Shri Arvindbhai Laljibhai Patel, Navsari V. The Income Tax Officer, Ward-1, Navsari

ITA 2019/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2168 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: MEHUL R SHAH
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 50C; 69B

Judgement Text

ARVINDBHAI LALJIBHAI PATEL V. ITO-WD-1 NAVSARI/I.T.A. NO.2019/AHD/2015/A.Y.08-09 PAGE 1 OF 4 , , INCOM TAX APPELLATE TRIBUNAL SURAT-BENCH-SURAT BEFORE C .M. GARG, JM & O. P. MEENA, AM . . /. I.T.A NO. 2019/AHD/2015: / ASSESSMENT YEAR:2008- 09 SHRI AR VINDBHAI L ALJIBHAI PATEL, 301, SHARDA RESIDENCY, NEAR SHAISHAV APARTMENT , ASHANAGAR NAVSARI 396445 PAN:ACCPP1479Q V. INCOME TAX OFFICER WARD-1, NAVSARI APPELLANT /RESPONDENT ASSESSEE BY SHRI MEHUL R. SHAH, CA REVENUE BY MS. ANUPAMA SINGLA, SR. D.R. DATE OF HEARING 30.08.2018 DATE OF PRONOUNCEMENT 18 .09.2018 /ORDER PER O. P. MEENA, AM 1. THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 04.03.2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- VALSAD (IN SHORT THE CIT (A)) FOR THE ASSESSMENT YEAR 2008-09. 2. GROUND NO.1: IS NOT PRESSED BEFORE US, HENCE, IT IS TREATED AS DISMISSED. 3. GROUND NO. 2: STATES THAT LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.13,91,699 ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE ACT. 4. SUCCINCT FACTS ARE THAT THE ASSESSEE ALONG WITH OTHER CO-OWNERS HAVE PURCHASED VARIOUS OPEN PLOT OF LAND IN WHICH ASSESSEE`S SHARE BEING 25% WAS ARVINDBHAI LALJIBHAI PATEL V. ITO-WD-1 NAVSARI/I.T.A. NO.2019/AHD/2015/A.Y.08-09 PAGE 2 OF 4 AT RS.19,35,699 AS PER PURCHASE DEED. THE STAMP DUTY VALUATION WAS DETERMINED AT HIGHER AMOUNT BY STAMP DUTY COLLECTOR, NAVSARI ON WHICH HIGHER DUTY WAS DULY PAID BY THE ASSESSEE. THESE PROPERTIES IN QUESTION WAS REFERRED TO ASSISTANT VALUATION OFFICER (VALUATION CELL) U/S.142A, WHO VALUED THE PROPERTY AT HIGHER RATE, ACCORDING TO WHICH SHARE OF THE ASSESSEE ESTIMATED AT RS. 33,26,949. HENCE, AFTER ISSUING SHOW-CAUSE NOTICE TO THE ASSESSEE, THE AO HAS MADE ADDITION OF RS. 13,91,699 BEING THE DIFFERENCE OF PURCHASE VALUE AND VALUATION OF THE AVO, IN THE HANDS OF THE ASSESSEE. 5. FEELING AGGRIEVED AND DISSATISFIED, THE ASSESSEE FILED AN APPEAL BEFORE CIT (A). HOWEVER, CIT (A) AFTER OBSERVING THAT THE VALUATION BY THE AVO AND JANTRI VALUE IS MUCH HIGHER THAN SHOWN BY THE ASSESSEE. HENCE, THE AO WAS JUSTIFIED IN MAKING ADDITION ON ACCOUNT OF DIFFERENCE OF VALUATION IN PROPERTY PURCHASED. THE CIT (A) HAS FILED THE DECISION OF CIT (A) IN THE CASE OF CO-OWNERS OF SHRI SURESHCHANDRA AGARWAL IN CIT (A)/VLS/243/10-11 DTD. 27.07.2011. 6. FEELING AGGRIEVED AND DISSATISFIED, THE ASSESSEE HAS COME UP BEFORE THIS TRIBUNAL BY WAY OF THIS APPEAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED BY THE ORDER OF AHMEDABAD TRIBUNAL IN THE CASE OF ONE OF THE CO-OWNERS SHRI VISHNU PRASAD AND SHRI SURESHCHANDRA S. AGARWAL IN I.T.A.NO. 2567/AHD/2011 A.Y. 2008-09 AND I.T.A.NO. 2571/AHD/2011 A.Y. 2008-09 DATED 17.07.2015 (COPY FILED). ARVINDBHAI LALJIBHAI PATEL V. ITO-WD-1 NAVSARI/I.T.A. NO.2019/AHD/2015/A.Y.08-09 PAGE 3 OF 4 7. CONVERSELY, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY DECISION OF CO-ORDINATE BENCH IN THE CASE OF CO-OWNERS OF PROPERTIES IN I.T.A.NO. 2571 AND 2567/AHD/2011 IN THE CASE OF SHRI SURESHCHANDRA AND SHRI VISHNUPRASAD (SUPRA) IN WHICH VIDE PARA NO. 10 AND 11, THE TRIBUNAL HAS OBSERVED AS UNDER: 10. IN THE ABOVE THREE DECISIONS, IT HAS BEEN UNANIMOUSLY HELD THAT VALUATION MADE FOR THE PURPOSE OF STAMP DUTY IS AN ESTIMATED OPINION. IT CAN BE CORROBORATIVE EVIDENCE FOR THE HELP OF THE AO, BUT, IT CANNOT BE CONCLUSIVE PIECE OF EVIDENCE DEMONSTRATING THE UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE FOR PURCHASE OF LAND. SOLELY ON THE BASIS OF SUCH ESTIMATED OPINION, THE ADDITION CANNOT BE MADE. FROM PERUSAL OF RECORD, WE FIND THAT, APART FROM THIS ESTIMATED OPINION, THE AO WAS NOT POSSESSING ANY OTHER EVIDENCE. AS FAR AS REFERENCE MADE UNDER SECTION 50C OF THE ACT IS CONCERNED, WE ARE OF THE VIEW THAT SECTION 50C IS DEEMING PROVISION, WHICH AUTHORIZES THE AO TO REPLACE THE SALE CONSIDERATION WITH REGARD TO THE VALUE OF CONSIDERATION DISCLOSED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN. IN THAT SITUATION, THE AO WOULD REPLACE THE SALE CONSIDERATION DISCLOSED BY THE ASSESSEE BY AN AMOUNT ON WHICH IS STAMP DUTY WAS PAID BY THE ASSESSEE. THEREFORE, THIS SECTION IS OF NO HELP WHILE DETERMINING THE UNEXPLAINED INVESTMENT OF THE ASSESSEE. 11. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE LEARNED REVENUE AUTHORI TIES HAVE FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES. THE ASSESSEES HAVE NOT MADE ANY UNEXPLAINED INVESTMENT IN PURCHASE OF PLOTS, AND THEREFORE, NO ADDITION, THE JUST TO BE MADE. 9. IN THE LIGHT OF THE DISCUSSION AND FINDINGS OF THE COORDINATE BENCH IN ABOVE ORDER IN THE CASE OF CO-OWNERS OF THE IMPUGNED PROPERTIES PURCHASED BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT NO ADDITION ON ACCOUNT OF ARVINDBHAI LALJIBHAI PATEL V. ITO-WD-1 NAVSARI/I.T.A. NO.2019/AHD/2015/A.Y.08-09 PAGE 4 OF 4 DEEMING PROVISIONS UNDER SECTION 50C OF THE ACT AND ON THE BASIS OF ESTIMATED VALUATION OF THE AVO CAN BE MADE BY THE AO IN THE CASE OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH AS REPRODUCED ABOVE, THE ADDITION MADE AT RS. 13, 91, 699 AND SUSTAINED BY THE CIT (A) IN THE CASE OF THE ASSESSEE IS THEREFORE, DELETED. THIS GROUND OF APPEAL IS ACCORDINGLY, ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS, PARTLY ALLOWED. 11. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.09.2018. SD/- SD/- ( . . /C.M. GARG) ( . . /O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 18-09-2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) THE CIT(A)4. / PR. CIT 5. , / D.R. (ITAT) 6. / GUARD FILE ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT