Rajeshkumar K. Nandani, Rajkot V. Income Tax Officer, Ward-1(2)(2), Rajkot

ITA 23/RJT/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9246 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DV LALCHANDANI
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 201; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT RAJKOT BENCH BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER . ITA NO. 23/RJT/2018 / ASSTT. YEAR: 2007-08 SHRI RAJESH KUVERJIBHAI NANDANI C/O. M/S. THA TULSHIDAS NARSHIDAS, PARA BAZAR, RAJKOT VS. ITO WARD-1(2)(2), RAJKOT ./ ./PAN/GIR NO. : AAS PN1 993 K / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI D. V. LALCHANDANI, AR REVENUE BY : SHRI ANIL KUMAR DAS, SR. DR ! /DATE OF HEARING : 12/09/2019 '# ! /DATE OF PRONOUNCEMENT: 23/09/2019 $% / O R D E R PER AMARJIT SINGH - AM : THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2007-08 , ARISE FROM ORDER OF THE CIT(A)-1, RAJKOT DATED 22.12.2017, IN PROCEEDINGS U NDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION ON ACCOUNT OF LON G-TERM CAPITAL GAIN TO THE AMOUNT OF RS. 2,09,950/-. 4. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RET URN OF INCOME DECLARING INCOME OF RS. 1,02,734/- ON 31.07.2007. SUBSEQUENTLY, THE CA SE WAS REOPENED U/S. 147 OF THE ACT BY ISSUING OF NOTICE U/S. 148 OF THE ACT ON 25. 02.2014 ON THE GROUND THAT AS PER THE INFORMATION THE ASSESSEE HAS SOLD FLAT NO. 201 AT NILKANT APARTMENT, RAJKOT FOR CONSIDERATION OF RS. 4,90,000/- HOWEVER, THE STAMP VALUATION AUTHORITY HAD ADOPTED THE VALUE OF THE PROPERTY AT RS. 7,60,860/- AND ASS ESSEE HAS NOT SHOWN THE CAPITAL GAIN ITA NO. 23/RJT/2018(SHRI RAJESH KUVERJIBHAI NANDNI VS. ITO) A.Y. 2007-08 2 FROM THE AFORESAID TRANSACTION ACCORDING TO SEC. 50 C OF THE ACT. CONSIDERING THE ABOVE FACT WE DO NOT FIND ANY ERROR IN THE ACTION O F THE AO IN REOPENING THE ASSESSMENT U/S. 147 OF THE ACT, THEREFORE, FIRST GR OUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 5. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSEE HAS MADE REFERENCE TO THE DEPARTMENT VALUATION OFFICER FOR DETERMINATION OF FAIR VALUE OF THE PROPERTY U/S. 55A OF THE ACT. THE VALUATION OFFICER HAS ESTIMATE D THE FAIR MARKET VALUE OF THE PROPERTY AT RS. 9,71,800/- ON 10.07.2016. THEREAFT ER, THE AO HAS DETERMINED THE LONG-TERM CAPITAL GAIN AT RS. 20,09,950/- AFTER TAK ING INTO CONSIDERATION THE FAIR MARKET VALUE OF THE SOLD PROPERTY DETERMINED BY THE DEPART MENT VALUATION OFFICER AT RS. 9,71,800/-. 6. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 7. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL ON RECORD AND NOTICED THAT LD. CIT(A) HAS WRONGLY INTERPRETED THE PROVISION OF SEC. 50C(3) OF THE ACT WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE S TATING THAT FULL VALUE OF CONSIDERATION IF TO BE TAKEN AS DETERMINED BY THE D VO. IN THIS REGARD, WE HAVE PERUSED TO PROVISION OF SEC. 50C(3) OF THE ACT WHIC H IS REPRODUCED AS UNDER:- (3) SUBJECT TO THE PROVISIONS CONTAINED IN SUB-SEC TION (2), WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEEDS THE VALUE ADOPTED OR ASSESSED [OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY REFERR ED TO IN SUB-SECTION (1), THE VALUE SO ADOPTED OR ASSESSED [OR ASSESSABLE] BY SUCH AUTH ORITY SHALL BE TAKEN AS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR A ACCRUING A S A RESULT OF THE TRANSFER.] IT IS CLEAR FROM THE ABOVE CITED PROVISION OF SEC. 50C(3) THAT WHERE THE VALUE ASCERTAINED UNDER SUB-SECTION (2) EXCEED THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY REFER TO IN SUB-SECTION (1) THE VALUE SO ADOPTED OR ASSESSED BY SUCH AUTHORITY SHALL BE TAKEN AS THE FULL VALUE OF CONSI DERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER. SINCE, THE FAIR MARKET VAL UE DETERMINED BY THE DEPARTMENT VALUATION OFFICER HAS EXCEEDED THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY, THEREFORE, AS PER PROVISION OF SEC. 50C(3) OF THE A CT THE VALUE ADOPTED BY THE STAMP ITA NO. 23/RJT/2018(SHRI RAJESH KUVERJIBHAI NANDNI VS. ITO) A.Y. 2007-08 3 VALUATION AUTHORITY SHALL BE TAKEN AS THE FULL VALU E OF THE CONSIDERATION ON THE SALE OF THE PROPERTY. IN VIEW OF THE ABOVE FACTS AND FINDI NGS WE ARE NOT INCLINED WITH THE DECISION OF THE LD. CIT(A). THEREFORE, THE AO IS D IRECTED TO COMPUTE THE LONG-TERM CAPITAL GAIN AFTER ADOPTING THE SALE PRICE OF RS. 7 ,60,863/- AS DETERMINED BY THE STAMP VALUATION AUTHORITY. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. [ORDER PRONOUNCED IN THE COURT ON 23-09-2019.] SD/- SD/- ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD; DATED 23/09/2019 TANMAY / COPY OF ORDER FORWARDED TO:- $% / BY ORDER & / ' (DY./ASSTT. REGISTRAR) !( , ')$*$ / ITAT, RAJKOT 1. DATE OF DICTATION : 17-09-2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER. : 18 -09-2019 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 20-09-2019 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT. : 20-09-2019 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEM BER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 23 -09-2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 23 -09-2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER : 1. / THE APPELLANT 2. + / THE RESPONDENT. 3. *( , / CONCERNED CIT 4. , ( ) / THE CIT(A) 5. -./ ( , !( / DR, ITAT, 6. /01 / GUARD FILE.