The ACIT, Circle-2, RAJKOT-GUJARAT V. Shri Jayantilal Govindji Kundalia, RAJKOT-GUJARAT

ITA 173/RJT/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0499 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KABRA
• Assessee Lawyers: RM MANEK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL , RAJKOT BENCH: RAJKOT BEFORE SHRI PRAMOD KUMAR , A CCOUNTANT MEMBER AND SHRI RAJPAL YADAV , JUDICIAL MEMBER . / ITA . NO . 173 /RJT/201 3 ( / ASS TT YEAR : 200 9 - 20 1 0 ) ACIT, CIR.2 RAJKOT. VS. SHRI JAYANTILAL GOVINDJI KUNDALIA VEGETABLE MARKET PARA BAZAR, RAJKOT. / APPELLANT BY : SHRI PRAVEEN KABRA, DR / RESPONDENT BY : SHRI R.M. MANEK / DATE OF HEARING 05 - 10 - 2015 / DATE OF PRONOUNCEMENT 05 - 10 - 2015 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME (APPEALS) - III, RAJKOT DATED 28.2.2013 PASSED FOR THE ASSTT.YEAR 2009 - 10. 2. THE REVENUE HAS TAKEN FOUR GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE, WHEREBY , IT HAS PLEADED THAT THE LD.FIRST APPELLATE AUTHORITY HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION OF RS.67,54,570/ - TO THE TUNE OF RS.8,10,210/ - . ITA.NO. 173 /RJT/201 3 - 2 - 3. THE LD.AO GOT AN INFORMATION FROM THE SUB - REGISTRAR OFFICE, ZONE - 4, RAJKOT UNDER THE ANNUAL INFORMATION REPORT. FROM THE INFORMATION IT REVEALED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS SOLD TWO PLOTS OF LAND VIDE SALE DEED NO.1171 AND 1169 REGISTERED ON 7.2.2009. IN THE S ALE DEED, THE ASSESSEE HAS DECLARED SALE CONSIDERATION AT RS.15,9 0,000/ - AND RS.28,42,390/ - . THE STAMP DUTY AUTHORITY CHARGED THE S TAMP DUTY ON THE VALUE OF THE LAND AT RS.40,13,040/ - AND RS.71,73,920/ - . THUS, THERE WAS A DIFFERENCE IN THE VALUE OF THE LAND SOLD BY THE ASSESSEE OF RS.67,54,570/ - . ACCORDING TO THE ASS ESSING OFFICER, WHILE CALCULATING THE CAPITAL GAIN ON SALE OF THE LAND, THE VALUE ADOPTED FOR THE PURPOSE OF THE PAYMENT OF STAMP DUTY IS TO BE DEEM E D AS SALE CONSIDERATION REC EIVED OR ACCRUED TO THE ASSESSEE. ACCORDINGLY, THE LD.AO HAS MADE ADDITION OF R S.67,54,570/ - UNDER SECTION 50C OF THE INCOME TAX ACT. 4. DISSATISF I ED WITH THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.FIRST APPELLATE AUTHORITY. THE LD.FIRST APPELLATE AUTHORITY HAS CALLED FOR REMAND REPO RT FROM THE ASSESSING OFFICER, AND HE DIRECTED TO THE ASSESSING OFFICER TO OBTAIN REPORT OF THE DVO FOR DETERMINING THE FAIR VALUE OF THE PROPERTY AS PER SECTION 50C(2) OF THE INCOME TAX ACT. THE D VO HAS DETERMINED THE FAIR MARKET VALUE OF THE PROPERTY IN QUESTION AS ON 7.2.2009 AT RS.32,47,100/ - AND RS.19,95,500/ - AS AGAINST THE DECLARED VALUE OF RS.28,42,390/ - AND RS.19,95,500/ - . THE LD.FIRST APPELLATE A U T H ORITY HAS ACCEPTED THE REPORT OF THE DVO AND DIRECTED THE ASSESSING OFFICER TO CALCULATE THE LONG TERM CAPITAL GAIN ASSESSABLE IN THE HAND OF THE ASSESSEE BY ADOPTING THE SALE CONSIDERATION EQUIVALENT TO THE AMOUNT DETERMINED BY THE DVO AS FAIR VALUE OF THE PROPERTY. IN THIS WAY, THE VALUE OF THE PROPERTY WAS DIRECTED TO BE ADOPTED AT RS.32,47,100/ - AND RS.19,95,500/ - . ITA.NO. 173 /RJT/201 3 - 3 - 5. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 50C OF THE INCOME TAX ACT PROVID ES THAT WHERE THE 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 BY ANY AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSE OF PAYM ENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, FOR THE PURPOSE OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. SUB - SECTION 2 OF SECTION 50C FURT HER PROVIDES THAT IN CASE AN ASSESSEE OBJECTS FOR ADOPTING OF SUCH VALUE, THEN THE ASSESSING OFFICER MAY REFER THE VALUATI O N OF THE CAPITAL ASSET TO A VALUATION OFFICER WHO WILL DETERMINE THE VALUE AS PER THE PROCEDURE PROVIDED IN THE WEALTH TAX ACT. I N T HE PRESENT CASE, THE VALUE DETERMINED BY THE ST AMP DUTY AUTHORITY WAS ON A HIGHER SIDE. IT WAS RS.40,13,040/ - AND RS.71,73,920/ - . THE ASSESSEE WAS NOT SATISFIED WITH THE ADOPTI ON OF THE VALUE, AND THEREFORE, THE REFERENCE UNDER SECTION 50C(2) OF THE ACT WAS MADE TO THE VALUATION OFFICER OF THE DEPARTMENT WHO HAD VALUE D THE PROPERTY AT RS.32,47,100/ - AND RS.19,95,500/ - . THE LD.FIRST APPELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ADOPT THE S ALE CONSIDERATION EQUIVALENT TO THE VALUE DETERMINED BY THE DVO FOR COMPUTING THE CAPITAL GAIN UNDER SECTION 48 OF THE INCOME TAX. WE FIND THAT THE LD.CIT(A) HAS FOLLOWED THE PROCEDURE AVAILABLE IN THAT ACT. THE VALUE HAS BEEN DETERMINED BY THE DVO. THE LD.DR FAILED TO POINT OUT ANY DEFECT IN THE MANNER VAL UATION HAS BEEN MADE. THE DEPARTMENT HAS NOT TAKEN ANY GROUND , DEMONSTRATING THE FACT THAT THE PROCEDURE CONTEMPLATED IN THE WEALTH - TAX ACT HAS NOT BEEN FOLLOWED BY THE DVO. ITA.NO. 173 /RJT/201 3 - 4 - THEREFO R E, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A ), WHOSE ORDER IS CONFIRMED. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH OCTOBER, 2015 AT RAJ K OT. SD/ - SD/ - (PRAMOD KUMAR ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER