Shri Kirankumar N.Champaneriya, Surat V. The Income tax Officer,Ward-2(1), Surat

ITA 2256/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0295 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 05-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 2256/AHD/2013 / ASSESSMENT YEAR : 2006-07 SHRI KIRANKUMAR N. CHAMPANERIYA, B-501, RUDRAUSH RESIDENCY, NEAR TGB HOTEL, OPP. JANKI ROW HOUSE, LA SAVANI ROAD, SURAT-395009 PAN : ADNPC 5478 N VS ITO, WARD 2 (1), SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MS. ARTI N. SHAH, AR REVENUE BY : SHRI JAMESH KURIAN, SR DR / DATE OF HEARING : 15/09/2016 / DATE OF PRONOUNCEMENT: 18/10/2016 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT DATE D 03.07.2013 FOR AY 2006-07. 2. THE ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY OF RS.10,19, 990/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX A CT. 3. BRIEFLY STATED THE FACTS ARE AS FOLLOWS:- ITA NO. 2256/AHD/2013 SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO AY : 2006-07 2 ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT WAS CO MPLETED VIDE ORDER DATED 18.12.2009, MAKING ADDITION OF RS.54,69,840/- ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF LAND. ON FURTHER APPE AL, THE CIT(A) DIRECTED THE AO TO TAKE THE FAIR MARKET VALUE OF THE PROPERT Y REFERRED TO FOR VALUATION U/S 50C(2) OF THE ACT AS DETERMINED BY VALUATION OF FICER AT RS.71,22,770/- AS ON 09.03.2006 AND COMPUTE THE LONG TERM CAPITAL GAIN FROM SALE OF THE ABOVE PROPERTY ACCORDINGLY. AFTER GIVING EFFECT OF THE CIT(A)S ORDER, THE ADDITION CONFIRMED STOOD AT RS.45,01,285/-. SUBSEQ UENT TO THE AFORESAID CIT(A)S ORDER, PENALTY U/S 271(1)(C) OF THE ACT WA S COMPLETED, IMPOSING A PENALTY OF RS.10,19,990/-, BEING THE 100% OF THE TA X SOUGHT TO BE EVADED, FOR FURNISHING INACCURATE PARTICULAR OF INCOME AND THER EBY CONCEALING THE INCOME TO THE EXTENT OF RS.45,01,285/-. ON FURT HER APPEAL, THE PENALTY IMPOSED WAS CONFIRMED BY THE CIT(A). THE ASSESSEE, BEING AGGRIEVED, IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. AT THE TIME OF HEARING BEFORE US, IT WAS POINTED OUT BY THE LD. COUNSEL THAT, IN THE QUANTUM APPEAL, THE TRIBUNAL HAS GIVEN PARTIAL RELI EF TO THE ASSESSEE BY DIRECTING THE ASSESSING OFFICER TO COMPUTE THE CAPI TAL GAINS BY TAKING THE VALUE OF THE LAND IN QUESTION AT RS.67 LACS INSTEAD OF THE VALUE DETERMINED BY THE DVO AT RS.71,22,720/-, VIDE ORDER DATED 20.1 1.2015 IN ITA NO.1213/AHD/2011 COPY OF THE ORDER IS PLACED ON R ECORD. 4.1. THIS CASE IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH IN THE CASE OF SHRI KIRANKUMAR N.CHAMPANERIYA VS. I TO IN ITA ITA NO. 2256/AHD/2013 SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO AY : 2006-07 3 NO.1213/AHD/2011 FOR AY 2006-07, ORDER DATED 20/11/ 2015. IN THIS CASE, THE TRIBUNAL HELD AS UNDER:- 6. THE ASSESSEES SECOND ARGUMENT DISPUTES VALUAT ION OF THE LAND SOLD DETERMINED BY THE DVO AS RS.71,22,720/- @ RS.88 PER SQ.MT. AS AGAINST THE ONE STATED IN THE SALE DEED @ RS.55.60 SQ.MT. COMIN G TO RS.45 LACS. HE SUBMITS THAT THERE ARE VARIOUS DEPRECIATING FACTORS INVOLVED IN THE INSTANT CASE I.E. PENDENCY OF TITLE DISPUTE, SUDA RESERVAT ION FOR GARDENING ETC. AND THE FACT THAT THE COMPARABLE SALE INSTANCES INVOLVE D MUCH SMALLER PORTIONS OF LAND THEN THE ONE IN QUESTION. THE REVENUE STRONGL Y SUPPORTS THE DVOS VALUATION AS CONFIRMED IN THE LOWER APPELLATE PROCE EDINGS. IT EMANATES FROM THE CASE FILE THAT THE DVO HAS ALREADY REDUCED THE JANTRI PRICE FROM RS.80,94,000/- TO RS.71,22,720/- (SUPRA). HE HAS AL READY GRANTED RELIEF TO ASSESSEE MORE THAN THAT @ 10% OF THE ORIGINAL VALUE . HE SEEMS TO HAVE TAKEN LOWEST VALUE OF THE ABOVE STATED