONCERNED CIT 4. +- / CIT (A) .. /01 22)*3 )*#3 45( / DR, ITAT, AHMEDABAD 6. 178 9 / GUARD FILE. BY ORDER / 3 /4 )*#3 45( THIS ORDER PRONOUNCED IN OPEN COURT ON 25/03/20 19