The DCITNavsari Circle, Navsari V. M/s. Suzaina Foods Pvt.Ltd., Navsari

ITA 2731/AHD/2010

• Counselvise Citation: 273120514 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 31-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 22-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report
• Section: 143(3); 50C; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALANKAMONY, AM) ITA NO. 2731/AHD/2010 A. Y.: 2007-08 THE D. C. I. T., NAVSARI CIRCLE, RANGPUJA, SWAPNALOK SOCIETY, NEAR KALIAWADI BRIDGE, JUNATHANA, NAVSRI VS M/S. SUZAINA FOODS PVT. LTD., JAYDEEP SHOPPING CENTRE, CHIKHLI, DISTRICT NAVSARI P. A. NO. AAGCS 7753 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI D. K. SINGH,, SR. DR RESPONDENT BY SHRI TUSHAR HEMANI, AR DATE OF HEARING: 31-10-2012 DATE OF PRONOUNCEMENT: 14-12-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT ( A), VALSAD DATED 24 TH JUNE, 2010 IN APPEAL NO. CIT(A)/VLS/282/09-10, FOR THE ASSESSMENT YEAR 2007-08 PASSED U/S 250 READ WITH SECTION 143(3) OF THE ACT. 2. THE REVENUE HAS RAISED FOUR GROUNDS IN THIS APPE AL WHEREIN GROUNDS NO.2, 3 AND 4 ARE GENERAL IN NATURE AND DO NOT SURV IVE FOR ADJUDICATION. THE LOAN SURVIVING GROUND NO.1 IS REPRODUCED HEREIN UNDER FOR REFERENCE: [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE HONBLE CIT(A) ERRED IN LAW IN DELETING THE ADD ITION OF RS.38,25,674/- MADE ON ACCOUNT OF DISALLOWANCE (SIC ) UNEXPLAINED INVESTMENTS U/S 69B OF THE I. T. ACT FOR UNDERSTAT EMENT OF PURCHASE CONSIDERATION OF NON AGRICULTURAL LAND. ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 2 3. THE ASSESSEE, A PRIVATE LIMITED COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING OF PICKLE AND CHUTNEY, FILED ITS E -RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON DECLARING TOTAL INCOME A T NIL ON 30-10-2007. THE SAME WAS PROCESSED U/S 143(1) OF THE ACT ACCEPT ING THE RETURNED INCOME. THEREAFTER, CASE WAS TAKEN UP FOR SCRUTINY AND FINALLY ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE ACT ON 30-12-200 9 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS.33,37,975/- WHEREIN AD DITION OF RS.38,25,674/- WAS MADE U/S 69B OF THE ACT ON ACCOU NT OF DIFFERENCE BETWEEN VALUATION FOR THE PURPOSE OF STAMP DUTY AND ACTUAL PURCHASE PRICE PAID. ON VERIFICATION OF THE BALANCE SHEET THE LEAR NED AO NOTICED THAT THE ASSESSEE HAD PURCHASED A PLOT OF NON-AGRICULTURAL L AND BEARING BLOCK NO.218 AND 219 PAIKEE SITUATED AT VILLAGE KHUNDH, T ALUKA CHIKHLI AT THE COST OF RS.12,25,000/-. THE LEARNED AO WAS OF THE O PINION THAT THE ASSESSEE HAD UNDERSTATED THE PURCHASE PRICE OF THE SAID LAND AND THEREFORE, HE REFERRED THE MATTER TO THE ASSISTANT VALUATION OFFICER (AVO) (VALUATION CELL) BARODA TO DETERMINE THE VALUATION OF THE LAND IN QUESTION WHO HAD DETERMINED THE VALUE OF THE LAND AT RS.50,2 5,732/-. THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD PURCHASED THE NON -AGRICULTURAL LAND AND HAD SHOWN AT A LOW PRICE AS COMPARED TO THE VAL UE DETERMINED BY THE STAMP VALUATION OFFICER. THE LEARNED AO FURTHER OBS ERVED THAT THE ASSESSEE HAD INDIRECTLY ACCEPTED THE VALUE DETERMIN ED BY THE STAMP VALUATION OFFICER AS HE HAD PAID EXTRA STAMP DUTY O N THE DIFFERENCE AMOUNT AND THUS HE WAS OF THE OPINION THAT THE ASSE SSEE HAD NOT FULLY AND TRULY DISCLOSED ITS INVESTMENT MADE IN PURCHASE OF THE NON-AGRICULTURAL. THE LEARNED AO ALSO OBSERVED THAT THE ASSESSEE HAD FAIL ED TO FURNISH THE VALUATION REPORT IN RESPECT OF THE SAID NON-AGRICUL TURAL LAND FROM THE REGISTERED VALUER. THEREAFTER THE LEARNED AO OBSERV ED THAT THE VALUE DETERMINED BY THE AVO SHOULD BE SUBSTITUTED AS THE VALUE OF THE SAID LAND SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND M ADE AN ADDITION OF ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 3 THE DIFFERENCE OF RS.38,25,674/- (RS.50,25,732 12 ,25,000) TO THE INCOME OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTI ON 69B OF THE ACT. WHILE DOING SO, THE LEARNED AO RELIED ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF SMT. AMAR KUMAR SURANA VS CIT, 226 ITR 334, 349 (RAJ.). ON APPEAL BY THE ASSESSEE, THE LEARNED CIT(A) DELETED THE ADDITION MADE BY THE LEARNED AO HOLDING THAT THERE IS NO PROVISION IN THE INCOME TAX ACT TO MAKE SUCH AN ADDITION. RELEVANT F INDINGS OF THE LEARNED CIT(A) ARE REPRODUCED HEREIN BELOW FOR REFERENCE: 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE. I HAVE PAID DUE ATTENTION TO THE FINDING OF T HE AO AND THE SUBMISSIONS MADE BY THE LD. AR. THE AO DOUBTED THE VALUE OF THE LAND SHOWN BY THE APPELLANT AND REFER THE MATTER TO THE AVO FOR ESTIMATING THE VALUE OF THE LAND. THE AVO SUBMITT ED THE REPORT INDICATING THE VALUE AT RS.50,25,732/-. THE AO ADOP TED THE LAND VALUE DETERMINED BY THE AVO AND THE DIFFERENCE AMOU NT OF RS.38,25,674/- ADDED AS UNEXPLAINED INVESTMENT OF T 4E APPELLANT (PURCHASER) BY INVOKING SEC. 69B OF THE ACT. THE AO HAS HEAVILY RELIED ON TH4E VALUATION REPORT OF THE AVO AND SOME COMPARATIVE RATES IN THE LOCALITY FROM WHERE THE APPELLANT HAD PURCHASED THE LAND. THE AO IN THE ASSESSMENT ORDER ALSO CITED THE VALUE OF RS.34,20,497/- ASSESSED BY THE STAMP DUTY VALUATION AUTHORITY. BEFORE COMPLETION OF THE ASSESSMENT THE AO HAD EXAM INED THE SELLERS U/S. 131 OF THE ACT. THE AO ALSO PLACED RE LIANCE ON THE DECISION OF THE HONBLE RAJASTHAN H. C. IN THE CASE OF SMT. AMAR KUMAR SURANA VS. CIT 226 ITR 344, 349 (RAJ.). IN TH E DEFENCE OF THE APPELLANT, THE LD. AR MADE THE EXHAUSTIVE SUBMISSIO NS AS MENTIONED IN THE EARLIER PARAGRAPHS. IN THIS BACKGR OUND IT IS PERTINENT TO DISCUSS THE CORE ISSUES REFERRED IN PA RA 5 ABOVE. I) AT THE OUTSET, THE AO CAN NOT APPLY SEC. 50 FOR SIMPLE REASON THAT THE CONSIDERATION WAS NOT RECEIVED OR ACCRUED AND THE TRANSFER OF CAPITAL ASSET WAS NOT BY THE APPELLANT WHILE PUR CHASING THE PROPERTY. IN OTHER WORDS, SEC. 50C CAN NOT BE APPLI ED IN CASE OF A PURCHASER OF THE CAPITAL ASSET. IT APPLIES TO THE S ELLER OF A CAPITAL ASSET FOR THE PURPOSE OF COMPUTING INCOME/CAPITAL G AIN U/S 48 OF THE ACT. ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 4 II) THAT LEADS THE SECOND ISSUE WHAT SHOULD BE THE VALUE/CONSIDERATION OF THE LAND FOR INCOME TAX PURP OSES AT THE HAND OF THE APPELLANT? THE AO REFERRED THE MATER TO THE AVO AND THE ESTIMATED VALUE GIVEN IN THE REPORT BY THE AVO WAS HIGHER THAN THE COST OF PURCHASE STATED IN THE PURCHASE DEEDS. THE AO DREW AN INFERENCE THAT THE APPELLANT MIGHT HAVE PAID THE EX CESS PORTION IN BLACK MONEY SO HE INVOKED SEC. 69 B OF THE ACT. SEC . 142 A EMPOWERS THE AO TO REFER THE MATTER TO THE VALUATIO N OFFICER FOR ESTIMATING THE VALUE OF INVESTMENT REFERRED TO IN S EC. 69, 69B ETC. IT IS IMPORTANT TO NOTE HERE THAT THIS SECTION ONLY RE FER TO ESTIMATING THE VALUE. EVEN SEC. 69, 69A, 69B ALSO DO NOT USE THE WORDS FAIR MARKET VALUE. FOR INVOKING SEC. 69 B, AO HAS TO FI RST FIND OUT HOW MUCH AMOUNT WAS ACTUALLY PAID BY THE APPELLANT. THE FINDING MUST BE SUPPORTED BY DOCUMENTARY EVIDENCES AND NOT MEREL Y BASED ON SUSPICION. EVEN IF STAMP DUTY WAS PAID ON HIGHER AM OUNT OR THE VALUER HAS GIVEN HIGHER VALUATION, THE FACT BY ITSE LF CANNOT ESTABLISH THAT THE APPELLANT HAD PAID HIGHER AMOUNT. THERE MA Y BE VARIOUS REASONS FOR PAYING LESSER AMOUNT BY THE APPELLANT S UCH AS MARKET SLACK, DISTRESS SALE BY THE SELLERS, POOR CONDITION S OF THE PROPERTY, FUTURE LIFE OF THE PROPERTY, SURROUND AREAS/ATMOSPH ERE, EXPENSES ON REPAIR/DEVELOPMENT, AVAILABILITY OF TRANSPORT, ROAD S AND SO ON AND SO FORTH. THEREFORE IN THIS SITUATION ADOPTING ESTIMAT ED VALUE FOR ATTRACTING PROVISION U/S. 69B MAY NOT STAND THE JUD ICIAL SCRUTINY. IN THE INSTANT CASE THE LD. AR BROUGHT TO MY NOTICE SO ME OF THE DISADVANTAGE CONDITIONS EXISTED AT THE TIME OF PURC HASE OF LAND WERE EXPLAINED TO THE AO WHICH HE IGNORE WHILE MAKING SU CH ADDITION. EVEN THE COURTS HAVE CONSISTENTLY HELD THAT VALUAT ION REPORT, CANNOT BY ITSELF FORM THE BASIS FOR MAKING THE ADDITION. V ALUATION IS ALWAYS A QUESTION OF OPINION AND UNLESS THERE IS CLEAR FINDI NG ON THE BASIS OF MATERIALS THAT THE APPELLANT HAD PAID EXTRA AMOUNT WHILE ACQUIRING THE PROPERTY, NO ADDITION CAN BE MADE MERELY ON THE BASIS OF VALUATION REPORT. IN THIS CASE THE AO HAD EXAMINED THE SELLERS OF THE PROPERTY U/S. 131 OF THE ACT WHO DENIED HAVING ANY MONEY/CONSIDERATION OTHER THAN THE AMOUNT SHOWN IN THE SALE DEEDS. IN THESE CIRCUMSTANCES I HELD THAT THE VALUE SHOWN IN THE SALE DEEDS IS THE CONSIDERATION FOR THE LAND PURCHA SED BY THE APPELLANT. III) WHETHER ADDITION OF RS.38,25,674/- BY INVOKING OF SEC. 69B OF THE IT ACT BY THE AO IS TENABLE? FOR INVOKING SEC. 69, IT REQUIRES THE OA TO SEEK APPELLANTS EXPLANATION. IT IS ONLY IF T HE APPELLANT OFFERS NO EXPLANATION OR HIS EXPLANATION IS FOUND TO BE UN SATISFACTORY THAT THE AO MAY PROCEED TO ASSESS THE EXCESS PORTION AS INCOME FROM ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 5 UNDISCLOSED SOURCES U/S. 69B. THAT MEANS, THREE FIN DINGS ARE CUMULATIVE I.E. A) THE APPELLANT MUST HAVE MADE INV ESTMENT B) IT IS FOUND