Shri Jitendra Gamanlal Gandhi, Surat V. The Dy.CIT.,Circle-3, Surat

ITA 2203/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9082 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Assessee Lawyers: M K PATEL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA NOS.689/AHD/2011 & 2203/AHD/2013 (ASSESSMENT YEAR:2007-08) JITENDRA GAMANLAL GANDHI 3/622, KARVA ROAD, NAVAPURA, SURAT 395 003 APPELLANT VS. DCIT, CIRCLE-2, AAYKAR BHAVAN, MAJURA GATE, SURAT 395 001 RES PONDENT PAN: ABCPG0820H /BY ASSESSEE : SHRI M. K. PATEL, A.R. /BY REVENUE : SHRI SAMIR VAKIL, SR. D.R. /DATE OF HEARING : 23.02.2017 /DATE OF PRONOUNCEMENT : 27.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO ASSESSEES APPEALS FOR ASSESSMENT YEAR 20 07-08 ARISE AGAINST CIT(A)- II, SURATS SEPARATE ORDERS DATED 24.12.2010 AND 22 .07.2013 IN APPEAL NOS. CAS- II/232/09-10/209 & CAS-II/07/2012-13, UPHOLDING ASS ESSING OFFICERS ACTION ITA NOS. 689/AHD/2011 & 2203/AHD/2013 (JITENDRA G. GANDHI VS. DCIT) A.Y. 2007-08 2 MAKING QUANTUM ADDITION OF RS.15,36,283/- AFTER APP LYING SECTION 50C OF THE ACT AS WELL AS IMPOSING THE CONSEQUENTIAL PENALTY O F RS.3,44,743/-; RESPECTIVELY IN PROCEEDINGS U/S.143(3) & SECTION 271(1)(C) OF TH E INCOME TAX ACT, 1961, IN SHORT THE ACT. 2. RELEVANT FACTS INVOLVED IN THESE TWO CASES ARE I N A NARROW COMPASS. THE ASSESSEE SOLD THREE PROPERTIES AT UDHNA UDHYOGNAGAR SAHAKARI SANGH, SURAT IN THE RELEVANT PREVIOUS YEAR STATING AGREEMENT VALUES OF RS.1,60,000/-, RS.3,20,000/- & RS.3,50,000/-; RESPECTIVELY AS AGAI NST STAMP PRICE THEREOF RS.5,48,800/-, RS.10,92,200/- & RS.7,17,700/-. THE ASSESSING OFFICER INVOKED SECTION 50C OF THE ACT TO MAKE REFERENCE TO THE DVO WHO IN TURN REPORTED TOTAL DIFFERENCE ON ACCOUNT OF NET LONG TERM CAPITAL GAIN S COMING TO RS.17,44,718/- AS AGAINST THAT STATED AT ASSESSEES BEHEST OF RS.2,08 ,435/- TO ARRIVE AT THE CONSEQUENTIAL IMPUGNED ADDITION. 3. THE CIT(A) CONFIRMS ASSESSING OFFICERS ACTION A S FOLLOWS: 3.1. THE APPELLANT VIDE HIS ABOVE SUBMISSION HAS A LSO ENCLOSED A COPY OF VALUATION REPORT DTD.23.9.2010 PREPARED BY A REGIST ERED VALUER. THE APPELLANT'S SUBMISSION IN SHORT IS THAT FOR DETERMINING THE VAL UE OF THE IMMOVABLE PROPERTIES, THE REGISTERED VALUER HAS TAKEN THE VAL UE OF THE LAND AS PER 'JANTRI RATE', BUT FOR THE BUILDING CONSTRUCTED ON THE LAND, HE HAS TAKEN IT VALUE AS SCRAP BECAUSE IT IS IN A DILAPIDATED CON DITION, WHEREAS THE DVO HAS TAKEN THE 'JANTRI RATE' FOR THE LAND AS WELL AS STR UCTURE. THE APPELLANT HAS ALSO STATED THAT SINCE THE DEED OF SALE OF THE ABOVE PRO PERTY THOUGH EXECUTED IS STILL PENDING FOR REGISTRATION WITH THE OFFICE OF SUB-REG ISTRAR, SURAT, THE VALUE OF THE ABOVE PROPERTY U/S 50C OF THE ACT, IS NOT VALID. AN OTHER GROUND OF THE APPELLANT IS THAT THE DVO HAS NOT PROVIDED COMPARABLE SALE OF .STRUCTURE IN THE NEARBY AREA/ AND HAS ACCEPTED JANTRI RATE' WITHOUT CONSID ERING THE FACTS OF THE CASE. THE ABOVE SUBMISSION HAS BEEN DULY, CONSIDERED BY M E AND I FIND THAT ALL THESE OBJECTIONS WERE RAISED BEFORE THE DVO ALSO AND THE SAME HAS BEEN DULY CONSIDERED BY HIM WHILE INSPECTING THE PROPERTY ON .07.10.2010. THE DVO, IN HIS REPORT HAS ALSO RECORDED THAT PHOTOGRAPHS OF TH E PROPERTY WERE SUBMITTED ITA NOS. 689/AHD/2011 & 2203/AHD/2013 (JITENDRA G. GANDHI VS. DCIT) A.Y. 2007-08 3 BY THE APPELLANT VIDE LETTER DTD. 14.9.2010. THUS, THE SAME HAS ALSO BEEN TAKEN INTO ACCOUNT BY THE DVO. IT IS FURTHER MENTIONED IN THE REPORT THAT ON THE DATE OF INSPECTION, MINOR CRACKS WERE FOUND TO HAVE DEVE LOPED DUE TO VIBRATION OF EARTHQUAKE. THE DVO HAS ALSO GIVEN REASONS FOR METH OD OF VALUATION ADOPTED BY HIM. HE HAS ALSO MENTIONED IN THE REPORT THAT PR OPOSED ESTIMATE WAS SENT TO THE APPELLANT VIDE HIS LETTER DTD.10.11.2010 INVITI NG OBJECTION IN WRITING BY 18.11.2006 AND ALSO FOR HEARING ON THE SAME DATE. T HE DVO HAS ALSO GIVEN HIS COMMENTS ON THE REGISTERED VALUER'S REPORT RELIED U PON BY THE APPELLANT. I, THEREFORE, FIND THAT THE OBJECTIONS TAKEN DURING TH E APPEAL ON THE VALUATION MADE BY THE DVO HAVE BEEN COMPREHENSIVELY DEALT BY HIM WHILE FINALIZING HIS REPORT DTD.18.11.2010. IN VIEW OF THE SAME, I DO NO T FIND ANY MERIT IN THE ARGUMENT OF THE APPELLANT AND REJECT THE SAME. I, A CCORDINGLY, DIRECT THE ASSESSING OFFICER TO COMPUTE LONG TERM CAPITAL GAIN ON THE PROPERTIES REFERRED TO THE DVO FOR VALUATION BY TAKING THE VALUE OF THE PROPERTY AS DETERMINED BY HIM IN HIS ABOVE REPORT DTD.18.11.2010. THE FIRST G ROUND OF APPEAL IS, THEREFORE, DISPOSED OF IN TERMS OF THE ABOVE DIRECTIONS. IN VI EW THAT THE MATTER.IN APPEAL REGARDING VALUATION OF IMMOVABLE PROPERTIES FOR COM PUTATION OF LONG TERM CAPITAL GAIN WAS REFERRED TO THE DVO, THE GROUND OF APPEAL NO.2 ALREADY STANDS DISPOSED OF WITH THE DIRECTION TO THE ASSESSING OFF ICER TO COMPUTE THE LONG TERM CAPITAL GAIN BY TAKING THE VALUE OF PROPERTIES AS D ETERMINED IN THE DVO'S REPORT. 4. WE HAVE HEARD RIVAL SUBMISSIONS. RELEVANT FINDI NGS STAND PERUSED. IT EMERGES IN THE COURSE OF HEARING THAT STAMP PRICE O F THE PROPERTY IN QUESTION IS VERY MUCH UNDER LITIGATION TILL THE TIME OF PASSING OF THE LOWER APPELLATE ORDER DATED 24.12.2010. WE NOTICE THAT SECTION 50C(2)(B) ENVISAGES THAT THE ASSESSING OFFICER MAY REFER ISSUE OF VALUATION OF A CAPITAL ASSET TO THE DVO IN CASE THE SAID STAMP PRICE IS NOT IN DISPUTE IN ANY APPEAL OR REVISION OR REFERENCE MADE BEFORE ANY OTHER AUTHORITY, OR THE HIGH COURT. RELEVANT FACTS NARRATED / EXTRACTED HEREINABOVE ALREADY INDICATE THAT SUCH A DISPUTE WAS VERY MUCH PENDING REGARDING CORRECTNESS OF THE STAMP PRICE IN QUESTION. WE THEREFORE DEEM IT APPROPRIATE IN LARGER INTEREST OF JUSTICE THAT T HE LD. CIT(A) NEEDS TO RE- ADJUDICATE THE IMPUGNED QUANTUM ISSUE AFRESH AS PER LAW AFTER GETTING UPDATE OF THE FINAL OUTCOME OF THE RELEVANT STAMP VALUE DISPU TE HEREINABOVE. WE ADOPT THE SAME COURSE OF ACTION IN CONSEQUENTIAL PENALTY APPEAL ITA ITA NOS. 689/AHD/2011 & 2203/AHD/2013 (JITENDRA G. GANDHI VS. DCIT) A.Y. 2007-08 4 NO.2203/AHD/2013 AS WELL AS THE SAME DOES NOT HAVE ANY LEGS TO STAND INDEPENDENTLY. 5. THESE TWO ASSESSEES APPEALS SUCCEED FOR STATIST ICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( PRADIP KUMAR KEDIA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDI CIAL MEMBER AHMEDABAD: DATED 27/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. !'# $%% , , / DR, ITAT, AHMEDABAD 6. #() / GUARD FILE. BY ORDER / , / ,