FOUR SALE INSTANCE S (SUPRA). IT DOES NOT REQUIRE A MUCH LENGTHIER DISCUSSION THAT DETERMINAT ION OF FAIR MARKET VALUE OF ANY PROPERTY IS PURELY A SUBJECTIVE ISSUE TO BE ADJUDICATED KEEPING IN MIND LOCATION, APPROACH THERETO AND ALL OTHER CORROBORAT IVE FACTORS. WE TAKE INTO ACCOUNT THIS TRITE PROPORTION FOR APPLYING THUMB RU LE IN ACTS OF THE INSTANT CASE AND HOLD IN LARGER INTEREST OF JUSTICE THAT VA LUE OF THE ASSESSEES LAND SOLD DESERVES TO BE FIXED AT RS.67 LACS. IT IS MADE CLE AR THAT THIS PART REDUCTION IN VALUE IS DUE TO THE ABOVE STATED THREE DEPRECIATING FACTORS OF PENDENCY OF LEGAL DISPUTES, SUDA RESERVATION AND THE FACT THAT COMPARA BLE SALE INSTANCES INVOLVED SMALLER PLOTS OF LAND. WE ACCORDINGLY DIR ECT THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAINS BY TAKING THE VALUE OF THE LAND IN QUESTION AT RS.67 LACS INSTEAD OF THAT DETERMINED BY THE DVO AT RS.71,22,720/-. THE ASSESSEES ARGUMENTS ARE PARTLY ACCEPTED. 4.2. THE LD.AR OF THE ASSESSEE RELIED ON THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. FORTUNE HOTELS AN D ESTATES (P.) LTD. REPORTED IN (2014) 52 TAXMANN.CON 330 (BOMBAY) AND DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. MADAN TH EATRES LTD. REPORTED IN (2014) 44 TAXMANN.COM 382 (CALCUTTA). LD.AR OF TH E ASSESSEE ALSO RELIED ON THE DECISION OF THE COORDINATE BENCH (ITAT D BENC H AHMEDABAD) IN THE ITA NO. 2256/AHD/2013 SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO AY : 2006-07 4 CASE OF CHIMANLAL MANILAL PATEL VS. ACIT IN ITA NO. 508/AHD/2010 FOR AY 2006-07, ORDER DATED 22/06/2012, WHEREIN THE TRIBUN AL HELD AS UNDER:- 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. IT IS A FACT THAT THE ADDITION HAS BEEN MADE BY THE AO IN THE REVISIONARY PROCEEDINGS. THE ADDITION HAS BEEN MADE ON THE BAS IS OF PROVISIONS OF SECTION 50C. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE HAS RECEIVED CONSIDERATION OVER AND ABOVE THAN THAT DECLARED IN THE SALES DEED . THE AO HAS NOT DISPUTED THE CONSIDERATION RECEIVED BY THE ASSESSEE . THE ADDITION HAS BEEN MADE ON THE BASIS OF DEEMING PROVISIONS OF SECTION 50C. THE ASSESSEE HAS FURNISHED ALL THE FACTS OF SALE, DOCUMENTS/MATERIAL BEFORE THE AO. THE AO HAS NOT DOUBTED THE GENUINENESS OF THE DOCUMENTS/DE TAILS FURNISHED BY THE ASSESSEE. ONLY BECAUSE THE ASSESSEE AGREED TO THE ADDITIONS BECAUSE OF THE DEEMING PROVISIONS IT CANNOT BE CONSTRUED TO BE FIL ING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE ASSES SEE AGREED TO ADDITION ON THE BASIS OF VALUATION MADE BY THE STAMP VALUATION AUTH ORITY CANNOT BE A CONCLUSIVE PROOF THAT THE SALE CONSIDERATION AS PER THE SALE AGREEMENT IS SEEMED TO BE INCORRECT AND WRONG. IN VIEW OF THESE FACTS WE ARE OF THE CONSIDERED VIEW THAT PENALTY CANNOT BE LEVIED ON TH E BASIS OF DEEMING PROVISION. WE ACCORDINGLY DELETE THE SAME. 4.3. WE HAVE GONE THROUGH THE IMPUGNED ORDERS AND C ITATION FILED BY THE LD.AR. IN OUR OPINION, FACTS ARE SIMILAR TO THE AF ORESAID CASE AND WE ARE INCLINED TO FOLLOW THE DECISION OF OUR COORDINATE B ENCH AND THE SAME IS SQUARELY COVERED. THEREFORE, PENALTY LEVIDED U/S.2 71(1)(C) OF THE ACT IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 18TH OCTOBER, 2016 AT AHMEDABAD. SD/- SD/- PRADIP KUMAR KEDIA (ACCOUNTANT MEMBER) MAHAVIR PRASAD (JUDICIAL MEMBER) AHMEDABAD; DATED 18/10/2016 *BIJU T. ITA NO. 2256/AHD/2013 SHRI KIRANKUMAR N. CHAMPANERIYA VS. ITO AY : 2006-07 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- .. 12.09.2016/7.10.16 (2 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15.09.2016/13.10.16 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.10.16 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER