Alka Mohanlal Desai L/h of late Mohanlal Ambelal Desai, Navsari V. The Income Tax Officer, Ward-3, Navsari

ITA 1870/AHD/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8527 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: SAPNESH SHETH
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 271(1)(c); 143(3); 48; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) . . ./ I.T.A NO.1870/AHD/2015 [ [ / ASSESSMENT YEAR: 2009-10 LATE SHRI MOHANLAL AMBELAL DESAI, THROUGH L.R.ALKA MOHANLAL DESAI MATRU SMRUTI, ASHANAGAR, NAVSARI 396 445. [PAN: ABKPD 0777 A] VS. THE INCOME TAX OFFICER, WARD-3, NAVSARI. / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI SAPNESH SHETH AR /REVENUE BY SMT. ANUPAMA SINGLA SR. DR / DATE OF HEARING: 15 . 1 2 .20 20 /PRONOUNCEMENT ON: 07 . 01 .20 2 1 /O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD, DATED 20.05.2015 FOR THE A.Y. 2009-10. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A HAS ERRED IN UPHOLDING ACTION OF THE AO OF ASSESSING LONG TERM GAIN AT RS.14,65,063/- IN THE HANDS OF THE APPELLANT, AS AGAINST TAXABLE GAIN OF RS.1,33,363/- WORKED OUT AND ASSESSED 1 THE AO IN CASE OF OTHER CO-OWNERS HAVING EQUIVALENT INTEREST IN THE SAME PROPERTY, WHO ASSESSMENT HAS BEEN FRAMED U/S. 143(3) BY THE SAME AO. LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT( HAS ERRED IN GIVING DIRECTION TO ASSESSING OFFICER TO REFER THE MATTER TO DVO FOR DETERMINING THE VALUE OF PROPERTY AS OF 01/04/1981. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT HAS ERRED IN CONSIDERING THE REPORT OF DVO FOR DETERMINING THE VALUE OF PROPERTY A 01/04/1981 AS AGAINST THE VALUATION OF RS.4,16,314/- (BEING 6.25% OF RS.66,61,0< REFLECTED IN GOVT. APPROVED VALUER'S REPORT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CI HAS ERRED IN GIVING DIRECTION TO ASSESSING OFFICER TO RE-CALCULATE THE LONG TERM CAPITAL KEEPING IN VIEW THE VALUATION REPORT OBTAINED FROM THE DVO AFTER IGNORING THE VALUATION RS.4,16,314/- (BEING 6.25% OF RS.66,61,000/-) MADE BY THE GOVT. APPROVED VALUER 01/04/1981. 5. FOR VARIOUS REASONS AND ON DIFFERENT GROUNDS, THE ADDITION OF RS. 13,06,313/- MADE BY T AND UPHELD BY THE LEARNED CIT(A), DESERVES TO BE DELETED. 6. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO AND ARE INDEPENDENT OF EACH OTHER. 7. YOUR APPELLANT CRAVES, LEAVE TO AMEND, ALTER, DELETE AND/OR ADD TO FOREGOING GROUNDS OF APPEAL ANY TIME BEFORE THE APPEAL IS DECIDED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 19.05.2009 DECLARING INCOME OF RS.2,13,560/-. IN THE COMPUTATION OF INCOME THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN (LTCG) OF RS.1,58,750/-. DURING THE ASSESSMENT THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBSTANTIATE THE LTCG. ON SHOW CAUSE BY THE ASSESSING OFFICER (AO), THE ASSESSEE CONTENDED THAT DURING THE RELEVANT PERIOD THE ASSESSEE ALONG WITH HIS CO-OWNER SOLD ANCESTRAL PROPERTY BEARING LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 3 TIKKA NO.86 CS NO.3848 SITUATED AT NAVASARI. THE ASSESSEE HAS 6.25% OF HIS SHARE IN THE SAID LAN. THE ASSESSEE RECEIVED CONSIDERATION OF HIS SHARE OF RS.12,50,000/- ON WHICH THE ASSESSEE WORKED OUT THE LONG TERM CAPITAL GAIN OF RS.1.58 LAKHS. THE AO IN ORDER TO VERIFY THE CORRECTNESS OF CLAIM MADE ENQUIRY FROM SUB- REGISTRAR CONCERNED. THE SUB-REGISTRAR CONCERNED INFORMED THAT AS PER STAMP DATE VALUATION, THE VALUE OF PROPERTY DETERMINED AT RS.4.09 CRORES AGAINST THE SALE CONSIDERATION OF RS.2.00 CRORES. THE AO ON THE BASIS OF VALUATION OF PROPERTY VALUED BY STAMP VALUATION AUTHORITY TREATED THE SALE CONSIDERATION OF ASSESSEES SHARES AT RS.25,56,314/- AGAINST THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE OF RS.12,50,000/-, ACCORDINGLY, THE AO WORKED OUT LONG TERM CAPITAL GAIN ON THE BASIS OF STAMP VALUATION AUTHORITY. THE AO WORKED OUT LONG TERM CAPITAL GAIN OF RS.14,65,063/- AGAINST THE CAPITAL GAIN CLAIMED BY THE ASSESSEE AT RS.1,58,750/-, THEREBY MADE ADDITION OF RS.13,06,313/-. 3. ON APPEAL BEFORE THE LD.CIT(A), THE ACTION OF AO WAS CONFIRMED. THUS, FURTHER AGGRIEVED, THE ASSESSEE FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND HAVE GONE THROUGH THE ORDER OF THE LOWER AUTHORITIES CAREFULLY. AT THE OUTSET OF HEARING, THE AR OF THE ASSESSEE SUBMITS THAT HE HAS TWO FOLD SUBMISSION, BOTH ARE LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 4 INDEPENDENT WITH EACH OTHER. THE AR FOR ASSESSEE FURTHER SUBMITS THAT THE AMENDED PROVISION OF SECTION 50C, AMENDED W.E.F 01.10.2009 AND IS NOT APPLICABLE FOR THE A.Y. 2009-10. HENCE, THE VALUE SO ADOPTED BY THE STAMP VALUATION AUTHORITY CANNOT BE CONSIDERED AGAINST THE ASSESSEE. 5. IN OTHER ALTERNATIVE SUBMISSION THE AR FOR THE ASSESSEE SUBMITS THAT IN ASSESSEE CO-OWNERS CASE THE DEPARTMENT HAS ACCEPTED SIMILAR LONG TERM CAPITAL GAIN IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THE AR OF THE ASSESSEE FURNISHED THE COPY OF ASSESSMENT ORDER IN CASE OF SMT. PRABHODHCHANDRA AMBELAL DESAI DATED 27.09.2013 AND IN CASE OF SMT. PRABHABEN H.DESAI IN THE ASSESSMENT ORDER DATED 27.09.2013 PASSED UNDER SECTION 147 R.W.S 143(3) OF THE ACT. THE AR FOR THE ASSESSEE SUBMITS THAT BEING CO-OWNER THE ASSESSEE IS ALSO ENTITLED FOR SIMILAR TREATMENT. THE REVENUE CANNOT TREAT THE ASSESSEE INDIFFERENTLY. IN SUPPORT OF HIS SUBMISSION THE AR RELIED UPON THE DECISION OF MADRAS HIGH COURT IN CIT VS. KUMAR RANI MEENAKSHI ACHI (207) 292 ITR 624 (MAD), DECISION OF AHMEDABAD BENCH IN CHETANBHAI PRAHALDBHAI GAMI VS. ITO (ITA NO. 2082/AHD/2013) DATED 19.07.2019 AND CBDT CIRCULAR NO.014(XL-35) DATED 11.04.1955 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF LOWER AUTHORITIES. LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 5 7. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF LOWER AUTHORITIES CAREFULLY. WE HAVE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED BY THE AR OF THE ASSESSEE. BEFORE US, THE AR OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT IN ASSESSEES CO-OWNER CASE, THE REVENUE HAS ACCEPTED SIMILAR LONG TERM CAPITAL GAIN IN THE SCRUTINY ASSESSMENT. COPY OF THE ASSESSMENT ORDER IN RESPECT OF TWO CO-OWNERS IS PLACED ON RECORD. WE HAVE NOTED THAT NO COUNTER TO THE SUBMISSION OF THE ASSESSEE, WAS MADE BY DR THAT SIMILAR LONG TERM CAPITAL GAIN WAS ACCEPTED IN CASE OF CO-OWNER. 8. THE HON'BLE MADRAS HIGH COURT IN ICT VS. KUMARARANI MEENAKSHI ACHI (SUPRA) HELD THAT DURING THE SAME ASSESSMENT YEAR SAME QUANTITY OF WEALTH IN POSSESSION OF CO-SHARER IS SUBJECTED TO A LOWER RATE OF TAXATION, IT WOULD BE HIGHLY IMPROPER TO BURDEN A SIMILARLY SITUATED CO-SHARER WITH A HIGHER RATE OF TAX. IF SUCH AN ACTION ON THE PART OF THE ASSESSING AUTHORITIES IS SANCTIONED IT WOULD MILITATE AGAINST THE PRINCIPLE OF EQUALITY OF LAWS ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION. BY FOLLOWING THE SAME PRINCIPLE, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN CHETANBHAI PRAHLADBHAI GAMI VS. ITO IN ITA NO.2082/AHD/2013 DATED 19.07.2019, THE TRIBUNAL GRANTED RELIEF TO THE ASSESSEE HOLDING THAT WHILE MAKING THE ASSESSMENT OF THE SAME PROPERTY THE SIMILAR TREATMENT SHOULD BE GRANTED. 9. WE HAVE NOTED THAT IN ASSESSEES CO-OWNERS CASE WITH RESPECT TO THE PROPERTY AGAINST THE SALE OF WHICH THE ASSESSEE CLAIMED LONG LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 6 TERM CAPITAL GAIN, THE AO IN ASSESSEES CO-OWNER CASE IN PRABHODHCHANDRA AMBELAL DESAI ALLOWED THE SIMILAR LONG TERM CAPITAL GAIN BY PASSING THE FOLLOWING ORDER : 3. ON PERUSAL OF RECORDS AND DETAILS SUBMITTED BY THE ASSESSEE IT WAS FOUND THAT THE ASSESSEE WAS CO-OWNER HAVING SHARE OF 6.25% IN THE PROPERTY SOLD FOR RS.2,00,00,001/- ON 19.01.2009 SITUATED AT SURVEY NO.86, LUNSIKUI, NAVSARI. VALUE OF PROPERTY AS PER STAMP DUTY VALUATION WAS DETERMINED AT RS.4,09,01,000/- . THE ASSESSEE HAS NOT DECLARED CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME FOR AY 2009-10 . THE SAID PROPERTY WAS INHERITED BY THE ASSESSEE. THE ASSESSEE HAS SUBMITTED VALUATION REPORT OF THE PROPERTY FROM GOVT. APPROVED VALUER WHO HAS ARRIVED VALUE OF PROPERTY AT RS.66,61,020 AS ON 01.04.1981. THE VALUE OF THE ASSESSEES SHARE COMES TO RS. 4,16,314. INDEXED COST AS PER SECTION 48 OF THE ACT IS WORKED OUT AT RS.24,22,947/-. AS PER STAMP DUTY AUTHORITY THE ASSESSEES SHARE BEING 6.25% OF SALE VALUE IN THE PROPERTY COMES TO RS.25,56,310/-. THUS CAPITAL GAIN COMES TO RS. 1,33,363/-, WHICH WAS TAXABLE IN THE HANDS OF THE ASSESSEE. THE CAPITAL GAIN OF RS.1,33,363 HAS NOW BEEN SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT DECLARED SUO MOTO LONG TERM CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME. THE ASSESSEE HAS CONSCIOUSLY NOT FILED RETURN OF INCOME TO AVOID PAYMENT OF TAX. THEREFORE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE INITIATED ON THIS ISSUE FOR CONCEALMENT OF INCOME. 