The Dy. Commissioner of Income Tax (Exemptions), Circle-2, Ahmedabad V. Sister of Charity St. Anne, Vadodara

ITA 1759/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8497 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: PARMESH DOSHI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 50C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 1759/AHD/2016 (ASSESSMENT YEAR: 2007-08) DEPUTY COMMISSIONER OF INCOME-TAX (EXEMPTIONS) CIRCLE-2, AHMEDABAD V/S SISTER OF CHRITY OF ST. ANNE SNEH SHANTI, PROVINICAL HOUSE SEVASI ROAD, SEVASI, VADODARA (APPELLANT) (RESPONDENT) PAN: AAATS 6630C APPELLANT BY : SHRI V.K. SINGH, SR. D.R. RESPONDENT BY : SHRI PARMESH DOSHI, A.R. ( )/ ORDER DATE OF HEARING : 18 -04-201 8 DATE OF PRONOUNCEMENT : 19-04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-9, AHMEDABAD DATED 23.05.2016 PERTAI NING TO A.Y. 2007-08. ITA NO. 1759 /AHD/2016 . A.Y. 2007-0 8 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 1,25,19,635/-. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS ENTERED INTO AGREEMENT FOR PU RCHASE OF N.A LAND ADMEASURING 26608 SQ. MTRS. FOR A CONSIDERATION OF RS. 87,71,765/- ON 24.03.2005. THE A.O. FOUND THAT SUBSEQUENTLY THE FI NAL CONVEYANCE DEED WAS EXECUTED FOR A CONSIDERATION OF RS. 87,71,765/- UTI LIZING STAMP DUTY OF RS. 11,92,000/-. THE A.O. FOUND THAT THE STAMP DUTY PAI D WAS AT RS. 2,12,86,400/-. TAKING A LEAF OUT OF THE PROVISIONS OF SECTION 50C OF THE ACT, THE A.O. ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ASKING IT TO EXPL AIN WHY RS. 2,12,86,400/- BE NOT TAKEN AS THE FULL VALUE OF CONSIDERATION FOR TH E PURPOSE OF THE PURCHASE OF LAND AND WHY THE DIFFERENCE SHOULD NOT BE ADDED AS UNEXPLAINED INVESTMENT U/S. 69B OF THE ACT. 4. THE ASSESSEE FILED A DETAILED REPLY CONTENDING THAT THE STAMP DUTY VALUE IS DEEMED TO BE THE FULL VALUE OF CONSIDERATION IN THE HANDS OF THE SELLER AND NOT THE PURCHASER. 5. THE CONTENTIONS OF THE ASSESSEE WERE DISMISSED BY T HE A.O. WHO WAS OF THE FIRM BELIEF THAT PROVISIONS OF SECTION 50C OF THE A CT SQUARELY APPLY ON THE FACTS OF THE CASE AND ACCORDINGLY TREATED THE DIFFERENCE OF RS. 1.25 CRORES AS UNEXPLAINED INVESTMENT AND ADDED THE SAME U/S. 69B OF THE ACT. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CONTENTION THAT THE PROVISIONS OF SECTION 69 DO NOT APPLY IN T HE HANDS OF THE ASSESSEE. ITA NO. 1759 /AHD/2016 . A.Y. 2007-0 8 3 7. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) WAS CONVINCED THAT THE DEEMING PROVISION OF SECTION 50C OF THE AC T IS APPLICABLE ONLY TO THE SELLER AND NOT THE PURCHASER OF THE PROPERTY. THE L D. CIT(A) FURTHER OBSERVED THAT FOR MAKING ADDITION U/S. 69B OF THE ACT, THE B URDEN IS ON THE A.O. TO PROVE WITH SUBSTANTIVE PROOF THAT THE INVESTMENT MA DE IN THE PROPERTY EXCEEDS THE AMOUNT RECORDED IN THE BOOKS. THE LD. CIT(A) CO NCLUDED BY HOLDING THAT THE A.O. HAS NOT BROUGHT OUT ANY INDEPENDENT EVIDEN CE TO PROVE THAT THE INVESTMENTS IN THE PURCHASE OF LAND WAS MORE THAN T HE VALUE REFLECTED IN THE BOOKS OF ACCOUNTS AND THE A.O. HAS SINGULARLY DEPEN DED UPON SECTION 50C OF THE ACT WHICH IS A DEEMING PROVISION APPLICABLE TO THE SELLER OF PROPERTY FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. THE LD. CIT(A) DIRECTED THE A.O. TO DELETE THE ADDITION 1.25 CRORES. 8. BEFORE US, THE LD. D.R. STRONGLY RELIED UPON THE FI NDINGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE IS THE PURCHASER OF THE IMPUGNED PROPERTY. IT IS ALSO NOT IN DISPUTE THAT T HE PROVISIONS OF SECTION 50C OF THE ACT FOR THE SUBJECT ASSESSMENT YEAR IS APPLI CABLE IN RESPECT OF THE SELLER ONLY. THE DEEMING PROVISION OF SECTION 50C OF THE A CT PROVIDES THAT THE STAMP DUTY VALUE ASSESSED OR ASSESSABLE SHALL BE DEEMED T O BE THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF THE COMPUTATION O F CAPITAL GAINS TAX LIABILITY. SINCE THE ASSESSEE IS THE PURCHASER OF THE PROPERTY , IN OUR CONSIDERED OPINION, PROVISIONS OF SECTION 50C OF THE ACT DO NOT APPLY. FURTHER, THE A.O. HAS NOT BROUGHT ON RECORD ANY DEMONSTRATIVE MATERIAL EVIDEN CE WHICH COULD SUGGEST ITA NO. 1759 /AHD/2016 . A.Y. 2007-0 8 4 THAT THE ASSESSEE HAS IN FACT PAID A CONSIDERATION OF RS. 1.25 CRORES OVER AND ABOVE THE CONSIDERATION OF TRANSACTION. 10. CONSIDERING THE FACTS IN TOTALITY, WE DO NOT FIND A NY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REV ENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19- 04- 2018 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 19 /04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD