The ITO, Ward-3(2), Surat V. Shri Bharatbhai Kalyanbhai Malvia, Surat

ITA 2227/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89254 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 26-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO. 2227/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2008-2009 ITO, WARD - 3(2) SURAT. VS SHRI BHARTBHAI KALYANBHAI MALVIA FLAT NO.203, CENTRE POINT ANAND, MAHAL ROAD ADAJAN, SURAT. PAN : ACZPM 1630 P +, / (APPELLANT) -. +, / (RESPONDENT) REVENUE BY : SHRI M.K. SINGH, SR.DR ASSESSEE(S) BY : NONE / DATE OF HEARING : 26/03/2015 / DATE OF PRONOUNCEMENT: 10/04/2015 // O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER O F INCOME-TAX-II, SURAT DATED 28.6.2011. 2. THE SOLE GROUND OF APPEAL OF THE REVENUE READS U NDER: 1. ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A) HAS GROSSLY ERRED IN DELETING THE ADDITIO N OF RS.65,98,214/- BEING THE 1/3 RD SHARE OF THE APPELLANT IN THE LONG TERM CAPITAL GAIN ON SALE OF ANCESTRAL AGRICULTURAL LAND BY ADOPTING THE VALUE OF THE LAND AS DETERMINED BY THE VALUATIO N OFFICER UNDER SECTION 50C(2) OF THE I.T.ACT INSTEAD OF ACCEPTING THE JANTRI RATE PRESCRIBED FOR THE AREA SPECIALLY IN VIEW OF THE UR BANIZATION OF THE SAID AREA UNDERTAKEN BY THE STATE AUTHORITIES. ITA NO.2227/AHD/2011 2 3. BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS SOLD LAND MEASURING 7386 SQ.METERS FOR RS.45 LA KHS ON 27.8.2007. THE SALE DEED WAS REGISTERED WITH SUB-REGISTRAR, SU RAT 4, WHO VALUED THE PROPERTY AT RS.2,32,65,900/- AND THE ASSESSEE P AID STAMP DUTY OF RS.11,40,500/- ON THE SAID VALUE. THEREFORE, THE A O ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY SALE CONSIDERATION FOR DETERMINATION OF CAPITAL GAIN UNDER SECTION 48 OF THE ACT SHOULD NOT BE TAKEN AS RS.2,32,65,900/-. SINCE THE ASSESSMENT WAS GETTING TIME BARRED, THE AO COMPLETED THE ASSESSMENT TAKING THE SALE CONSIDE RATION OF LAND AT RS.2,32,65,900/-, AND ACCORDINGLY MADE ADDITION OF 1/3 RD OF THE CAPITAL DETERMINED AFTER DEDUCTING RS.11,40,500/- BEING INT EREST COST OF THE LAND WORKED OUT THE CAPITAL GAIN AT RS.65,98,214/- AND ADDED TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) OBSERVED THAT SINCE THE RE FERENCE UNDER SECTION 50C(2) OF THE ACT WAS MADE TO THE VALUATION OFFICER AT THE INSTANCE OF THE ASSESSEE, THE FAIR MARKET VALUE OF THE ABOVE PROPERTY DETERMINED BY THE VALUATION OFFICER BECOMES FULL VA LUE OF THE SALE CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CA PITAL GAIN UNDER SECTION 48 OF THE ACT. ACCORDINGLY, DIRECTED THE AO TO TAKE THE FAIR MARKET VALUE OF THE PROPERTY AS ON 7.9.2007 DETERMI NED BY THE VALUATION OFFICER, AS FULL VALUE OF SALE CONSIDERAT ION FOR COMPUTING THE CAPITAL GAIN FROM THE SALE OF THE PROPERTY IN QUEST ION, AND TO COMPUTE THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE ON T HE SAID BASIS, AND ACCORDINGLY, ALLOWED THE APPEAL OF THE ASSESSEE. 5. BEING AGGRIEVED BY THE SAID ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US BY TAKING THE ABOVE GROUND OF APPE AL. 6. THE DR SUPPORTED THE ORDER OF THE AO. ITA NO.2227/AHD/2011 3 7. THE AR OF THE ASSESSEE HAS FILED ADJOURNMENT PET ITION STATING THEREIN THAT SHRI DENNIS CHOKSI, WHO IS AUTHORIZED REPRESENTATIVE IN THE PRESENT APPEAL IS EXTENSIVELY BUSY IN ATTENDING THE TIME BARRED INCOME TAX MATTERS TO BE COMPLETED BEFORE 31/3/2015, AND HENCE APPEAL SHOULD BE ADJOURNED TO A LATER DATE AFTER 7/4/2015. AS THE BENCH FOUND THE REASON FOR ADJOURNMENT OF HEARING NOT BEING PLA USIBLE ONE, ADJOURNMENT PETITION WAS REJECTED, AND APPEAL OF TH E ASSESSEE WAS HEARD EX PARTE QUA THE ASSESSEE-RESPONDENT, AFTER CONSIDERING THE MATERIAL ON RECORD AND THE SUBMISSIONS OF THE DR. 8. AFTER CONSIDERING THE SUBMISSIONS OF THE DR, WE FIND THAT IN THE PRESENT CASE, THE ASSESSEE SOLD A PLOT OF LAND FOR CONSIDERATION OF RS.45 LAKHS AND THE STAMP DUTY WAS CHARGED ON THE VALUE O F RS.2,32,65,900/- . THE ASSESSEE OBJECTED BEFORE THE AO THAT THE STAM P DUTY VALUATION OF SUB-REGISTRAR, SURAT OF THE PROPERTY WAS MUCH HIGHE R THAN THE MARKET VALUE, AND THEREFORE, THE SAME SHOULD NOT BE CONSID ERED, AS THE FULL VALUE OF CONSIDERATION UNDER SECTION 48 OF THE ACT FOR COMPUTING THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. BEING S ATISFIED, THE AO REFERRED THE MATTER TO THE VALUATION OFFICER ON 28. 12.2010, BUT AS THE ASSESSMENT WAS GETTING TIME BARRED, HE COMPLETED TH E ASSESSMENT BY TAKING THE SALE CONSIDERATION AS THE VALUE DETERMIN ED BY THE SUB- REGISTRAR AT RS.2,32,65,900/-. THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE CIT(A) WHO DIRECTED THE AO TO TAK E THE SALE CONSIDERATION AS DETERMINED BY THE DVO, AND ACCORDI NGLY, COMPUTE THE CAPITAL GAIN. 9. DR CONTENDED BEFORE US THAT THE CIT(A) WAS NOT J USTIFIED IN DIRECTING THE AO TO TAKE THE VALUE AS DETERMINED BY THE DVO FOR COMPUTING THE CAPITAL GAINS IN THE INSTANT CASE. 10. WE FIND THAT SECTION 50C(2) PROVIDES THAT WHERE THE ASSESSEE CLAIMED BEFORE THE AO THAT THE VALUE ADOPTED OR ASS ESSED BY THE STAMP VALUATION AUTHORITY UNDER SUBSECTION (1) EXCEEDS TH E FAIR MARKET VALUE ITA NO.2227/AHD/2011 4 OF THE PROPERTY, ON THE DATE OF TRANSFER, THE AO MA Y REFER THE VALUATION OF THE CAPITAL ASSET TO THE VALUATION OFFICER, IN S UCH A SITUATION, THE LOWER OF VALUE DETERMINED BY THE DEPARTMENTAL VALUA TION OFFICER AND STAMP DUTY VALUATION OFFICER SHALL BE CONSIDERED AS CONSIDERATION ACCRUING TO THE ASSESSEE. SINCE IT HAS NOT BEEN D ISPUTED BY THE DR THAT THE VALUE OF THE PROPERTY DETERMINED BY THE DV O WAS LOWER THAN THE VALUE DETERMINED BY THE STAMP DUTY VALUATION OF FICER, THEREFORE, WE FIND THAT THERE IS NO INFIRMITY IN THE ORDER OF THE CIT(A) IN DIRECTING THE AO TO ADOPT THE VALUE DETERMINED BY THE DEPARTMENTA L VALUATION OFFICER, AS SALE CONSIDERATION OF THE PROPERTY FOR COMPUTING THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. THEREFORE, WE DISMISS T HIS GROUND OF APPEAL OF THE REVENUE. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 10 /04/2015