Asaram Shankar Perkar, Aurangabad V. Assistant Commissioner of Income tax,

ITA 2704/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2263 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH GAWLI
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Reassessment proceedings
• Section: 143(3); 50C

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2 704 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 SHRI ASARAM SHANKAR PERKAR, GAT NO. 04, SADANAND NAGAR, SATARA PARISAR, AURANGABAD 431001 PAN : BTUPP5311D ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3, AURANGABAD / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI RAJESH GAWLI / DATE OF HEARING : 2 0 - 0 8 - 201 8 / DATE OF PRONOUNCEMENT : 09 - 1 1 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 2, AURANGABAD DATED 06 - 09 - 2016 FOR THE ASSESSMENT YEAR 20 12 - 13. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE SOLD AGRICULTURE LAND COMPRISING IN GUT NO. 212, SATARA 2 ITA NO . 2704/PUN/2016, A.Y. 2012 - 13 (KHANDOBA), AURANGABAD ADMEASURING 40 R FOR CONSIDERATION OF RS.45,00,000/ - AND HAD OFFERED THE GAIN ON SALE OF LAND UNDER THE HEAD CAPITAL GAINS. IN REASSESSMENT PROCEEDINGS THE ASSESSING OFFICER TOO K GOVERNMENT VALUATION I.E. RS.51,75,000/ - AS SALE VALUE OF LAND . THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) AND THUS MADE ADDITION OF DIFFERENCE IN THE CAPITAL GAINS AS RS.6,75,000/ - . AGGRIEVED BY THE ASSESSMENT ORDER DATED 19 - 02 - 2016 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE APPEAL OF ASSESSEE AND CONFIRMED THE ADDITION. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI PRAMOD SHINGTE APPEAR ING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AN AGRICULTURIST. THE ASSESSEE SOLD AGRICULTURAL LAND FOR RS.45,00,000/ - . THE COST OF ACQUISITION OF LAND WAS RS.2,00,000/ - AND OFFERED THE CAPITAL GAIN ARISING THERE FROM FOR TAX. THE ASSESSI NG OFFICER TOOK THE SALE VALUE AS PER GOVERNMENT VALUATION AND MADE ADDITION OF RS.6,75,000/ - . THE DIFFERENCE BETWEEN THE SALE VALUE DECLARED BY THE ASSESSEE AND THE SALE VALUE DETERMINED BY THE ASSESSING OFFICER IS APPROXIMATELY 13%. THE LD. AR SUBMITTE D THAT THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF C.B. GAUTAM VS. UNION OF INDIA & ORS. REPORTED AS 199 ITR 530 HAS APPROVED TOLERANCE LIMIT OF 15% VARIATION IN ESTIMATING SALE VALUE. THE LD. AR SUBMITTED THAT THE PUNE BENCH OF TRIBUNAL IN THE CASE OF RAHUL CONSTRUCTIONS VS. DEPUTY COMMISSIONER OF INCOME TAX REPORTED AS 38 DTR 19 ALLOWED RELIEF TO ASSESSEE WHERE THE DIFFERENCE BETWEEN THE SALE CONSIDERATION SHOWN BY THE ASSESSEE AND THE FAIR MARKET 3 ITA NO . 2704/PUN/2016, A.Y. 2012 - 13 VALUE DETERMINED BY THE DVO WAS LESS THAN 10%. THE LD. AR TO FURTHER SUBSTANTIATE HIS CONTENTIONS WITH RESPECT TO THE TOLERANCE LIMIT FOR MAKING THE ADDITION RELIED ON THE DECISION OF HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P) LTD. VS. COMMISSIONER OF INCOME TAX REPORTED AS 123 TAXMAN 464. 4. ON THE OTHER HAND SHRI RAJESH GAWLI REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION. HOWEVER, THE LD. DR SUBMITTED THAT IN PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE HAD OFFERED ADDITION OVER AND ABOVE 10% OF THE DIFFERENCE BETWEEN THE SALE VALUE DISCLOSED BY THE ASSESSEE AND GOVERNMENT VALUATION . 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE SOLITARY ISSUE RAISED IN THE APPEAL IS WITH RESPECT TO THE ADDITION ON ACCOUNT OF CAPITAL GAIN IN RESPECT OF SALE OF AGRICULTURAL LAND. THE ASSESSEE SOLD THE LAND FOR RS.45,00,000/ - AND OFFERED THE GAIN UNDER THE HEAD CAPITAL GAIN. THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 50C AND TOOK THE GOVERNMENT VALUATION I.E. RS.51,75,000/ - AS SALE CONSIDERATION. THE CONTENTIONS OF THE ASSESSEE IS THAT WHERE THE DIFFERENCE IN THE SALE VALUE DECLARED BY THE ASSESSEE AND VALUE DETERMINED BY THE ASSESSING OFFICER IS LESS THAN 1 5 %. NO ADDITION IS WARRANTED. WE FIND IN THE PRESENT CASE THERE IS DIFFERENCE OF 13% IN THE VALUE DECLARED BY THE ASSESSEE AND AS DETERMINED BY THE ASSESSING OFFICER. THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF RAHUL CONSTRUCTIONS VS. DEPUTY COMMISSIONER OF INCOME TAX (SUPRA) HAS TAKEN A TOLERANCE LIMIT OF DIFFERENCE IN TWO VALUATIONS AS 10%. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P) LTD. VS. 4 ITA NO . 2704/PUN/2016, A.Y. 2012 - 13 COMMISSIONER OF INCOME TAX (SUPRA). THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) HAD VOLUNTARILY OFFERED FOR THE ADDITION OF SALE CONSIDERATION OVER AND ABOVE THE DIFFERENCE OF 10% . TAKING INTO CONSIDE RATION ENTIRETY OF FACTS AND THE DECISIONS CITED BY THE ASSESSEE, TO MEET THE ENDS OF JUSTICE THE BENEFIT OF 10% DIFFERENCE OF SALE VALUE IS ALLOWED. THE SALE CONSIDERATION OVER AND ABOVE 10% IS ADDED FOR THE PURPOSE OF DETERMIN ING CAPITAL GAIN S . THE APP EAL OF ASSESSEE IS PARTLY ALLOWED , IN THE TERMS AFORESAID . 6. IN THE RESULT, THE IMPUGNED ORDER IS MODIFIED TO THE EXTENT MENTIONED ABOVE AND THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 09 TH DAY OF NOVEMBER, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 09 TH NOVEMBER, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, AURANGABAD 4. THE PR. COMMISSIONER OF INCOME TAX - 2, AURANGABAD 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE