Shri Prakashbhai Prahladbhai Gami, Surat V. The Income tax Officer,Ward-6(3), Surat

ITA 2167/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73072 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 26-02-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: VIKRAM V SHAH
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO.2167/AHD/2010 A.Y. 2006-07 PRAKASHBHAI PRAHLADBHAI GAMI, C/O MADHV & ASSOCIATES CHARTERED ACCOUNTANTS, S-124/125, BELGIUM SQUARE, OPP. LINEAR BUS STAND, NEAR DELHI GATE, SURAT. PAN: ADSPP 6520F VS ITO, WARD 6(3), SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.C. MATHEWS, SR.D.R., ASSESSEE(S) BY : SHRI VIKRAM V. SHAH, A.R. / DATE OF HEARING : 26/02/2014 / DATE OF PRONOUNCEMENT: 26/02/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M THE ORDER OF LEARNED CIT(A)-IV, SURAT, DATED 16.02.2010 AND THE GROUNDS RAISED ARE REPRODUCED BELOW: 1. THAT THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FACTS IN THE CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCO UNT OF NOTIONAL RENT OF RS.4485 U/S. 23 OF THE IT ACT. 2. THAT THE LEARNED CIT(APPEALS) ERRED IN LAW AND O N FACTS IN CONFIRMING THE ADDITION OF RS.4,37,223/- U/S. 69B AS UNEXPLAINED I NVESTMENT BEING DIFFERENCE IN VALUATION ADOPTED BY STAMP DUTY AUTHORITY AND AC TUAL PURCHASE PRICE OF THE PROPERTY. 3. THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACT S IN PARTLY CONFIRMING THE ADDITION OF RS.31681/- ON ACCOUNT OF PERSONAL USE B EING 20% OF (MOBILE BILL EXP. RS.16599, OFFICE EXP. 65506, PETROL EXP. RS.43 ,254 AND TELEPHONE EXP. RS.33,048/-). ITA NO.2167/AHD/2010 PRAKASHBHAI PRAHALADBHAI GAMI VS. ITO, SURAT. FOR A.Y. 2006-07 - 2 - 2. AT THE OUTSET, LEARNED AR, MR. VIKRAM V. SHAH HA S STATED NOT TO PRESS GROUND NOS. 1 & 3. THESE GROUNDS BEING NOT PR ESSED; HENCE DISMISSED. NOW, WE ARE LEFT WITH GROUND NO.2 WHICH IS IN RESPECT OF AN ALLEGED UNEXPLAINED INVESTMENT HAVING THE DIFFERENC E IN THE VALUATION AS ADOPTED FOR THE PURPOSE OF STAMP DUTY PAYMENT. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) DATED 05.12.2008 WERE THAT THE AS SESSEE IN INDIVIDUAL CAPACITY IS IN THE BUSINESS OF JOB WORK OF DIAMOND. THE ASSESSEE HAD PURCHASED AGRICULTURAL LAND AT MAGOB, SURAT. THE PU RCHASED VALUE OF THE LAND AS DISCLOSED BY THE ASSESSEE WAS RS.4,81,000/- WHEREAS THE SUB- REGISTRAR HAS VALUED THE PROPERTY AT RS.26,67,115/- . ACCORDING TO AO, THE ASSESSEE HAD SHOWN LOWER VALUE OF THE PROPERTY SO THE PROVISIONS OF SECTION 69B BEING UNEXPLAINED INVESTMENT IN PROPERT Y WERE INITIATED. AS PER AO, THE JANTRI RATES ARE FIXED ON FACTORS LIKE ROAD FACILITY AND DEVELOPMENT OF THE AREA, THEREFORE, THE ASSESSEE HA D MADE UNACCOUNTED INVESTMENT IN THE PURCHASE OF THE PROPERTY. THE AO WAS AWARE THAT FEW DECISIONS, NAMELY, SMT. AMAR KUMAR SURANI VS. CIT ( 226 ITR 344), CIT VS. SHIV KAMI CO. PVT. LTD. (159 ITR 71), K.P. VARGHESE (131 ITR 597), CIT VS. KISHANKUMAR & OTHERS (215 CTR 18) WER E IN FAVOUR OF THE ASSESSEE BUT ACCORDING TO HIM THOSE WERE RELATED TO THE PERIOD PRIOR TO THE INSERTION OF SECTION 50C OF IT ACT WHICH WAS INTROD UCED W.E.F. 1.4.2003. BY APPLYING THE PROVISIONS OF SECTION 50 C, THE DIF FERENCE IN THE VALUE AT RS.4,37,223/- (1/5 SHARE OF THE ASSESSEE) WAS ASSES SED. 4. WHEN THE MATTER WAS CARRIED BEFORE LEARNED CIT(A ), IT WAS OPINED THAT THE VALUE AS PER THE STAMP VALUATION WAS HIGHE R THAN THE VALUE ITA NO.2167/AHD/2010 PRAKASHBHAI PRAHALADBHAI GAMI VS. ITO, SURAT. FOR A.Y. 2006-07 - 3 - DISCLOSED IN THE INCOME TAX DEPARTMENT. THERE WAS N O ATTEMPT TO CHALLENGE OR PROTEST THE VALUATION FIXED FOR STAMP DUTY PURPOSE. RATHER, THE ASSESSEE HAD PAID THE STAMP DUTY INSTEAD OF AGI TATING THE AMOUNT OF STAMP. HENCE, THE ACTION OF THE AO WAS UPHELD. 5. WE HAVE HEARD BOTH THE SIDES. THE ADMITTED FACTU AL POSITION IS THAT THIS IS A CASE WHERE THE ASSESSEE HAS PURCHASED THE PROPERTY. THIS IS NOT A CASE WHERE THE ASSESSEE HAS SOLD THE PROPERTY AS PR ESCRIBED IN SECTION 50- C, WHICH SAYS THAT WHERE THE CONSIDERATION RECEIVED AS A RESULT OF THE TRANSFER OF A CAPITAL ASSET IS LESS THAN THE VALUE ASSESSED FOR STAMP VALUATION THEN FOR THE PURPOSE OF SECTION 48 THE DI FFERENCE SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RE CEIVED ON SUCH TRANSFER. IN SUPPORT OF THIS LEGAL PROPOSITION, FEW CASE LAWS CITED ARE AS UNDER: 1. DCIT VS. VIRJIBHAI KALYANBHAI KUKADIA, (2012) 2 6 TAXMANN.COM 13 (AHD). 2. DCIT VS. VALLABHBHAI (2012) 27 TAXMANN.COM 306 ( AHD.) 5. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE A RE OF THE VIEW THAT SINCE THE PROVISIONS OF SECTION 50C HAVE WRONGLY BE EN INVOKED IN THE CASE OF THE ASSESSEE; THEREFORE, THE ADDITION OF BA D DIFFERENCE IN THE VALUATION WAS WRONGLY MADE. RESULTANTLY, GROUND NO. 2 IS HEREBY ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (T.R. MEENA) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED /02/2014 PRABHAT KR. KESARWANI, SR. P.S. ITA NO.2167/AHD/2010 PRAKASHBHAI PRAHALADBHAI GAMI VS. ITO, SURAT. FOR A.Y. 2006-07 - 4 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD