Shri Ramubhai S. Ahir, Surat V. The Income Tax Officer, Ward-1(2)(5), Surat

ITA 2160/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9850 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 17-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B P K
• Assessee Lawyers: RASESH SHAH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Reassessment proceedings
• Section: 143(3); 50C; 147; 148

Judgement Text

RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 1 OF 9 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER . . ./ I.T.A. NO.2160/AHD/2016 [ [ / ASSESSMENT YEAR : 2012-13 RAMUBHAI S . AHIR, 501-A, AMBANAGAR, CHOWKY SHERI, UDHNA MAGDALLA ROAD, SURAT 395 007. [PAN: AKUPA 3766 B] VS. THE INCOME TAX OFFICER, WARD-1(2)(5), SURAT 395 001. APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI RASESH SHAH CA /REVENUE BY SHRI B.P.K.PANDA SR.DR / DATE OF HEARING: 0 6 . 0 5 .201 9 /PRONOUNCEMENT ON: 10 .0 5 .2019 /O R D E R PER SUDHANSHU SRIVASTAVA, JM: 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (IN SHORT THE CIT (A)) DATED 14.06.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. 2. THE BRIEF FACTS OF THE CASE ARE THAT AS PER THE INFORMATION AVAILABLE WITH THE DEPARTMENT THE ASSESSEE HAD ENTERED INTO CERTAIN PROPERTY TRANSACTIONS FOR THE PERIOD UNDER CONSIDERATION RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 2 OF 9 AND HAD NOT SHOWN THE CAPITAL GAINS ARISING FROM SUCH TRANSACTION IN HIS RETURN OF INCOME. THE ASSESSING OFFICER RECORDED REASONS FOR ESCAPEMENT OF INCOME AND INITIATED PROCEEDINGS U/S.147 OF THE INCOME TAX ACT, 1961 [HEREINAFTER CALLED THE ACT]. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED ON 28.03.2014 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. 2.1 THE ASSESSING OFFICER, DURING THE COURSE OF REASSESSMENT PROCEEDINGS, NOTICED THAT THE ASSESSEE ALONG WITH HIS WIFE AND FOUR SONS HAD SOLD ANCESTRAL AGRICULTURAL LAND SITUATED AT VILLAGE BAMROLI ADMEASURING 13606 SQ.MTRS FOR TOTAL CONSIDERATION OF RS.4,13,00,000/- VIDE SALE DEED REGISTRATION NO. SRT/2/UDN/13222 EXECUTED ON 06.09.2011. THE ASSESSING OFFICER ALSO NOTICED THAT THE SUB-REGISTRAR HAD ADOPTED THE VALUE OF IMPUGNED PROPERTY AT RS.6,87,10,300/- AS AGAINST THE SALE CONSIDERATION OF RS.4,13,00,000/- AS SHOWN BY THE ASSESSEE. THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTICE AND AFTER CONSIDERING THE ASSESSEES REPLY, RELYING ON THE PROVISIONS OF SECTION 50C OF THE ACT, THE TAXABLE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.47,16,905/- BY THE ASSESSING OFFICER (AO). RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 3 OF 9 2.2 BEING AGGRIEVED, THE ASSESSEE APPROACHED THE LEARNED FIRST APPELLATE AUTHORITY WHO DISMISSED THE ASSESSEES APPEAL. NOW THE ASSESSEE HAS APPROACHED THIS TRIBUNAL (ITAT) AND HAS CHALLENGED THE ADDITION MADE U/S 50C OF THE ACT BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE ASSESSING OFFICER HAS ERRED IN ASSUMING JURISDICTION U/S 147 BY ISSUING NOTICE U/S 148 OF THE I.T.ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.47,16,905/- ON ACCOUNT OF LONG TERM CAPITAL GAIN U/S 50C OF I.T.ACT, 1961. 3. IT IS THEREFORE PRAYED THAT ASSESSMENT FRAMED U/S 143(3) R.W.S. 147 OF THE ACT MAY KINDLY BE QUASHED AND/OR THE ADDITION MADE BY ASSESSING OFFICER CONFIRMED BY LD. CIT(A) T(A) MAY PLEASE BE DELETED. 4. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 3. AT THE OUTSET, THE LEARNED AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT GROUND NO.1 CHALLENGING THE ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT BY THE ASSESSING OFFICER WAS NOT BEEN PRESSED, ACCORDINGLY THE GROUND NO.1 IS DISMISSED AS NOT PRESSED. RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 4 OF 9 3.1 WITH RESPECT TO GROUND NO.2, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE IMPUGNED PROPERTY WAS AGREED TO BE SOLD FOR A TOTAL CONSIDERATION OF RS. 4,13,00,000/- VIDE REGISTERED SALE AGREEMENT NO.10529 DATED 21.07.2010. IT WAS FURTHER SUBMITTED THAT THE SALE PRICE DETERMINED IN THE IMPUGNED SALE AGREEMENT WAS DETERMINED ON THE BASIS OF JANTRI VALUE PREVAILING ON THE DATE OF AGREEMENT I.E. 21.07.2010 AND FURTHER THAT THE TERMS OF PAYMENT OF THE SALE CONSIDERATION WAS ALSO AGREED UPON IN THE SAID SAME AGREEMENT. THE LEARNED AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT AN AMOUNT OF RS.1,14,00,000/- WAS PAID BY CHEQUE AS PART PAYMENT TOWARDS THE SALE CONSIDERATION AT THE TIME OF SIGNING OF THE SALE AGREEMENT ITSELF. IT WAS ALSO SUBMITTED THAT IN TERMS OF THE CONDITIONS IN THE SALE AGREEMENT, THE SALE DEED WAS TO BE EXECUTED ONLY ON THE RECEIPT OF THE TOTAL SALE CONSIDERATION AND, THEREFORE, IT WAS ONLY AFTER RECEIVING THE FULL PAYMENT THAT THE ASSESSEE HAD EXECUTED THE SALE DEED ON 06.09.2011. 3.2 IT WAS FURTHER SUBMITTED BY THE LD. AR THAT AT THE TIME OF EXECUTION OF THE SALE DEED THE JANTRI VALUE HAD CHANGED AND THE PROPERTY WAS VALUED AT RS.6,87,10,300/- FOR THE PURPOSES OF STAMP DUTY VALUATION BUT THE FACT REMAINED THAT THE ACTUAL RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 5 OF 9 CONSIDERATION WAS ONLY RS.4,13,00,000/- WHICH WAS DULY REFLECTED IN THE RETURN OF INCOME AND LONG TERM CAPITAL GAIN WAS CALCULATED THEREON. 3.3 THE LEARNED AUTHORISED REPRESENTATIVE ALSO SUBMITTED THAT THIS ENHANCEMENT IN THE VALUATION WAS BEYOND THE CONTROL OF THE ASSESSEE AND FURTHER THAT IT WAS NOT ALLEGED THAT THE ASSESSEE HAD RECEIVED ANY AMOUNT OVER AND ABOVE THE SALE CONSIDERATION AS MENTIONED IN THE AGREEMENT OF SALE. THE LEARNED AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT FINANCE ACT, 2016 HAD INSERTED PROVISOS TO SECTION 50C OF THE ACT WHICH WERE EFFECTIVE FROM 01.04.2017 WHEREIN IT HAS BEEN PROVIDED THAT WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER. IT WAS SUBMITTED THAT THIS PROVISO WAS TO BE APPLIED 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 DRAFT OR BY USE OF ELECTRIC CLEARING SYSTEM THROUGH A BANK ACCOUNT ON OR BEFORE THE DATE OF AGREEMENT FOR RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 6 OF 9 TRANSFER. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT BOTH THESE CONDITIONS WERE FULFILLED IN THE CASE OF ASSESSEE. IT WAS FURTHER SUBMITTED THAT THIS AMENDMENT THE SECTION 50C, ALTHOUGH, SAID TO BE EFFECTIVE FROM 01.04.2017 WAS HELD TO BE RETROSPECTIVE IN NATURE BEING EFFECTIVE FROM 01.04.2003. RELIANCE WAS PLACED ON THE ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT IN ITA NO.1237/AHD/2013 VIDE ORDER DATED 30.09.2016 IN THIS REGARD. A COPY OF THE SAID ORDER WAS PLACED ON RECORD. FURTHER RELIANCE WAS PLACE ON ANOTHER ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF RAHUL G. PATEL VS. DCIT IN ITA NO.2767/AHD/2016 VIDE ORDER DATED 26.09.2018 WHEREIN THE ITAT AHMEDABAD HAD FOLLOWED ITS EARLIER ORDER IN THE CASE OF DHARAMSHIBHAI SONANI VS. ACIT(SUPRA) IN ITA NO.1237/AHD/2013 VIDE ORDER DATED 30.09.2016. RELIANCE WAS ALSO PLACED ON ANOTHER ORDER IN THE CASE OF ITO VS. KANUBHAI NATHABHAI PATEL IN ITA NO.527/AHD/2017 VIDE ORDER DATED 18.07.2018 WHEREIN ALSO THE ORDER IN THE CASE DHARAMSHIBHAI SONANI WAS FOLLOWED. IT WAS PRAYED THAT THE ASSESSEES APPEAL DESERVED TO SUCCEED ON MERITS. 4. IN RESPONSE, THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE PLACED RELIANCE ON THE ORDERS OF THE LOWER RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 7 OF 9 AUTHORITIES BUT COULD NOT CONTROVERT THE EFFECT THAT THE ISSUE STOOD COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF ITAT AHMEDABAD BENCH WHEREIN IT HAS BEEN HELD THAT THE PROVISOS TO SECTION 50C WERE TO BE TAKEN AS BEING RETROSPECTIVE AND WERE TO BE DEEMED TO HAVE TAKEN EFFECT FROM 01.04.2003. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. THE FACTS OF THE CASE ARE NOT IN DISPUTE AND AFTER HAVING PERUSED BOTH THE AGREEMENT TO SALE AS WELL AS THE REGISTERED SALE DEED WE DO NOT FIND ANY APPARENT CONTRADICTIONS BETWEEN THE TWO SET OF DOCUMENTS IN SO FAR AS THE QUANTUM OF CONSIDERATION IS CONCERNED. WE ALSO NOTE THAT THE REGISTERED SALE DEED MAKES A MENTION OF THE AGREEMENT TO SELL AND DULY RECORDS THAT AN AMOUNT OF RS.1,14,00,000/- HAD ALREADY BEEN PAID TO THE SELLER/ASSESSEE AT THE TIME OF EXECUTION OF THE AGREEMENT TO SELL. WE ALSO NOTE THAT THERE IS NO INFERENCE BY THE DEPARTMENT THAT AN AMOUNT MORE THAN THE SALE CONSIDERATION AS SHOWN IN THE AGREEMENT TO SELL AND/OR THE SALE DEED HAD EXCHANGED HANDS. THUS, THE ONLY QUESTION REMAINING FOR OUR CONSIDERATION IS WHETHER THE ASSESSEE IS ENTITLED TO THE BENEFIT OF PROVISOS TO SECTION 50C OF THE ACT WHICH AS PER THE FINANCE ACT 2016 WAS TO TAKE EFFECT FROM 01.04.2017. ADMITTEDLY, THE YEAR UNDER CONSIDERATION IS ASSESSMENT YEAR 2012-13 AND IF THE RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 8 OF 9 AMENDMENT IS HELD TO BE COMING INTO FORCE FROM 01.04.2017 THEN THE ASSESSEE WILL NOT GET THE BENEFIT OF PROVISOS. HOWEVER, THE CO-ORDINATE BENCHES IN AHMEDABAD IN A NUMBER OF CASES HAVE HELD THAT THIS AMENDMENT WAS TO BE TAKEN AS BEING RETROSPECTIVE IN EFFECT WITH EFFECT 01.04.2003. THE LEAD CASE IN THIS REGARD IS DHARAMSHIBHAI SONANI VS. ACIT (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE PROVISOS TO SECTION 50C WERE EFFECTIVE FROM 01.04.2003. THE DEPARTMENT HAS NOT PRODUCED ANY JUDGMENT OR ORDER TO THE CONTRARY AND, THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE CO-ORDINATE BENCH OF AHMEDABAD IN (1) DHARAMSHIBHAI SONANI VS. ASST. CIT[2016] [ITA NO.1237/AHD/2013] (TRIB. AHMEDABAD); (2) SHRI RAHUL G. PATEL VS. THE DY. CIT., CIRCLE-1(2), [2018] [ITA NO.2767/AHD/2016] (TRIB. AHMEDABAD); & (3) THE ITO, WARD- 2(2), VS. SHRI KANUBHAI NATHABHAI PATEL, [2018] (ITA NO.527/AHD/2017) (TRIB. AHMEDABAD), WE HOLD THAT SINCE THE AMENDMENT TO SECTION 50C IS RETROSPECTIVE IN NATURE, THE ASSESSEE WILL BE ENTITLED TO RELIEF IN THE PRESENT APPEAL. ACCORDINGLY, WE RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO VERIFY AS TO WHETHER THE REGISTERED AGREEMENT TO SALE AS CLAIMED BY THE ASSESSEE WAS ACTUALLY EXECUTED ON 06.09.2011 AND THE PARTIAL SALE CONSIDERATION OF RS.1,14,00,000/ WAS RECEIVED THROUGH BANKING CHANNELS. IF THESE TWO CLAIMS OF THE ASSESSEE STAND VERIFIED, THE ASSESSING OFFICER RAMUBHAI S AHIR VS. ITO, WARD-1(2)(5), SURAT/ITA NO.2160/AHD/2016/A.Y.: 2012-13 PAGE 9 OF 9 WILL, THEREAFTER, FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, ADOPT THE STAMP DUTY VALUATION AS ON 06.09.2011. WITH THESE TERMS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION DE NOVO AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRESENT HIS CASE. THUS, GROUND NO.2 STANDS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10.05.2019. SD/- SD/- (VIKRAM SINGH YADAV) (SUDHANSHU SRIVASTAVA) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 10 TH MAY , 2019/ 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