Shri Babulal B.Bhogar, Surat V. The ACIT.,Circle-2, Surat

ITA 1933/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6028 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D.AGRAWAL, V.P. & HONBL E SHRI T.K. SHARMA, J.M.) I.T.A. NO. 1933/AHD./2009 : ASSESSMENT YEAR : 2006-2007 SHRI BABULAL B. BHOGAR, SURAT -VS- ACIT, CIRCLE-2, SURAT (PAN : AAVPB 6136F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARDIK VORA, A.R. RESPONDENT BY : SHRI B.L.YADAV, D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 31-03-2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II, SUR AT CONFIRMING THE ADDITION OF RS. 32,74,750/- MADE BY THE AO UNDER SECTION 50C OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2006-2007. 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ART SILK CLOTH. IN THE PREVIOUS YEAR RELEVANT TO THE AS SESSMENT YEAR UNDER APPEAL, THE ASSESSEE SOLD TWO IMMOVABLE TWO IMMOVABLE PROPERTIE S, BEING LAND AT VESU AND RUNDH, ON WHICH LONG TERM CAPITAL GAIN OF RS.34,14, 450/- HAD BEEN SHOWN. THE AO OBTAINED INFORMATION FROM THE OFFICE OF THE SUB-REG ISTRAR REGARDING THE VALUATION OF SUCH PROPERTIES FOR THE PURPOSE OF DETERMINING THE STAMP DUTY PAYABLE. THESE DETAILS HAVE BEEN REPRODUCED BY THE AO IN PARA 4 OF THE ASS ESSMENT ORDER, WHICH IS REPRODUCED HEREUNDER: SALE DEED NO./DATE SURVEY NO SALE DEED AMOUNT STAMP DUTY VALUATION DIFFER- ENCE ADDL STAMP DUTY PAID DATE & RECEIPT NO. ITA NO.1933-AHD-09 2 7233/ 10.06.05 NO. 29 4960000 9920000 4960000 413280 + 250 PENALTY 19.09.06 /896 13512/ 16.9.05 NO. 28 /4 2810500 4400000 1589500 133500 + 250 04.10.06/ 957 TOTAL 6549500 547280 2.1 BEFORE THE AO, THE ASSESSEE STATED THAT HE HAD ONLY 50% SHARE IN THE AFORESAID PROPERTIES. THE AO MADE INQUIRIES WITH THE BUYERS W HO CONFIRMED THE AFORESAID TRANSACTIONS AND THE PAYMENT OF ADDITIONAL STAMP DU TY TO THE EXTENT OF RS.5,47,280/-. THE AO INVOKED THE PROVISIONS CONTAINED IN SECTION 50C AND MADE ADDITION OF RS.32,74,750/- (RS.50% OF RS.65,49,500/-). 3. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.32,74,750/-. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SHRI HARDIK VORA, A.R. APPEARED AND PRODUCED A NOTICE UNDER SECTION 142(A) OF THE I.T. ACT VIDE NO.2(1)/DVO/2008-2009/157 DATED 21.06.2008, ISSUED TO THE ASSESSEE BY THE DVO, CALLING CERTAIN DETAILS FOR VALUATION OF THE AFORES AID PROPERTIES IN QUESTION SOLD BY THE ASSESSEE IN THE PREVIOUS YEAR RELEVANT TO THE ASSES SMENT YEAR UNDER APPEAL. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THIS NOTICE WAS ISSUED BY THE DVO ON THE BASIS OF LETTER NO.ACIT-CIR-2/VALUATION/07-08 D ATED 10.03.2008 OF ACIT, CIRCLE- II, SURAT. THE COUNSEL OF THE ASSESSEE FURTHER EXPL AINED THAT THE AO FRAMED THE ASSESSMENT ON 30.02.2008 BUT THERE IS NO DISCUSSION OF REFERENCE TO DVO. IT IS NOT KNOWN WHAT IS THE SALE VALUE ESTIMATED BY THE DVO. THE COUNSEL OF THE ASSESSEE FURTHER DREW OUR ATTENTION TO THE PROVISIONS CONTAI NED IN SUB-SECTION (2) OF SECTION 50C AND POINTED OUT THAT BEFORE THE AO, THE ASSESSEE CL AIMED THAT THE VALUE ADOPTED OR ASSESSED BY STAMP DUTY VALUATION EXCEEDS FAIR MARKE T VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. ON THIS BASIS, REFERENCE WAS MADE TO DVO BUT IN THE ASSESSMENT FRAMED, THERE IS NO REFERENCE TO SUCH DISPUTE. THER EFORE, IN THE INTEREST OF JUSTICE, THE IMPUGNED ORDER OF THE LD. CIT(A) BE SET ASIDE AND T HE MATTER BE RESTORED TO THE FILE OF ITA NO.1933-AHD-09 3 THE AO FOR ADJUDICATING THE ADDITION OF RS. 32,74,7 50/- MADE UNDER SECTION 50C OF THE I.T. ACT AFRESH, AFTER CONSIDERING THE DVO REPORT, ON THE BASIS OF REFERENCE MADE ( SUPRA ). 5. ON THE OTHER HAND, SHRI B.L.YADAV, D.R. APPEARIN G ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. THE LD. D.R. POINTED OUT THAT SUB-SECTION (2) OF SECTION 50C CONTAINS THE WO RDS MAY AND NOT SHALL. THEREFORE, THE VIEW TAKEN BY THE LD. CIT(A) CONFIRM ING THE ADDITION OF RS. 32,74,750/- BE UPHELD. 5.1 AS AGAINST THIS, THE COUNSEL OF THE ASSESSEE PO INTED OUT THAT IN CASE OF DISPUTE, THE AO WAS BOUND TO REFER THE VALUATION TO DVO. IN SUPPORT OF THIS, RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: (I) MEGHRAJ BAID VS- ITO [2008] 23 SOT 25 (JODH) (URO) (II) RAVIKANT VS- ITO [2007] 110 TTJ 297 (DEL) (II) ITO-VS-SMT. MANJU RANI JAIN [2008] 24 SOT 24 (DEL) 6. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER, THE LD. CIT(A) REFUSED TO FOLLOW THE DECISION OF THE TRIBUNAL IN T HE CASE OF MEGHRAJ BAID ( SUPRA ) AND SMT. MAJU RANI JAIN ( SUPRA ) ON THE GROUND THAT ITAT HAS EXCEEDED ITS JURISDIC TION. THE LD. CIT(A) FURTHER OBSERVED THAT THE ITAT IS NO T COMPETENT TO CREATE ANY LAW. FOR NOT FOLLOWING THE DECISION OF RAVIKANT VS- ITO ( SUPRA ), THE LD. CIT(A) OBSERVED THAT ITAT HAS MISINTERPRETED THE PROVISIONS OF SECTION 5 0C AND HAS CREATED A NEW LAW WHICH IS BEYOND WHAT WAS INTENDED BY THE LEGISLATUR E. IN THIS CONNECTION, SUFFICE TO SAY THAT WE DO NOT APPRECIATE THIS SORT OF COMMENTS OF CIT(A). KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE FACT THAT THE AO HIMSELF MADE A REFERENCE TO DVO, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT THE AO WILL DISCUSS THE VALUATION REPORT, IF ANY RECEIVED FROM THE DVO AND RE-ADJUDICATE THE ADDITION OF RS. 32,74,750/- MADE UNDER SECTION 50C OF THE ACT AFRESH, AFTER GIVING O PPORTUNITY OF BEING HEARD TO THE ITA NO.1933-AHD-09 4 ASSESSEE. RESULTANTLY, FOR STATISTICAL PURPOSES, T HE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 26.07. 2011 SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 26/07/2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S.