The DCIT, Patan Circle, Patan V. Saifee Jubilee High School & Madressa Yusufiyan Society, Sidhpur

ITA 2301/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5845 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 11-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Charitable institution; Additional evidence; Fair market value; Competent authority; Onus to prove
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO. 2301/AHD/2014 WITH CO NO. 298/AHD/14 (ASSESSM ENT YEAR: 2010- 2011) DCIT, PATAN CIRCLE, PATAN ROOM NO. 104, 1 ST FLOOR, SANTOKABA HALL, RAJMAHAL ROAD, PATAN - 384265 APPELLANT VS. SAIFEE JUBIEE HIGH SCHOOL & MADRESSA YUSUFIYAN SOCIETY, DR. SYEDHA AKOSHI, POST-PATAN RESPONDENT/CROSS OBJECTOR PAN: AABTS3775P / BY REVENUE : SHRI PRASOON KABRA, SR. D.R. / BY ASSESSEE : SHRI S. N. DIVATIA, A.R. /DATE OF HEARING : 14.03.2018 /DATE OF PRONOUNCEMENT : 16.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTION FOR ASSESSMENT YEAR 2010-11 ARISE AGAINST THE CIT(A), GANDHINAGARS ORDE R DATED 22.05.2014, IN CASE NO. CIT(A)/GNR/212/2013-14, REVERSING ASSESSING OFFI CERS ACTION MAKING LONG TERM CAPITAL GAINS ADDITION OF RS.70,34,635/- BY INVOKING SECTION 50C OF ITA NO. 2301/AHD/14 WITH CO NO. 298/AHD/14 [DCIT VS. SAIFEE JUBILEE HIGH SCHOOL & MADRESSA YUSUFIYAN SOCIETY] A.Y. 2010 -11 - 2 - THE ACT, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO RIVAL PLEADINGS FIRST. THE REVENUE S SOLE SUBSTANTIVE GRIEVANCE SEEKS TO REVIVE THE ASSESSING OFFICERS I MPUGNED ACTION MAKING LONG TERM CAPITAL GAINS ADDITION OF RS.70,34,635/- AS DE LETED IN COURSE OF LOWER APPELLATE PROCEEDINGS. THE ASSESSEES CROSS OBJECTI ON ON THE OTHER HAND PLEADS THAT SECTION 50C OF THE ACT IS NOT APPLICABLE IN IT S CASE BEING A CHARITABLE TRUST ALREADY ASSESSED UNDER A SPECIAL PROVISION U/S.11 O F THE ACT. 3. THERE IS NO DISPUTE BETWEEN THE PARTIES ABOUT THE FACT THAT THIS ASSESSEE IS A PUBLIC TRUST REGISTERED UNDER THE BOMBAY PUBLIC TR UST ACT. IT HAS SOLD/TRANSFERRED THE CAPITAL ASSET IN QUESTION BEAR ING SURVEY NO. 503 TO 510 ADMEASURING 2447 SQ.MTRS. KNOWN AS SAKINABAUGH TO SANT ROHITDAS CHARITABLE TRUST, FOR RS.12.50LACS BY WAY OF THE RE GISTERED SALE DEED IN QUESTION DATED 24.02.2010. THE ASSESSING OFFICER RECEIVED A IR INFORMATION THAT THE PRICE IN QUESTION TAKEN FOR STAMP PURPOSES WAS RS.7 4,87,400/-. BOTH THE LEARNED COUNSEL AT THIS STAGE TAKE US TO LEARNED CIT(A)S FI NDINGS UNDER CHALLENGE INDICATING THE FOLLOWING ELABORATE DISCUSSION ON TH E ISSUE AS UNDER: 4.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER AND SUBMISSION FILED BY APPELLANT. THE AO IN THE ASSESSMENT ORDER HAS ADOPTED THE VALUE OF LAND ON THE BASIS OF VALUE SHOWN BY THE STAMP VALUA TION AUTHORITY RELYING ON THE DECISION OF RAVIKANT VS ITO (2007) 110 TTJ DELH I 297. FURTHER, AO STATES THAT THE ONUS TO PROVE THAT FAIR MARKET VALUE IS LO WER THAN SUCH VALUATION BY THE SVA IS ON THE APPELLANT. THE AO HAS ALSO RELIED ON THE AIR INFORMATION WHICH WAS AUTHENTICATED BY THE LETTER OF SUB-REGISTRAR DA TED 01/02/2013 WHEREIN FAIR MARKET VALUE IS HELD TO BE RS.74,87,400/-. FURTHER, AO IS ALSO