Shri Nilesh Ravjibhai Patel, Nadiad V. The ITO, Ward-5, Nadiad

ITA 1785/AHD/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2700 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Unexplained expenditure; Capital asset; Principle of natural justice; Cost of acquisition
• Section: 50C; 48; 144

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./I.T.A. NO. 1785/AHD/2018 ( / ASSESSMENT YEAR: 2013-14) SHRI NILESH RAVJIBHAI PATEL 01, BHAGAT NI KHADKI, NR. DAIRY, UTTARSAND, NADIAD-387370 / VS. THE INCOME TAX OFFICER WARD-5, NADIAD ./ ./PAN/GIR NO. : BLIPP0345K ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY: SHRI PURUSHOTTAM KUMAR, SR. DR !' /DATE OF HEARING 07/10/2021 #$!' / DATE OF PRONOUNCEMENT 27/10/2021 %& /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2013-14, ARISE FROM ORDER OF THE CIT(A) 2, VADODARA DATED 23.04.2018, IN PROCEEDING S UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT WIT H THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN PASSING AN EX-PARTE ORDER WITHOUT PROVIDING REASONABLE OPPORTUNITY OB B EING HEARD TO THE APPELLANT HENCE THE SAME BEING AGAINST THE PRINCIPLES OF NATURAL JUSTIC E AND LAW REQUIRES TO BE CANCELLED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN PASSING EX-PARTE ORDER U/S. 144 R.W.S. 147 OF THE I.T. ACT, 1961 WITHOUT PROVIDING REASONABLE OPPORTUNITY OF BEING H EARD WHICH IS AGAINST THE LAW OF NATURAL JUSTICE HENCE THE ORDER PASSED SHOULD BE CANCELLED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN COMPUTING THE TOTAL INCOME OF THE APPELLANT AT RS. 21,76,500/- MAKING ADDITION OF RS. 20,74,830/- U/S. 50C OF THE I.T. ACT, 1961 AND DISALLOWED OF RS. 1,01,666/- TREATING THE PAYME NTS OF STAMP DUTY AS ALLEGED UNEXPLAINED EXPENDITURE. ITA NO. 1785/AHD/2018(SHRI NILESH RAVJIBHAI PATEL VS. ITO) A.Y. 2013-14 2 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT O F CAPITAL GAIN ON SALE OF LAND WITHOUT GRANTING ANY BENEFIT OF THE COST OF ACQUISITION/COS T OF IMPROVEMENT OF LAND. 5. THE APPELLANT PRAYS THAT THE DELAY IN FILING OF APPEAL MAY KINDLY BE CONDONED. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING OF APPEAL. 2. THE FACTS OF THE CASE IS THAT ASSESSMENT UNDER S ECTION 144 R.W.S. 147 OF THE INCOME TAX ACT WAS MADE ON 18.11.2016. IN THE ASSE SSMENT ORDER AO HAS STATED THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS SO LD LAND SITUATED AT NADIAD JOINTLY OWNED WITH OTHER TWO PERSONS FOR RS. 20 LACS AND AS PER STAMP DUTY PAID THE VALUATION OF THE PROPERTY WAS DETERMINED AT RS. 62,24,489/-. DURING THE COURSE OF ASSESSMENT ASSESSEE HAS NOT MADE ANY COMPLIANCE TO THE NOTICES ISSUED BY THE AO, THEREFORE, THE AO HAS TAXED THE WHOLE PART OF DEEMED CONSIDERATION OF RS. 20,74,830/- AS INCOME FROM CAPITAL GAIN UNDER SECTION 50C OF THE INCOME T AX ACT. 3. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). HOWEVER, THE ASSESSEE HAS NOT MADE ANY COMPLIANCE TO THE NUMBER OF NOTICES ISSUED BY THE LD. CIT(A), THEREFORE, THE LD. CIT(A) HAS SUSTAINED THE ADDITIONS MADE BY THE AO. 4. HEARD THE LD. DR AND PERUSED THE MATERIAL ON REC ORD. 5. DURING THE YEAR ASSESSEE HAS SOLD IMMOVABLE PROP ERTY JOINTLY WITH TWO OTHER CO-OWNERS FOR RS. 20 LACS. THE AO HAS DETERMINED T HE SALE CONSIDERATION ON THE BASIS OF STAMP DUTY PAID AT RS. 62,24,489/- AND TREATED T HE DEEMED 1/3 RD SHARE OF THE ASSESSEE OF RS. 20,74,830/- AS INCOME FROM CAPITAL GAIN SINCE THE ASSESSEE HAS NOT MADE ANY COMPLIANCE DURING THE COURSE OF ASSESSMENT PROCEEDING. THE LD. CIT(A) HAS SUSTAINED THE IMPUGNED ADDITION SINCE THE ASSES SEE HAS ALSO FAILED TO MAKE COMPLIANCE BEFORE THE LD. CIT(A). WE HAVE GONE THROUGH THE PROVISION OF SECTION 50C OF THE INCOME TAX ACT WHICH PROVIDE THAT WHERE THE CONSIDERATION DECLARED TO BE RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ITA NO. 1785/AHD/2018(SHRI NILESH RAVJIBHAI PATEL VS. ITO) A.Y. 2013-14 3 ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOP TED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION AND CAPITAL GAI N SHALL BE COMPUTED ACCORDINGLY UNDER SECTION 48 OF THE INCOME TAX ACT. SECTION 50 C OF THE INCOME TAX ACT BY DEEMING FICTION SUBSTITUTED THE CONSIDERATION RECEI VED ON SALE OF A CAPITAL ASSET BY STAMP DUTY VALUATION. IN THE LIGHT OF THE ABOVE FACTS IT IS OBSERVED THA T IN THE CASE OF THE ASSESSEE THE AO HAS TREATED THE WHOLE VALUE OF DEEMED SALE CONSI DERATION DETERMINED UNDER SECTION 50C OF THE I. T. ACT AS THE INCOME FROM THE CAPITAL GAIN. HOWEVER, THE AO IS REQUIRED TO TAXED THE CORRECT INCOME FROM CAPITAL G AIN AS PER THE MODE OF COMPUTATION PRESCRIBED UNDER THE PROVISION OF SECTION 48 OF THE I. T. ACT AFTER DEDUCTING THE COST OF ACQUISITION OR OTHER CONNECTED EXPENDITURE IF ANY A S PRESCRIBED IN THE PROVISION OF SAID SECTION. IT IS FURTHER OBSERVED THAT NEITHER THE AO NOR THE LD. CIT(A) HAVE INITIATED ANY ACTION UNDER SECTION 271(1)(B) OR SECTION 131(1) OF THE ACT TO ENFORCE THE ATTENDANCE OF THE ASSESSEE, SINCE THE BASIC MATERIAL I.E. DETA IL OF COST OF ACQUISITION OF THE SOLD PROPERTY WAS NOT ON RECORD, THEREFORE, THE ASSESSIN G OFFICER SHOULD HAVE MADE EFFORTS TO ENFORCE THE COMPLIANCE OF THE ASSESSEE AS DIRECT ED ABOVE IN ORDER TO COMPUTE THE INCOME EARNED UNDER THE HEAD CAPITAL GAIN. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES WE CONSIDER IT APPROPRIATE TO RESTORE THIS CASE TO THE FILE OF THE AO FOR DECIDING THE ISSUE OF ADDITION UNDER SECTION 50C OF THE ACT DENOVO AS DIRECTED ABOVE. THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD: DATED 27/10/2021 TANMAY TRUE COPY THIS ORDER PRONOUNCED IN OPEN COURT ON 27/10/2021 ITA NO. 1785/AHD/2018(SHRI NILESH RAVJIBHAI PATEL VS. ITO) A.Y. 2013-14 4 / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. % / ASSESSEE 3. + ,! -! / CONCERNED CIT 4. -!- / CIT (A) 5. 123 ! ,, ' ,, 56%+% / DR, ITAT, AHMEDABAD 6. 38 9 / GUARD FILE. BY ORDER / %& , :/5 ' ,,56%+% < 1.DATE OF DICTATION ON 22.10.2021 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 25.10.2021 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 25.10.2021 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .10.2021 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR . P.S./P.S 27.10.2021 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.10.2021 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER