Shri Dhanesh K. Jariwala,HUF, Surat V. The Income tax Officer,Ward-2(3), Surat

ITA 180/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89433 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: D K PARIKH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition; Fair market value; Revised return
• Section: 50C; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI SHAILEND RA KUMAR YADAV, JUDI CIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 179 /AHD/20 12 (ASSESSMENT YEAR: 2008 - 09 ) SHRI AJAY HASMUKHLAL JARIWALA 3/1854, SALABATPURA, GHAMLAWAD, SURAT - 395002 APPELLANT VS. ITO, WARD - 2(3), SURAT RESPONDENT PAN: AATPJ3690E & ITA. NO. 180 /AHD/20 12 (ASSESSMENT YEAR: 2008 - 09 ) SHRI DHANESH K. JARIWALA HUF 3/1845, SALABATPURA, GHAMLAWAD, SURAT - 395002 APPELLANT VS. ITO, WARD - 2(3), SURAT RESPONDENT ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 2 PAN: AABHD3326D / BY ASSESSEE : SHRI D. K. PARIKH , A.R. / BY REVENUE :SHRI DINESH SINGH , SR. D.R . / DATE OF HEARING : 12 .0 5 .2015 / DATE OF PRONOUNCEMENT : 14 .0 5 .2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: BOTH APPEALS FILED BY TWO ASSESSES ON SIMILAR ISSUE ARE ARISING OUT FORM THE ORDER OF CIT(A) - II , SURAT , DATED 14.11.2011 FOR THE ASSESSMENT YEAR 20 08 - 09 . SO, THEY ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 179 /AHD/20 12, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : 1. THE CIT(A) ERRED IN NOT CONSIDERING THE REVISED RETURN FILED PRIOR TO THE DATE OF RECEIPT OF ASSESSMENT ORDER. 2. THE CIT(A) ERRED IN NOT CONSIDERING & ADMITTING THE REVISED RETURN FILED, AS ADDITIONAL GROUND VIDE RULE 46A(1)(A) & 46A(1)(C). 3. THE CIT(A) ERRED IN NOT CONSIDERING THE CONTENTS OF AFFIDAVIT FILED. ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 3 THE ASSESSE CANNOT BE PRESUMED TO BE AWARE OF THE DATE OF PASSING THE ASSESSMENT ORDER. 4. THE CIT(A) ERRED IN NOT APPRECIATING VA LUATION REPORT VALUING THE PROPERTY AS ON 01/04/1981 FILED WITH THE REVISED RETURN. 5. THAT THE ORDERS OF AUTHORITIES BELOW VIZ. CIT(A) & A.O. MAY KINDLY BE SET ASIDE & THE MATTER MAY KINDLY BE RESTORED BACK TO THE FILE OF A.O. WITH NECESSARY DIRECTIONS T O RECOMPUTED THE LONG TERM CAPITAL GAIN WORKING AS PER REVISED RETURN FILED. 6. THE CIT(A) ERRED IN NOT GIVING DEDUCTION OF SECTION 50EC FOR RS.1,00,000 INVESTED. ITA NO. 179/AHD/2012 FOR A.Y. 2008 - 09 IN CASE OF SHRI AJAY HASMUKHLAL JARIWALA. 3. ASSESSEE OWNED 14 PROPERTIES WITH 17 OTHER CO - OWNERS AND HIS SHARE IN PROPERTY WAS 1/18 TH . THE DOCUMENT VALUE OF PROPERTIES SOLD WAS RS.2,37,34,750/ - . ASSESSEES SHARE IN SALE PROCEEDS WAS RS.13,18,595/ - . HE CLAIMED COST OF ACQUISITION AT RS.2,70,258/ - (FMV AT 01.04.1981) WHICH GAVE INDEX COST OF ACQUISITION OF RS.14,89,122/ - . LONG TERM CAPITAL LOSS OF RS.1,83,713/ - WAS CLAIMED. ASSESSING OFFICER OBTAINED INFORMATION U/S.133(6) FROM SUB - REGISTRAR, NAVAGAM, SURAT - 3, ACCORDING TO WHICH, THE VALUE OF PLOT OF LAND SOLD AS PER STAMP DUTY VALUATION WAS RS.4,48,50,675/ - . AS PER SECTION 50C, VALUE ADOPTED FOR STAMP DUTY PURPOSE WAS TO BE DEEMED AS FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 4 TRANSFER. THE SHARE OF ASSESSE AS PER PROVISIONS OF SECTION 50C WORKED OUT TO RS.24,91,704/ - AND LONG TERM CAPITAL GAIN ACCRUING TO ASSESSE WORKED OUT TO RS.9,89,396/ - . ASSESSING OFFICER ISSUED SHOW CAUSE TO ASSESSE ASKING HIM TO EXPLAIN WHY LONG TERM CAPITAL GAIN INCOME NOT BE TAKEN AS RS.9,89,396/ - . IN RESPONSE TO SAME, ASSESSE SUBMITTED THAT HE HAD COME TO KNOW THAT LAND IN THE SAME LOCALITY HAD BEEN SOLD FOR RS.5,000/ - PER SQ.MT. ONE YEAR AGO AND