Shri Nishith Babulal Shah, Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-5(3), Ahmedabad

ITA 2052/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8343 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SINGH SR DR
• Assessee Lawyers: S N DIVATIA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Principle of natural justice; Corroborative evidences
• Section: 50C; 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD : , , BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.2052/AHD/2016 ( / ASSESSMENT YEAR : 2012-13) SHRI NISHITH BABULAL SHAH PROP. M/S.AKASH EXPORTS 52, S.P. DIAMOND MARKET BAPUNAGAR AHMEDABAD 38 024 / VS. THE DY.CIT CIRCLE-5(3) 118, 1 ST FLOOR NARAYAN CHAMBERS ASHRAM ROAD AHMEDABAD ' ./ ./ PAN/GIR NO. : AKQPS 8934 D ( '% / APPELLANT ) .. ( &'% / RESPONDENT ) '% ' / APPELLANT BY : SHRI S.N. DIVATIA, AR &'% ( ' / RESPONDENT BY : SHRI V.SINGH, SR.DR ) * ( + / DATE OF HEARING 07/05/2018 ,-. ( + / DATE OF PRONOUNCEMENT 17 / 05 /2018 / O R D E R PER MS. MADHUMITA ROY - JM: BEING AGGRIEVED BY AND/OR DISSATISFIED WITH THE O RDER DATED 23.06.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), AHMEDABAD-5 [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2012 -13 ARISING OUT OF THE ASSESSMENT ORDER DATED 18.03.20 15 PASSED BY THE ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 2 - DY.CIT CIRCLE-5(3), AHMEDABAD, THE INSTANT APPEAL H AS BEEN FILED BEFORE US BY THE ASSESSEE WITH THE FOLLOWING GROUNDS:- 1.1 THE ORDER PASSED U/S.250 ON 23.06.2016 FOR A. Y. 2012-13 BY CIT(A), ABAD-5, UPHOLDING THE ADDITION OF RS.26, 93,750/- U/S.50C OF THE ACT, IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2. THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE EXPLANATI ONS FURNISHED AND THE EVIDENCE PRODUCED BY THE APPELLANT. THE OR DER PASSED BY CIT(A) IS NON-SPEAKING AND AMBIGUOUS. 2.1. THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THAT THE STAMP DUTY VALUATION OF THE AGRI CULTURAL LAND SOLD BY THE APPELLANT AS PER THE VALUE INTIMATED BY STAMP DUTY AUTHORITY, THOUGH THE DY.COLLECTOR SDV DIVL.-2, HAD INTIMATED THE RATE OF RS.2150/- PER SQ.METER. 2.2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDIN G THE STAMP DUTY VALUATION OF THE PROPERTY SOLD BY THE APPELLAN T AT RS.86,93,750/- THOUGH THE DY.COLLECTOR SDV DIVI.-2, HAD ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 3 - INTIMATED THE RATE OF RS.2150/- PER SQM. BOTH THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE THAT IN VIEW OF THE CERTI FICATE ISSUED BY STAMP DUTY VALUATION DIVISION II, AHMEDABAD, THERE WAS NO SUCH DIFFERENCE OF THE STAMP DUTY VALUATION AT RS.86,93, 750/-. 3.1. WITHOUT PREJUDICE TO ABOVE AND IN THE ALTERNAT IVE, BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT REFERRING THE V ALUATION OF THE PROPERTY SOLD TO DVO. 2. THE BRIEF FACTS OF THE CASE IS THIS THAT THE AS SESSEE HAS SOLD LAND FOR A CONSIDERATION OF RS.60 LAKHS ON 23/09/2011 DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEE HAS SHOWN THE SAID V ALUE FOR THE PURPOSE OF CAPITAL GAIN TAX LIABILITY. DURING THE ASSESSME NT PROCEEDINGS, THE RELEVANT DETAILS BEING THE CONCERNED SALE-DEED ALON G WITH THE WORKING OF CAPITAL GAINS ARISING WERE CALLED FOR WHICH WAS DU LY SUBMITTED. IT APPEARED FROM THOSE RECORDS THAT THE ASSESSEE EXECU TED THE SALE-DEED OF THE AGRICULTURAL LAND FOR AN AMOUNT OF RS.60,00,000 /- AND STAMP DUTY OF RS.4,26,000/- WAS PAID. IT IS FURTHER SEEN THAT TH E ASSESSEE HAS SHOWN THE SAID CONSIDERATION OF RS.60,00,000/- FOR THE PURPOS E OF CAPITAL GAIN TAX LIABILITY. DETAILS IN RELATION TO THE PROPERTY WAS ALSO GATHERED FROM THE SUB-REGISTRAR OFFICE (AHMEABAD-3), MEMNAGAR, AHMEDA BAD WHEREFROM IT IS EVIDENT THAT THE VALUE OF THE SAID PROPERTY H AS BEEN DETERMINED BY THE STAMP REGISTRAR FOR SUCH SALE AT RS.86,93,750/ -. ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 4 - DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FI LED TWO LETTERS DATED 31.01.2015 FOLLOWED BY 11.3.2015 SUBMITTING T HE MARKET PRICE (JANTRI VALUE) FIXED BY AT RS.86,93,750/- FOR THE L AND IN QUESTION @RS.3.125 PER SQ.METER AS RELIED UPON BY THE AO IS NOT CORRECT. IN RESPONSE TO THE APPLICATION DATED 03.02.2014 MADE B Y THE ASSESSEE IN REGARD TO THE JANTRI VALUE OF THE LAND IN QUESTION THE SUPERIOR AUTHORITY BEING THE DEPUTY COLLECTOR STAMP DUTY VALUATION DEP ARTMENT CONFIRMED THE RATE OF THE SAID AGRICULTURAL LAND IS @ RS.2,15 0/- PER SQ.METER AND THUS THE TOTAL VALUE OF SAID PROPERTY BECOMES RS.59,81,3 00/- WHICH HE HAD SOLD FOR A CONSIDERATION OF RS.60,00,000/-. THE ASSESSEE FURTHER SUBMITTED THAT HE HAD ACCEPTE D THE VALUATION MADE BY THE SUB-REGISTRAR AND NOT REFERRED THE DISP UTE TO THE VALUATION DEPARTMENT ON APPREHENSION THAT SUCH CAN CAUSE DELA Y IN REGISTRATION OR EVEN CANCELLATION WHILE ANSWERING THE QUERY PUT TO HIM BY THE AO TO THIS EFFECT. HOWEVER, SUCH SUBMISSION WAS NOT ACCEPTED BY THE AO IN THE ABSENCE OF SUPPORTING EVIDENCE AND ON THE BASIS OF THE VALUE ASSESSED BY THE SUB-REGISTRAR AT RS.86,93,750/- AS AGAINST T HE SALE VALUE TAKEN BY THE ASSESSEE AT RS.60,00,000/- THE DIFFERENCE WORKE D OUT TO RS.26,93,750/- AS SHORT TERM CAPITAL GAIN ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNDERSTATEMENT OF SALE PROCE EDS OF THE IMMOVABLE PROPERTY U/S.50C OF THE ACT. ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 5 - 3. IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) JUST IFIED THE ACTION OF THE AO IN CONSIDERING THE VALUATION OF THE PROPERTY PROVIDED BY THE SUB- REGISTRAR OFFICE BUT NOT JUSTIFIED MAKING ADDITION OF DIFFERENCE BETWEEN THE CONSIDERATION SHOWN BY THE ASSESSEE AND CONSIDE RATION PROVIDED BY THE SUB-REGISTRAR OFFICE. HE THUS DIRECTED THE AO TO RECALCULATE THE CAPITAL GAIN ON THE BASIS OF CONSIDERATION PROVIDED BY THE SUB-REGISTRAR OFFICE AND RESTRICT THE ADDITION TO THE DIFFERENCE BETWEEN CAPITAL GAIN SHOWN BY THE ASSESSEE AND THE CAPITAL GAIN RECALCUL ATED BY THE AO. 4. THE LD.ADVOCATE APPEARING FOR THE ASSESSEE SUBMI TTED BEFORE US THAT THE AO HAS NOT TAKEN INTO CONSIDERATION THE AS SESSMENT MADE BY DEPUTY COLLECTOR, STAMP DUTY VALUATION DEPARTMENT W HEREIN THE VALUATION OF THE PROPERTY WAS ASSESSED AT RS.2,150 PER SQ.MTR. AND THE AO ERRED IN FACT IN CONSIDERING THE VALUATION MADE BY THE SUB-REGISTRAR TO THE TUNE OF RS.3,125/- PER SQ.MTR. THOUGH THE D EPUTY COLLECTOR , STAMP DUTY VALUATION DEPARTMENT IS SUPERIOR OFFICER THAN THAT OF THE SUB- REGISTRAR. THE LD.AR PRAYED FOR REFERRING THE MAT TER TO THE DVO FOR VALUATION OF THE PROPERTY AS ON THE DATE OF SALE I. E. 23.09.2011 AND THE MATTER BE RESTORED TO THE FILE OF AO FOR ADJUDICATI ON DE NOVO ON THE BASIS OF THE REPORT OF THE DVO AND TO PASS A SPEAKING ORD ER AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 6 - 5. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DER PASSED BY THE AO AND RAISED HIS OBJECTION TO THE SUBMISSION MADE BY THE LD.AR. 6. WE HAVE HEARD THE RIVAL CONTENTIONS MADE BY THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE SHORT POINT INVOLVED IN THE CASE IS THIS THAT WHETHER THE PROVI SIONS OF SECTION 50C HAS BEEN APPLIED IN TRUE SPIRIT UNDER THE ORDER IMPUGNE D. THE PROVISION OF SECTION 50C IS NARRATED BELOW FOR READY REFERENCE: SECTION 50C. (1) WHERE 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 OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORI TY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSE S OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER : [ PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXING THE AM OUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESS ED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEM ENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATI ON FOR SUCH TRANSFER: PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEEN RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DR AFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER.] ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 7 - FOLLOWING THIRD PROVISO SHALL BE INSERTED AFTER THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 50C BY THE FINANCE ACT, 2018, W.E.F. 1-4- 2019 : PROVIDED ALSO THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESS ABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED ONE H UNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESU LT OF THE TRANSFER SHALL, FOR THE PURPOSES OF SECTION 48 , BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICER TH AT THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET 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 REFERE NCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS M ADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND (6) OF SECTI ON 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 MODIF ICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATIO N TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF S ECTION 16A OF THAT ACT. IT APPEARS FROM THE RECORDS THAT THE AO HAD RELIED UPON THE VALUATION ASSESSED BY THE SUB-REGISTRAR AND NOT THE ASSESSMENT MADE BY ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 8 - THE DEPUTY COLLECTOR, SDV DIVL.-2 IN SPITE OF THAT BEING RELIED UPON BY THE ASSESSEE. THE AO OUGHT TO HAVE MADE DELIBERATI ON ON THIS ABSENCE OF WHICH SHOWS THE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE TO THE ASSESSEE. HOWEVER, IT IS ALSO THE DUTY INCUMBENT UPON THE AO TO MAKE A REFERENCE TO THE DDO IN TERMS OF THE PROVISIONS OF THE ACT. 7. THIS ISSUE HAS ALREADY BEEN EXAMINED IN THE J UDGEMENT OF AGRA TRIBUNAL IN THE CASE OF RAJ KUMARI AGARWAL VS. DY.C IT (2014) 150 ITD 597 RELIED UPON BY THE LD.AR. IN THE CASE OF RAJ KUMAR AGARWAL (SUPRA) THE LD.TR IBUNAL HELD THAT ONCE THE ASSESSEE CLAIMS THAT THE ACTUAL MARKE T VALUE OF THE LAND IN QUESTION IS LESS THAN THE STAMP DUTY VALUATION ADOP TED BY THE AUTHORITIES, IT IS INCUMBENT UPON THE AO TO REFER THE VALUATION OF THE SAID LAND TO THE DVO. THE DECISION IS SQUARELY APPLICABLE IN THE IN STANT CASE. IT IS RELEVANT TO MENTION THAT THE ABOVE JUDGEMEN T OF ITAT AGRA FOLLOWED THE JUDGEMENT PASSED BY THE HONBLE HIGH C OURT OF CALCUTTA IN THE CASE OF SUNIL KUMAR AGRAWAL VS. CIT (GA NO.3686 /2013 IN ITAT NO.221/2013) IN ITAT NO.221/2013 WHERE THEIR LORDS HIPS OBSERVED AS FOLLOWS:- ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 9 - ....WE ARE OF THE OPINION THAT THE VALUATION BY TH E DEPARTMENTAL VALUATION OFFICER, CONTEMPLATED UNDER SECTION 50C, IS REQUIRED TO AVOID MISCARRIAGE OF JUSTICE. THE LEGISLATURE DID N OT INTEND THAT THE CAPITAL GAIN SHOULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DISTRICT SUB-REGISTRAR FOR THE PURPO SE OF STAMP DUTY. THE LEGISLATURE HAS TAKEN CARE TO PROVIDE ADE QUATE MACHINERY TO GIVE A FAIR TREATMENT TO THE CITIZEN/TAXPAYER. T HERE IS NO REASON WHY THE MACHINERY PROVIDED BY THE LEGISLATURE SHOUL D NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MADE BY THE LEARNED ADVOCATE REPRESE NTING THE ASSESSEE, WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW, THE ASSESSING OFFICER, DISCHARGING A QUASI JUDICIAL FUN CTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREA TMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PRO VIDED BY LAW.' AS THERE IS NO BINDING JUDICIAL PRECEDENT CONTRARY TO WHAT HAS BEEN HELD BY THE HONBLE CALCUTTA HIGH COURT, AS ABOVE, THE ESTEEMED VIEWS OF THEIR LORDSHIPS EVENTHOUGH FROM NON JURISDICTION AL HIGH COURT, BINDS US AS WELL. WE FIND THAT IT IS MANDATORY ON THE PART OF THE AO TO REFER THE MATTER TO THE DVO BEFORE MAKING ASSESSMENT UNDER TH E FACTS AND CIRCUMSTANCES OF THE CASE IN HAND AS DECIDED BY THE LD.TRIBUNAL MENTIONED ABOVE AND THE HONBLE HIGH COURT AS WELL WHICH THE AO HAS ITA NO.2052/AHD /2016 SHRI NISHITH BABULAL SHAH VS. DCIT ASST.YEAR 2012-13 - 10 - FAILED TO DO AND WE DEEM IT FIT AND PROPER TO REMI T THE MATTER TO THE FILE OF THE AO FOR ADJUDICATION OF THE MATTER DE NOVO UP ON MAKING REFERENCE TO THE DVO AND COMPLETE THE ASSESSMENT ACCORDINGLY. WE MAKE IT CLEAR WHILE DOING SO THE AO SHALL GIVE AN OPPORTUNITY TO THE ASSESSEE TO CONFRONT THE AO WITH COGENT EVIDENCE SHOWING THE VA LUATION RELIED UPON BY THE AO ASSESSED BY THE SUB-REGISTRAR IS NOT SUST AINABLE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 17 / 0 5 / 201 8 SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 17/ 05/2018 0+..) , .)../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 12 3 / CONCERNED CIT 4. 3 ( ) / THE CIT(A)-5, AHMEDABAD 5. 67 8 )2 , + 2 . , 1 / DR, ITAT, AHMEDABAD 6. 8 :; < * / GUARD FILE. / BY ORDER, & 6 //TRUE COPY // / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD