Amar Induatries, Unjha V. The Income tax Officer,Ward-2, Patan

ITA 2281/AHD/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6165 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Fair market value
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. AMAR INDUSTRIES, C/O. SHRI DASRATHBHAI M. PATEL, 59, DHANJINAGAR SOCIETY, NR. EYE HOSPITAL, UNJHA, PAN: AADFA3021E (APPELLANT) VS THE ITO, WARD - 2, PATAN. (RESPONDENT) REVENUE BY : S H RI K. MADHUSUDAN , SR. D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 15 - 03 - 2 017 DATE OF PRONOUNCEMENT : 20 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBE R : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR IS ES FROM ORDER OF THE CIT(A), GANDHINAGAR DATED 16 - 07 - 2012 IN APPEAL NO. CIT(A)/GNR/122/2011 - 12 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 2281 / A HD/20 12 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 2281 /AHD/20 12 A.Y. 2009 - 10 PAGE NO M/S. AMAR INDUSTRIES VS. ITO 2 2. THE ASSESSEE HAS RAI SED FOLLOWING GROUNDS OF APPEAL: - 1. THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE ACTION OF LEARNED AO IN COMPUTING THE LONG TERM CAPITAL GAIN AT RS. 35,23,153/ - AND SHORT TERM CAPITAL GAIN AT RS.10,02,821/ - 2. THAT, ON FA CTS AND IN LAW, THE ENTIRE ADDITION IS UNWARRANTED ON THE CORRECT INTERPRETATION OF PROVISIONS OF SECTION 50C OF THE ACT. 3. THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE ADDITION OF INTEREST OF RS.14,060/ - FROM ELECTRICI TY BOARD, WHICH IS NEITHER ACCRUED NOR RECEIVED BY THE APPELLANT. 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 63,070/ - WAS FILED ON 20/09/2009. THERE A F TER , THE CASE OF THE ASSESSEE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143( 2) OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS SOLD FACTORY LAND, BUILDING ALONG WITH OTHER ASSETS. THE STAMP DUTY WAS PAID AT THE TIME OF REGISTRATION OF DOCUMENT BEFORE THE SUB - REGISTR AR ADOPTING THE VALUE OF LAND AT RS. 59 , 08 , 160/ - . SUBSEQUENTLY, T HE ASSESSEE WAS NOT SATISFIED WITH THE VALUE OF LAND ADOPTED BY THE SUB - REGISTRAR FOR THE PURPOSES OF STAMP DUTY, THEREFORE, HE DISPUTED THIS MATTER BEFORE THE DY. COLLECTOR, STAMP VALUATIO N AUTHORITY. THE DY. COLLECTOR HAD REDUCED THE SALE VALUE OF LAND AND BUILDING TO THE AMOUNT OF (RS. 3988315+687800) RS. 4646115/ - AS AGAINST RS. 5908160/ - . ACCORDINGLY , THE ASSESSING OFFICER HAD WORKED OUT THE LONG TERM CAPITAL GAIN IN THE CASE OF SALE OF LAND AT RS. 35,23,153/ - AND SHORT TERM CAPITAL GAIN ON SALE OF BUILDING AND MATERIAL AT RS. 10 , 02 , 821/ - BY ADOPTING THE VALUE RE - DECIDED BY THE DY. COLLECTOR ON THE REFERENCE MADE BY THE ASSESSEE AGAINST THE I.T.A NO. 2281 /AHD/20 12 A.Y. 2009 - 10 PAGE NO M/S. AMAR INDUSTRIES VS. ITO 3 DETERMINATION OF VALUE FOR PAYMENT OF STAMP DUTY BY THE SUB - REGISTRAR. 4. AGGRIEVED AGAINST THE DECISION OF ASSESSING OFFICER , THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) HAD SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 4. 4 I HAVE GONE THROUGH T HE FACTS OF THE CASE, THE PROVISIONS OF SECTION 50C(2), THE REPORT OF THE AO AND SUBMISSIONS OF THE APPELLANT. I AGREE WITH THE AO THAT THE ASSESSEE'S CLAIM BEFORE ANY ASS ESSING OFFICER THAT THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY THE STAM P VALUAT ION AUTHORITY UNDER SUB - SECTION (1) EXCEEDS THE FAIR, MARKET VALUE OF THE PROPERTY AS ON THE D ATE OF TRANSFER IS MAINTAINABLE AS PER THE PROVISIONS ONLY IF - , 'THE VALUE SO ADOPTED OR ASSESSED (OR ASSESSABLE) BY : THE STAMP VALUATION AUTHORITY UNDE R SUB SE CTION (1) HAS NOT BEEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BEFORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT FROM THE RECORD, IT IS SEEN THAT THE '.ASSESSES VIDE LETTER DATED 13/10/2011 HAD CHALLENGED THE VALUATION ADOPTED O F RS 59,08,1 60/ - BY THE SUB REGISTRAR UNJHA BEFORE DEPUTY COLLECTOR STAMP DUTY MEHSA NA. I N RESPONSE VIDE LETTER DATED 21/10/2011, IT