THEREFORE IN THEIR OPINION THE SALE RATE OF RS.10,000/ - PER SQ.MT. BY ASSESSE WAS TRUE AND FAIR MARKET V ALUE. IT WAS SUBMITTED THAT PURCHASER HAD PAID STAMP DUTY AT RS.18500/ - PER SQ.MT. WITHOUT THEIR KNOWLEDGE. IT WAS SUBMITTED THAT CASE BE REFERRED TO DISTRICT VALUATION OFFICER, SURAT. EXPLANATION WAS NOT ACCEPTED BY ASSESSING OFFICER AS SUBMISSION THAT LAND HAD BEEN SOLD AT RS.5,000/ - PER SQ.MT. ONE YEAR AGO WAS NOT SUPPORTED BY ANY EVIDENCE. AS NEITHER THE SELLER I.E. ASSESSEE NOR PURCHASER OF PROPERTY HAD MADE ANY REPRESENTATION OR DISPUTED THE VALUATION ADOPTED BY THE STATE AUTHORITY, THE VALUATION WAS FINAL AND REQUIRED TO BE ADOPTED FOR SECTION 50C. IN ABSENCE OF ANY EVIDENCE THAT RATES ADOPTED WERE HIGH, THE REQUEST FOR REFERENCE TO DISTRICT VALUATION OFFICER, WAS REJECTED. ASSESSING OFFICER APPLYING SECTION 50C ADOPTED THE FULL VALUE OF CONSIDE RATION OF ASSESSEES 1/18THSHARE AS RS.24,91,704/ - AND WORKED OUT THE LONG TERM CAPITAL GAIN AT RS.9,89,396/ - AS AGAINST LOSS OF RS.1,83,713/ - WORKED OUT BY ASSESSE. ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 5 4. MA TTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS W ERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER . BEFORE US, LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT ASSESSING OFFICER SHOULD HAVE REFER THE MATTER TO DISTRICT VALUATION OFFICER IN VIEW OF OBJECTION TAKEN BY ASSESSEE AND ALSO FULFILLING THE CONDITION OF SECTION 50C. LEARNED AUTHORIZED REPRESENTA TIVE POINTED OUT THAT ITAT C BENCH ON IDENTICAL ISSUE IN CASE OF ONE OF THE CO - OWNER SHRI NIKUNJKUMAR H. JARIWALA VS. ITO IN ITA NO. 2404/AHD/2011 HAS CONSIDERED THE FACTS AND SET ASIDE THE MATTER TO ASSESSING OFFICER TO MAKE ASSESSMENT IN ACCORDANCE WIT H VALUATION AS PER DISTRICT VALUATION OFFICER BY OBSERVING AS UNDER: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IN THE INSTANT CASE, THE AO HAS MADE ADDITION ON THE BASIS OF THE DIFFERENCE IN THE VALUE OF THE PROPERTY DECLARED BY THE ASSESSE AS SALE CONSIDERATION AND ADOPTED BY THE STAMP VALUATION AUTHORITY. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSE IS THAT IN TERMS OF THE PROVISIONS OF SECTIO N50C(1) OF THE ACT, WHERE THE AO FINDS THAT 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 (OR ASSESSABLE) BY ANY AUTHORITY O F A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE) SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO ADOPTED ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 6 THE FULL VALUE OF THE CONSIDERATION AS ADOPTED BY THE 'STAMP VALUATION AUTHORITY'. HOWEVER, THE AO FAILED TO TAKE NOTE OF THE MANDATE OF SUB - SECTION(2) OF SECTION 50C O F THE ACT. AT THIS JUNCTURE, IT WOULD BE APPROPRIATE TO REPRODUCE HEREUNDER THE SECTION 50C(2) OF THE ACT FOR THE BETTER APPRECIATION OF THE SUBMISSION OF LD.COUNSEL FOR THE ASSESSEE. 'SECTION 50C(2): - WITHOUT PREJUDICE TO THE PROVISIONS OF SUB - SECTION (1) , WHERE - (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER THAT THE VALUE ADOPTED [OR ASSESSED OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED [OR ASSESSED OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB - SECTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MA Y REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB - SECTIONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (I) OF SUB - SECTION (1) AND SUB - SECTIONS (6) AND (7) OF SECTION 23A, SUB - SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UN DER SUB - SECTION (1) OF SECTION 16A OF THAT ACT. EXPLANATION. : [1] FOR THE PURPOSES OF THIS SECTION, 'VALUATION OFFICER' SHALL HAVE THE SAME MEANING AS IN CLAUSE (R) OF SECTION 2 OF THE WEALTH - TAX ACT, 1957 (27 OF 1957). [EXPLANATION 2 : FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION 'ASSESSABLE' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOULD HAVE, NOTWITHSTANDING ANYTHING ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 7 TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FOR THE PURPOSES OF THE PAYMENT OF STAMP DUTY.]' 5.1. THE LD.COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PARA - 6 OF THE ASSESSMENT ORDER IN SUPPORT OF THE CONTENTION THAT BEFORE THE AO A REQUEST WAS MADE TO REFER THE CASE TO DVO FOR SEEKING HIS REPORT ON THE FAIR MARKET VALUE OF THE PROPERTY. PARA - 6 OF THE ASSESSMENT ORDER IS REPRODUCED HEREINBELOW: - '6. THE REPLY OF THE ASSESSEE DATED 10.12.2010 IS REPRODUCED AS UNDER: - 'WE JUST COME TO KNOW THAT ONE OPEN LAND IN THE SAME LOCALITY WAS SOLD AT 5,000/ - PER SQ.MT. BEFORE ONE YEAR AGO, WE ARE IN THE OPINION THAT WHAT WE GOT AMOUNT @ 10,000/ - PER SQ.MT. IS TRUE & FAIR MARKET VALUE. SECONDLY, WE ARE OF THE OPINION TO REFER THE CASE TO THE D.V.O., SURAT TO JUSTIFY THE CASE. THERE ARE CASES OF JUDGEMENT OF: > NEW KALINDI KAMAVATI CO - OP. HOUSING SOCIETY LTD. VS. STATE O F GUJARAT & ORS. 2006(2) GUJ.LR. VOL.XL VII(2). > DINESHKUMAR MITTAL VS. ITO 193 ITR 770 (ALL.) > HINDUSTAN MOTORS LTD. VS. MEMBERS APPROPRIATE AUTHORITY (2001) 249 ITR 424 (MAD.) > K.R. PALANISAM Y VS. UOI 306 ITR 61 (MAD.). IN WHICH THE JUNTRY VALUE IS A GUIDELINE & NOT INSTRUMENT LA LAY DOWN ON THE ASSESSEE'. 5.2. THEREFORE, IN VIEW OF THE PROVISIONS OF S ECTION 50C(2) OF THE ACT, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS NOT JUSTIFIED IN ADOPTING THE VALUE OF THE PROPE RT Y AS ADOPTED BY ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 8 THE 'STAMP VALUATION AUTHORITY' WITHOUT REFERRING TO THE DVO FOR ASCERTAINING THE FAIR MARKET VALUE OF THE PROPERTY. THEREFORE, THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE ARE HEREBY SET ASIDE AND THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS RESTO RED BACK TO THE FILE OF AO TO DECIDE THE SAME IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT THE AO WOULD AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDER. THUS, ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE HOLD THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN ADOPTING VALUE OF PROPERTY AS ADOPTED BY STAMP VALUATION AUTHORITY WITHOUT REFERRING TO DISTRICT VALUATION OFFICER FOR ASCERTAIN FAIR MARKET VALUE OF THE PROPERTY. THEREFORE, FOLLOWING THE REASONING OF SHRI NIKUNJKUMAR H. JARIWALA, WE SET ASIDE THE ORDER OF AUTHORITIES BELOW ON THE ISSUE AND ISSUE RAISED BY WAY OF ADDITIONAL GROUND BY ASSESSE IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO ASSESSE. 5. IN RESULT, ASSESSEES APPEAL IN CASE OF SHRI AJAY HASMUKHLAL JARIWALA IS ALLOWED FOR STATISTICAL PURPO SE. 6. NOW WE TAKE UP ITA NO. 180/AHD/12 IN CASE OF SHRI DHANESH K. JARIWALA HUF (ONE OF THE CO - OWNER) . SIMILAR ISSUE AROSE IN THIS APPEAL. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, ORDER OF AUTHORITIES BELOW IN CASE OF SHRI DHANESH ITA NOS. 179 & 180/AHD/12 A.Y. 08 - 09 (SHRI AJAY H. JARIWALA & SHRI DHANESH K. JARIWALA HUF VS. ITO) PAGE 9 K. JARIWALA ARE ALSO SET ASIDE AND MATTER IS RESTORED WITH SIMILAR DIRECTION TO ASSESSING OFFICER. 7 . AS A RESULT, BOTH APPEALS FILED BY ASSESSE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF MAY , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 14 /0 5 /2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO: - 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. BY ORDER / , / ,