Shri Manjunath Mysore Cheluve Urs , Bangalore V. The Income Tax Officer Ward-7(2)(3), Bangalore

ITA 2644/BANG/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3785 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-07-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN J
• Assessee Lawyers: ASHOK A KULKARNI
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Capital Gains
• Section: 50C; 142(1); 143(2); 48; 13; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2644/BANG/2018 ASSESSMENT YEAR : 2013-14 SHRI MANJUNATH MYSORE CHELUVE URS, NO.14, 18 TH CROSS, VICTORIA LAYOUT, BENGALURU. PAN AAQPM 2083 D V S. THE INCOME-TAX OFFICER, WARD-7(2)(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI ASHOK A KULKARNI, ADVOCATE, REVENUE BY : SHRI KANNAN NARAYANAN, JCIT(DR) DATE OF HEARING : 15-07-2021 DATE OF PRONOUNCEMENT : 30-09-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAIN ST ORDER DATED 23/07/2018 PASSED BY THE LD. CIT (A)-7, BANGA LORE FOR ASSESSMENT YEAR 2013-14 ON FOLLOWING GROUNDS OF APP EAL: 1. THE ORDER OF THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS)-7 IS OPPOSED TO LAW AND FACTS OF THE CASE . 2. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) -7 ERRED IN COMPUTING CAPITAL GAINS AT RS.1,77,17,119/- BY A DOPTING THE SALE CONSIDERATION OF THE PROPERTY AT RS. 1 1,55,00 0/-. PAGE 2 OF 19 ITA NO.2644/BANG/2018 3. HAVING REGARDED TO THE SALE AGREEMENT, MEMORANDU M OF SETTLEMENT AND THE CONSEQUENTIAL COURT ORDER THE CO MMISSIONER OF INCOME TAX (APPEALS)-7 OUGHT TO HAVE HELD THAT T HE PROVISIONS OF SECTION 50C OF THE I.T. ACT ARE NOT A PPLICABLE. 4. ALTERNATIVELY AND WITHOUT PREJUDICE THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS)-7 OUGHT TO HAV E HELD THAT APPELLANT'S CASE FALLS UNDER THE PROVISO TO SE CTION 50C OF THE I.T. ACT. 5. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) -7 OUGHT TO HAVE HELD THAT UNDER THE FACTS AND IN THE CIRCUM STANCES OF THE CASE, ADOPTION OF RS.11,50,00,000/- AS SALE CON SIDERATION OF THE SUBJECT PROPERTY IS NOT CORRECT. 6. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) -7 OUGHT TO HAVE HELD THAT THE COMPUTATION OF DEDUCTION U/S 54 IS NOT IN ACCORDANCE WITH LAW. 7. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) -7 OUGHT TO HAVE ALLOWED EXPENDITURE OF RS.30 LAKHS INCURRED ON REFURBISHING THE HOUSE WHILE COMPUTING DEDUCTION U/ S 54 OF THE ACT. 8. THE APPELLANT CRAVES FOR LEAVE TO ADD TO, DELETE FROM OR AMEND THE GROUNDS OF APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/1 0/2013 DECLARING TOTAL INCOME OF RS.13,34,870/-. THE CASE WAS SELECTED FOR SCRUTINY FOR THE VERIFYING THE CAPITAL GAIN CON SIDERATION AND THE DEDUCTION CLAIMED BY ASSESSEE UNDER SECTION 54. NOTICE UNDER SECTION 143(2) AND 142(1) WERE RECEIPT ISSUED . IN RESPONSE TO STATUTORY NOTICES, REPRESENTATIVE