BY AO THAT THE AMOUNT EXPENDED ON MAKING SUCH INVESTMENT EXCEEDED THE AMOUNT RECORDED IN THE BOOKS OF A/C. T HE FINDING OF AO MUST BE ON CLEAR AND COGENT MATERIALS IN RESPECT OF THE AMOUNT EXPENDED, C) EITHER THE APPELLANT OFFERS NO EXPLANA TION OR THE EXPLANATION OFFERED IS UNSATISFACTORY IN THE OPINIO N OF THE AO. THE ONUS IS ON THE REVENUE TO SHOW THAT THE APPELLANT H AS EXPENDED EXTRA AMOUNT. MERELY BECAUSE THERE EXISTS SOME COMP ARABLE CASES SHOWING HIGHER PRICES IN RESPECT OF SIMILAR TRANSAC TIONS, IT COULD NOT BE STATED THAT THE APPELLANT HAS EXPENDED EXTRA AMO UNT. THUS, IN MY CONSIDERED OPINION THE ADDITION MADE BY THE AO B Y INVOKING SEC. 69B IS LEGALLY NOT SUSTAINABLE IN THE ABSENCE OF CLEAR FINDING THAT THE APPELLANT HAD EXPENDED EXCESS MONEY APART FROM WHAT IS SHOWN IN THE SALE DEEDS. THEREFORE, BASED ON THE FA CTUAL AND LEGAL MATRIX AND AFTER HAVING CONSIDERED THE PROVISIONS O F SEC. 69B, I DIRECT THE AO TO DELETE THE ADDITION IN THIS GROUND OF APPEAL. ACCORDINGLY THE APPELLANTS GROUND NO.1, 2 & 3 ARE ALLOWED. 4. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARN ED AO AND PRAYED THAT HIS ORDER MAY BE SUSTAINED. IN THIS CONTEXT, T HE LEARNED DR ALSO RELIED ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF SMT. AMAR KUMARI SURANA VS CIT [1996] 89 TAXMAN 544 (RAJ .). ON THE OTHER HAND, THE LEARNED AR RELIED ON THE ORDER OF THE LEA RNED CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW. IT WAS FURTHER SUBMITTED BY THE LEARNED AR BEFORE US THAT THE LEARNED AO HAD REFERRED THE MATTER FOR DETERMINING THE VALUATION O F THE LAND IN QUESTION BY THE AVO WITHOUT REJECTING THE BOOKS OF ACCOUNTS. TH ERE WAS NO COGENT EVIDENCE FOR THE AO TO MAKE SUCH ADDITION BECAUSE T HERE WERE NO MATERIALS ON RECORD TO SUGGEST THAT THE ASSESSEE HA D PAID EXCESS MONEY AS PURCHASE CONSIDERATION OTHER THAN WHAT WAS DECLA RED IN THE SALE DEED. THE LEARNED AR FURTHER SUBMITTED THAT THE LEARNED A O HAS FAILED TO CONSIDER THE STATEMENTS OF THE SELLERS EXAMINED BY HIMSELF U/S 131 OF THE ACT WHEREIN ALL THE SELLERS HAVE ADMITTED THAT THE ASSESSEE HAD NOT PAID ANY EXTRA AMOUNT TO THEM OUTSIDE ITS BOOKS OF ACCOU NTS. IT ALSO ARGUED THAT ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 6 BASED ON THESE FACTS THERE WAS NO REASON FOR THE LE ARNED AO TO REFER THE MATTER TO AVO FOR ESTIMATION. THE LEARNED AR IN SU PPORT OF HIS CONTENTIONS RELIED ON (I) THE ORDER OF THE ITAT AHMEDABAD IN TH E CASE OF M/S. JALARAM & CO. VS. ITO, NAVSARI IN ITA NO.3964/AHD/2008, (II ) DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SARGAM CINEMA VS CIT, 328 ITR 513 (SC) AND (III) ORDER OF THE ITAT AHMEDABAD IN T HE CASE OF FOREMOST FIVEST VS. ITO ITA NO.2826/AHD/2008) AND PRAYED THAT THE ORDER OF THE LEARNED CIT(A) DELETING THE ADDITION MADE BY THE LE ARNED AO MAY BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW ALONG WITH THE PAPER BOOK SUBMITT ED BEFORE US. AT THE OUTSET WE ARE REMINDED OF THE DECISION RENDERED BY THE TRIBUNAL, AHMEDABAD BENCH IN ITA NO.1934/AHD/2012 DATED 27-1 1-2012 IN THE CASE OF ITO VS SHRI DIPAKKUMAR CHAMPALAL DOSHI, FOR THE ASSESSMENT YEAR 2009-10, ON THE IDENTICAL ISSUE WHEREIN ONE OF US WAS THE AUTHOR OF THE ORDER WHEREIN IT WAS HELD AS FOLLOWS: 5. WE HAVE HEARD THE LEARNED DR AND PERUSED THE O RDERS OF THE AUTHORITIES BELOW. IT APPEARS THAT THE REVENUE HAVE MIXED UP THE SPECIAL PROVISIONS U/S 50C OF THE ACT, WHEREIN THE CONSIDERATION RECEIVED AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET IS DETERMINED BY INVOKING THE DEEMING FICTION BASED ON THE VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY, ALONG WIT H, SECTION 69B OF THE ACT WHEREIN THE AMOUNT OF INVESTMENT NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNTS IS DEEMED TO BE INCOME OF THE ASS ESSEE. SECTION 50C OF THE ACT SPECIFICALLY PROVIDE THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOT H, IS LESS THAN THE VALUE ADOPTED OR ASSESSED (OR ASSESSABLE) BY AN Y AUTHORITY OF A STATE GOVERNMENT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE S O ADOPTED OR ASSESSED [OR ASSESSABLE] SHALL, FOR THE PURPOSE OF SECTION 4 8, ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 7 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. 6. SIMILAR DEEMING FICTION IS STIPULATED U/S 69B OF THE ACT ONLY WITH RESPECT TO ANY INVESTMENTS OR BULLION, JEWELLE RY OR ANY VALUABLE ARTICLE. FOR REFERENCE SECTION 69B OF THE ACT IS R EPRODUCED HEREIN BELOW FOR REFERENCE:- 69B WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS MA DE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND THE [ASSE SSING] OFFICER FINDS THAT THE AMOUNT EXPENDED ON MAKING SU CH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY SOURCE OF INCOME , AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXCESS AMOUNT OR T HE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE [ASSESSING] OFFICER, SATISFACTORY, THE EXCESS AMOUN T MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR]. 7. THE LEARNED CIT(A) HAD RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF JAWAJEE NAGNATHAM VS R EVENUE DIVISIONAL OFFICER (4 SSC 595) WHEREIN IT WAS HELD BY THE HONBLE APEX COURT THAT THE VALUE ESTIMATED ON THE BASIS OF STANDARD RATES DO NOT REPRESENT THE REAL MARKET VALUE. , AND ON THE VARIOUS DECISIONS OF THE ITAT AHMEDABAD BENCHES WHE REIN IT WAS HELD THAT ADDITIONS MADE U/S 69 B CANNOT BE SUSTAINED BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. , AND THEREBY GRANTED RELIEF TO THE ASSESSEE. THE PROVISION OF SE CTION 50C OF THE ACT IS A SPECIAL PROVISION FOR ADOPTING THE VALUE O F SALE CONSIDERATION IN A SPECIFIC CIRCUMSTANCE WITH RESPECT TO THE VEND OR OF AN IMMOVABLE PROPERTY AND NOT WITH RESPECT TO THE VEND EE. IF THE ACT INTENDED TO APPLY THE PURCHASE CONSIDERATION IN THE CASE OF THE PURCHASER OF THE IMMOVABLE PROPERTY, IT WOULD HAVE SPECIFICALLY SAID SO. THE DEEMING FICTION CREATED FOR A SPECIFIC PURP OSE CANNOT BE INFUSED FOR ANOTHER APPLICATION UNLESS AND UNTIL IT IS SPECIFICALLY PROVIDED IN THE ACT. FURTHER, WE DERIVE STRENGTH FR OM THE DECISION OF THE CASE ITO VS HARLEY STREET PHARMACEUTICALS LTD., REPORTED IN [2010] 6 ITR (TRIB.) 182 (AHMEDABAD) WHEREIN IT WAS HELD THAT THE PROVISIONS OF SECTION 50C WERE APPLICABLE ONLY FOR THE COMPUTATION OF CAPITAL GAINS IN REAL ESTATE TRANSAC TION IN RESPECT OF SELLER ONLY AND NOT FOR THE PURCHASER. S ECTION 50C OF ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 8 THE ACT CREATES A LEGAL FICTION WHEREBY APPARENT CO NSIDERATION WAS SUBSTITUTED BY THE VALUATION DONE BY THE STAMP VALUATION AUTHORITIES AND CAPITAL GAINS WERE CALCULATED ACCOR DINGLY. THE LEGAL FICTION COULD NOT BE EXTENDED ANY FURTHER AND HAD TO BE LIMITED TO THE AREA FOR WHICH IT WAS CREATED. SECTI ON 50C CREATES A LEGAL FICTION FOR TAXING CAPITAL GAINS IN THE HAN DS OF THE SELLER AND IT CANNOT BE EXTENDED FOR TAXING THE DIFFERENCE BETWEEN THE APPARENT CONSIDERATION AND THE VALUATION DONE BY TH E STAMP VALUATION AUTHORITIES AS UNDISCLOSED INVESTMENT UND ER SECTION 69. SECTION 69 ITSELF WAS A LEGAL FICTION WHEREBY I NVESTMENT IN AN ASSET WAS TREATED AS INCOME IF IT WAS NOT DISCLO SED IN THE REGULAR BOOKS OF ACCOUNT. NO FURTHER LEGAL FICTION FROM ELSEWHERE IN THE STATUTE COULD BE BORROWED TO EXTEN D THE FIELD OF SECTION 69. THE ASSESSING OFFICER APPLIED PROVIS IONS OF SECTION 50C FOR THE COMPUTATION OF UNEXPLAINED INVE STMENT UNDER SECTION 69B OF THE ACT WHICH WAS NOT PERMISSI BLE UNDER THE ACT. APART FROM THE STAMP DUTY VALUATION, THERE WAS NOTHING ON RECORD WHICH SUGGESTED THAT THE REVENUE HAD PROV ED THAT THE ASSESSEE HAD PAID OVER AND ABOVE, WHAT HAD BEEN RECORDED AS PURCHASE CONSIDERATION OF THE LAND IN THE SALE D EED. THEREFORE NO ADDITION OF UNDISCLOSED INVESTMENT COU LD BE MADE BY INVOKING THE PROVISION OF SECTION 69B OF THE ACT . FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH CITED SUPRA, WE DO NOT HAVE ANY HESITATION TO CONFIRM THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, WE CONFIRM THE SAME. 6. SINCE, THE ISSUE IN BOTH THE CASE IS IDENTICAL AND FACTUALLY SIMILAR, FOLLOWING OUR EARLIER DECISION, WE HEREBY DELETE TH E ADDITION MADE BY THE LEARNED AO U/S 69B OF THE ACT FOR RS.38,25,675/- ON ACCOUNT OF UNEXPLAINED INVESTMENTS, BASED ON THE PREMISES THAT THE ACTUAL PAYMENT MADE FOR THE PURCHASE OF LAND WOULD BE THE SAME AS TO THE VALUATION OF LAND DETERMINED FOR THE PURPOSE OF STAMP DUTY, THOU GH THE ASSESSEE HAD RECORDED LESSER AMOUNT IN THE BOOKS OF ACCOUNTS FOR THE PURCHASE OF SUCH LAND AND CLAIMED TO HAVE PAID ONLY SUCH AMOUNT TO T HE SELLER. ITA NO.2731/AHD/2010 (AY: 2007-08) DCIT, NAVSARI CIRCLE VS M/S. SUZAINA FOODS PVT. LT D. 9 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-12-2012. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA / DEKA / DEKA / DEKA / COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 27-11-12 DIRECT ON COMPUT ER 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 03-12-12 / 07-12-12OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: