The ACIT,S.K. Range, Himatnagar V. Shri Shanubhai M.Patel, Himatnagar

ITA 2309/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89526 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Competent authority
• Section: 50C

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 2309/AHD/2011 / ASSESSMENT YEAR: 2008-09 ACIT, S.K. RANGE HIMMATNAGAR. VS SHRI SHANUBHAI M. PATEL NR. MOTIBAUG SOCIETY HIMATNAGAR. PAN : AVFPP 1146 C ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI NIMESH YADAV, SR.DR ASSESSEE(S) BY : SHRI S.N. DIVETIA / DATE OF HEARING : 04/06/2015 / DATE OF PRONOUNCEMENT: 12/06/2015 $%/ O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) VIII DATED 8.7.2011 FOR THE ASST.YEAR 2008-09. 2. THE SOLE GROUND TAKEN BY THE REVENUE IN THIS APP EAL IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.2,44,83 ,495/- MADE ON ACCOUNT OF CAPITAL GAIN ON THE BASIS OF VALUATION O F ASSET BY DVO. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO LD TWO PLOTS OF LAND BEARING SURVEY NO.14 AND 15 FOR RS.8,04,20,506/-. THE AO REFERRED THE MATTER TO THE DVO ON 31.3.2008 FOR DETERMINING THE FAIR MARKET VALUE OF THE LAND. THE DVO SUBMITTED THE VALUATION REPOR T ON 24.12.2010, FROM WHICH IT WAS OBSERVED THAT THERE WAS NO CHANGE IN THE VALUATION OF PLOT BEARING SURVEY NO.15, BUT FOR PLOT BEARING SUR VEY NO.14, THE ITA NO.2309/AHD/2011 2 VALUATION CELL HAS DETERMINED ITS FAIR MARKET VALUE AT RS.10,49,04,000/- INSTEAD OF RS.8,04,20,506/- DECLARED BY THE ASSESSE E. 4. THE ASSESSEE OBJECTED TO THE VALUATION DONE BY T HE DVO ON THE GROUND THAT THE SALE CONSIDERATION SHOWN BY THE ASS ESSEE WAS HIGHER THAN THE STAMP VALUATION, HENCE SECTION 50C WAS NOT APPLICABLE. THE AO DID NOT ACCEPT THE OBJECTION OF THE ASSESSEE, AN D HAVE COMPUTED LONG TERM CAPITAL GAIN OF LAND SITUATED AT SURVEY N O.14 AND ADOPTED VALUE OF RS.10,49,04,000/- AND DETERMINED INCOME AT RS.9,72,08,700/- 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). 6. THE CIT(A) OBSERVED THAT IT IS AN ADMITTED FACT THAT THE SALE CONSIDERATION OFFERED BY THE ASSESSEE WAS HIGHER TH AN THE VALUE PRESCRIBED IN JANTRI FOR STAMP DUTY VALUATION. UNDER THE CIRCUMSTANCES , SECTION 50C WAS NOT APPLICABLE TO THE ASSESSEE. HE RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F K.R. PALANI SWAMY VS. UNION OF INDIA, 306 ITR 61, PUNJAB POLY JUTE CO RP. VS. ACIT, 120 TTJ 1113 AND THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF JITENDRA MOHAN SAXENA VS. ITO, 117 TTJ 974, AND DELETED THE ADDITION. 7. DR SUPPORTED THE ORDER OF THE AO, WHEREAS, THE A R OF THE ASSESSEE RELIED ON THE DECISION OF THE AHMEDABAD TR IBUNAL IN THE CASE OF ITO VS. NITIN JAYANTILAL SHAH, (2011) 48 SOT 16( AHD) WHEREIN IT WAS HELD THAT IN CASE WHERE THE VALUATION DONE BY THE D VO IS MORE THAN THE VALUATION DONE BY THE STAMP VALUATION AUTHORITY, TH EN THE VALUATION DONE BY THE STAMP VALUATION AUTHORITY WILL BE DEEME D AS FULL VALUE OF CONSIDERATION AS PER SUB-SECTION (1) OF SECTION 50C . THEREFORE, SECTION 55A AS SUCH CANNOT BE INVOKED WHEN TRANSFER OF IMMO VABLE PROPERTY BEING LAND OR BUILDING OR BOTH ARE INVOLVED. 8. IN THE INSTANT CASE, THE ISSUE INVOLVES COMPUTAT ION OF CAPITAL GAIN IN RESPECT OF SALE OF PLOT OF LAND BEING SURVEYNO.1 4. IT IS NOT IN DISPUTE ITA NO.2309/AHD/2011 3 THAT THE SAID PLOT OF LAND WAS SOLD BY THE ASSESSEE BY A REGISTERED DEED AT ACTUAL SALE CONSIDERATION OF RS.8,04,20,506/-. FURTHER, IT IS ALSO NOT IN DISPUTE THAT THE JANTRI VALUE OF THE SAME FOR THE PURPOSE OF STAMP DUTY WAS DETERMINED BY THE COMPETENT AUTHORITY AT R S.5,07,60,000/-. THUS, THE ACTUAL SALE VALUE BEING MORE THAN STAMP D UTY, THE ASSESSEE COMPUTED THE CAPITAL GAINS BY TAKING ACTUAL SALE VA LUE AS THE CONSIDERATION OF THE TRANSFER. ON THE ABOVE FACTS, NEITHER SECTION 50C NOR SECTION 55A OF THE ACT EMPOWERS THE AO TO SUBST ITUTE THE ACTUAL SALE CONSIDERATION BY ESTIMATING FAIR MARKET VALUE DETERMINED BY THE DVO. AS PER SECTION 50C A REFERENCE TO DVO CAN BE MADE BY THE AO WHEN THE STAMP DUTY VALUE IS MORE THAN THE ACTUAL S ALE CONSIDERATION, AND THE ASSESSEE OBJECTS FOR ADOPTION OF STAMP DUTY VALUE AS CONSIDERATION FOR COMPUTATION OF CAPITAL GAIN. THE ABOVE SITUATION IS NOT PRESENT IN THE INSTANT CASE. FURTHER, A REFERENCE UNDER SECTION 55A TO THE DVO CAN BE MADE WHEN IT IS NECESSARY TO DETERMI NE THE FAIR MARKET VALUE OF AN ASSET. IN THE INSTANT CASE, AS THE ACT UAL SALE CONSIDERATION WAS DETERMINED, AND THE SAME BEING MORE THAN THE ST AMP DUTY VALUE, QUESTION OF DETERMINING OF FAIR MARKET VALUE DOES N OT ARISE. THEREFORE, WE DO NOT FIND ANY ERROR IN THE ORDERS OF THE CIT(A ), WHICH IS CONFIRMED, AND THE GROUND OF THE APPEAL OF THE REVENUE IS DISM ISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 12 TH DAY OF JUNE, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 12/06/2015