OF ASSESSEE AP PEARED BEFORE THE LD.AO AND FILED REQUISITE DETAILS AS CALLED FOR . PAGE 3 OF 19 ITA NO.2644/BANG/2018 2.2 THE LD.AO OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION ASSESSEE SOLD RESIDENTIAL PROPERTY JO INTLY WITH HIS FAMILY MEMBERS AND THE RESULTANT CAPITAL GAINS WAS INVESTED IN PURCHASE OF RESIDENTIAL HOUSE. ASSESSEE CLAIMED DED UCTION UNDER SECTION 54 ON THIS INVESTMENT. LD. AO NOTED THAT TH E SALE CONSIDERATION SHOWN IN COMPUTATION OF INCOME WAS RS .7 CRORES HOWEVER IT WAS ASCERTAINED FROM THE OFFICE OF SUB R EGISTRAR THAT THE VALUE ADOPTED BY THE STAMP AUTHORITIES FOR PURP OSE OF STAMP DUTY WAS AT RS.11,55,00,000/-. THE LD.AO NOTED THAT SUB REGISTRAR COLLECTED THE STAMP DUTY ON THE GUIDANCE VALUE TO THE SALE CONSIDERATION MENTIONED IN THE SALE DEED WAS R S.7 CRORE. 2.3 THE LD.AO NOTED THAT ASSESSEE HAS CLAIMED EXEMP TION OF RS.2,66,52,615/-UNDER SECTION 54 FOR HAVING INVESTE D IN THE RESIDENTIAL HOUSE THAT WAS PURCHASED ON 03/06/2013. LD.AO NOTED THAT ASSESSEE HAD PACED CONSIDERATION OF RS.2 ,20,00,000/- ONLY. LD.AO THUS DISALLOWED A SUM OF RS.46,52,615/- UNDER SECTION 54 AS THE SAME WAS CLAIMED IN EXCESS. LD.AO CALLED UPON ASSESSEE AS TO WHY THE PROVISIONS OF SECTION 50C OF THE ACT SHOULD NOT BE INVOKED IN THE PRESENT FACTS. IN RESPONSE AS SESSEE SUBMITTED AS UNDER: IN RESPONSE MR.K.M NARASIMHAMURTHY CA DULY AUTHORI ZED BY THE ASSESSEE APPEARED AN SUBMITTED ASSESSEE'S REPLY. TH E SUBMISSION OF THE ASSESSEE IS REPRODUCED HERE AS UNDER : A. DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESS MENT YEAR 2013-14, I, ALONG WITH FAMILY MEMBERS HAVE SOLD RESIDENTIAL HOU SE SITUATED AT NO.10 NEW NO.1, 1 CROSS, MAIN, RMV EXTENSION, SADAS HIVANAGAR, BANGALORE-560080. PAGE 4 OF 19 ITA NO.2644/BANG/2018 B. THE SAID PROPERTY IS CO-OWNED / JOINTLY OWNED BY MRS. M.C. CHANDRA PRABHA @ M.C. CHANDRAPRABHA URS, SRI. M.CMANJUNATH URS AND MRS. ANUPAMA URS. C. MRS. M.C.CHANDRAPRABHA URS EXECUTED AN AGREEMENT TO SELL THE ABOVE MENTIONED PROPERTY DAGTED 08109-01-2004 IN FAVOUR O F MRS. PRABHA S MALLIKARJUN AGREEING TO SELL THE ABOVE MENTIONED PR OPERTY FOR AN AGREED CONSIDERATION OF RS.335,55,5551- AND RECEIVED AN AD VANCE OF RS.85,55,555/-. (COPY OF THE AGREEMENT DATED 08/09- 01-2004 IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL) D. SUBSEQUENTLY, THE BUYER OF THE PROPERTY. MRS. PR ABHA S MALLIKARJUNA HAS FILED A PETITION BEFORE THE COURT (OS NO. 15079 /2005) FOR SPECIFIC PERFORMANCE. (COPY OF THE COURT ORDER AND COPY MEMO RANDUM OF SETTLEMENT I COMPROMISE IS ENCLOSED HEREWITH FOR YO UR KIND PERUSAL) E. AS IT WAS JOINTLY OWNED PROPERTY AND AGREEMENT W AS ENTERED INTO BY MRS. CHANDRAPRABHA URS ALONE, MR. MANJUNATH URS AND MR. AJAY URS (DECEASED), SONS OF MRS. CHANDRAPRABHA URS HAVE FIL ED A PETITION BEFORE THE CITY CIVIL AND SESSION COURT AGAINST MRS. CHAND RAPRABHA URS, KSFC AND MRS. PRABHA S MALLIKARJUNA. F. THROUGH THE HON'BLE COURT'S INSTRUCTION DATED 25 TH AUGUST, 2012, THE PARTIES AGREED FOR COMPROMISE AND FINALLY THE PRICE OF THE PROPERTY IS FIXED AT RS.7,00,00,000/-. THE PARTIES SUBMITTED A MEMORANDUM OF SETTLEMENT / COMPROMISE TO THE HON'B!E COURT. ACCOR DINGLY, THE SALE DEED OF THE SAID PROPERTY EXECUTED BY THE PARTIES, MRS.CHANDRAPRABHA URS, MR. MANJUNATH URS AND MRS. ANUPAMA URS FOR A C ONSIDERATION OF RS.7,00,00,000/- (RUPEES SEVEN CRORES ONLY). G. CONSIDERING THE FACT THAT, THERE WAS AN AGREEMEN T ENTERED INTO SELL THE PROPERTY TO THE SAME BUYER IN THE YEAR 2004 ITS ELF AND DUE TO LITIGATION AMONGST THE PARTIES THE REGISTRATION OF THE PROPERTY HAS BEEN DONE DURING THE FY 2012-13. THEREFORE, I SUBMIT THA T, THE PROVISION OF SECTION 500 IS NOT APPLICABLE FOR THE ABOVE MENTION ED TRANSACTION. H. THE HONBLE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME-TAX-11, AGRA VS SHIMBHU MEHRA (2016) 65 TAXMANN.COM 142 (AL LAHABAD) HAS HELD THAT, 'WHERE AGREEMENT TO SALE WAS ENTERED IN 2001 AND PART CONSIDERATION WAS RECEIVED AND LATER SALE DEED WAS EXECUTED IN APRIL 2003, TRANSFER OF PROPERTY COULD BE SAID TO HAVE TA KEN PLACE IN 2001 I. IN VIEW OF THE ABOVE SUBMISSIONS AND AS PER DECI SIONS OF VARIOUS COURTS, I KINDLY REQUEST YOUR GOODSELF TO CONSIDER RS.7.00 CRORES AS THE FULL VALUE OF CONSIDERATION RECEIVED AND NOT TO CON SIDER THE VALUE PAGE 5 OF 19 ITA NO.2644/BANG/2018 ADOPTED FOR REGISTRATION (11.50 CRORES) FOR THE PUR POSE OF COMPUTATION OF CAPITAL GAINS. 2.4 THE LD.AO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE ACCEPTED THE VALUATION DETERMINED BY THE STAMP DUTY AUTHORITY FOR PURPOSE OF PAYING STAMP DUTY AND REGISTRATION O F THE DEED. THE LD.AO CONCLUDED THAT THE PROVISIONS OF SECTION 50C ARE APPLICABLE AND ADOPTED RS.11,55,00,000/- AS FULL VA LUE OF CONSIDERATION FOR PURPOSE OF SECTION 48 TO COMPUTE THE LONG TERM CAPITAL GAINS. THE LD. AO COMPUTED THE LONG TERM CA PITAL GAIN AT RS.8,23,39,648/-AND ASSESSEES SHARE BEING 50% OF T HE LONG-TERM CAPITAL GAIN TO BE RS 4,11,69,734/-. 2.5 IN RESPECT OF AID DEDUCT DEDUCTION CLAIMED UNDE R SECTION 54, LD.AO WAS OF THE OPINION THAT ASSESSEE HAS CLAI MED IN EXCESS OF RS.32,00,000/- AFTER GRANTING BENEFIT OF THE STA MP DUTY PAID TOWARDS THE REGISTRATION OF THE SAID AGREEMENT. THE LD.AO DENIED THE CLAIM AS ASSESSEE FAILED TO FURNISH THE SUPPORT ING PROOF OF HAVING INCURRED THE EXPENSES TOWARDS IMPROVEMENT OF THE PROPERTY PURCHASED. 2.6 AGGRIEVED BY THE ORDER OF LD.AO ASSESSEE PREFER RED APPEAL BEFORE THE LD. CIT (A). 2.7 THE LD. CIT (A) OBSERVED AS UNDER: THE SUBMISSION OF THE APPELLANT HAS BEEN CONSIDERE D. AS PER THE SUBMISSION OF THE - APPELLANT THE PROPERTY IN QUEST ION AT 1 CROSS. 8H MAIN. RMV EXTN., SADASHIVANAGAR, BANGALORE WAS PURC HASED BY THE GRANDFATHER AND THE FATHER OF THE APPELLANT OUT OF THE FAMILY INCOME AND SAVINGS AND ALL THE FAMILY MEMBERS WERE THE CO-OWNE RS IN THE SAID PROPERTY. THUS, THE CO-OWNERS ARE THE MOTHER, BROTH ER AND SISTER OF THE APPELLANT ALONG WITH HIM. THE APPELLANT CLAIMS THAT THERE WAS AN AGREEMENT FOR SALE OF THE PROPERTY BY THE MOTHER OF THE APPELLANT ON 8/9 PAGE 6 OF 19 ITA NO.2644/BANG/2018 JAN 2004 AND THE PRICE FIXED AS PER THE SAID AGREEM ENT WAS RS 3.35.55,555 AND HENCE, THE PROVISIONS OF SECTION 50 C CANNOT BE APPLIED TO THIS TRANSFER. HOWEVER, THIS CONTENTION OF THE A PPELLANT IS NOT SUSTAINABLE AS THE AGREEMENT WAS ONLY BY THE MOTHER OF THE APPELLANT AND NOT BY ALL THE RIGHTFUL CO-OWNERS. AS THE MOTHE R WAS NOT THE ONLY OWNER OF THE PROPERTY, THE AGREEMENT COULD NOT BE C ONSIDERED AS A VALID AND LEGALLY ENFORCEABLE AGREEMENT. THIS FACT HAS BE EN EVIDENCED SOON AFTER NN-HEN THE APPELLANT AND HIS BROTHER FILED CI VIL SUIT QUESTIONING THE OWNERSHIP OF THEIR MOTHER AND THEREBY CHALLENGING T HE AGREEMENT FOR SALE ENTERED INTO BY THE MOTHER ON 8/9 JAN 2004. SUBSEQU ENTLY, THE PROPERTY WAS SOLD BY ALL THE CO-OWNERS FOLLOWING THE SETTLEM ENT OF THE DISPUTE OF OWNERSHIP BETWEEN THEM AND THE COMPROMISE APPROVED BY THE COURT. THEREFORE, THERE IS NO BASIS FOR THE APPELLANT TO A RGUE THAT SECTION SOC IS NOT APPLICABLE AS THE TRANSFER IS ON THE BASIS OF A GREEMENT OF SALE EARLIER TO THE DATE OF SALE. THE VALUE FIXED IN THE AGREEME NT FOR SALE WAS NEVER ADOPTED AS FULL CONSIDERATION FOR SALE IN THE SALE DEED- HENCE, THE AGREEMENT FOR SALE WHICH WAS CHALLENGED BY THE APPE LLANT HIMSELF AND PROVED ILLEGAL IN THE COURT OF LAW, CANNOT BE TAKEN COGNIZANCE OF CONTRARY TO THE ARGUMENT OF THE APPELLANT. 6.2 IT IS UNDISPUTED THAT THE VALUE OF THE PROPERTY FOR STAMP DUTY PURPOSE WAS RS 11.55 CRORES AS AGAINST THE VALUE OF RS 7 CR ORES MENTIONED IN THE SALE DEED. UNDER THESE FACTS, THE APPLICATION OF SE CTION SOC IS CLEARLY ATTRACTED AND THE AO WAS RIGHT TO INVOKE THE PROVIS ION. FURTHER, THE APPELLANT HAS ACCEPTED THE VALUATION OF THE PROPERT Y FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. THE ASSESSEE HAD ALSO NEVER CLAIMED BEFORE ASSESSING OFFICER THAT VALUE ADOPTED BY STAMP VALUA TION AUTHORITY WAS MORE THAN FMV OF SAID PROPERTY. THEREFORE, THERE WA S NO REASON FOR THE AO NOT TO ADOPT THE VALUE AS DETERMINED 1R STAMP DU TY PURPOSE AS FULL CONSIDERATION FOR THE SALE OF THE PROPERTY. 2.8 IN RESPECT OF REDUCTION DENIED UNDER SECTION 54 BY THE LD. AO, THE LD. CIT (A) OBSERVED AS UNDER: 7. THE OTHER ISSUE RAISED BY THE APPELLANT IS THAT THE AO HAS ALLOWED ONLY RS 2.20 CRORES AS INVESTMENT IN RESIDENTIAL HO USE U/S 54 OF THE ACT AGAINST THE CLAIM OF RS 2,6652,615/- OF THE ASSESSE E. THE AO NOTED THAT THAT AS PER PURCHASE DEED DATED 03-06-2013, TH E ASSESSEE HAS PURCHASED THE HOUSE FOR A CONSIDERATION OF RS 2.20 CRORES ONLY (EXCLUDING REGISTRATION A STAMP DUTY OF RS 14,52.61 5/-) AND HENCE HE DISALLOWED EXCESS CLAIM U/S 54 OF RS 32 LAKHS. THOU GH IN THE GROUND OF APPEAL IT IS CONTENDED THAT THE APPELLANT HAD PAID RS 30 LAKHS TO THE CONTRACTOR BY CHEQUE FOR REFURBISHING THE HOUSE PUR SUANT TO AGREEMENT TO CONSTRUCT, NO DETAILS OR EVIDENCE WERE SUBMITTED BEFORE THE AO IN PAGE 7 OF 19 ITA NO.2644/BANG/2018 SUPPORT OF THIS CLAIM IN SPITE OF SPECIFICALLY ASKE D BY THE AO FOR THE SAME. DURING THE HEARING, THE AR SUBMITTED THAT THE PROOF OF INVESTMENT/EXPENDITURE FOR RENOVATION IN THE NEW HO USE COULD NOT BE SUBMITTED TO AO DUE TO MISPLACEMENT OF THE DOCUMENT S DURING SHIFTING. HOWEVER, NOTHING WAS BROUGHT ON RECORD DURING THE H EARING TO SUBSTANTIATE THE CLAIM OF ADDITIONAL INVESTMENT IN THE NEW HOUSE. 2.9 AGGRIEVED BY THE ORDER OF LD.CIT(A) ASSESSEE IS IN APPEAL BEFORE US NOW. 2.10 THE LD.AR AT THE OUTSET SUBMITTED THAT ASSESSE E DO NOT WISH TO PRESS GROUND NO.2-4. ACCORDINGLY, WE DISMISS THESE GROUND IS AS NOT PRES SED. 3. GROUND NO. 5 IS IN RESPECT OF ADOPTING THE SALE CONSIDERATION OF SUBJECT PROPERTY TO BE RS.11,50,00 ,000/- BY THE LD.AO FOR PURPOSE OF COMPUTING CAPITAL GAINS IN THE HANDS OF ASSESSEE. 3.1 THE LD.AR SUBMITTED THAT ASSESSEE IS A CO-OWNER OF THE RESIDENTIAL PROPERTY SITUATED AT NO. 10, 1 ST CROSS, 8 TH MAIN, RMV EXTENSION, SADAR SHIV NAGAR, BANGALORE, 560080. IT HAS BEEN SUBMITTED THAT ASSESSEE ALONG WITH OTHER CO-OWNERS SOLD THE SAID PROPERTY VIDE SALE DEED DATED 30/08/2012 FOR CONSI DERATION OF RS.7 CRORES. 3.2 THE LD.AR SUBMITTED THAT THE CO-OWNERS ARE THE MOTHER, BROTHER AND SISTER OF THE ASSESSEE ALONG WITH HIM. 3.3 ADMITTEDLY, THE SUB REGISTRAR ESTIMATED THE VAL UE OF PROPERTY FOR THE PURPOSE OF STAMP DUTY AT RS.11.55 CRORES AND IN THE ASSESSMENT PROCEEDINGS, THE LD.AO PROCEEDED TO ADOPT THE GUIDANCE VALUE OF RS.11.55 CRORES TO COMPUTE LONG T ERM CAPITAL PAGE 8 OF 19 ITA NO.2644/BANG/2018 GAINS IN THE HANDS OF ASSESSEE BY INVOKING THE PROV ISIONS OF SECTION 50C OF THE ACT. HE SUBMITTED THAT ORIGINALL Y THE AGREEMENT FOR SALE OF THE PROPERTY WAS ENTERED BY T HE MOTHER ALONE DATED 8/09/01/2004 FOR SALE CONSIDERATION OF RS.3,35,55,555/-. SUBSEQUENTLY, AS MOTHER WAS NOT THE ONLY OWNER OF THE PROPERTY THE AGREEMENT COULD NOT BE TR EATED AS VALID AND LEGALLY ENFORCEABLE WHICH IS SUBSTANTIATE D BY THE HONBLE CITY CIVIL SUIT, WHEREIN QUESTIONED THE OWN ERSHIP OF THE MOTHER AND CHALLENGED THE AGREEMENT OF SALE ENTERED INTO BY THE MOTHER DATED 8/09/01/2004. THE LD.AR SUBMITTED THAT BY THE ORDER OF COURT THE PROPERTY WAS SOLD BY ALL THE CO- OWNERS, FOLLOWING THE SETTLEMENT OF THE DISPUTE OF OWNERSHI P AMONGST THEM. FOR THIS PURPOSE THE CO-OWNERS ENTERED INTO C OMPROMISE DEED AND THE TOTAL SALE CONSIDERATION WAS FIXED AT RS.7 CRORE AS MENTIONED IN THE SALE DEED DATED 30/8/2012. EXPLAIN ING THE BRIEF FACTS THAT CULMINATED INTO EXECUTION OF SALE DEED DATED 30/08/2012, THE LD.AR SUBMITTED AS UNDER: ---------SPACE LEFT INTENTIONALLY ------ PAGE 9 OF 19 ITA NO.2644/BANG/2018 PAGE 10 OF 19 ITA NO.2644/BANG/2018 PAGE 11 OF 19 ITA NO.2644/BANG/2018 PAGE 12 OF 19 ITA NO.2644/BANG/2018 PAGE 13 OF 19 ITA NO.2644/BANG/2018 3.4 THE LD.AR THUS VEHEMENTLY SUBMITTED THAT, PROV ISIONS OF SECTION 50C CANNOT BE APPLIED IN SUCH CIRCUMSTANCES . 3.5 IT IS SUBMITTED BY THE LD.AR THAT, PROPORTIONAT E SALE CONSIDERATION AS PER THE REGISTERED SALE DEED IS TO BE CONSIDERED FOR THE PURPOSE OF COMPUTING LTCG IN THE HANDS OF A SSESSEE, AND THAT ASSESSEE DID NOT RECEIVE ANYTHING OVER AND ABO VE WHAT HAS BEEN AGREED TO HAVE BEEN RECEIVED IN THE SALE DEED DATED 30/08/2012. 3. IN SUPPORT OF ITS SUBMISSION THE LD.AR RELIED ON FOLLOWING DECISIONS: 1. DHARMSIBHAI SONI [2016] 161 ITD 627 (AHMEDABAD TRIB UNAL) 2. CHALASANI NAGA RATNA KUMARI (ITA NO. 639/VIZAG/2013 3. RAUL G PATEL VS DCIT BY ORDER DATED 26/09/2018 (AHMEDABAD TRIBUNAL) 4. KISHORE HIRA BHANDARI VS ITO BY ORDER DATED 06/06/2 019 (MUMBAI TRIBUNAL) 3.6 THE LD.AR SUBMITTED THAT THE VALUE THAT WAS AGR EED BEFORE THE HONBLE CITY CIVIL COURT IS THE ACTUAL VALUE RE CEIVED BY ASSESSEE ALONG WITH OTHER CO-OWNERS AND THERE IS NO IOTA OF EVIDENCE REGARDING RECEIPT OF ANY AMOUNT OVER AND A BOVE WHAT HAS BEEN AGREED IN THE SALE DEED DATED 30/08/2012. 3.7 THE LD.SR.DR ON THE CONTRARY, PLACED RELIANCE O N OBSERVATIONS OF AUTHORITIES BELOW. 3.8 WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOT H SIDES IN LIGHT OF RECORDS PLACED BEFORE US. PAGE 14 OF 19 ITA NO.2644/BANG/2018 3.9 ADMITTEDLY, AGREEMENT ENTERED INTO BY MOTHER AL ONE FOR SALE OF SUBJECT PROPERTY DATED 08/01/2004 IS NOT DOUBTED BY THE COURTS IN ANY OF THE PROCEEDINGS BEFORE THE HONBLE CITY CIVIL COURT. WE HAVE PERUSED THE COURT DECREE DATED 25/08 /2012 IN OS NO. 15079/2005 AND OS NO. 8787/2005 WHEREIN RS.7 CRORE HAS BEEN AGREED TO BE THE SALE CONSIDERATION OF THE SUBJECT PROPERTY BY ALL THE CO-OWNERS. ON PERUSAL OF THE SA LE DEED DATED 30/08/2012, WE NOTE THAT, THE PRECEDING INCIDENTS N ARRATED BY THE LD.AR REPRODUCED HEREINABOVE HAS BEEN MENTIONED THEREIN. IT IS ALSO NOT DISPUTED THAT THE SALE DEED DATED 30 /08/2012 IS EXECUTED BY ALL THE CO-OWNERS AS PER THE DIRECTIONS DECREED BY THE HONBLE CITY CIVIL COURT DATED 25/08/2012. 3.10 THE LD.AO TREATED STAMP VALUATION AS VALUE OF SUBJECT PROPERTY SOLD HOLDING THAT SECTION 50C IS DEEMING P ROVISION WHICH IS MANDATORY IN NATURE IGNORING THE FACT, THA T THE SALE CONSIDERATION WAS APPROVED BY THE HONBLE CITY CIV IL COURT. 3.11 IT IS OBSERVED THAT THE MARKET VALUE OF THE PR OPERTY FOR STAMP DUTY PURPOSE WAS DETERMINED BY THE CONCERNED AUTHORITY AT RS.11.55 CRORE AND ACCORDINGLY THE STAMP DUTY TH EREON WAS DULY PAID, WHILE REGISTERING THE SALE DEED. THE VAL UE ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IS NOT DISPUTE D BY THE ASSESSEE. THE LD.AO HAS NOT BROUGHT ON RECORD THAT THE PROPERTY UNDER SALE WAS NOT WAS UNDER VARIOUS ENCUMBRANCES A ND THE ASSESSEE WAS HAVING ABSOLUTE MARKETABLE TITLE OF TH E SAID PROPERTY. NO MATERIAL IS BROUGHT ON RECORD BY LD.AO THAT THE ASSESSEE RECEIVED MUCH MORE CONSIDERATION THAN SHOW N IN THE PAGE 15 OF 19 ITA NO.2644/BANG/2018 SALE DEED. IN OUR VIEW APPLICABILITY OF THE PROVISI ONS OF SECTION 50C CANNOT BE INVOKED IN THE FACTS AS THAT OF THE A SSESSEE BEFORE US. 4. THE HONBLE HIGH COURTS WHILE CONSIDERING THE QU ESTION OF LAW WITH REGARD TO THE ADDITION ON ACCOUNT OF DIFFERENC E BETWEEN THE CIRCLE RATE AND THE SALE PRICE OF IMMOVABLE PROPERT Y, DECLARED BY THE ASSESSEE, HELD THAT THAT, THE EXPRESS PROVISION OF SECTION 50C ENABLING THE REVENUE TO TREAT THE VALUE CONSIDERED FOR PURPOSES OF COMPUTING STAMP DUTY, IPSO FACTO, CANNOT BE A LEGIT IMATE GROUND FOR CONCLUDING THAT THERE WAS UNDERVALUATION, OF SU CH IMMOVABLE PROPERTY. IF PARLIAMENTARY INTENTION WAS TO ENABLE SUCH A FINDING, A PROVISION AKIN TO SECTION 50C WOULD HAVE BEEN INC LUDED IN THE STATUTE BOOK, TO ASSESS INCOME ON THE BASIS OF A SI MILAR FICTION IN THE CASE OF THE ASSESSEE IN SIMILAR CIRCUMSTANCES. NO DOUBT, THE DECLARATION OF A HIGHER COST FOR ACQUISITION FOR ST AMP DUTY COULD BE THE STARTING POINT FOR AN INQUIRY IN THAT REGARD , HOWEVER THAT ALONE CANNOT BE THE BASIS FOR INVOKING THE PROVISIO NS OF SECTION 50 C OF THE ACT WITHOUT THERE BEING CONCLUSIVE EVID ENCE OF AN UNDERVALUATION. THE COMPULSION FOR HIGHER VALUE IS THE MANDATE OF THE STAMP ACT, AND PROVISIONS WHICH LEVY STAMP D UTY AT PRE- DETERMINED OR NOTIFIED DATES. 4.1 IN THE PRESENT CASE, THE REVENUE DID NOT RELY O N ANY OBJECTIVE FACT OR CIRCUMSTANCES. THERE IS NO IOTA O F EVIDENCE OF ASSESSEE AND THE CO-OWNERS HAVE RECEIVED ANY AMOUNT OVER AND ABOVE WHAT IS AGREED IN THE SALE DEED DATED 30/08/2 012. WHEREAS SUFFICIENT EVIDENCE ARE PLACED ON RECORD TO ESTABLISH THAT PAGE 16 OF 19 ITA NO.2644/BANG/2018 THE AMOUNT OF RS.7 CRORES IN THE SALE CONSIDERATION RECEIVED BY ASSESSEE ALONG WITH THE CO-OWNERS ARE AS PER THE AP PROVAL SOUGHT FROM HONBLE CITY CIVIL COURT IN A SUIT FILED BY AS SESSEE. 4.2 ADMITTEDLY, THERE WAS A LITIGATION THAT WAS PEN DING IN RESPECT OF THE SALE OF THE PROPERTY BY MOTHER ALONE , DISREGARDING THE OTHER CO-OWNERS IN WHICH THERE WAS A DECREE THA T WAS PASSED IN TERMS OF COMPROMISE PETITION BETWEEN ALL THE CO- OWNERS WHEREIN THE TOTAL CONSIDERATION WAS AGREED TO BE RS .7CRORES. 4.3 WE ALSO NOTE THAT THE LD.AO HAS NOT VERIFIED TH E VALUE OF THE PROPERTY AS ON THE DATE OF AGREEMENT TO SELL ENTERE D INTO BY MOTHER ALONE WITH THE PURCHASER IN THE YEAR 2004. N EITHER THAT THE LD.AO REFERRED THE MATTER TO THE DVO AS PER THE PROVISIONS OF SECTION 50C(2). IT IS AN UNDISPUTED FACT THAT THE P ROPERTY UNDER SALE FOR CONSIDERATION WAS SUBJECTED TO LITIGATION BY THE ASSESSEE ALONG WITH OTHER CO-OWNERS AGAINST THE MOTHER PURSU ANT TO AGREEMENT TO SELL DATED 08/01/2004. THE GUIDANCE VA LUE OF THE PROPERTY AS ON THE DATE OF EXECUTION OF SALE DEED D ATED 30/08/2012 CHANGED. HOWEVER THE PARTIES TO THE AGRE EMENT WERE THE SAME AND BECAUSE THERE WAS A LITIGATION THAT WA S PENDING IN RESPECT OF THE SALE OF PROPERTY, SALE DEED COULD NO T BE ENTERED. IT WAS ONLY WHEN THE DECREE WAS PASSED BY HONBLE CI TY CIVIL COURT ON 25/08/2012 THE SALE DEED WAS ENTERED WITH THE SAME PURCHASER WITH ALL CO-OWNERS. UNDER SUCH CIRCUMSTAN CES, ADOPTION OF STAMP VALUATION BY THE LD. AO, BY APPLY ING THE PROVISIONS OF SECTION 50C WAS NOT JUSTIFIED. PAGE 17 OF 19 ITA NO.2644/BANG/2018 4.4 THEREFORE, WE DIRECT THE LD.AO TO WORK OUT CAPI TAL GAIN ON THE BASIS OF PROPORTIONATE CONSIDERATION SHOWN BY THE ASSESSEE. ACCORDINGLY GROUND NO.5 RAISED BY ASSESSEE STANDS A LLOWED. GROUND NO. 6-7: 5. LD.AR SUBMITTED THAT AUTHORITIES BELOW HAVE DISA LLOWED RS.32 LACKS INCURRED FOR REFURBISHING THE HOUSE FOR PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 54 OF THE ACT. 5.1 THE LD. SENIOR DR SUBMITTED THAT ASSESSEE HAD N OT FILED ANY DETAILS IN RESPECT OF THE EXPENDITURE INCURRED AND THEREFORE T HE AMOUNT HAS BEEN CORRECTLY DENIED. 5.2 WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 5.3 IT HAS BEEN SUBMITTED BY THE LD.AR THAT EVIDENC ES ARE AVAILABLE IN RESPECT OF THE PAYMENTS MADE TO THE ARCHITECT WHICH HAS BEEN FILED IN PAPER BOOK AT PAGES 68 TO 82. AS THESE DOCUMENTS ARE NOT VERIFIED BY THE AUTHORITIES BELOW, WE REMAND THIS ISSUE BACK TO THE LD.AO. THE LD. AO SHALL VERIFY ALL THE DETAILS FILED BY ASSESSEE AND CONSID ER THE CLAIM IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER OPPORTUNITY O F BEING HEARD MUST BE GRANTED TO ASSESSEE. ACCORDINGLY THESE GROUNDS RAISED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED AS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPT, 2021 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMB ER BANGALORE, DATED, THE 30 TH SEPT, 2021. /VMS/ PAGE 18 OF 19 ITA NO.2644/BANG/2018 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 19 OF 19 ITA NO.2644/BANG/2018 DATE INITI AL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -9-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -9-2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -9-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -9-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -9-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -9-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -9-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS