The DCIT, Circle3, Surat V. Shri Kemran F.Lakdawala, Surat

ITA 1810/AHD/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9716 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: R N VEPARI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: S H RI G. D. AGRAWAL , VICE PRESIDENT AND SHR I RAJPAL YADAV , JUDICIAL MEMBER DCIT, CIRCLE - 3, SURAT (APPELLANT) VS SHRI KEMRAN F. LAKDAWALA C/O. UNITED TRANSPORT, GORAT, RANGDER, SURAT PAN: AAGPL7532G (RESPONDENT) REVENUE BY: S MT. SONIA KUMAR , SR. D.R. ASSESSEE BY: S HRI R.N. VEPARI , A.R. DATE OF HEARING : 24 - 06 - 2 015 DATE OF PRONOUNCEMENT : 17 - 07 - 2 015 / ORDER P ER : RAJPAL YADAV , JUDICIAL MEMBER : - THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 3 RD MAY, 2011 PASSED FOR ASSESSMENT YEAR 2007 - 08. I T A NO . 1810 / A HD/20 11 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 1810 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI KEMRAN F. LAKD AWALA 2 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING PENALTY OF RS. 3,3 6,580/ - IMPOSED BY THE ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. HE HAS FILED HIS RETURN OF INCOME ON 31 ST JULY, 2007 DECLARING TOTAL INCOME OF RS. 32,79,244/ - . THE CAS E OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAD SOLD A PLOT OF LAND COMPRISES AT SURVEY NO. 263, 265 AND 266/1 AND 267 PA IK EE. THE LD. ASSESSING OFFICER HAS OBSER VED THAT THE SALE CONSIDERATION SHOWN BY THE ASSESSEE IS LOWER THAN THE VALUE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. WITH THE HELP OF SECTION 50C, HE MADE AN ADDITION OF RS. 14,99,885/ - . THE LD. ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDI NGS U/S. 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY CONCEALING TRUE AND CORRECT INCOME. 4. IN RESPONSE TO THE NOTICE RECEIVED U/S. 274 R.W.S. 271(1)(C), ASSESSEE CONTENDED THAT HE HAS DISCLOSED ALL THE PARTICULARS FULLY AND TRULY. TH E ADDITION IN THE TOTAL INCOME HAS BEEN MADE WITH THE HELP OF SECTION 50C WHICH IS A DEEMING PROVISION. THIS PROVISION AUTHORIZES THE ASSESSING OFFICER TO DEEM SALE CONSIDERATION ALLEGED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON TRANSFER OF A CAPITAL ASSET EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID FOR THE PURPOSE OF REGISTERING THE SALE DEED. THUS, ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF INCOME. HOWEVER, LD. ASSESSING OFFICER WAS NOT SATISFIED WITH THE CONTENTIONS OF THE ASSESSEE AND HE IMPOSED A PENALTY OF RS. 3,36,580/ - . I.T.A NO. 1810 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI KEMRAN F. LAKD AWALA 3 5. ON APPEAL, LD. FIRST APPELLATE AUTHORITY HAS DELETED THE PENALTY. 6. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. A B ARE PERUSAL OF SECTION 50C WOULD INDICATE THAT IT AUTH ORIZES THE ASSESSING OFFICER TO DEEM THE SALE CONSIDERATION WHICH HAS BEEN ACCRUED OR RECEIVED BY AN ASSESSEE O N TRANSFER OF A CAPITAL ASSET. THE SALE CONSIDERATION TO BE DEEMED BY THE ASSESSING OFFICER IS EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY HAS B EEN PAID BY THE VENDEE WHILE PURCHASING THE CAPITAL ASSET. SUB - SECTION 2 OF SECTION 50C FURTHER CONTEMPLATES THAT IF AN ASSESSEE OBJECTS ABOUT THE TRUE DETERMINATION OF THE VALUE OF THE PROPERTY BY THE STAMP DUTY AUTHORITIES , THEN , ASSESSING OFFICER WAS R EQUIRED TO REFER THE MATTER TO THE VALUATION OFFICER WHO WILL DETERMINE THE FAIR MARKET VALUE OF THE PROPERTY. THIS SCHEME OF THE PROVISION ITSELF SUGGEST S THAT ADDITION TO THE INCOME OF AN ASSESSEE IS MADE ON THE BASIS OF A DEEMING PROVISION. IT IS NOT BASED ON ANY FACTUAL MISREPRESENTATION AT THE END OF ASSESSEE BECAUSE IF THE MATTER IS REFERRED TO THE DVO , THEN , A THIRD FIGURE MIGHT COME I.E. (1) ACTUAL PAYMENT RECEIVED BY THE ASSESSEE (2) SALE CONSIDERATION DEEMED BY THE ASSESSING OFFICER ON THE BASIS OF STAMP DUTY VALUATION (3) THE FAIR MARKET VALUE DETERMINED BY THE DVO ON A REFERENCE BY THE ASSESSING OFFICER UNDER SUB - SECTION 2 OF SECTION 50C. IF THAT BE SO, THEN, HOW ONE CAN SAY THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME DELIBERATEL Y. THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY OBSERVED THAT MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION ON THE BASIS OF VALUATION MADE OR STAMP DUTY VALUATION AUTHORITY WOULD NOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER AGREEMENT WAS INCORRECT AND WRONG, THEREFORE, I.T.A NO. 1810 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI KEMRAN F. LAKD AWALA 4 ASSESSING OFFICER CANNOT IMPOSE PENALTY IN SUCH SITUATION. WE DO NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN COURT ON 17 - 07 - 2015 SD/ - SD/ - ( G.D. AGRAWAL ) ( RAJPAL YADAV ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD : DATED 17 /07 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. D R, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,