OF THE VIEW THAT INCOME OF THE APPELLANT FROM NON-EDUCATIONAL ACTIVI TIES IS NOT EXEMPT UNDER SECTION 10(23C)(VI). FURTHER, AO STATES THAT APPELL ANT HAS NOT SUBMITTED THE DOCUMENTS TO SHOW ACQUISITION OF PROPERTY AND HAS N OT EVEN SHOWN RS.1,250,000/- WHICH IS CLAIMED AS SALE CONSIDERATI ON. IN VIEW OF THE ABOVE, AO HAS TAKEN THE FULL CONSIDERATION OF THE PROPERTY TO BE RS.74,87,400/- AND COST OF ITA NO. 2301/AHD/14 WITH CO NO. 298/AHD/14 [DCIT VS. SAIFEE JUBILEE HIGH SCHOOL & MADRESSA YUSUFIYAN SOCIETY] A.Y. 2010 -11 - 3 - ACQUISITION IS HELD TO BE RS.71,640/- AS PER THE BO OK VALUE OF THE APPELLANT AND LTCG IS WORKED OUT AT RS.70,34,635/-. FROM THE SUBMISSION MADE BY THE APPELLANT, THE FOLL OWING FACTS EMERG: (I) APPELLANT HAS ADOPTED THE SALES VALUE AS PER APPROV ED BY THE CHARITY COMMISSIONER AND THIS VALUE IS ADOPTED BY THE CHANT Y COMMISSIONER AFTER INVITING OBJECTIONS TO THE PROPOSED SALE BY A DVERTISING IN VERNACULAR DAILY 'SANDESH', (II) APPELLANT HAS CHALLENGED THE STAMP DUTY VALUAT ION BEFORE THE AO BY POINTING OUT THAT THE SALE VALUE IS ADEQUATE BECAUS E SOME PART OF THE PROPERTY WAS ENCROACHED BY NEARBY SLUM AREAS AND AS SUCH HAD NOT MUCH VALUE. (III) THE APPELLANT HAD REQUESTED THE AO TO REFER T HE MATTER TO THE DVO WHICH WAS REJECTED BY THE AO. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE, I FIND THAT THE TRANSACTION OF SALE OF THE PROPERTY HAS BEEN MADE W ITH THE PRIOR APPROVAL OF THE CHARITY COMMISSIONER, AHMEDABAD. BEFORE THE FINALIZ ATION OF TRANSACTION, THE CHARITY COMMISSIONER HAD INVITED OBJECTIONS TO THE PROPOSED SALE OF THE PROPERTY AND ACCORDINGLY ADVERTISED IN VERNACULAR D AILY 'SANDESH'. ONLY THEREAFTER, A WRITTEN ORDER WAS PASSED PERMITTING T HE APPELLANT TO SELL THE SAID PROPERTY FOR RS.12,50,000/-. AS THE TRANSACTION TOO K PLACE UNDER THE SUPERVISION AND DIRECTIONS OF AN AUTHORITY I.E. CHARITY COMMISS IONER. I FIND THAT THE STAMP AUTHORITY HAS NOT ARRIVED AT THE VALUE OF RS.74,87, 400/- BUT THE AO HAS WORKED OUT SUCH AMOUNT ON THE BASIS OF DETAILS FURNISHED. THE CHARITY COMMISSIONER HAS STATED IN THE ORDER OF APPROVAL PASSED THAT THE SAID PROPERTY COULD NOT BE USED FOR COMMERCIAL PURPOSE AND THE SAME HAS TO BE PUT TO USE FOR THE OBJECTS OF THE PURCHASER TRUST, THE VALUATION OF THIS PROPERTY COULD NOT BE THE SAME AS ANY UNRESTRICTED PROPERTY. THE FAIR MARKET VALUE OF THE PROPERTY HAS BEEN ESTIMATED RS.12,41,000/- BY A REGISTERED-VALUER AND A COPY OF SUCH CERTIFICATE IS PRODUCED BEFORE ME. THE ALTERNATE CLAIM MADE BY THE APPELLANT STATING THAT EVEN ANY INCOME OF APPELLANT IS EXEMPT TO TAX U/S 1 0(23C)(VI) IS ALSO FOUND TENABLE AS IT IS RUNNING AN EDUCATION INSTITUTION A ND APPROVAL HAS ALSO BEEN GRANTED BY THE COMPETENT AUTHORITY. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES DISCUSSE D ABOVE, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN WORKING OUT AND MAKING ADDITION OF RS.70,34,640/- ON ACCOUNT OF LTCG. THE SAME IS HEREBY DIRECTED TO BE DELETED. THE RELEVANT GROUNDS OF APPEAL ARE ALLOWED. ' 4. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CO NTENDS THAT THE CIT(A) HAS VIOLATED THE PROVISION CONTAINED IN RULE 46A OF THE INCOME TAX RULES IN ADMITTING ASSESSEES ADDITIONAL EVIDENCE I N THE NATURE OF ITS REGISTERED ITA NO. 2301/AHD/14 WITH CO NO. 298/AHD/14 [DCIT VS. SAIFEE JUBILEE HIGH SCHOOL & MADRESSA YUSUFIYAN SOCIETY] A.Y. 2010 -11 - 4 - VALUERS REPORT THAT THE ABOVE CAPITAL ASSETS FAIR MARKET VALUE WAS RS.12.4LACS ONLY. HIS CASE IS THAT THE CIT(A) DID NOT ISSUE ANY NOTICE TO THE ASSESSING OFFICER FOR FACTUAL VERIFICATION OF THE SAID DETAIL S. WE FIND NO MERIT IN THE INSTANT ARGUMENT. PAGE 11 OF THE PAPER BOOK INDICATES THAT THE CHARITY COMMISSIONER HAD PASSED HIS ORDER AS PER THE PROVISIONS OF THE B OMBAY TRUST ACT AND RULES (AS APPLICABLE IN GUJARAT STATE) APPROVING THE IMPU GNED SALE AT A PRICE OF RS.12.50LACS WHICH ULTIMATELY CULMINATED IN THE SAL E DEED. THERE CAN HARDLY BE ANY QUARREL THAT SUCH AN APPROVAL INVOLVES A LONG D RAWN PROCEDURE OF PUBLIC NOTICE INVITING RELEVANT BIDS. THE REVENUE FAILS T O DISPUTE THAT THE ASSESSEE TRUST IS BOUND BY SUCH AN APPROVAL ORDER PASSED BY THE ST ATUTORY AUTHORITY. WE FURTHER FIND THAT HONBLE JURISDICTIONAL HIGH COURTS JUDGM ENT IN OM SHRI JIGAR ASSOCIATION VS. UNION OF INDIA (1994) 209 ITR 608 (G UJ) AS FOLLOWED IN (2010) 327 ITR 185 (BOMBAY) VIRENDRA VS. APPROPRIATE AUTHOR ITY & ORS. HOLDS THAT THERE IS NO INFERENCE OF UNDERSTATEMENT OF CONSIDER ATION IN SUCH A CASE INVOLVING AN APPROVAL ACCORDED BY THE CHARITY COMMISSIONER UN DER THE BOMBAY TRUSTS ACT. MR. KABRA SEEKS TO DISTINGUISH THE SAME BY PL EADING THAT THE SAID CASE LAW PERTAINS TO THE PROCEEDINGS U/S.269UD OF THE ACT IN STEAD OF SECTION 50C OF THE ACT. WE OBSERVE THAT THIS DISTINCTION FAILS TO REB UT THE FACT THAT THE ABOVE HONBLE HIGH COURTS HAVE CONSIDERED THE RELEVANT PROVISIONS ENSHRINED IN BOMBAY TRUST LAW VIS--VIS UNDERSTATEMENT OF SALE CONSIDERATIONS OF THE RELEVANT CAPITAL ASSETS THEREIN. WE CONCLUDE IN THIS FACTUAL BACKDROP THAT WHATEVER SALE PRICE CHARITY COMMISSIONER HAD APPROVED HAD TO BE FOLLOWED IN ASS ESSES IMPUGNED SALE DEED. COUPLE WITH THIS, THE LOWER APPELLATE AUTHOR ITY HAS ALREADY OBSERVED THAT THERE ARE VARIOUS RESTRICTIONS ON USAGE OF THE CAPI TAL ASSET. ALL THIS FINDINGS HAVE GONE UNCONTROVERTED FROM REVENUE SIDE. WE THUS SEE NO REASON TO ACCEPT REVENUES SOLE SUBSTANTIVE GROUND. THE SAME IS THER EFORE REJECTED. SO IS THE OUTCOME OF ITS APPEAL ITA NO. 2301/AHD/2014. 5. LEARNED AUTHORIZED REPRESENTATIVE AT THIS STAGE S UBMITS THAT THE ASSESSEE NO MORE WISHES TO PRESS FOR ITS CROSS OBJECTION IN VIEW OF OUR FINDINGS IN ITA NO. 2301/AHD/14 WITH CO NO. 298/AHD/14 [DCIT VS. SAIFEE JUBILEE HIGH SCHOOL & MADRESSA YUSUFIYAN SOCIETY] A.Y. 2010 -11 - 5 - REVENUES APPEAL. THE ASSESSEES CROSS OBJECTION CO NO. 298/AHD/2014 IS THEREFORE DISMISSED AS NOT PRESSED. 6. THE REVENUES APPEAL ITA NO. 2301/AHD/14 IS DISMIS SED AND ASSESSEES CO NO. 298/AHD/14 IS DISMISSED AS NOT PRESSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF MARCH, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 16/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ()*+ ,--. ./0 / DR, ITAT, AHMEDABAD 1+23 / GUARD FILE. BY ORDER / . // ./0