The DCIT, Circle-2, Surat V. Shri Haresh Jagmohandas Mehta, Surat

ITA 1508/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94641 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Value adopted by valuation officer; Retrospective amendment; Cost of acquisition; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER. ITA. NO. 1508/AHD/2011 (ASSESSMENT YEAR:2008-09) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-2, ROOM NO.110, AAYAKAR BHAVAN, MAJURA GATE, SURAT 395001 APPELLANT VS. SHRI HARESH JAGMOHANDAS MEHTA PLOT NO. 7/B, JAWAHAR ROAD NO.1, UDYOG NAGAR, UDHANA, SURAT. RESPONDENT PAN: ABXPM7550P & ITA. NO. 1509/AHD/2011 (ASSESSMENT YEAR:2008-09) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-2, ROOM NO.110, AAYAKAR BHAVAN, MAJURA GATE, SURAT 395001 APPELLANT VS. SHRI VIJAY JAGMOHANDAS MEHTA PLOT NO. 5419, ROAD NO.6, NR. WATER TANK, GIDC, SACHIN, SURAT. RESPONDENT PAN: ADHPM1690A & ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 2 - ITA. NO. 1510/AHD/2011 (ASSESSMENT YEAR:2008-09) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-2, ROOM NO.110, AAYAKAR BHAVAN, MAJURA GATE, SURAT 395001 APPELLANT VS. SHRI JAGMOHANDAS MEHTA, HUF, PLOT NO. 5419, ROAD NO.6, NR. WATER TANK, GIDC, SACHIN, SURAT. RESPONDENT PAN: AABHJ3060Q / BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. / BY REVENUE : SHRI RAJ DEEP SINGH, SR.D.R. /DATE OF HEARING : 06.10.2015 /DATE OF PRONOUNCEMENT : 06.11.2015 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE THREE REVENUES APPEALS FOR ASSESSMENT YEAR 2008- 09, ARISE FROM ORDERS OF THE CIT(A) - II, SURAT, DA TED 14.03.2011 IN CASE OF SHRI HARESH J. MEHTA AND 15.03.2011 IN C ASE OF SHRI VIJAY JAGMOHANDAS MEHTA AND SHRI JAGMOHANDAS MEHTA (HUF), PASSED IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961, HEREINAFTER THE ACT. 2. BOTH THE PARTIES AT THE OUTSET TAKE US TO ITA NO.1508/AHD/2011 RAISING TWO SUBSTANTIVE GROUNDS IN TER ALIA CHALLENGING THE LOWER APPELLATE ORDER DELETING ADDI TIONS OF ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 3 - UNACCOUNTED INVESTMENT OF RS.94,99,500/- U/S.69B AN D THAT OF UNACCOUNTED AND UNDISCLOSED CAPITAL GAINS OF RS.98, 86,250/- MADE IN THE COURSE OF A REGULAR ASSESSMENT FRAMED O N 27.12.2010. 3. THIS APPEAL PERTAINS TO THE ASSESSEE/INDIVIDUAL SHRI HARESH JAGMOHANDAS MEHTA. HE PURCHASED AGRICULTURAL LAND MEASURING 4500 SQ.MTRS. COMPRISED IN TP 2, RS NO. 106/3, FINA L PLOT NO.160 AT VESU, SURAT ON 12.03.2008 @ RS.473/- PER SQ. MTR. THE TOTAL COST OF THIS CHUNK CAME TO BE RS.11,16,00 0/-. ITS JANTRI PRICE WAS RS.105/- PER SQ.MTR. WE COME TO THE LATT ER GROUND AND FIND THAT THE VERY ASSESSEE SOLD HIS HALF SHARE OF LAND AT TP NO.6, RS NO.247/1/2 IN THE SAME LOCALITY VESU, SURAT ON 1 0.01.2008 MEASURING 2340 SQ. MTRS. FOR SALE PRICE OF RS.20.75 LACS @ RS.1100/- PER SQ. MTR. JANTRI PRICE OF THIS PARCEL OF LAND WAS RS.105/- PER SQ. MTR. 4. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE WAS OF THE VIEW THAT ASSESSEE HAD UNDERSTATED HIS PURCHASE AS WELL AS SALE PRICE HEREINABOVE SINCE THIS VESU LOCALITY ADJOINED TO PR EMIER EDUCATIONAL, RESIDENTIAL AND COMMERCIAL PROJECTS AS WELL AS THE CITY AIRPORT. HE APPEARS TO HAVE QUOTED THE SURAT URBAN DEVELOPMENT AUTHORITY AUCTION PRICES RANGING BETWEE N RS.5000/- PER SQ. MTR. TO RS.13,200/- PER SQ.MTR. I N FINANCIAL YEAR 2005-06. WE FURTHER NOTICE THAT LD. ASSESSING OFFICER TOOK COGNIZANCE OF THE FACT THAT THE STATE GOVERNMENT HA D REVISED JANTRI PRICE OF THE DEVELOPED LAND TO THAT @ RS.120 00/- PER SQ.MTR. FROM 01.04.2008 AND AGRICULTURAL ONE @ RS.6 000/-. THE ASSESSEE OBJECTED TO THIS ACTION BY INTER ALIA PLEA DING THAT ITS UNDEVELOPED LANDS (BOTH AGRICULTURAL AND NON AGRICU LTURAL) COULD ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 4 - NOT BE VALUED AT PAR WITH THE SUDA AUCTION RATE HER EINABOVE AS WELL AS THE REVISED JANTRI PRICES EFFECTIVE ONLY FR OM 01.04.2008 COULD NOT BE APPLIED WITH RETROSPECTIVE ASPECT. HE STATED THAT ITS PURCHASE AS WELL AS SALE PRICES WERE THE MOST APPRO PRIATE. THERE WAS NO EVIDENCE TO BE THEIR UNDER STATEMENT. NO FA ULT WAS FOUND WITH THE RELEVANT BOOKS. THERE WAS NO UNACCOUNTED INVESTMENT FORTHCOMING. WE FIND THAT ALL THESE PLEADINGS FAIL ED TO IMPRESS UPON THE ASSESSING OFFICER. HE WAS OF THE VIEW THA T THE STATE GOVERNMENT HAD REVISED JANTRI PRICES DECADES BACK. HE OBSERVED THAT THE REVISED JANTRI PRICES W.E.F. 01.04.2008 HE REINABOVE COULD BE SUITABLE ADJUSTED FOR ASCERTAINING CORRECT VALUE OF ASSESSEES PROPERTIES SUBJECT MATTER OF SALE AND PURCHASE IN Q UESTION. HE PROCEEDED ACCORDINGLY BY GIVING 25% REBATE IN THEIR REVISED JANTRI PRICES AND COMPUTED PURCHASED PRICE OF THE LAND TO BE RS.1,06,15,500/- (RS.4500/- @ 75% OF THE REVISED JA NTRI PRICES OF RS.6000/- MULTIPLIED BY AREA OF THE LAND MEASURING 2359 MTRS.). THE SAME WAS REDUCED TO THE DECLARED PURCHASE PRICE OF RS.11,16,000/- AS SHOWN IN THE ACCOUNTS RESULTING I N THE BALANCE SUM OF RS.94,99,500/- BEING ADDED AS UNACCO UNTED INVESTMENT. 5. THE CASE FILE REVEALS THAT THE ASSESSING OFFICER ADOPTED THE VERY FORMULA FOR COMPUTING AN ADDITION OF RS.98,86, 250/- QUA ASSESSEES LANDS SOLD. THE SAME STOOD ADDED AS UNA CCOUNTED SALE PROCEEDS. 6. THE ASSESSEE PREFERRED THE APPEAL. THE CIT(A) D ELETED BOTH THE IMPUGNED ADDITIONS AS UNDER: ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 5 - 4.1 I HAVE DULY CONSIDERED THE DISCUSSION MADE IN THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE ADD ITIONS MADE IN THE ASSESSMENT ORDER CAN BE SUMMARIZED AS UNDER: (I) ADDITION ON ACCOUNT OF UNACCOUNTED INVESTMENT U /S.69B OF THE ACT. (A) LAND PURCHASED AT VESU. : RS.94,99,500/- (B) LAND PURCHASED AT DUMAS : RS.36,60,675/- (II) ADDITION ON ACCOUNT OF UNDISCLOSED CAPITAL GAI N ON SALE OF LAND AT VESU. : RS.98,86,250/-. 4.2 GROUNDS OF APPEAL NO. 1,2,5,&6 ARE RELATING TO TWO ADDITIONS MADE U/S. 69B OF THE ACT, WHEREAS GROUNDS OF APPEAL NO. 3 & 4 ARE RELATING TO ADDITION ON ACCOUNT OF UNDISCLOSED CAPI TAL GAIN ON SALE OF LAND AT VESU. GROUND OF APPEAL NO. 7 IS GENERAL IN NATURE, AS WELL AS ARGUMENT IN SUPPORT OF GROUNDS OF APPEAL NO. 1 TO 6 , HENCE, SHALL NOT BE DEALT SEPARATELY; BUT CONSIDERED AS PAIL; OF THE AB OVE GROUNDS OF APPEAL. 4.3 THE ISSUES RAISED IN THE GROUNDS OF APPEAL NO. 1,2,5 & 6 ARE COMMON HENCE, ALL THE FOUR GROUNDS OF APPEAL ARE TA KEN TOGETHER FOR DISCUSSION AND DISPOSAL, THE APPELLANT HAS PRIMARIL Y RAISED THREE ISSUES IN THE ABOVE GROUNDS OF APPEAL, VIZ. (I) WHETHER NEW JANTRI RATES MADE EFFECTIVE FROM 01 -04-2008 CAN BE APPLIED RETROSPECTIVELY BY THE ASSESSIN G OFFICER TO THE PURCHASE OF LAND EFFECTED ON 11-07-2007, [T HERE IS MISTAKE IN THE ORDER, AS CORRECT DATE OF PURCHASE I S 12-03- 2008 AND NOT 11-07-2007] AND 10-09-2007 RESPECTIVEL Y. (II) WHETHER, IN ADDITION TO THE NEW JANTRI RATES, ASSESSING OFFICER HAS BROUGHT ANY OTHER CORROBORATIVE EVIDENC E ON RECORD TO JUSTIFY ALLEGED UNACCOUNTED INVESTMENT. ( III) WHETHER SECTION 69B OF THE ACT, CAN BE INVOKED IN T HE CASE OF THE APPELLANT FOR MAKING ABOVE ADDITIONS OF RS.94,99,500/- AND RS.36,60,600/-. 4.4 ALL THE ABOVE ISSUES ARE INDEPENDENT OF EACH OT HER. IN RESPECT OF THE FIRST ISSUE, THE ASSESSING OFFICER'S OBSERVATIO N IS THAT NEW JANTRI RATES OF 6,000/- PER SQ. MTR. IS EFFECTIVE FOR THE LAND IN VESU AREA W.E.F. 01-04-2008, AND THOUGH THE APPELLANT HAS PURCHASED THE LAND IN VESU AREA ON 12-03-2008 (CORRECT DATE TAKEN), THE DIFFER ENCE IN BOTH DATES IS ONLY OF 19 DAYS (CORRECT DIFFERENCE BETWEEN THE TWO DATES TAKEN). HE HAS, THEREFORE, AFTER ALLOWING DEDUCTION OF 25 % IN THE NEW JANTRI RATE EFFECTIVE 01-04-2008, ADOPTED THE RAT E OF RS.4,500/- PER SQ. MTR. AS THE RATE PER SQ. MTR. FOR PURCHASE OF LAND BY THE APPELLANT IN VESU ON 12-03-2008 [CORRECT DATE TAKEN), AS AGAINST RS.473 PER SQ. MTR. AS PER THE SALE DEED. THE SAME LOGIC HAS BEEN APPL IED IN THE PURCHASE OF LAND MADE BY THE APPELLANT ON 10-09-2007 IN THE DUMAS AREA, WHICH HAS BEEN PURCHASED APPROXIMATELY SEVEN MONTHS BEFOR E THE NEW JANTRI ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 6 - RATES BECAME EFFECTIVE FROM 01-04-2008, AS PER WHIC H, THE SALE RATE FIXED FOR JANTRI PURPOSES IN DUMAS AREA WAS RS.700/ - TO RS.1,000/- PER SQ. MTR. THE ASSESSING OFFICER, THEREFORE, AFT ER GIVING REDUCTION OF 2.5% FROM THE RATE OF RS.700/- PER SQ. MTR., ADOPT ED THE RATE OF RS.525/- PER SQ. MTR. TO DETERMINE THE PURCHASE COS T OF THE LAND IN DUMAS AREA. THE ASSESSING OFFICER FOR MAKING THE A BOVE ADDITIONS, HAS ALSO TAKEN INTO CONSIDERATION THE AUCTION PRICE OF THE LAND IN THE VESU AREA DURING THE PERIOD 05-04-2005 TO 20-12-200 6, WHICH IS RANGING FROM RS.500//- PER SQ. MTR. TO RS.7711/- PE R SQ. MTR. FOR THE RESIDENTIAL PLOTS OF LAND, RS.7,500/- TO RS. 11,425 /- FOR SCHOOL AND PLAY GROUND PLOTS AND RS. 6,555/- TO RS.13,200/ - FOR COMMERCIAL PLOTS. THE LOCATION OF ALL THE PLOTS OF LAND AUCT IONED ARE IN TP-1, OF VESU AREA. IN RESPECT OF PURCHASE OF LAND IN DUMAS AREA, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY INSTANCES OF AUCTION OR SALE OF PLOTS ON RECORD, THE APPELLANT WAS, THEREFORE, CONF RONTED BY THE ASSESSING OFFICER WITH THE ABOVE 12 INSTANCES OF AU CTION OF PLOT OF LAND IN VESU BY SUDA. IN SO FAR AS THE APPELLANT'S CONTE NTION THAT THE ADDITION IS NOT JUSTIFIED, BECAUSE IT HAS BEEN MADE ONLY ON THE BASIS OF JANTRI RATES IS CONCERNED, I DO NOT FIND ANY MERIT IN THIS ARGUMENT AS THE ASSESSING OFFICER HAS NOT ADOPTED THE JANTRI RATE O F 01-04-2008 FOR MAKING THE ADDITION, THOUGH HE HAS TAKEN THE SAM E AS BASIS FOR ARRIVING AT THE PROBABLE MARKET RATE DURING THE PERIOD OF PURCHASE OF THE PLOTS OF LAND BY THE APPELLANT. THE ISSUE WHICH , THEREFORE, REQUIRES ATTENTION IS AS TO WHETHER THE ABOVE INSTANCES OF S ALE TAKEN BY THE ASSESSING OFFICER CAN BE TAKEN AS COMPARABLE INSTAN CES FOR DETERMINING THE PURCHASE COST OF THE LAND: BOUGHT: BY THE APPEL LANT IN VESU AND DUMAS, AND WHETHER ON THE BASIS OF THE SAID INSTANC ES, ADDITIONS MADE BY THE ASSESSING OFFICER IS JUSTIFIED. THE APPELLAN T HAS VIDE REPLY DATED 04-03-2011, REPRODUCED ABOVE GIVEN 16 INSTANCES OF SALE OF OPEN AGRICULTURAL PLOTS IN VESU AREA INCLUDING R.S. NO. 106/1 IN TP NO.2, WHERE AGRICULTURAL LAND PURCHASED BY THE APPELLANT IS LOCATED. THE PURCHASE RATE PER SQ. MTR. IN THE INSTANCES GIVEN B Y THE APPELLANT RANGES FROM RS.46/- TO RS.202/- PER SQ. MTR. AND TH E DATE OF PURCHASE OF THESE PLOTS OF LAND ARE FROM DECEMBER 2004 TO MA RCH 2008. THE AGRICULTURAL LAND IN THE VESU AREA WAS PURCHASED BY THE APPELLANT AT THE RATE OF RS.473/- PER SQ. MTR. IN THE SAME AREA , A PLOT OF LAND OF THE SIZE OF 2400 SQ. MTR. WAS PURCHASED ON 22-03-2008 @ RS. 130/- PER SQ. MTR. FURTHER, IN THE ABOVE 16 INSTANCES OF PURCHAS E OF PLOTS OF LAND IN THE VESU AREA IN THE FINANCIAL YEARS 2005-06, 2006- 07 AND 2007-08, FURNISHED BY THE APPELLANT, THE MAXIMUM SELLING RAT E PER SQ. MTR., IS RS.202/- PER SQ. MTR., I.E. ON 05.11.2007, AND IN T HE THREE INSTANCES WHERE OPEN AGRICULTURAL PLOT OF LAND HAS BEEN PURCH ASED IN MARCH 2008, THE MAXIMUM PURCHASE RATE IS RS.166/- PER SQ. MTR. THE APPELLANT HAS ALSO ENCLOSED COPY OF INDEX OBTAINE D FROM THE OFFICE OF THE SUB-REGISTRAR IN RESPECT OF ALL 16 INSTANCES OF PURCHASE OF OPEN AGRICULTURAL PLOT VIDE ANNEXURE-4 TO THE WRITTEN SU BMISSION DATED 04-03- 2011. UPON DUE CONSIDERATION OF THE SAME, I FIND T HAT THE ASSESSING OFFICER HAS INCORRECTLY TAKEN THE AUCTION RATES FOR PURCHASE OF PLOTS FOR RESIDENTIAL, COMMERCIAL AND SCHOOL AND PLAY GROUND AS INDICATORS FOR DETERMINING THE PURCHASE PRICE OF THE PLOTS OF LAND AT VESU AND DUMAS, ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 7 - IN THE CASE OF THE APPELLANT. THE PLOTS OF LAND PU RCHASED BY THE APPELLANT IN VESU AND DUMAS ARE AGRICULTURAL LAND C AN BE APPLIED. I, THEREFORE, HOLD THAT INSTANCES OF AUCTION SALE OF P LOTS CITED BY THE ASSESSING OFFICER HAVE NO RELEVANCE TO THE AGRICULT URAL, LAND PURCHASED BY THE APPELLANT, AND CANNOT BE CONSIDERED AS COMPA RABLE CASES. ACCORDINGLY, IN THE ABSENCE OF ANY RELEVANT CORROBO RATIVE EVIDENCE, THE JANTRI RATES TAKEN AS BASE RATE TO DETERMINE THE PO SSIBLE MARKET RATE OF THE AGRICULTURAL PLOTS OF LAND PURCHASED BY THE APP ELLANT, ARE ALSO NOT VALID. THE ADDITIONS MADE U/S. 69B OF THE ACT ARE, THEREFORE, WITHOUT ANY RELEVANT OR DIRECT EVIDENCE TO SHOW AMOUNT OF I NVESTMENTS ETC. MADE IN THE ABOVE TWO PLOTS OF LAND, SIS NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNT OF THE APPELLANT. IN THE LIGHT OF THESE FACTS, THE DECISION OF THE JURISDICTIONAL AHMEDABAD BENCH OF THE ITAT IN THE C ASE OF SHANKARLAL NEBHUMAL HUF (SUPRA) AND ITAT, JAIPURS DECISION IN THE CASE OF SWAMI COMPLEX PVT. LTD. (SUPRA), REFERRED IN THE AP PELLANTS SUBMISSION DATED 04-03-2011 REPRODUCED ABOVE, BECOME RELEVANT. 4.5 IN VIEW OF THE DISCUSSION MADE ABOVE, AND THE D ECISIONS REFERRED TO THEREIN, I DELETE THE ADDITIONS OF RS.94,99,500/ - AND RS.36,50,6757- U/S, 69B OF THE ACT, AND ALLOW THE GROUNDS OF APPEA L NO. 1,2,5 & 6. 4.6 THE APPELLANT HAS DURING THE COURSE OF APPELLAT E PROCEEDINGS, VIDE LETTER DATED 04-03-2011 SUBMITTED THAT THE ASS ESSING OFFICER HAS ALSO MADE REFERENCE TO THE VALUATION OFFICER FOR DE TERMINING THE VALUE OF THE LAND ON THE DATE OF PURCHASE, WITHOUT REJECTING HIS BOOKS OF ACCOUNTS, AND, IN THIS REGARD, HAS RELIED UPON THE ORDER DATED 19-10- 2009 OF THE HON'BLE SUPREME COURT IN THE CASE OF SA RGAM CINEMA VS. CIT, WHEREIN THE HON'BLE SUPREME COURT HAS UPHELD T HE FINDING OF THE TRIBUNAL THAT THE ASSESSING AUTHORITY COULD NET HAV E REFERRED THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER WITHOUT THE B OOKS OF ACCOUNTS BEING REJECTED. THE APPELLANT'S SUBMISSION, THEREFO RE, IS THAT REFERENCE TO VALUATION OFFICER HAS BEEN MADE WITHOUT REJECTIN G THE BOOKS OF ACCOUNTS ARID THE SAME IS, THEREFORE, INVALID. THE ABOVE SUBMISSION OF THE APPELLANT/ AT THIS STAGE HAS NO RELEVANCE, AS T HERE IS NO DISCUSSION IN THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS REFERRED TO THE DVO THE ABOVE TWO PROPERTIES FOR VALUATION., THE AS SESSING OFFICER HAS ALSO NOT RELIED UPON ANY REPORT OF THE DVO FOR MAKI NG THE ABOVE TWO ADDITIONS U/S. 69B OF THE ACT. I, THEREFORE, DO NOT CONSIDER IT NECESSARY TO ADJUDICATE ON THIS SUBMISSION. 4.7 GROUNDS OF APPEAL NO. 3 &4 RELATE TO ADDITION O F RS. 98,86, 250/- BY TAKING THE VALUE OF NON AGRICULTURAL LAND OF 234 0 SQ. MTR. (WRONGLY MENTIONED BY THE ASSESSING OFFICER AS 2090 SQ. MTR. ) IN WHICH THE APPELLANT HAS 50% SHARE, THAT IS 1170 SQ, MTR. THE SALE PRICE OF THE ABOVE LAND AS DOCUMENTED IS RS.1100/- PER SQ. MTR. THE APPELLANT HAS ALSO OBJECTED TO THE ABOVE ADDITION ON THE GROUND T HAT WHILE REFERENCE HAS BEEN MADE BY THE ASSESSING OFFICER TO THE DVO U /S. 55A OF THE ACT, FOR THE VALUATION OF THE ABOVE LAND, HE HAS MADE TH E ADDITION, WITHOUT WAITING FOR HIS REPORT ALTERNATELY, THE REFERENCE T O THE DVO ITSELF IS NOT VALID. THE ABOVE LAND WAS SOLD BY THE APPELLANT AS A JOINT OWNER ON 10- ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 8 - 01-2008 FOR A TOTAL CONSIDERATION OF RS.25,75,000/- (WRONGLY MENTIONED IN THE ORDER AS RS.12,87,5007-), IN WHICH ASSESSEE' S HALF SHARE IS RS.12,87,500/-. THE APPELLANT HAS DURING THE COURSE APPELLATE PROCEEDINGS VIDE SUBMISSION DATED 04-03-2011 STALED THAT DIE ASSESSING OFFICER HAS WRONGLY TAKEN THE SALE CONSID ERATION OF THE ENTIRE LAND AT RS.12,87 , 500/- INSTEAD OF RS. 25,75,000/- AND THE APPELLANT'S HALF SHARE IN THAT AT RS. 6,43,750/- INSTEAD OF RS .12,87,500/-. THIS MISTAKE IS FOUND APPARENT FROM RECORD. THE TOTAL SA LE CONSIDERATION OF THE NON AGRICULTURAL LAND OF 2340 SQ. MTR. AT VESU SOLD DURING THE YEAR, IN WHICH THE APPELLANT HAS HALF SHARE, IS, THEREFOR E, TAKEN AT RS. 25,87,500/- AND THE APPELLANT'S SHARE AT RS. 6,43,7 50/-. SIMILARLY, THE RATE OF THE ABOVE LAND COMES TO RS.1100/- PER SQ. MTR. AND NOT RS.616/- PER SQ. MTR., AS MENTIONED IN PARA 5 OF T HE ORDER, AND THE DATE OF SALE OF THE ABOVE PLOT OF LAND IS ALSO TAKE N AS 10-01-2008 AND NOT 12-01-2002 AS MENTIONED IN THE ABOVE PARA OF TH E ORDER. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, REJECTED THE APPELLANT'S SUBMISSION TH AT THE SALE RATE AT RS. 1100/- PER SQ. MTR. FOR THE ABOVE PLOT WAS MORE THAN THE JANTRI RATE OF RS.105/- PER SQ. MTR. HENCE, NOT BELOW THE RATE PRESCRIBED U/S. 50C OF THE ACT, FOR THE PURPOSE OF COMPUTATION OF CAPIT AL GAIN, ON THE GROUND THAT THE JANTRI PRICE PREVAILING DURING THE PERIOD DOES RIOT STAND GOOD IN THE EYES OF LAW, AS THE EXISTING; PRICE OF LAND IN VESU AREA WAS RS.2500/- TO RS.3000/-PER SQ. MTR., AND SUDA IN THE F.Y. 2005-06 HAD AUCTIONED LAND IN VESU, BETWEEN RS.5000/- PER SQ. M TR. TO RS.13200/- PER SQ. MTR., WHICH IS VERY HIGH COMPARED TO JANTRI PRICE REGISTERED IN THE GOVERNMENT RECORD. HE, THEREFORE, SHOW CAUSED THE A PPELLANT AS TO WHY THE SALE PRICE MAY NOT BE ESTIMATED AT RS.12000/- P ER SQ. MTR., WHICH WAS THE JANTRI PRICE INDICATED B\ THE GOVERNMENT F OR DEVELOPED LAND FROM 01-04-2008 ONWARDS, AND, AFTER CONSIDERING THE REPLY OF THE APPELLANT, THE ASSESSING OFFICER ESTIMATED TH E SALE RATE AT RS. 9000/- PER SQ. MTR. I.E. AFTER GIVING REDUCTION OF 25% FROM THE RATE OF RS. 12000/- PER SQ. MTR. AND COMPUTE D THE APPELLANT'S SHARE IN THE SALE PROCEEDS OF THE ABOVE LAND AT RS.1,05,3 0,000/- (1170 X 9000), AND, AFTER SUBTRACTING THE VALUE SHOWN BY TH E APPELLANT IN HIS BOOKS OF ACCOUNTS AT RS.6,43,750/-, HE DETERMINED T HE UNACCOUNTED SALE PROCEEDS AT RS.98,86,250/-. I FIND THAT THERE IS AN APPARENT MISTAKE IN THE COMPUTATION OF ABOVE AMOUNT, AS THE ASSESSING OFFICER HAS WRONGLY SUBTRACTED 6,43,750/-, INSTEAD OF RS.12 ,87,500/-. THE ADDITION MADE ON THE ABOVE ACCOUNT IS, THEREFORE, E XCESS BY RS.6,43,750/-, I.E. INSTEAD OF MAKING ADDITION OF RS. 85,98,750/-, THE ASSESSING OFFICER HAS MADE ADDITION, OF RS. 98,86,2 50/-. 4.8 THE ISSUE INVOLVED IN THE ABOVE ADDITION AR E, THEREFORE, AS UNDER: (I) WHETHER THE INSTANCES OF AUCTION SALE OF RESIDE NTIAL PLOT, COMMERCIAL PLOTS, SCHOOL AND PLAY GROUND BY SUDA IN THE F.YS. 2005-06 AND 2006-07, CAN BE TAKEN AS COMPARAB LE INSTANCES FOR DETERMINING THE SALE CONSIDERATION OF NON- AGRICULTURAL LAND SOLD BY THE APPELLANT DURING THE YEAR. ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 9 - (II) WHETHER THE JANTRI RATE OF RS.12000/- PER SQ. MTR. FOR DEVELOPED LAND IN VESU W.E.F. 01-04-2008 (AS PER ANNEXURE-2 OF ASSESSMENT ORDER) CAN BE APPLIED FOR DETERMINING THE SALE CONSIDERATION OF THE PROPERTY SOLD ON 10-01-2008. 4.9 THE APPELLANT'S SUBMISSION ON THIS GROUND OF APPEAL CAN BE SUMMARIZED AS UNDER: (I) THE JANTRI RATE PREVAILING :N THE DALE OF SALE OF THE ABOVE LAND WAS RS. 105/- PER SQ. MTR., WHEREAS THE LAND HAS BE EN SOLD BY THE, APPELLANT @ 1100/- PER SQ. MTR. THE A SSESSING OFFICER HAS TAKEN THE NEW JANTRI RATE FOR DEVELOPED LAND AS AT 01-04- 2008, AS THE BASE RATE TO DETERMINE THE TOTAL SALE CONSIDERATION OF THE LAND, WHICH ISSUE IS COVERED BY THE ORDER DATED 23-04-2.010 OF THE AHMEDABAD BENCH OF THE ITAT IN THE CASE OF K AUSHIK S RESHAMWALA & ORS. (SUPRA), WHEREIN THE TRIBUNAL HAS HELD THAT IF THE SALE TRANSACTION IS ABOVE THE JANTRI PRICE P REVAILING AT THE TIME OF TRANSACTION, THE PROVISIONS OF SECTION 50C ARE APPLICABLE, ARID THE ASSESSING OFFICER IS NOT EMPOWERED TO ALTE R-THE SAME. (II) THE APPELLANT HAS FURNISHED 34 SALE INSTANCE S INCLUDING 4 INSTANCES OF SALE MADE IN THE MONTH OF JANUARY TO M ARCH 2008 IN THE VESU AREA WHERE, THE SALE RATE PER SQ. MTR., IS LESS THAN THE SALE RATE OF RS.1100/- PER SQ. MTR., THAT IS AS PER THE SALE DEED OF THE LAND SOLD BY THE APPELLANT. THE APPELLANT HAS A LSO ENCLOSED A COPY OF 'INDEX' OBTAINED FROM THE OFFICE OF THE SUB REGISTRAR OF THE ABOVE 34 SALE INSTANCES, VIDE ANNEXURE 8 TO THE WRI TTEN SUBMISSION DATED 04-03-2011. (III) THE ASSESSING OFFICER HAS MADE REFERENCE U/S. 55A OF THE ACT, FOR VALUATION OF THE ABOVE PROPERTY TO THE DVO, WIT HOUT REJECTING HIS BOOKS OF ACCOUNTS, THE SAME IS, THEREFORE; ERRO NEOUS AND BAD IN LAW, AS HELD BY THE HON'BLE SUPREME COURT VIDE O RDER DATED 19-10-2009 IN THE CASE OF SARGAM CINEMA (SUPRA). 4.10 I FIND, FROM THE DISCUSSION MADE IN PARA 4 OF THE ORDER THAT THE ASSESSING OFFICER WHILE REJECTING THE SUBMISSION OF THE APPELLANT THAT IF JANTRI RATE IS NOT ACCEPTED, ADDITION- CANNOT BE MA DE WITHOUT THE VALUATION OFFICER'S REPORT U/S. 55A OF THE ACT, HAS RECORDED, AS FOLLOWS. ' A REFERENCE IS BEING MADE TO GOVT. VALUER TO DETE RMINE THE REAL VALUE OF LAND TOLD BY THE ASSESSEE. AS REPORT FROM GOVT. VALUER IS PENDING WITHOUT ANY PREJUDICE TO THE REPO RT OF THE VALUER,, BASED ON THE SALE INSTANCES AT AUCTION HEL D BY SUDA. AND JANTRI PRICE MADE EFFECTIVE FROM 01-4-2008 BECO MES PARAMETER TO DETERMINE THE REASONABLE SALE PRICE. I F THE RATES FINALIZED BY THE VALUATION AUTHORITIES SUBSEQUENT T O THE COMPLETION OF THE ASSESSMENT PROCEEDINGS ARE FOUND TO BE LOWER THAN THE PRICE ADOPTED BY I.T. DEPARTMENT, THEN THE PRICE INDICATED BY VALUATION AUTHORITIES SUBSEQUENT TO TH E COMPLETION OF ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 10 - THE ASSESSMENT PROCEEDINGS ARE FOUND TO BE LOWER TH AN THE PRICE ADOPTED BY IT DEPARTMENT, THEN THE PRICE INDICATED BY VALUATION AUTHORITIES MAY BE SUBSTITUTED FOR CALCULATION OF U NDISCLOSED CAPITAL GAIN AND UNACCOUNTED INVESTMENT,' IT IS NOT CLEAR FROM THE ABOVE DISCUSSION MADE BY T HE ASSESSING OFFICER, AS TO WHETHER A REFERENCE TO THE DVO U/S. 55A OF TH E ACT, HAS BEEN MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THEREFORE, AS AT ONE POINT, HE HAS RECORDED THAT A 'REFERENCE IS BEI NG MADE' WHEREAS AT THE OTHER POINT HE HAS RECORDED 'REPORT FROM GOVT. VALUER IS PENDING'. IN ANY CASE, THE ASSESSING OFFICER HAS HIMSELF RECO RDED THE REASONS FOR TAKING JANTRI RATE AS BASE RATE FOR DETERMINING THE SALE VALUE OF LAND, AS UNDER, RECOURSE TO JANTRI PRICES AND MARKET RATE AND AUCT ION RATE OF SUDA WERE ONLY TAKEN TO INDICATE THAT WHET EVER THE SALE / INVESTMENT ON LAND MADE BY THE ASSESSEE AT VESU ARE A, SURAT IS BELOW THE EXISTING MARKET RATE WHICH ASSESSEE HAS N OT DISCLOSED IN HIS BOOKS OF A/C.' 4.11 IN THE LIGHT OF THE FACTS DISCUSSED ABOVE AS W ELL AS 34 INSTANCES OF SALE IN. THE VESU AREA GIVEN BY THE APPELLANT, I HO LD THAT THE AUCTION SALE RATES OF 12 INSTANCES QUOTED BY THE ASSESSING OFFICER AND ANNEXED TO THE ORDER CANNOT BE TAKEN AS TRUE AND CORRECT IN DICATOR FOR DETERMINING THE SALE RATE OF NON AGRICULTURAL LAND SOLD BY THE APPELLANT. FURTHER INSTANCES OF AUCTION SALE RATE RELATE TO RE SIDENTIAL PLOTS, SCHOOL AND PLAY GROUND PLOTS AND COMMERCIAL PLOTS, WHEREAS , THE INSTANCES OF SALE FURNISHED BY THE APPELLANT ARE FOUND MORE RELE VANT FOR DETERMINING THE SALE CONSIDERATION OF LAND SOLD BY THE APPELLAN T, AS THE SAME RELATE TO NON AGRICULTURAL LAND SOLD DURING THE SAME PERIO D IN THE VESU AREA. IN SO FAR AS ADOPTING THE JANTRI RATE OF DEVELOPED LAND IN VESU AREA AS AT 01-04-2008, VIDE ANNEXURE-2 TO THE ORDER IS CONC ERNED, THE SAME, IN THE LIGHT OF DECISION OF THE JURISDICTIONAL AHMEDAB AD BENCH OF THE ITAT IN THE CASE OF KAUSHIK RESHAMWALA (SUPRA) CANNOT BE ADOPTED AS AN INDICATOR TO DETERMINE THE SALE RATE OF NON AGRICUL TURAL LAND SOLD BY THE APPELLANT ON 10-01-2008. IN NUTSHELL, THE ASSESSING OFFICER HAS NOT BROUGHT ANY DIRECT EVIDENCE ON RECORD TO SHOW THAT CAPITAL GAIN FROM THE SALE OF THE ABOVE LAND HAS NOT BEEN FULLY ACCOUNTED FOR IN THE BOOKS OF THE APPELLANT. I, THEREFORE, DELETE THE ADDITION OF RS. 98,86,250/- MADE ON THE ABOVE ACCOUNT. WHILE DELETING THE SAID ADDIT ION, I AM NOT ADJUDICATING ON THE ISSUE RAISED, BY THE APPELLANT THAT NO REFERENCE U/S. 55A OF THE ACT, CAN BE MADE WITHOUT REJECTING THE B OOKS OF ACCOUNTS, BECAUSE IN THE CASE DECIDED BY THE SUPREME COURT AN D RELIED UPON BY THE APPELLANT, THE ASSESSMENT HAD BEEN MADE AFTER E STIMATE MADE BY THE VALUATION OFFICER HAD BEEN RECEIVED. SINCE IN T HE CASE OF THE APPELLANT, THE ASSESSING OFFICER HAS NOT RELIED UPO N ANY VALUATION REPORT FOR DETERMINING THE SALE VALUE OF THE LAND S OLD, THE SAME IS NOT SUBJECT MATTER OF THE PRESENT APPEAL. THE GROUNDS OF APPEAL NO.3 & 4, THUS, STAND ALLOWED. ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 11 - THIS LEAVES THE REVENUE AGGRIEVED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE C ASE FILE. THERE IS NO DISPUTE ABOUT THE FACTUAL POSITION THAT THE ASSESSING OFFICER REVISED PURCHASE AND SALE PRICES OF ASSESSE ES LANDS IN RESPECT TO HIS TRANSACTIONS EXECUTED IN THE RELEVAN T PREVIOUS YEAR BY TREATING SUDA AUCTION PRICES OF DEVELOPED LAND A ND STATE GOVERNMENTS REVISED JANTRI PRICES APPLICABLE FROM 01.04.2008. THERE IS NO QUARREL THAT THESE JANTRI PRICES ARE NO T RETROSPECTIVELY APPLICABLE. NOR THERE IS ANY CASE MADE OUT AT REVE NUES BEHEST DISPUTING THAT ASSESSEES PURCHASE PRICE @ RS.473/- IS ALMOST 4.5 TIMES MORE THAN THE JANTRI RATE AND SALE PRICE IS ALMOST 10 TIMES THERETO (SUPRA). IT HAS COME ON RECORD THAT THE ASSESSEE HAS PRODUCED 16 SALE INSTANCES FROM DECEMBER 2004 T O MARCH 2008 WHEREIN OPEN AGRICULTURAL PLOTS IN VESU AREA I TSELF HAD BEEN SOLD IN THE RANGE OF RS.46 TO 202/- PER SQ. MTR. S IMILAR POSITION APPEARS IN CASE OF 34 SALE INSTANCES INCLUDING FOUR TRANSACTIONS FROM JANUARY TO MARCH 2008 STATING PRICES LESS THAN RS.1100/- PER SQ. MTR. THE REVENUE FAILS TO REBUT CORRECTNES S THEREOF. THEREFORE, WE INFER IN THESE FACTS THAT NEITHER THE ASSESSEE UNDERSTATED HIS PURCHASE PRICE NOR SALE RATE OF THE RESPECTIVE LANDS SITUATED IN THE VESU LOCALITY AT SURAT. THE REVENUES ENDEAVOR SEEKS RELIANCE UPON AUCTION PRICES OF SUDA S DEVELOPED PLOTS. APPLES ARE SOUGHT TO BE COMPARED WITH ORANG ES IN OTHER WORDS. WE DO NOT AGREE TO THIS ARGUMENT AS IT IS A N ADMITTED FACT THAT NEITHER THE LAND PURCHASED NOR SOLD HAPPENS TO BE A DEVELOPED PROPERTY. THE REVENUES ARGUMENTS ACCORD INGLY FAIL. ONCE WE HAVE REJECTED ITS TWIN ARGUMENTS ON THE BAS IS OF SUDA RATE AND APPROPRIATE ADJUSTMENT IN REVISED JANTRI P RICES IN ITA NOS.1508 TO 1510/AHD/2011 (AC IT VS. SHRI HARES H J. MEHTA & ORS.) A.Y. 2008-09 - 12 - APPLYING THE SAME WITH RETROSPECTIVE EFFECT, ASSESS EES OTHER ARGUMENTS IN THE NATURE OF LEGAL PLEAS QUA APPLICAT ION OF SECTION 69B, SECTION 50C AND SECTION 55A HAVE BEEN RENDERED INFRUCTUOUS. THE REVENUES BOTH SUBSTANTIVE GROUND S RAISED IN THE APPEAL FAIL. ITS APPEAL ITA NO.1508/AHD/2011 I S DISMISSED. 8. SAME ORDER TO FOLLOW IN REVENUES OTHER APPEALS ITA NOS.1409/AHD/2011 INVOLVING IDENTICAL ISSUES OF UNA CCOUNTED INVESTMENT 55A OF RS.99,68,000/- AND UNDISCLOSED CA PITAL GAINS OF RS.98,86,250/- AS WELL AS ITS LAST APPEAL ITA NO.1510/AHD/2011 RAISING SOLITARY SUBSTANTIVE GROUN D OF UNACCOUNTED INVESTMENT OF RS.38,06,450/-; RESPECTIV ELY. 9. THESE THREE REVENUES APPEALS ITA NOS. 1508 TO 1510/AHD/2011 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 06 TH DAY OF NOVEMBER, 2015. SD/- SD/- (MANISH BORAD) (S. S. GO DARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 06/11/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 4 5 / GUARD FILE. BY ORDER / . // . /0