Manisha Rithesbhai Soni, Ahmedabad V. The ITO, Ward-5(3)(4), Ahmedabad

ITA 2450/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0958 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APOORVA BHARDWAJA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Set aside
• Section: 50C

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 2450/AHD/2017 / ASSESSMENT YEAR: 2013-14 MANISHA RITESHBHAI SONI 201, MEERA MANTHAN APARTMENT RAIPUR CO-OP. SOCIETY OPP: DIWAN BALLUBHAI SCHOOL KANKARIA AHMEDABAD 380 022. PAN : BLOPS 2383 A VS ITO, WARD-5(3)(4) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI HARDIK VORA, AR REVENUE BY : SHRI APOORVA BHARDWAJA, SR.DR / DATE OF HEARING : 20/03/2019 /DATE OF PRONOUNCEMENT : 26/ 03/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 5, AHMEDABAD DATED 12.9.2017 PASSED FOR THE ASSTT.YEAR 2013-14. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.6,35,925/- WHICH WAS ADDED BY THE AO UNDER SECTION 50C OF THE INCOME TAX ACT, 1961. ITA NO.2450/AHD/2017 - 2 - 3. IN THE NEXT GROUND OF APPEAL, THE ASSESSEE HAS C ONTENDED THAT LD.REVENUE AUTHORITIES OUGHT TO HAVE MADE A REFEREN CE TO THE DVO UNDER SECTION 50C(2) OF THE ACT BEFORE DETERMINING THE CAPITAL GAIN TAXABLE IN THE CASE OF THE ASSESSEE WITH THE HELP O F SECTION 50C OF THE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME ELECTRONICALLY ON 22.4.2016 DECLARING TOTAL INCOME AT RS.1,220/-. AFTER SCRUTINY OF THE ACCOUNTS, THE LD.AO HAS CONFR ONTED THE ASSESSEE THAT PROPERTY BEARING SURVEY NO.169/A AND 169B WAS SOLD BY THE ASSESSEE SHOWING SALE CONSIDERATION AT RS.5 LAKHS. HOWEVER, A PERUSAL OF THE INFORMATION WOULD REVEAL THAT STAMP VALUATIO N AUTHORITIES HAVE VALUED THE PROPERTY AT RS.38,62,225/- FOR THE PURPO SE OF STAMP DUTY VALUATION. HE CONFRONTED THE ASSESSEE TO SHOW AS TO WHY THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY BE NOT DEEMED AS FULL SALE CONSIDERATION RECEIVED BY THE VENDOR ON SALE OF THI S PROPERTY FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN UNDER SECTION 48 OF THE INCOME TAX ACT. IT WAS CONTENDED BY THE ASSESSEE THAT SHE HAS 1/5 TH SHARE IN THE PROPERTY. IT WAS NEVER USED BY THE ASSESSEE AND WA S OCCUPIED BY THE TENANT. SHE HAS NOT RECEIVED ANYTHING MORE THAN TH E DISCLOSED IN THE RETURN OF INCOME. THE AO WAS NOT SATISFIED WITH TH E EXPLANATION OF THE ASSESSEE. HE OBSERVED THAT THE SALE CONSIDERATION SHOWN BY THE VENDORS AT RS.5.00 LAKHS OUGHT TO BE REPLACED BY RS.38,67,2 25/-. IF THIS SALE CONSIDERATION IS BEING DIVIDED BY 5 BEING 1/5 SHA RES OF THE ASSESSEE, THEN RECEIPT IN THE HANDS OF THE ASSESSEE ARE TO BE WORKED OUT AT RS.7,72,245/-. AFTER REDUCING THE INDEX COST, HE W ORKED OUT THE CAPITAL GAIN AT RS.6,35,925/-. APPEAL TO THE CIT(A) DID NO T BRING ANY RELIEF TO THE ASSESSEE. ITA NO.2450/AHD/2017 - 3 - 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 48 CONTEMPLA TES INCOME CHARGE UNDER THE HEAD CAPITAL GAIN SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF TRANSFER OF THE CAPITAL ASSET, THE AMOUNTS VIZ. (A) EXPENDIT URE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER, ( B) COST OF ACQUISITION OF ASSETS AND THE COST OF ANY IMPROVEMENT THERETO. THE EXPRESSION FULL VALUE OF THE CONSIDERATION EMPLOYED IN SECTION 48 WOULD BE REPLACED BY WAY OF DEEMING FICTION PROVIDING IN SECTION 50C. THIS SECTION CONTEMPLATES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET BEING PLANT & B UILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED BY THE STAMP VALUATION AUTHO RITY OF THE STATE GOVERNMENT, FOR THE PURPOSE OF CHARGING STAMP DUTY, THEN THE VALUATION SO ADOPTED WOULD BE DEEMED AS FULL VALUE OF CONSIDE RATION REFERRED IN SECTION 48 OF THE INCOME TAX ACT, AS RECEIVED OR AC CRUING AS A RESULT OF SUCH TRANSFER. THERE IS NO DISPUTE WITH REGARD TO THE APPLICABILITY OF SECTION 50C IN THE PRESENT CASE. THE CASE OF THE A SSESSEE IS THAT THIS PROPERTY WAS BEING OCCUPIED BY THE TENANT, HENCE, I T COULD NOT FETCH VALUE EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID. THEREFORE, REFERENCE TO THE DVO UNDER SECTION 50C(2 ) OUGHT TO HAVE BEEN MADE BY THE AO. ON THE OTHER HAND, THE LD.DR POINTED OUT THAT NO SUCH SPECIFIC REQUEST WAS MADE BY THE ASSESSEE BEFO RE THE AO. 6. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE NOTE THAT SUB-SECTION (2) OF SECTION 50C FURTHER PROVIDES THAT WHERE AN A SSESSEE RAISES A DISPUTE ABOUT ADOPTION OF VALUE DETERMINED BY THE S TAMP VALUATION AUTHORITY, FOR THE PURPOSE OF CHARGING STAMP DUTY, THE REFERENCE WILL BE MADE TO THE DVO FOR DETERMINING FAIR MARKET VALUE O F THE PROPERTY ON ITA NO.2450/AHD/2017 - 4 - THE DATE OF TRANSFER. THE ASSESSEE HAS RAISED ALL THESE PLEAS THOUGH NOT SPECIFIC PLEADING THAT A REFERENCE BE MADE TO THE D VO. SHE HAS PLEADED THAT IT IS TENANTED PROPERTY. PRICE RECEIVED BY TH E ASSESSEE IS EQUIVALENT TO THE ONE SHOWN BY THE VENDOR IN THE COMPUTATION O F LONG TERM CAPITAL GAIN. WE FIND THAT IMPLIEDLY THE ASSESSEE POINTED OUT ALL THE FACTS TO THE AO FOR MAKING A REFERENCE UNDER SECTION 50C(2). HE OUGHT TO HAVE MADE SUCH REFERENCE. THEREFORE, WE ALLOW THIS APPE AL OF THE ASSESSEE, AND SET ASIDE BOTH THE ORDERS OF THE REVENUE, AND R EMIT THIS ISSUE TO THE FILE OF THE AO. THE LD.AO SHALL MAKE A REFERENCE T O THE DVO UNDER SECTION 50(2) AND CALL FOR A REPORT. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EXPLANATION/ EVIDENCE IN REBUTTAL TO SUC H REPORT. THE AO SHALL DECIDE THE ISSUE AFTER TAKING ALL THE MATERIA L INTO CONSIDERATION. 7. OBSERVATION MADE BY US HEREINABOVE WILL NOT IMPA IR OR INJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 26/03/2019