WAS INTIMATED THAT THE FAIR MARKET VALUE OF THE PROPERTY WAS 46,46,205/ - . WORKING OF THE FAIR MARKET VALUE AS WELL AS JUSTI FICATION FOR THE SAME WAS ALSO PROVIDED BY THE SAID LETTER. VALUATION OF TH E PROPERTY INTIMATED BY THE SAID LETTER BY DEPUTY COLLECTOR, MEHSANA WAS ADOPTED FOR COMPUTATION OF CAPITAL GAIN BY AO. THE FACT THAT THE - ASSESS.EE. HAD DISPUTED THE VALUATION . BEFORE THE HIGHER AUTHORITIES' WAS 'ADMITTED BY IT IN ITS SUBMISSION BEFOR E THE AO VIDE LETTER DATED 15.11.2011, PARA 3 (II); AS POINTE D OUT BY THE AO IN HIS RE MAND REPORT REPRODUCED EARLIER IN THIS ORDER . THE AFORESAID FACT SHOWS THAT THE VALUATION OF T HE PROPERTY HAS BEEN DISPUTED BY THE ASSESSEE BEFORE DY. COLLECTOR, MEHSANA WHICH HAS ALSO RESULTED IN SUBSTANTIAL REDUCTION IN MARKET VALUE ADOPTED FOR THE PROPERTY. I.T.A NO. 2281 /AHD/20 12 A.Y. 2009 - 10 PAGE NO M/S. AMAR INDUSTRIES VS. ITO 4 ONCE, THE APPELLANT HAS EXERCISED ITS OPTION AS ABOVE, IN - VIEW OF THE PROVISIONS OF SEC TION 50C(2)(B); NO REFERENCE TO VALUATION OFFICER IS REQUIRED TO BE MADE IN THIS CASE; AND THE AO WAS PERFECTLY JUSTIFIED IN ADOPTING THE FINAL VALUATION ADOPTED FOR THE PURPOSE OF STAMP DUTY FOR WORKING OUT THE CAPITAL GAINS. THE DECISIO NS OF THE AO IN TH IS REGARD ARE UPHELD AND THE G ROUNDS OF APPEAL ARE DISMISSED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES. WE CONSIDERED THAT PROVISION S OF SECTION 50C ARE FULLY APPLICABLE TO THE CASE OF THE ASSESSEE. WE NOTICED THAT THE ASSESSEE HAD ALREADY CHALLENGED THE DECISION OF SUB - REGISTRAR OF ADOPTING VALUE OF THE ASSETS ON THE BASIS OF PAYMENT OF STAMP DUTY BEFORE THE DY. COLLECTOR WHO HAD REDUCED THE SALE CONSIDERATIONS AS MENTIONED SUPRA IN THIS ORDER. UNDER THESE CIRCUMSTANCES , THE LD. CIT(A) HE LD THAT IN VIEW OF THE PROVISIONS OF SECTION 50( 2)(B ) NO FURTHER REFERENCE TO VALUATION OFFICER IS REQUIRED. AFTER CONSIDERING THE FACTS AND FINDINGS OF THE LD. CIT(A) W E DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LD. CIT(A). GROUND NO. 3 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER NOTICED THAT A SSESSEE FIRM FAILED TO DISCLOSE THE INTEREST OF RS. 16,872/ - EARNED FROM THE COMPANY UTTAR GUJARAT VIJ AS ON 31 - 03 - 2009. IN THIS CONNECTION, T HE ASSESSEE EXPLAINED THAT RIGHT IN RESPECT OF ELECTRICITY CONNECTION DEPOSIT ET C. WERE TRANSFERRED TO THE BUYER VIDE SALE DEED EXECUTED ON 10/02/2009. THE ASSESSING OFFICER HAS NOT A CCEPTED THE EXPLANATION OF THE ASSESSEE MADE THE ADDITION OF I.T.A NO. 2281 /AHD/20 12 A.Y. 2009 - 10 PAGE NO M/S. AMAR INDUSTRIES VS. ITO 5 THE ABOVE AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE . THE A SSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 5. 2 HAVING GONE THROUGH THE FACTS OF T HE CASE, IT IS EVIDENT THAT ALL RIGHTS WITH RESPE CT TO THE CAPITAL ASSETS AND DEPOSITS WITH ELECTRICITY BOARD HAD BEEN TRANSFERRED EFFECTIVE FROM THE DATE OF EXECUTION OF SALE DEED I.E. 10/2/2009. ANY INTEREST ACCRUED OR INCOME FROM THE ASSETS BEFORE THE DATE OF TRANSFER LEGALLY BELONGS TO THE APPELLANT. THE AO IS PERFECTLY JUSTIFIED TO TAX THE ACCRUED INTEREST TILL THAT DATE IN THE HAN DS OF THE APPELLANT. THE GROUND OF APPEAL IS , THEREFORE, DISMISSED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS. WE NOTICED THAT THE CAPITAL ASSETS AND DEPOSITS OF THE ASSESSE E WITH THE ELECTRICITY BOARD HAD BEEN TRANSFERRED WITH EFFECT FROM THE DATE OF EXECUTION OF SALE DEED I.E. 10/02/2009. WE OBSERVED FROM THE FACTS AS ELABORATED IN THE DECISION OF THE LD.CIT(A) THAT THE INTEREST WAS ACCRUED IN THE HAND OF THE ASSESSEE B EFORE THE DATE OF TRANSFERRED OF THE ASSETS TO THE VENDEE , THEREFORE, WE DISINCLINED TO INTERFERE IN THE DECISION OF THE LD.CIT(A). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 0 4 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /04 /2017 I.T.A NO. 2281 /AHD/20 12 A.Y. 2009 - 10 PAGE NO M/S. AMAR INDUSTRIES VS. ITO 6 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,