The DCITNavsari Circle, Navsari V. Shri Subhash I.Vashi, Navsari

ITA 2509/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6926 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANKIT TALSANIA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Valuation report
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HON'BLE SHRI G.D.AGRAWAL, V.P. & HONBL E SHRI T.K. SHARMA, J.M. ) I.T.A. NO. 2509/AHD./2010 ASSESSMENT YEAR : 2007-2008 D.C.I.T., NAVSARI CIRCLE, NAVSARI - VS- SUBHASH I. VASHI, NAVSARI (PAN : ABGPP 6505Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, S R.D.R RESPONDENT BY : SHRI ANKIT TALSANIA, A. R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 03.05.2010 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VALSA D DELETING THE ADDITION OF RS.12,17,200/- MADE BY THE ASSESSING OFFICER UNDER SECTION 50C OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2007-2008. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME DECLARI NG TOTAL INCOME OF RS.42,95,291/- AND AGRICULTURE INCOME OF RS.3 LAKHS. THE ASSESSING OFF ICER FRAMED THE ASSESSMENT UNDER SECTION 143(3) WHEREIN HE MADE THE ADDITION TO THE TUNE OF RS.12,17,200/- (RS.3,92,000/- + RS.8,25,200/) UNDER SECTION 50C OF THE I.T. ACT, 19 61. THIS ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE BETWEEN THE VALUATION OF LAND IN QUESTIO N MADE BY THE DISTRICT VALUATION OFFICER (DVO) VIDE REPORT DATED 21.12.2009 AND THE VALUE ME NTIONED IN THE SALE DEED. 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), THE ASSESSEE CONTENDED THAT THE LAND IN QUESTION WAS IN CO-OWNER SHIP. IT WAS SOLD FOR RS.36 LAKHS AND RS.54 LAKHS. AS PER THE DVO VALUATION, 50% SHARE O F THE ASSESSEE WORKS OUT TO RS.18 LAKHS AND RS.27 LAKHS. THE DVO WORKED OUT VALUE OF THE PR OPERTY AT RS.43,84,000/- AND RS.70,50,000/-, OUT OF WHICH, ASSESSEES SHARE IS W ORKED OUT BY THE ASSESSING OFFICER AT 2 ITA NO. 2509-AHD-2010 RS.21,92,000/- AND RS.35,25,200/-. ON THIS BASIS, T HE ASSESSING OFFICER ENHANCED THE CAPITAL GAIN ON THE ENHANCED SALE VALUE BASED ON DVOS REPO RT AND MADE TOTAL ADDITION OF RS.12,17,200/- BY INVOKING PROVISIONS OF SECTION 50 C OF THE ACT, BEING THE DIFFERENCE BETWEEN THE SALE DEED VALUE AND THAT ESTIMATED BY T HE DVO. 3.1 IN THE BACKDROP OF THE AFORESAID FACT, IT WAS C ONTENDED THAT THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE ACTUAL PROVISIONS LAID DOWN IN THE INCOME TAX ACT BEFORE INVOKING THE PROVISIONS OF SECTION 50C. THE ASSESSI NG OFFICER SHOULD NOT HAVE RELIED ON THE VALUATION DETERMINED BY THE DVO BECAUSE VALUATION A DOPTED BY THE DVO HAS NO SIGNIFICANCE UNDER SECTION 50C OF THE I.T. ACT, 196 1. IT WAS FURTHER SUBMITTED THAT SECTION 50C IS VERY CLEAR IN STATING THAT IN ORDER TO CALCU LATE LONG TERM CAPITAL GAIN OR SHORT-TERM CAPITAL GAIN IN CASE OF SALE OF LAND OR BUILDING OR BOTH, WHETHER DEPRECIABLE OR NOT, THE VALUE ADOPTED (ASSESSED OR ASSESSABLE) BY ANY AUTHORITY O F A STATE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY ALONE SHOULD BE TAKEN AS FULL VALUE OF T HE SALE CONSIDERATION. THE VALUE ASSESSED AS PER THE COPY OF AN EXTRACT FROM STAMP DUTY VALU ATION AUTHORITY PRICES COMES AT RS.20,47,500/- [ 5460 SQ.MTRS * RS.375/- PER SQ. MT RS.] AND RS.33,04,875/- [8813 SQ.MTRS. * RS.375/- PER SQ. MTRS.], WHICH IN FACT IN COMPARISO N WITH THE SALE DEED DOCUMENTATION VALUE OF THE APPELLANT IS LESS THAN I.E. AT RS.36,00,000/ - AND RS.54,00,000/-, THERE REMAINS NO SCOPE FOR DISBELIEVING APPELLANTS CONTENTION. IN OTHER W ORDS, THE SALE CONSIDERATION STATED IN THE SALE DEED OF THE APPELLANT IS QUITE HIGHER THAN THE VALUATION ADOPTED BY STAMP DUTY AUTHORITY AND THEREFORE THERE WAS NO NECESSITY TO DOUBT THE G ENUINENESS OF THE CONSIDERATION STATED IN THE SALE DEED. 3.2 TO SUM UP, IT WAS ARGUED THAT THE ASSESSING OFF ICER HAS NOT ACTED WITHIN THE LEGAL BOUNDARY AND EXCEEDED HIS AUTHORITY IN INVOKING SEC TION 50C, ON THE BASIS OF VALUATION AS PROVIDED BY THE DVO. 3.3 AFTER CONSIDERING THE AFORESAID SUBMISSIONS, IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADD ITION FOR THE DETAILED REASONS GIVEN IN PARA 6.6, WHICH READS AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE. I HAVE A LSO CAREFULLY CONSIDERED THE FINDING OF THE AO AND THE SUBMISSION MADE BY THE LD. AR. SEC. 50C READ AS UNDER : 3 ITA NO. 2509-AHD-2010 'SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION IN CERTAIN CASES, -(1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHOR ITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED T O BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER'. EXPLANATION 2 : FOR THE PURPOSES OF THIS SECTION, THE EXPRESSION ' ASSESSABLE ' MEANS THE PRICE WHICH THE STAMP VALUATION AUTHORITY WOUL D HAVE, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE, ADOPTED OR ASSESSED, IF IT WERE REFERRED TO SUCH AUTHORITY FO R THE PURPOSES OF THE PAYMENT OF STAMP DUTY. AFTER CAREFULLY PURSUING THE SPECIFIC PROVISIONS O F SECTION 50C AND THE RATIO LAID DOWN IN THE LEGAL PRECEDENTS OF VARIOUS AUTHORITIES ON INTRICACIES AND IMPLICATION OF PROVISIONS OF SEC.5OC AS RELIED UPON BY THE AR OF THE APPELLANT THERE IS NO PLAUSIBLE REASON TO REJECT THE CLAIM OF THE APPELLANT. THE A O HAS FAILED TO BRING ON RECORD WITH COGENT EVIDENCE OF INVOLVEMENT OF EXTRA CONSIDERAT ION IF ANY OVER AND ABOVE THE CONSIDERATION STATED IN THE SALE DEED OF THE APPEL LANT. EVEN OTHERWISE THE CONSIDERATION STATED IN THE SALE DEED HAS BEEN ACC EPTED BY THE STAMP DUTY AUTHORITIES AND THE SAID VALUE HAS TO BE ADOPTED AS FULL VALUE CONSIDERATION AS PRESCRIBED IN THE PROVISIONS OF SEC. 50C OF THE ACT. I ALSO FIND THA T THE CASES RELIED UPON BY THE LD. AR PARTICULARLY IN CASE OF PUNJAB POLY JUTE CORPORATION VS. ACIT, (2009) 120 T TJ (ASR.) 1113, (2009) 12O ITD 233 AND JITENDRA MOHAN SAXENA VS. ITO (2008) 305 ITR (AT) 62 HAS SUPPORTED THE CAUSE OF THE APPELLANT. FURTHER, THE AFFIDAVITS SWORN BY THE PURCHASER THAT THE NO ON MONEY OR EXTRA CON SIDERATION OUTSIDE THE BOOKS HAS BEEN PAID BY THE PURCHASER OR RECEIVED BY THE APPE LLANT HAS STRENGTHEN THE CASE OF THE APPELLANT. THE AO DID NOT BRING ON RECORD ANY COGE NT DOCUMENTARY EVIDENCE TO JUSTIFY HIS OBSERVATION WITH RESPECT TO EXTRA CONSIDERATIO N RECEIVED BY THE APPELLANT, WHILE ENHANCING THE VALUE OF PROPERTIES. IN THIS CIRCUMS TANCES, I AM INCLINED TO GRANT RELIEF TO THE APPELLANT AND HELD THAT THE ACTION OF THE A O IN THIS GROUND OF APPEAL CAN NOT BE SUSTAINED IN THE EYE OF THE LAW. I, THEREFORE, DIR ECT THE AO TO DELETE THE ADDITION OF RS.12,17,200/-. THUS, THE APPELLANT'S GROUND NO.2 AND 3 ARE ALLOWED. 4. AGGRIEVED WITH THE ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US, SHRI K. MADHUSUDA N, APPEARED ON BEHALF OF THE REVENUE AND RELYING ON THE REASONING GIVEN BY THE A SSESSING OFFICER AND THE VALUATION 4 ITA NO. 2509-AHD-2010 REPORT OF THE DVO, CONTENDED THAT THE ASSESSING OFF ICER RIGHTLY INVOKED THE PROVISIONS OF SECTION 50C OF THE I.T. ACT, 1961. 6. SHRI ANKIT TALSANIA, A.R., APPEARING ON BEHALF O F THE ASSESSEE, VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 7. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM BARE PERUSAL OF THE PROVISI ONS CONTAINED IN SECTION 50C OF THE I.T. ACT, 1961, IT IS CLEAR THAT THE PROVISIONS OF SECTI ON 50C CANNOT BE INVOKED ON THE BASIS OF VALUATION REPORT OF DVO. ADMITTEDLY, IN THE ASSESSM ENT ORDER, THE ASSESSING OFFICER INVOKED THE PROVISIONS CONTAINED IN SECTION 50C ON DIFFEREN CE BETWEEN VALUATION DONE BY THE DVO AND SALE CONSIDERATION MENTIONED IN THE SALE DEED. THIS APPROACH OF THE ASSESSING OFFICER WAS CLEARLY CONTRARY TO THE PROVISIONS OF SECTION 5 0C OF THE I.T. ACT, 1961. THEREFORE, IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITION OF RS.12 ,17,200/-. WE, THEREFORE, DECLINE TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX(APPEALS). RESULTANTLY, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 08.04.201 1. SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 08/04/2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIST RAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S. 5 ITA NO. 2509-AHD-2010