Ananad Rajendrakumar Patel, Ahmedabad V. ITO Ward-4(2)(1), Ahmedabad

ITA 2101/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0989 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-09-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 20-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Set aside
• Section: 143(3); 50C; 201

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY, JUDICIAL MEMBER SL. NO(S) ITA NO(S) ASSE T. YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 2101/AHD/2017 2014 - 15 ANAND RAJENDRAKUMAR PATEL, SHAN BUNGLOWS, NR. MEGHALAYA FLATS. NAVRANGPURA , AHMEDABAD. PAN NO. AMNPP1486A ITO , WARD - 4(2)(1) , AHMEDABAD 2 . 2102 /AHD/201 7 2014 - 15 ARCHANABEN RAJENDRAKUMAR PATEL, AHMEDABAD. PAN NO. ACMPP206 7J ITO , WARD - 4(2)(1) , AHMEDABAD. 3. 2103/AHD/2017 2014 - 15 SHARDABEN NATWARLAL PATEL, AHMEDABAD. PAN NO. ACMPP2064 N ITO , WARD - 4(2)(5) , AHMEDABAD. 4 . 2104 /AHD/201 7 2014 - 15 NATWARLAL P RABHUDAS PATEL, AHMEDABAD. PAN NO. ACMPP2063N D.C.I.T , CIRLCE - 4(2) , AHMEDABAD. ASSESSEE BY : SHRI MEHUL THAKKAR, A.R REVENUE BY : SHRI N.K. GOEL, SR. D.R / DA TE OF HEARING : 23/09/ 201 9 / DATE OF PRONOUNCEMENT : 17 /12/ 201 9 / O R D E R PER BENCH : THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE DIFFERENT ASSESSEE S AGAINST THE SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME - TAX 2 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 (APPEALS) - 4 , AHMEDABAD [ LD. CIT(A) IN SHORT] OF EVEN DATED 14/06/2017 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 19/12/2016, 16/12/2016 & 20/12/2016 RELEVANT TO ASSESSMENT YEAR (A.Y) 2014 - 15. ITA NO. 2101 /AHD/2017 FOR A.Y. 2014 - 15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. BOTH THE LD. A. O. HAS ERRED IN MAKING ADDITION OF RS. 1,63,776/ - U/S 56(2)(VII)(B)(II) OF THE ACT, 1961 AND LD. CIT(A) HAS ERRED IN CONFIRMING THE SAME EVEN THOUGH IT WAS BROUGHT TO THEIR NOTICE THAT THE AGREEMENT FOR PURCHASE OF PROPERTY IN QUESTION WAS ACTUALLY ENTERED IN TO WITH THE SELLER ON 10/06/2010 AND STAMP DUTY VALUE HAS TO BE RECKONED FROM THE DATE OF AGREEMENT FOR PURCHASE OF PROPERTY AND NOT FROM THE DATE OF REGISTRATION AS'PROVIDED IN THE LAW. 2. BOTH THE LD. A.O. AND LD. CIT(A) HNS ERRED IN NOT CONSIDERING (RATHER OVERLOOKED) THE C RUCIAL PART OF THE SUBMISSION DATED 02/12/2016 (VIDE PARA - 8 & 9 ANNEXURE - 5 & 6) ESTABLISHING THE INCLUSION OF SURVEY NO. 140/1,140/2 AND 140/3 BY WAY OF RE - CONVEYANCE DEED AND DECLARATION IN FAVOUR OF THE APPELLANT. 3. THE LD. CIT(A) HAS FURTHER ERRED IN LAW AND ON FACT IN NOT CONSIDERING THE FOLLOWING GROUNDS OF APPEAL RAISED BEFORE HIM ON THE GROUND THAT EFFECTIVE GROUND OF THE APPEAL IS AGAINST THE ADDITION OF RS. 1,63,776/ - . (A) THE LD. A.O. HAS ERRED IN LAW IN MAKING THE ADDITION OF RS. 2,18,368/ - FOR TH E YEAR UNDER CONSIDERATION AS THE PROVISIONS OF SECTION 56(2)(VII)(B)(II) INSERTED BY THE FINANCE ACT, 2013 WAS GIVEN ASSENT BY THE PARLIAMENT ON 10/05/2013 WHEREAS REGISTRATION FORMALITIES OF THE PROPERTY WERE COMPLETED ON OR BEFORE 10/05/2013. (B) THE L D. A.O. HAS ERRED IN LAW IN MAKING REVERSE CALCULATION FOR ARRIVING AT THE STAMP DUTY VALUATION BY APPLYING STAMP DUTY RATE @ 4.9% IS AGAINST THE LAW BECAUSE THE PROVISIONS OF SECTION OF SECTION 50C DOES NOT EMPOWER A.O. TO WORK OUT STAMP DUTY VALUATION BY MAKING REVERSE CALCULATION. IT IS MANDATORY FOR HIM TO TAKE THE VALUATION AS ADOPTED ASSESSED OR ASSESSABLE BY STAMP DUTY AUTHORITY. THE LD. A.O. OUGHT TO HAVE PROVIDED/FURNISHED THE COPY OF THE VALUATION FROM THE STAMP DUTY AUTHORITY TO THE APPELLANT WHEN IT WAS ASKED TO HIM VIDE REPLY DATED 15/12/2016 THAT THE ASSESSEE COULD REBUT THE MATTER ONLY ON RECEIPT OF THE STAMP DUTY VALUATION. HAD THE A.O. PROVIDED THE SAME, THE APPELLANT WOULD HAVE OBJECTED U/S 50C (2) OF THE ACT, TO REFER THE MATTER TO THE VALUATION OFFICER IF NOT AGREED WITH THE STAMP DUTY 'VALUATION. (C) THE LD. A.O. HAS ERRED IN MAKING SUCH ADDITION WHICH IS BASED ON DEEMING PROVISIONS OF THE LAW WHERE PAYMENTS FOR PURCHASE OF PROPERTY OVER AND ABOVE THE DOCUMENTS VALUE (REGISTRATION AMO UNT) LIAS NOT BEEN PROVED/ESTABLISHED BY THE A.O. (D) THE LD. A.O. HAS ERRED IN MAKING THE ADDITION OF RS. 2,18,3687 - FOR THE YEAR UNDER CONSIDERATION IN THE HANDS OF THE ASSESSEE WITHOUT TAKING COGNIZANCE OF FIRST PROVISO TO SECTION 56(2)(VII) R. W. S. 5 0C(2) OF THE TT ACT, WHERE THE PURCHASER ALSO HAS RIGHT TO REFER THE MATTER TO THE VALUATION OFFICER IN CASE STAMP DUTY VALUATION IS NOT ACCEPTABLE TO HIM. 3 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 THE LD. A.O. OUGHT NOT TO HAVE MADE SUCH IMPUGNED ADDITION U/S 56(2)(VII)(B)(II) IN THE HANDS OF TH E APPELLANT WITHOUT KNOWING THE QUANTUM OF ADDITION MADE IN THE HANDS OF SELLER U/S 50C OF THE IT ACT FROM HIS JIUISDICTIONAL OFFICER AS SECTION 56(2)(VII)(B)(II) AND SECTION 50C ARE INTERLINKED WITH EACH OTHER. 4. THE APPELLANT CRAVES LEAVE TO ADD, A LTER OR DELETE ANY GROUND EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. T HE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN ALL THE GROUNDS OF APPEAL IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO UNDER THE PROVISIONS OF SECTION 56(2)(VII )( B)(II) OF THE ACT. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND DRAWING HIS INCOME UNDER THE HEAD HOUSE PROPERTY, FROM THE PARTNERSHIP FIRM AND OTHER SOURCES. THE ASSESSEE IN THE YE AR UNDER CONSIDERATION HAS PURCHASED THE PROPERTY BEING AGRICULTURAL LAN D JOINTLY WITH OTHER CO - OWNERS V IDE REGISTRATION NO. 63694 DATED 8 MAY 2013. THE SHARE OF THE ASSESSEE IN THE LAND WAS 15% ONLY. THE ASSESSEE ALONG WITH OTHER CO - OWNERS PURCHASED THE IMPUGNED AGRICULTURAL LAND AT 45 LAKHS WHEREAS THE AO DETERMINED THE STAMP DUTY VALUE OF THE SAME AT 55 , 91 , 840 .00 BY DOING THE REVERSE CALCULATION I.E. STAMP DUTY/4.90% (2,74,000/4.90%). ACCORDINGLY, THE AO WORKED OUT THE DIFFERENCE BET WEEN THE ACTUAL PURCHASE CONSIDERATION VIZ A VIZ THE STAMP VALUATION AMOUNTING TO 1 0 , 91 , 840 .00 ( STAMP VALUE 55 , 91 , 840 .00 45 , 00 , 000 .00 ) AND PROPOSED TO MAKE THE ADDITION OF 1 , 63 , 776 .00 BEING 15% OF 10 , 91 , 840 .00 UNDER THE PROVISIONS OF SECTION 56( 2)(VII )( B)(II) OF THE ACT. 3.1 THE ASSESSEE BEFORE THE AO SUBMITTED THAT HE HAS EXECUTED NOTARISED BANAKHAT WITH DURGA RECALL INDUSTRIES PRIVATE LTD. (DRIPL) AND IT S DIRECTOR SHRI SANJAY SINGH FOR THE PURCHASE OF THE PROPERTIES BEARING SURVEY NUMBERS 139 TO 142 DATED 10 - 6 - 2010 BUT THE PAYMENT WAS MADE BY THE ASSESSEE ALONG WITH THE OTHER CO - OWNERS DATED 27 APRIL 2010 AND THE 1 ST MAY 2010. THE SAID BANAKHAT WAS SU BSEQUENTLY REGISTERED WITH THE SUB - R EGISTRAR , SANAND DATED 23 - 09 - 2010. THUS THE 4 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 PROVISO TO SECTION 56(2)(VII )( B)(II) OF THE ACT CANNOT BE ATTRACTED FOR THE YEAR UNDER CONSIDERATION. 3.2 HOWEVER, THE AO FOUND THAT IN THE SAID BANAKHAT THERE WAS NO MENTION ABOUT THE LAND BEARING SURVEY NUMBER 140 AS DISCUSSED ABOVE. AS PER THE AO THE IMPUGNED LA ND WAS REGISTERED V IDE SALE DEED NO. 63694 DATED 8 MAY 2013 AT A PRICE LESS THAN THE STAMP DUTY VALUE. ACCORDINGLY THE AO DISALLOWED THE CONTENTION OF THE ASSESSEE AND MADE THE ADDITION OF 1 , 63 , 776 .00 TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSE SSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNER CIT (A) SUBMITTED THAT THE LAND IN DISPUTE WAS PART AND PARCEL OF THE AGREEMENT DATED 10 JUNE 2010 WHICH WAS SUBSEQUENTLY REGISTERED WITH THE SUB - REGISTRAR, SANAND DATED 23 - 09 - 2010. ACCORDINGLY THE VALUE OF THE STAMP DUTY SHOULD BE TAKEN FROM THE DATE OF THE AGREEMENT I.E. 10 - 6 - 2010 AND NOT FROM THE REGISTRATION DATE. 4.1 THE PROVISIONS OF SECTION 56(2)(VII )( B)(II) OF THE ACT WAS INSERTED BY THE FINANCE ACT 2013 AND THE ASSENT FROM THE PARLIAMENT WAS OBTAINED DATED 10 MAY 2013 AND THE PROPERTY WAS ALSO REGISTERED ON 8 MAY 2013. THEREFORE, THE AMENDED PROVISIONS CANNOT BE APPLIED IN THE CASE ON HAND. 4.2 THERE IS NO PROCEDURE TO WORK OUT THE VALUATION FOR THE STAMP DUTY ON THE BASIS OF REVERSE CALCULATION AS MADE BY THE AO. AS SUCH THE AO WAS UNDER THE OBLIGATION TO TAKE THE EX ACT STAMP DUTY VALUATION WHICH SHOULD HAVE ALSO BEEN PROVIDED TO THE ASSESSEE SO THAT IN CASE OF ANY OBJECTION, THE ASSESSEE COULD HAVE REQUESTED TO REFER THE MATTER TO THE DVO AS PROVIDED UNDER SECTION 50 C(2) OF THE ACT. 5 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 4.3 THE AO HAS NOT MADE ANY REF ERENCE TO THE VALUE ADOPTED AS SALE CONSIDERATION IN THE HANDS OF THE VENDOR UNDER THE PROVISIONS OF SECTION 50 C OF THE ACT. AS SUCH THE AO BEFORE MAKING ANY ADDITION UNDER THE PROVISIONS OF SECTION 56(2)(VII )( B)(II) OF THE ACT SHOULD HAVE CALLED FOR THE VALUE ADOPTED AS SALE CONSIDERATION IN THE HANDS OF THE VENDOR IN PURSUANCE TO THE PROVISIONS OF SECTION 50 C OF THE ACT. BUT THE AO HAS NOT DONE SO. 5. THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE CONFIRMED THE ORDER OF THE AO B Y OBSERVING AS UNDER: THE AO HAS PASSED VERY SPEAKING ORDRE AND CONSIDERED EACH AND EVERY CONTENTIOS RAISED BY THE APPELLANT PREOCEEDINGS, WHICH HAVE BEEN REPRODUCED ABOVE. THE APPELLANT S CONTENTION IS THAT THE SALE WAS MADE BY BANAKHAT IN SEPTEMBER 20 10, THEREFORE. PROVISION OF SECTION 56(2)(VII) (B)(II) ARE NOT APPLICABLE IS NOT ACCEPTABLE FOR THE REASON THAT IN THE AFORESAID BANAKHAT DESCRIPTION OF THE PROPERTY UNDER CONSIDERATION HAS NOT BEE MENTIONED ON PAGE NO.6 OF THE SAID BANAKHAT DESCRIPTION OF THE FOLLOWING PROPERTIES MENTIONED SURVEY NO.139/2, 129/3, 142/3 AND 143. THERE IS NO MENTION OF PROPERTY BEARING SURVEY NO.140/1 AND 140/3 WHICH IS UNDER CONSIDERATION. THEREFORE, THE APPELLANT S THIS CONTENTION IS FOUND FACTUALLY INCORRECT, HENCE IT IS REJECTED. THE PARTIES TO THE BANAKAHAT DATED 23.09.2010 AND PARTIES TO THE SALE DEED FOR LAND BEARING SURVEY NO.140/1 & 140/3 ARE ALSO DIFFERENT. THUS THE BANAKHAT OF SEPEMBER 2010 IS NOT RELEVANT TO DECIDE THE ISSUE. THESE FACTS CLEARLY PROVE THAT THE A.O . HAS CORRECTLY APPLIED PROVISIONS OF SECTION 56(2)(VII ) (B)(II) OF THE ACT AND MADE THE ADDITIONS OF RS.1,63,776/ - IN THE HAND OF THE APPELLANT. THUS, ADDITION MADE BY THE A.O. ARE CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 279 AND SUBMITTED THAT THE ASSESSEE SINCE BEGINNING NEGOTIATED TO PURCHASE THE ENTIRE PIECE OF LAND BEARING SURVEY NO. 139 TO 142. BUT THE TITLE OF THE LAND BEARING SURVEY NO. 140 WAS NOT CLEAR. THEREFORE THE DETAILS OF THE SAME WERE NOT MENTIONED IN THE 6 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 BANAKHAT DATED 23 - 09 - 2010. HOWEVER, THE SELLERS/VENDORS HAVE ASSURED THE BUYER TO SELL THE IMPU GNED LAND. FOR THIS PURPOSE, THERE WERE MANY DEEDS PREPARED BETWEEN THE BUYERS, SELLERS AND THE OCCUPANTS OF THE LAND BEARING SURVEY NO. 140. 6.1 THE LEARNED AR BESIDES THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW PRAYED TO REFER THE MATTER TO THE DV O FOR DETERMINING THE FAIR MARKET VALUE OF THE IMPUGNED LAND. 7. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THE LAND BEARING SURVEY NO. 140 WAS NOT OWNED BY THE BY THE VENDOR IS AS DISCUSSED ABOVE. THEREFORE, THERE WAS NO POINT TO HAVE THE VALID AGR EEMENT BETWEEN THEM. THE LEARNER DR ALSO SUBMITTED THAT THERE IS NO DISCUSSION ON CERTAIN CONTENTIONS RAISED BY THE ASSESSEE BEFORE THE LD. CIT - A. THEREFORE HE REQUESTED TO REFER THE MATTER TO THE LD. CIT - A FOR FRESH ADJUDICATION. HOWEVER, THE LD. DR VEHEM ENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 8. IN THE REJOINDER, THE LD. AR RAISED NO OBJECTION IF THE MATTER IS SET ASIDE TO THE LD. CIT - A FOR FRESH ADJUDICATION. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE TITLE OF THE LAND BEARING SURVEY NO. 140 WAS NOT CLEAR AND THEREFORE IT WAS NOT POSSIBLE FOR THE VENDOR TO ENTER THE LEGAL AGREEMENT WITH THE BUYER. AS SUCH THERE WAS NO DESCRIPTIO N IN THE BANAKHAT DATED 23 SEPTEMBER 2010 ABOUT THE LAND BEARING SURVEY NO. 140. THEREFORE WE ARE NOT IN AGREEMENT WITH THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE. ACCORDINGLY, WE HOLD THAT THERE IS NO REASON TO TAKE THE STAMP DUTY VALUATION REL ATING TO THE PERIOD 2010 WHEN THE BANAKHAT WAS EXECUTED. AS SUCH THE VALUE OF THE DATE OF REGISTRATION OF SUCH LAND I.E. 8 - 5 - 2013 WAS CORRECTLY VALUED BY THE AUTHORITIES BELOW. ACCORDINGLY, WE CONFIRM THE ORDER OF THE AUTHORITIES BELOW. 7 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 9.1 HOWEVER, BEFORE PARTING, WE FIND THAT THERE WERE MANY MORE CONTENTIONS RAISED BY THE ASSESSEE BEFORE THE LEARNED CITA WHICH HAVE NOT BEEN ADJUDICATED BY HIM. THESE CONTENTIONS ARE VERY MUCH RECORDED IN THE ORDER OF THE LEARNED CIT - A. 9.2 ACCORDINGLY WE FIND THAT THE ORDER PASSED BY THE LEARNED CIT (A) IS NON - SPEAKING AS IT DOES NOT COVER ALL THE CONTENTIONS RAISED BY THE ASSESSEE. THEREFORE, WE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE RE - EXAMINED BY THE LEARNED CIT (A) AFTER CONSIDERING THE SUBMISSION OF THE A SSESSEE AS PER THE PROVISIONS OF LAW. THEREFORE WE ARE RESTORING THE ISSUE TO THE FILE OF THE LEARNED CIT - A FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF LAW. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. IN THE RE SULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. COMING TO THE ITA NOS. 2102/AHD/2017, 2103/AHD/2017 AND 2104/AHD/2017, THE APPEALS FILED BY THE DIFFERENT ASSESSEE. 10. AT THE OUTSET WE NOTE THAT, THE ISSUES RAISED IN TH E PRESENT APPEALS ARE IDENTICAL TO THE ISSUES RAISED IN ITA NO. 2101/AHD/2017 IN THE CASE OF SHRI ANAND RAJENDRA KUMAR PATEL WHICH WE HAVE ALLOWED PARTLY FOR THE STATIS TICAL PURPOSES. AS THERE IS NO CHANGE IN THE FACTS OF THE PRESENT APPEALS VIZ A VIZ IN THE CASE OF SHRI ANAND RAJENDRA KUMAR PATEL, THEREFORE RESPECTFULLY FOLLOWING THE SAME, WE ALLOW ALL THE APPEALS PARTLY FOR THE STATISTICAL PURPOSES. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. 8 ITA NO S . 2101 - 2104/AHD/2017 A.Y. 2014 - 15 11. IN THE COMBINED RESULT, ALL THE APPEALS OF THE DIFFERENT ASSESSEE S ARE PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 17 /12/ 201 9 AT AHMEDABAD. SD/ - SD/ - - SD - - SD - ( MADHUMITA ROY ) JUDICIAL MEMBER ( WASEEM AHMED ) ACCOUNTANT MEMBER (TRUE COPY) AHMEDABAD ; DATED 17 / 12 /20 1 9 MANISH