The ACIT, Circle-3, Baroda V. Shri Harjivan Ramji Mistry, Baroda

ITA 1767/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0492 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 17-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 1767/AHD/2013 (ASSESSMENT YEAR: 2009-10) THE ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-3, BARODA V/S SHRI HARJIVAN RAMJI MISTRY A-11/12, RAJLAKSHMI SOCIETHY, NEAR ABHILASHA CHAR RASTA, NEW SAMA ROAD, BARODA-390002 (APPELLANT) (RESPONDENT) PAN: AAUPM 0009P APPELLANT BY : SHRI K. MADHUSUDAN, SR. D. R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 19 -09-201 6 DATE OF PRONOUNCEMENT : 20 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-II, BARODA DATED 28.03.2013 PERTAINING TO A. Y. 2009-10. ITA NO. 1767 /AHD/2013 . A.Y.2009-201 0 2 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READS AS U NDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ID. CIT(APPEALS) ERRED IN DELETING ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN BY INVOKING PROVISIONS OF SECTION 50C .OF THE ACT WITHOUT APPRE CIATING THAT THE PURCHASER OF THE PROPERTY HAD NOT DENIED THE STAMP DUTY VALUATIO N AND IT HAD ALREADY MADE THE FULL DUTY ON THE STAMP DUTY VALUATION. 2. THE ID.CIT(A) ERRED IN NOT APPRECIATING THAT PERCEN TAGE HAS BEEN FIXED ARBITRARILY AFTER THE EVENT OF PURCHASE HAD ALREADY TAKEN PLACE AND HAS NO BASIS AND THAT PERCENTAGE OF ALL THE PURCHASES SHOULD BE EQUAL. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE; WE DECIDED TO PROCEED EX-PARTE. WE HAVE HEARD THE LD. D.R. AT LENGTH AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DURIN G THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE A.O. FOUND THA T THE ASSESSEE IS A PARTNER IN PARTNERSHIP FIRMS WHICH ARE ENGAGED IN B UILDING CONSTRUCTION. ON SCRUTINIZING THE CAPITAL GAIN ON S ALE OF ASSETS, THE A.O. FOUND THAT A LAND SITUATED AT R S NO.607/A OF SAYAJIPURA VILLAGE OF BARODA DISTRICT WAS ACQUIRED ON 15 TH MAY, 2006 BY THE FOLLOWING ASSESSEES : 1. SHRI DHARAMSINH NARSINHBHAI PRAJAPATI - AAQPP 6390 Q 2. SHRI JIVARJBHAI NARSINBHAI TURAKHIYA - AAVPT 5362 K 3. SHRI MOHANBHAI NARSINBHAI TURAKHIYA - AAGPT 2467 C 4. SHRI KISHOR DHARAMSINH PRAJAPATI - ACQPP 5957 K 5. SHRI HARJIVANBHAI RAMJIBHAI MISTRY - AAUPM 0009 P 6. SHRI RAMESHBHAI PITAMBARBHAI TURAKHIYA - AAXPT 1007 B 7. SHRI VINODBHAI PITAMBARBHAI TURAKHIYA - AAXPT 1003 F ITA NO. 1767 /AHD/2013 . A.Y.2009-201 0 3 5. AS PER THE PURCHASE DEED THE SAID LAND WAS ACQUIRED FOR A CONSIDERATION OF RS. 18,00,000/- FROM THE OWNER OF THE LAND. IT IS RELEVANT TO MENTION HERE THAT THE RATIO OF CONSIDER ATION BY THE ABOVE PURCHASERS HAS NOT BEEN MENTIONED/DEFINED IN THE SA ID PURCHASE DEED. 6. THE ASSESSEES MENTIONED AT SR. NO. 1 TO SR. NO.5 AN D SR. NO.6 & 7 MADE AMENDMENT IN THE PURCHASE DEED ON 15.07.2006 I N WHICH THE NAMES OF ASSESSEES MENTIONED AT SR. NO.6 AND 7 WERE REMOVED SINCE THESE TWO PARTIES WERE NOT FARMERS. ON 16 TH JULY, 2007, A DEED OF UNDERSTANDING WAS MADE BETWEEN THE ASSESSEES MENTIO NED AT SR. NO. L TO 5 AND PARTIES NO.6 & 7. ACCORDING TO THIS DEED OF UNDERSTANDING, THE SHARE OF PARTIES AT SR. NO.6 AND 7 ARE 14% AND 12% RESPECTIVELY WHICH TO BE PAID AT THE TIME OF SALE OF LAND. 7. THIS PIECE OF LAND WAS SUBSEQUENTLY SOLD ON 16.10.2 008 BY THE PERSONS MENTIONED AT SR. NO. 1 TO 5 HEREINABOVE TO M/S. PACL INDIA LIMITED. THE SALE CONSIDERATION WAS MENTIONED IN TH E SALE DEED AT RS. 7,68,63,000/-. SINCE THE ASSESSEES SHARE WAS 1/5 TH IN THE PROPERTY, CAPITAL GAINS WERE ACCORDINGLY CALCULATED AND OFFER ED FOR TAXATION. HOWEVER, INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, THE ASSESSEE WAS ASKED TO EXPLAIN WHY STAMP DUTY VALUE SHOULD NOT BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION. 8. ASSESSEE FILED A DETAILED REPLY CLAIMING THAT PROVI SIONS OF SECTION 50C ONLY RAISES A PRESUMPTION THAT THE VALUE ADOPTED FO R STAMP DUTY PURPOSES COULD BE THE SALES CONSIDERATION. BUT THE SAID PRESUMPTION IS ALWAYS REBUTTABLE AS HELD BY THE HONBLE SUPREME CO URT IN THE CASE OF JAWAJEE NAGNATHAM VS. REVENUE DIVISIONAL OFFICER 4 SCC 595. IN ITA NO. 1767 /AHD/2013 . A.Y.2009-201 0 4 ALTERNATIVE, THE ASSESSEE ALSO RELIED UPON THE PROV ISIONS OF SECTION 50C(2) OF THE ACT. 9. THE CLAIM OF THE ASSESSEE DID NOT FIND ANY FAVOUR W ITH THE A.O. WHO PROCEEDED BY RE-COMPUTING THE CAPITAL GAINS BY TAKI NG THE STAMP DUTY VALUATION OF RS. 8,56,89,700/- AS THE FULL VALUE OF CONSIDERATION. ACCORDINGLY, ADDITION OF RS. 1,67,77,940/- WAS MADE . 10. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED WHAT HAS BEEN STATED BEFORE THE ASSESSING OFFICER. ONCE AGAIN ATTENTION WAS DRAWN TO THE PROVISIONS OF SECTION 50 C(2) OF THE ACT. 11. THE FIRST APPELLATE AUTHORITY DIRECTED THE A.O. TO REFER THE MATTER TO THE DVO AS PROVIDED IN SECTION 50C(2) OF THE ACT. ON SUCH DIRECTION, THE A.O. REFERRED THE MATTER TO THE DVO AND SUBMITTED A REMAND REPORT VIDE LETTER DATED 27.02.2013. 12. AFTER CONSIDERING THE REMAND REPORT AND THE DVOS R EPORT, THE FIRST APPELLATE AUTHORITY HELD AS UNDER:- 3.3.1. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. I HAVE A LSO PERUSED THE REPORT OF THE DVO DATED 15.02.2013. THE APPELLANT HAS ALSO SUBMIT TED COPY OF THE REPORT ON 19.03.2013. AS PER THE SAID REPORT, VALUATION OF TH E PROPERTY IS ESTIMATED AT RS. 1,55,64,925/- AS AGAINST THE DECLARED VALUE OF RS. 1,53,72,600/- BY THE APPELLANT. THUS, THERE IS ONLY MEAGER DIFFERENCE BETWEEN THE T WO FIGURES. THIS IS IN CONTRAST TO THE FIGURE OF SALE TAKEN BY THE AS SESSING OFFICER AT RS.1,67,77,940/- (L/5 TH SHARE OF THE ASSESSEE AFTER REDUCING THE PURCHASE COST OF RS. 18,00,000- FROM THE SALE VALUE OF THE LAND AS PER THE VALUE ADOPTED FOR THE PURPOSE OF THE STAMP DUTY I.E. RS.8,56,89,700/-). THEREFORE, THE CORRECT FIGURE OF SALE AS PER THE ASSESSING OFFICER SHOULD HAVE BEEN RS.1,71,37,940/- (RS.8,56,89,700/- DIVIDED BY ITA NO. 1767 /AHD/2013 . A.Y.2009-201 0 5 5) AND RS.1,67,77,940/- WAS THE VALUE OF STCG AS PE R THE COMPUTATION OF THE ASSESSING OFFICER SINCE, AS PER THE REPORT OF DVO, THERE IS NEGLIGIBLE DIFFERENCE IN THE SALE VALUE OF THE LAND FROM THE VALUE DECLARED BY THE APPELLANT, THE VALUE ADOPTED BY THE ASSESSING OFFICER U/S. 50C HAS TO BE IGNORED. THUS, THE ADDITION MADE UNDER THIS HEAD IS DIRECTED TO BE DELETED. 13. WE HAVE CAREFULLY CONSIDERED THE AFOREMENTIONED FIN DINGS OF THE LD. CIT(A).IT IS AN UNDISPUTED FACT THAT THE VALUAT ION OF THE PROPERTY IS ESTIMATED AT RS. 1,55,64,925/- AS AGAINST THE DECLA RED VALUE OF RS. 1,53,72,600/-. THE DIFFERENCE IS NEGLIGIBLE IF CONS IDERED IN STATISTICAL FORM. THEREFORE, WE DO NOT FIND ANY REASON TO INTER FERE WITH THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REV ENUE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 20 - 09- 201 6. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY 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