The ITO, Ward-2(3), RAJKOT-GUJARAT V. M/s. Vijay Ankit Foundry, RAJKOT-GUJARAT

ITA 179/RJT/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0506 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 5 month(s) 3 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: 2007-2008
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVEEN KABRA
• Assessee Lawyers: R N VEKARIYA
• 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 . 179 /RJT/201 3 ( / ASS TT YEAR : 200 7 - 20 08 ) ITO, WARD - 2(3) RAJKOT. VS. M/S.VIJAY ANKTI FOUNDRY 68 - 69, MIRA UDYOG IND. ESTATE B/6. AJI INDUSTRIAL ESTATE ROAD RAJKOT. / APPELLANT BY : SHRI PRAVEEN KABRA, DR / RESPONDENT BY : SHRI R.N. VEKARIYA / 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 200 7 - 08 . 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. 25,39,866/ - TO THE TUNE OF RS.8,37,100/ - . 3. BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 30.11.2007 DECLARING TOTAL I NCOME A T RS.16,884/ - . IT EMERGES ITA.NO. 17 9 /RJT/201 3 - 2 - OUT THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERTIES VIDE SALE DEED NO.12896 AND 12895 REGISTERED ON 4.1.22006. THE ASSESSEE HAS DISCLOSED SALE VALUE OF BOTH THE PLOTS AT RS.6 LAKHS, WHEREAS, FOR THE PURPO SE OF STAMP DUTY PAYMENT, THE VALUE WAS ADOPTED AT RS.31,39,866/ - . THE ASSESSING OFFICER HAS CONFRONTED THE ASSESSEE AS TO WHY FOR THE PURPOSE OF CALCULATING THE C APITAL GAIN UNDER SECTION 48 OF THE INCOME - TAX ACT, THE VALUE ADOPTED FOR THE PURPOSE OF PAY MENT OF STAMP DUTY SHOULD NOT BE TAKEN AS FULL SALE CONSIDERATION FOR TRANSFER OF THE CAPITAL ASSET . A FTER HEARING THE ASSESSEE, THE LD.AO HAS MADE AN ADDITION OF RS.25,39,866/ - , WHICH IS THE DIFFEREN CE BETWEEN THE SALE VALUE DISCLOSED BY THE ASSESSEE AS PER THE SALE DEED VIS - - VIS THE VALUE ON WHICH STAMP DUTY WAS PAID WHILE GETTING THE SALE DEED REGIST E RED. 4. ON APPEAL, THE LD.FIRST APPELLATE AUTHORITY H A S REFERRED THE MATTER TO THE VALUATION OFFICER WHO DETERMINED THE VALUE OF THE PROPERTY AT RS.14,37,100/ - . THE LD. FIRST APPELLATE AUTHORITY HAS DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE OF THE PROPERTY AT THIS AMOUNT WHICH HAS BEEN DETERMINED A S FAIR MARKET VALUE OF THE PROPERTY BY THE DVO ON A REFERENCE MADE UNDER SECTION 50C(2) OF THE INCOME TAX ACT. 5. I N RESPONSE TO THE NOTICE OF HEARING, THE ASSESSEE FILED AN APPLICATION FOR ADJOURNMENT OF THE HEARING . AFTER GOING THROUGH THE RECORD, WE DO NOT FEEL IT NECESSARY TO ADJOURN THE CASE, AND THEREFORE, WE DISMISSED THE ADJOURNMENT APPLICATION OF THE ASSESSEE AN D HEARD THE LD.DR. ITA.NO. 17 9 /RJT/201 3 - 3 - 6. SECTION 50C OF THE INCOME TAX ACT PROVIDES 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 B Y ANY AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT 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 FURTHER 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 V ALUE AS PER THE PROCEDURE PROVIDED IN THE WEALTH TAX ACT. I N THE PRESENT CASE, THE VALUE DETERMINED BY THE ST AMP DUTY AUTHORITY WAS ON A HIGHER SIDE. IT WAS RS.31,39,866/ - . 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 THE VALUE D THE PROPERTY AT RS 14,37,100/ - . 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 D EFECT IN THE MANNER VALUATION 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. THEREFO R E, WE DO NOT FIND ANY ITA.NO. 17 9 /RJT/201 3 - 4 - REASON TO INTERFERE WITH TH E ORDER OF THE LD.CIT(A), WHOSE ORDER IS CONFIRMED. 7 . 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 RAJKOT; DATED 5 / 1 0 /20 1 5