10. WE HAVE NOTED THAT IDENTICAL WORDED ASSESSMENT ORDER WAS PASSED IN OTHER CO-OWNER CASE I.E. SMT. PRABHABEN HARSHADRAI DESAI, RELEVANT PART OF THE ASSESSMENT ORDER IS EXTRACTED BELOW;: 3. ON PERUSAL OF RECORDS AND DETAILS SUBMITTED BY THE ASSESSEE IT WAS FOUND THAT THE ASSESSEE WAS CO-OWNER HAVING LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 7 SHARE OF 6.25% IN THE PROPERTY SOLD FOR RS.2,00,00,001/- ON 19.01.2009 SITUATED AT SURVEY NO.86, LUNSIKUI, NAVSARI. VALUE OF PROPERTY AS PER STAMP DUTY VALUATION WAS DETERMINED AT RS.4,09,01,000/-. THE ASSESSEE HAS NOT DECLARED CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME FOR AY 2009-10. THE SAID PROPERTY WAS INHERITED BY THE ASSESSEE. THE ASSESSEE HAS SUBMITTED VALUATION REPORT OF THE PROPERTY FROM GOVT. APPROVED VALUER WHO HAS ARRIVED VALUE OF PROPERTY AT RS.66,61,020 AS ON 01.04.1981. THE VALUE OF THE ASSESSEES SHARE COMES TO RS. 4,16,314. INDEXED COST AS PER SECTION 48 OF THE ACT IS WORKED OUT AT RS.24,22,947/-. AS PER STAMP DUTY AUTHORITY THE ASSESSEES SHARE BEING 6.25% OF SALE VALUE IN THE PROPERTY COMES TO RS.25,56,310/-. THUS CAPITAL GAIN COMES TO RS. 1,33,363/-, WHICH WAS TAXABLE IN THE HANDS OF THE ASSESSEE. THE CAPITAL GAIN OF RS.1,33,363 HAS NOW BEEN SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT DECLARED SUO MOTO LONG TERM CAPITAL GAIN AS HE HAS NOT FILED RETURN OF INCOME. THE ASSESSEE HAS CONSCIOUSLY NOT FILED RETURN OF INCOME TO AVOID PAYMENT OF TAX. THEREFORE, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE INITIATED ON THIS ISSUE FOR CONCEALMENT OF INCOME. 11. IN VIEW OF THE ABOVE AFORESAID FACTUAL AND LEGAL DISCUSSION AND RESPECTFULLY FOLLOWING THE DECISION OF MADRAS HIGH COURT IN KUMARARANI MEENAKSHI ACHI (SUPRA) AND DECISION OF CO-ORDINATE BENCH IN PRABHODHCHANDRA AMBELAL DESAI (SUPRA), THE REVENUE CANNOT TREAT THE ASSESSEE IN DIFFERENT WAY, THEREFORE, THE ADDITION TO THE LONG TERM CAPITAL GAIN ADDED BY THE AO, CONFIRMED BY LD.CIT(A) IS DELETED. IN THE RESULT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. LATE SHRI MOHANLAL AMBELAL DESAI VS. ITO, WARD-3, NAVSARI. ITA NO.1870/AHD/2015 FOR A.Y. 2009-10 8 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 07-01-2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (DR.ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER ( /JUDICIAL MEMBER) / SURAT, DATED : 7 TH JAN , 2021 / S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT