Shri Chetanbhai Prahladbhai Gami, Surat V. The Dy.CIT.,Circle-2, Surat

ITA 260/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1811 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S N DIVETIA
• Assessee Lawyers: G C DAXINI
• Keywords: Sale consideration of property below Jantri Value; Valuation report
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 3234/AHD/2011& 260/AHD/2012 (ASSESSMENT YEAR: 2008-09) INCOME-TAX OFFICER, WARD- 9(1), SURAT V/S SHRI CHETAN PRAHLADBHAI PATEL (GAMI) 33-34, INTERCITY TOWNSHIP PUNA KUMBHARIYA ROAD, SURAT (APPELLANT) (RESPONDENT) SHRI CHETAN PRAHLADBHAI PATEL (GAMI) 33-34, INTERCITY TOWNSHIP PUNA KUMBHARIYA ROAD, SURAT V/S THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2, SURAT (APPELLANT) (RESPONDENT) PAN: ABEPP6880C APPELLANT BY : SHRI G.C. DAXINI, SR. D.R. RESPONDENT BY : SHRI S.N. DIVETIA, A.R. ( )/ ORDER DATE OF HEARING : 07 -04-201 6 DATE OF PRONOUNCEMENT : 13 -04-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NOS. 323 4/A/11 & 260/A/12 . A.Y. 2008-09 2 1. ITA NOS.3234/AHD/11 & 260/AHD/12 ARE CROSS APPEALS BY THE REVENUE AND THE ASSESSEE AGAINST THE VERY SAME ORDER OF THE LD. CIT(A)-V, SURAT DATED 01.08.2011 PERTAINING TO A.Y. 2008-09. 2. AS GRIEVANCE OF THE REVENUE AND THE ASSESSEE RELATE TO THE SAME SET OF FACTS IN ISSUES, THEREFORE, THESE APPEALS WERE HEAR D TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE AND BREVITY. 3. THE GRIEVANCE OF BOTH THE PARTIES RELATE TO THE COM PUTATION OF CAPITAL GAINS IN RESPECT OF A PROPERTY SOLD BY THE ASSESSEE OF WHICH HE IS A CO- OWNER HAVING 13.33% OF SHARE. 4. ASSESSEE FILED RETURN OF INCOME ON 11.09.2008 DECLA RING TOTAL INCOME AT RS. 2,16,293/-. THE RETURN WAS SELECTED FOR SCRU TINY ASSESSMENT THROUGH CASS AND ACCORDINGLY STATUTORY NOTICES WERE ISSUES AND SERVED UPON THE ASSESSEE. 5. THE ASSESSING OFFICER WAS IN POSSESSION OF AN INFOR MATION THAT THE ASSESSEE HAS SOLD TWO PROPERTIES WORTH RS. 35.51 LA CS AND RS. 36.51 LACS DURING THE YEAR UNDER CONSIDERATION. ON VERIFI CATION OF THE RETURN OF INCOME, THE A.O FOUND THAT THE ASSESSEE HAS NOT SHOWN ANY INCOME FROM THE SALE OF PROPERTIES BY WAY OF CAPITAL GAINS . ON FURTHER VERIFICATION, THE A.O FOUND THAT THE PROPERTIES IN QUESTION WERE PURCHASED IN FINANCIAL YEAR 2006-07 FOR RS. 28.51 L ACS AND RS. 26.81 LACS. THESE PROPERTIES WERE SOLD BY THE ASSESSEE AL ONG WITH 8 OTHER PERSONS AND THE SHARE OF THE ASSESSEE IN THESE PROP ERTIES WAS 13.33%. ITA NOS. 323 4/A/11 & 260/A/12 . A.Y. 2008-09 3 6. THE A.O CALLED INFORMATION FROM THE OFFICER OF THE SUB REGISTRAR AND FOUND THAT AS PER STAMP DUTY VALUATION, THE VALUATI ON OF BOTH THE PROPERTIES WAS AT RS. 4,26,28,800/- AS AGAINST RS. 72,02,002/- SHOWN BY THE ASSESSEE. INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, THE A.O SHOW CAUSED THE ASSESSEE TO EXPLAIN WHY STAMP D UTY VALUE SHOULD NOT BE TAKEN AS FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF THE COMPUTATION OF CAPITAL GAINS. ON RECEIVING NO PLAUS IBLE REPLY, THE A.O PROCEEDED BY TAKING THE STAMP DUTY VALUE AS THE FUL L VALUE OF CONSIDERATION AND TAKING ASSESSEES SHARE @ 13.33%. THE SHORT TERM CAPITAL GAIN WAS COMPUTED AS UNDER:- SALE PRICE OF PROPERTIES AS PER STAMP DUTY VALUE RS. 56,82,419/- LESS: COST OF PROPERTIES AS PER PURCHASE DEED RS. 10,40,286/- SHORT TERM CAPITAL GAIN RS. 46,42,133 /- 7. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND EXPLAINED THAT HE HAS OFFERED SHORT TERM CAPITAL GAIN OF RS. 1,40, 350/- IN A.Y. 2009- 10. IT WAS FURTHER BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT IN THE CASE OF THE PURCHASER OF THE SAME PROPERTY, THE MAT TER WAS REFERRED TO VALUATION CELL OF THE DEPARTMENT WHICH VALUED THE P ROPERTY AT RS. 59,52,000/- EXCLUDING STAMP DUTY & OTHER CHARGES FO R THE PROPERTY NO. 171/ BLOCK 224 RS. 47,53,500/- EXCLUDING STAMP DUTY AND OTHER CHARGES FOR THE PROPERTY NO. 140/2/BLOCK NO. 222. THE ASSESSEE REQUESTED THE LD. CIT(A) TO ADOPT THE DVOS VALUATI ON FOR THE PURPOSES OF THE COMPUTATION OF CAPITAL GAINS. 8. THE LD. CIT(A) FORWARDED THE COPY OF THE VALUATION REPORT TO THE A.O CALLING FOR HIS COMMENTS. THE A.O VIDE ORDER SH EET DATED 29.08.2011 SUBMITTED THAT THE CASE MAY BE DECIDED O N ITS MERIT. ITA NOS. 323 4/A/11 & 260/A/12 . A.Y. 2008-09 4 9. AFTER CONSIDERING THE FACTS AND THE SUBMIS SIONS, THE LD. CIT(A) WAS CONVINCED THAT THE A.O WAS RIGHT IN INVOKING TH E PROVISIONS OF SECTION 50C AT THE TIME OF MAKING ASSESSMENT. HOWEV ER, ACCEPTING THE VALUATION REPORT OF THE DVO TAKEN IN RESPECT OF THE PURCHASER, THE LD. CIT(A) DIRECTED THE A.O TO ADOPT THE VALUE TAKE N BY THE DVO AND RE-CALCULATE THE CAPITAL GAIN. 10. AGGRIEVED BY THIS, THE REVENUE AND THE ASSESSEE ARE BOTH IN APPEAL BEFORE US. THE LD. D.R. STRONGLY SUPPORTING THE ASSESSMENT ORDER STATED THAT AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, A REFERENCE TO THE DVO HAS TO BE MADE IN THE CASE OF THE ASSESSEE. IT IS THE SAY OF THE LD. D.R. THAT THE VALUATION REPORT A CCEPTED IN THE CASE OF THE PURCHASER IS NOT AS PER THE PROVISIONS OF THE L AW. HENCE, THE ORDER OF THE LD. CIT(A) IS ERRONEOUS. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT IF THE VALUATION REPO RT OF THE DVO IN THE CASE OF THE PURCHASER OF THE PROPERTY IS ACCEPTED H E HAS NOTHING TO SAY. 11. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. WE HAVE ALSO CAREFULLY PERUSED THE PROVISION S OF SECTION 50C OF THE ACT. NO DOUBT, A REFERENCE TO THE VALUATION OFF ICER HAS TO BE MADE IN THE CASE OF THE SELLER (ASSESSEE) OF THE PROPE RTY. HOWEVER, IN OUR CONSIDERED OPINION, THE VALUATION DONE BY THE DEPAR TMENTAL VALUATION OFFICER IN THE CASE OF THE PURCHASER WOULD MAKE NO DIFFERENCE TO THE VALUE OF THE PROPERTY HAD IT BEEN DONE IN THE CASE OF THE SELLER OF THE PROPERTY. THE VALUATION REPORT ACCEPTED BY THE FIRS T APPELLATE AUTHORITY IS FROM THE DEPARTMENT VALUATION OFFICER AND, THEREFORE, CANNOT BE BRUSHED ASIDE LIGHTLY. SINCE THE PROPERTY IS THE SAME, THE VALUATION OFFICER IS THE SAME; WE DO NOT FIND ANY R EASON/LOGIC IN ITA NOS. 323 4/A/11 & 260/A/12 . A.Y. 2008-09 5 DISCARDING THE SAME MERELY BECAUSE IT HAS BEEN TAKE N IN THE CASE OF THE PURCHASER WHEREAS THE IMPUGNED APPEALS ARE OF T HE SELLER. 12. WE, THEREFORE, DO NOT FIND ANY ERROR OF INFIRMITY I N THE FINDINGS OF THE LD. CIT(A). WE, ACCORDINGLY DISMISS BOTH THESE APPEALS BY THE REVENUE AND THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON 13 - 04 - 2016. SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD